European Commission - Press release
Mergers: Commission approves acquisition of automotive business of Keiper Recaro Group by Johnson Controls
Brussels, 17 June 2011 - The European Commission has approved under the EU Merger Regulation the acquisition of the automotive business of Keiper Recaro Group (Keiper), which comprises metal structures and mechanisms for car seats, by Johnson Controls Inc. (JCI), a supplier of automotive systems and components. The Commission concluded that the parties will continue to face competition from other suppliers and that car manufacturers have an important role in the selection of suppliers of seat structures and mechanisms for their car models.
The companies' activities overlap in the downstream markets for car seat structures and the upstream markets for related mechanisms such as recliners and adjusters. As a consequence, the merger also results in vertical effects. The Commission conducted an extensive market investigation which covered car manufacturers, intermediate customers and actual as well as potential competitors.
Whilst the parties would have high combined market shares in a number of car seat mechanisms such as recliners and height and tilt adjusters, the Commission's investigation in particular showed that they will continue to face competition from other suppliers and that car manufacturers have an important role in the selection of suppliers of seat structures and mechanisms for their car models or platforms and are therefore a constraining factor. In addition, potential entry by non-European suppliers was taken into account in certain areas. The Commission therefore concluded that post-merger, these factors would constrain the parties' ability to raise prices or not provide inputs to customers and that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
The transaction was notified to the Commission on 6 May 2011.
The Companies and products
Keiper manufacturers and supplies – apart from speciality seats it sells to the independent aftermarket – car seat structures and related mechanisms to car manufacturers and intermediate suppliers such as JCI. US-based JCI sells its car seats, seat structures and related mechanisms exclusively to car manufacturers.
As a result of the planned transaction, JCI will acquire one of its competitors in car seat structures and mechanisms and also one of its suppliers, particularly with respect to mechanisms such as car seat recliners and length, height and tilt adjusters.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the European Economic Area (EEA)2 or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
A non-confidential version of today's decision will be available at:
Amelia Torres (+32 2 295 46 29)
Marisa Gonzalez Iglesias (+32 2 295 19 25)