Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: Divestiture period extended in automotive supplier tie-up, (Apr 9, 2015)

By Jeffrey May, J.D.

The U.S. Department of Justice Antitrust Division has extended for 30 days the deadline for Continental AG to divest the North American commercial vehicle air springs business of Veyance Technologies, Inc. The divestiture was required by the terms of a consent decree settling U.S. competition concerns that Germany-based automotive supplier/tire manufacturer Continental's acquisition of Veyance would have harmed competition by reducing the number of suppliers of air springs to North American commercial vehicle manufacturers from three to two. Under the Notice of Extension of Time filed with the federal district court in Washington, D.C. on April 6, Continental has until at least May 6 to complete the divestiture (U.S. v. Continental AG, Case No. 1:14-cv-02087-RBW).

The divestiture requirement was intended to provide the acquirer of the divested assets with the ability to develop, manufacture, and sell commercial vehicle air springs to customers in North America in competition with Continental. Commercial vehicle air springs are rubber components used in trucks, trailers, and buses to provide stability to the suspension system, keep the tires in contact with the road, and provide comfort and reduced driver fatigue in cabins and seats.

Under the consent decree, which was approved on March 30, Continental had five calendar days after notice of the entry of the final judgment to divest the assets. The government has the authority to approve an extension of the divestiture period for up to 60 days. The divestiture assets include Veyance's manufacturing facility and its assembly facility, both located in San Luis Potosi, Mexico, and its research and development, engineering and testing operations, and administration assets located in Ohio at the company's “Fairlawn Facility”, which is also Veyance’s world headquarters

In the event that defendants do not accomplish the divestiture within the prescribed period, the court is authorized to appoint a trustee selected by the government to complete the sale.

Attorneys: Suzanne Morris for U.S. Department of Justice. Bruce McColluch (Freshfields Bruckhaus Deringer LLP) for Continental AG. E. Marcellus Williamson (Latham & Watkins LLP) for Veyance Technologies, Inc.

Companies: Continental AG; Veyance Technologies, Inc.

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