RUBBER PRODUCTS: CONTINENTAL'S ACQUISITION OF PHOENIX UNDER INVESTIGATION.
An in-depth inquiry into the proposed acquisition of Phoenix AG by rival firm Continental AG has been launched, announced the European Commission late on June 29. The Commission is concerned that, by eliminating Phoenix as an independent competitor, the dominant position of Continental in the field of air spring suspension and conveyor belt products could be strengthened. Both companies are leading producers of rubber products in Germany. Phoenix specialises in the production of technical rubber products. Continental also produces such items, along with tyres and brakes.
The initial Commission investigation suggested that the merging parties would become the leading European supplier of air springs (suspension elements made of a rubber bellow and metal parts) for out-of-factory commercial vehicles as well as the aftermarket, for railway vehicles and for passenger cars. Also, the Commission notes that the two companies have a very strong position in Europe for some types of heavy conveyor belts, particularly heavy steel cord conveyor belts (used for the transport of heavy bulk goods) and filter belts (which allow dehumidifying of raw materials during transport). For both products, the combined entity would be the biggest in Europe. In addition, the Commission has found evidence of significant barriers to entry for each of these markets.
The Commission has four months from the date of opening the investigation to reach a final decision.
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|Date:||Jul 3, 2004|
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