Brussels, 3 September 2012
Mergers: Commission approves acquisition of Volvo Aero by rival GKN
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Volvo Aero of Sweden by GKN of the UK. The Commission's investigation focussed on the overlaps between the parties' activities in the production of certain aircraft engine components. The Commission's investigation confirmed that the proposed transaction would not significantly reduce the supply options available to customers of these components.
GKN and Volvo Aero produce a range of components for aircraft engines including fan cases and turbine exhaust cases (TECs). Fan cases make up the outer casing structure of a jet engine whilst TECs, which are also known as Turbine Rear Frames, make up the rear structure of a jet engine
The Commission's investigation showed that the transaction would not raise competition concerns on either the market for fan cases or the market for TEC given the presence of other manufacturers of these products and the capability of many customers to manufacture them in house. The Commission concluded that these elements would ensure that the merged entity would continue to face a competitive constraint from third parties and that the supply options open to customers would not be significantly reduced as a result of the transaction.
The Commission therefore concluded 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 27 July 2012.
Companies and products
GKN is a global engineering company whose technologies and products are incorporated into vehicles and aircraft. GKN's aerospace division supplies engine components and composite aircraft structures such as wings and fuselages. It also provides a complete range of aftermarket services.
Volvo Aero is a wholly owned subsidiary of the Swedish Volvo Group, which is one of the world’s leading manufacturers of trucks, buses, construction equipment, drive systems for marine and industrial applications and aerospace components. Volvo Aero produces aerospace engine components for commercial and military aircraft engines. It also produces gas turbine components for power generation, as well as components for the space industry. In addition, Volvo Aero provides maintenance, repair and overhaul services for aircraft and gas turbine engines.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified 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).
More information on the case is available at:
Antoine Colombani (+32 2 297 45 13)
Marisa Gonzalez Iglesias (+32 2 295 19 25)