Continental/Motorola Deal Gets EU Go-ahead

The European Commission has cleared the acquisition of Motorola’s automotive electronics systems business by Continental AG under the EU Merger Regulation. The Commission concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Both parties produce electronic systems for sale to automobile manufacturers worldwide. Such systems include units for automotive communications, such as mobile telephony applications as well as electronic control systems for inter alia transmissions, fuel management and emissions. Continental’s activities in this sector are located in Germany, Belgium, the Czech Republic, UK, Hungary, Portugal, Romania and Sweden, as well as the US, China, Japan, the Philippines, Taiwan, Brazil and Mexico. The business being acquired from Motorola has activities in the US, Mexico, Sweden, the UK, France, Germany, China, Japan and Korea.

On the rapidly growing markets for such systems the parties would have relatively modest combined market shares and would continue to face strong competition from competitors such as Bosch and Siemens. Moreover, the large automobile manufacturers wield significant power in terms of their ability to negotiate the price, terms and conditions when they purchase components.