EC to investigate Knorr-Bremse's proposed takeover of Haldex
The European Commission has opened an in-depth investigation to assess the proposed takeover of Haldex by Knorr-Bremse under the EU Merger Regulation.
Commissioner Margrethe Vestager, in charge of competition policy, said: "Brakes are a crucial component for the safety of the millions of trucks, trailers and buses that transport goods and passengers across Europe every day. We want to ensure that Knorr-Bremse's takeover of Haldex does not restrict competition for these critical components, which could lead to less innovation, for example in the development of automated driving, or to price increases for vehicle manufacturers, fleet operators and ultimately consumers." The Commission's initial investigation has shown that the proposed merger would likely remove a significant competitor from an already very concentrated sector. The Commission has concerns regarding a number of markets where Knorr-Bremse and Haldex currently compete, such as electronic braking systems (EBS) and air disc brakes for both trucks and trailers, anti-lock braking systems (ABS) for trailers, valves and air treatment systems. These markets have high entry barriers due to the technical and regulatory requirements for safety-critical equipment, as well as the significant research and development efforts required to enter, or expand, in these markets. At this stage, the Commission is concerned that, following the transaction, the level of the remaining competition would be insufficient to avoid price increases and to meet customer requirements in terms of innovation. In some markets, this may result in having Wabco as the only effective competitor to the merged entity. The transaction was notified to the Commission on 1 June 2017. On 30 June 2017, Knorr-Bremse submitted commitments to address the Commission's concerns. However, the Commission considered these commitments insufficient to clearly dismiss its serious doubts as to the transaction's compatibility with the EU Merger Regulation. The Commission therefore did not test them with market participants. Given the worldwide scope of Knorr-Bremse and Haldex' activities, the Commission is cooperating closely with the Department of Justice in the United States.