Continental AG's acquisition of Veyance Technologies runs into US regulatory issues
06 Nov 2014
German car parts and tyre manufacturer Continental AG may not be able to close its acquisition of US-based industrial hoses and conveyor belts maker Veyance Technologies due to US regulatory issues.
Hanover-based Continental had in February proposed buying Ohio-based Veyance, which once belonged to rival tyre giant Goodyear, from private equity firm Carlyle Group for €1.4 billion ($1.9 billion). (See: Continental AG to buy US rival Veyance Technologies for $1.9 bn)
Carlyle had acquired Veyance in 2007 from Goodyear Tire and Rubber Company for $1.475 billion and has license to use the Goodyear Engineered Products brand for its range of belts, hoses and other products.
Although the German, British and Chinese regulators have approved the deal, the transaction has run into trouble with the US antitrust regulators, who feel that Veyance, which will be merged into Continental's Contitech division, would create a market-dominating position.
Continental may have to sell one of Veyance's units in order to win US regulatory approval, German magazine Bilanz today reported.
Continental is planning to sell Veyance's air-spring division and has already found buyers for the unit, the report said.
Veyance manufactures and markets engineered rubber products for industrial, automotive, and military markets.
The company provides industrial hoses, hydraulics, power transmission products, automotive aftermarket parts, commercial truck aftermarket parts, air springs, conveyor belts, rubber tracks and rubberized components, OE hoses, belts, air springs and molded parts, home and garden products, power sports products, and marine fenders.
Veyance operates globally in the field of rubber and plastics technology and in 2013 recorded sales of approximately €1.5 billion, of which, around 90 per cent of it were generated outside the automotive industry.
Veyance has 27 plants around the world, including in the US and South America, with a workforce of about 9,000, which will be integrated into the German company's ContiTech division.
ContiTech currently accounts for more than 10 per cent of Continental's 2013 sales of €33.3 billion. The merged company will have sales of approximately €5.4 billion, and employ about 39,000 people worldwide.
