Continental cleared to buy Veyance, against sale of air springs plant

German auto dealer Continental has obtained clearance from US antitrust authority (the Department of Justice) to buy the rubber and plastics company Veyance Technologies under the condition that that it will divest Veyance’s air springs plant in San Luis Potosí, Mexico. The antitrust authority in Canada has meanwhile also approved the acquisition of the rubber and plastics company.

Reuters reported that the Justice Department had also ordered Continental to on sell certain assets for the acquisition to be approved. It was announced in February that Continetal would buy US-based Veyance for EUR1.4 billion.

“We welcome these decisions which bring us significantly closer to our strategic goal – expanding our industrial operations,” Executive Board of Continental and CEO of the ContoTech Division Heinz-Gerhard Wente said in a press statement.

“At the same time we regret that we are not permitted to take over the air springs business in NAFTA. In our estimation that would have brought clear benefits for the customers. We will now look for a buyer as quickly as possible who will provide a secure future for the approximately 500 employees in the plant in Mexico and develop the business further,” he added.

Veyance will complement the ContiTech division in markets in which the company is underrepresented at present, particularly in the US and South America. Canada, China, Australia and South Africa.

Veyance has a strong industry presence. In 2013 alone, it recorded sales of EUR1.5 billion. It also has 27 plants around the world and hires 9,000 employees.

(IMA)

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