Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: FTC approves ZF Friedrichshafen’s application to sell TRW’s linkage and suspension business, (Aug 28, 2015)
Organizations Mentioned:THK Co., Ltd. | TRW Automotive Holdings Corp. | TRW Automotive Holdings Corporation | ZF Friedrichshafen AG | Zf Friedrichshafen, AG
By Linda O’Brien, J.D., LL.M.
Following a public comment period, the FTC has approved an application from ZF Friedrichshafen AG and TRW Automotive Holdings Corporation to sell TRW’s North American and European linkage and suspension business for heavy and light vehicles to the Tokyo-based global machine component manufacturer THK Co., Ltd., the agency announced today.
In its complaint, (In the Matter of ZF Friedrichshafen AG, File No. 141-0235), the FTC charged that the market for heavy vehicle tie rods in North America was already highly concentrated. The acquisition would increase the likelihood of coordinated interaction among the remaining competitors in the North American heavy vehicle tie rod market and eliminate direct competition between ZF and TRW, resulting in the increased probability that customers would pay higher prices for heavy vehicle tie rods.
The divestiture was required by the FTC’s June 2015 final order settling charges that the $12.4 billion merger of ZF and TRW – combining two of the world’s largest automotive parts manufacturers – would likely harm competition in the North American market for heavy vehicle tie rods. The parties’ divestiture also addresses competition concerns raised by the European Commission. The linkage and suspension business to be divested includes five manufacturing plants in Michigan, Canada, the Czech Republic, and Germany, and a research and development lab in Germany, which THK will lease from TRW until THK completes its move to new space.
According to its application, ZF stated that THK is well qualified to be a viable competitor. Additionally, THK has sufficient resources, expertise, and incentive to maintain and develop the TRW linkage and suspension business.
Companies: ZF Friedrichshafen AG; TRW Automotive Holdings Corporation; THK Co., Ltd.
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