(Rubber News report)
Fairlawn, Ohio – The acquisition of Veyance Technologies by ContiTech AG is proceeding along relatively smoothly and should be finalised by the fourth quarter.
ContiTech expected that antitrust authorities would investigate the planned transaction “with appropriate effort” when it announced the deal to buy Veyance in February for about $1.91 billion (€1.4bn), a company spokesman said (see ERJ report.) The probe in some jurisdictions has led to a second phase of investigations, he said.
“Because of the size (of the transaction), we had expected that the cartel office would look deeper inside the deal,” he said. “So I think it's business as usual.” Basically, it's the duration the company expected, and things are running as planned, according to the spokesman.
He said ContiTech has submitted documents for examination in all mandatory jurisdictions within relevant countries. It has received clearances in some of the countries, he noted, although he did not name them.
Germany and the US still are reviewing the planned purchase, he said, because authorities in both countries need more time to review documents.
“Our goal is to still close the transaction by the end of the year,” the spokesman said, “and we are very optimistic we will reach it.”
Once that's done, ContiTech will move from being a smaller rubber conveyor belting and hose producer in the North American market to the top of the pack. It will more than double the size of that part of its operation in the region while significantly boosting its presence across the globe.
The deal also will give ContiTech much larger air spring, rubber track and power transmission belt businesses.
ContiTech has a major foothold in the hose and belt markets in Europe, but the addition of Veyance will expand its reach there too.
Heinz-Gerhard Wente, CEO of the ContiTech division of Continental AG and a member of the parent company's executive board, said at the time of the announced purchase that it will create greater stability for the company and it is a healthy investment for the firm. It should bring greater growth opportunities for the company in the future, he said.