Due to US regulatory issues, Continental AG may not be able to close its acquisition of industrial hoses and conveyer belts manufacturer, Veyance Technologies.
The German car parts and tyre manufacturer, Continental AG, had proposed in February to acquire Ohio-based Veyance which used to belong to competitor Goodyear Tyre and Rubber Company. Carlyle Group bought Veyance from Goodyear in 2007 in 2007 for $1.48 billion and holds the licence to use the brand for its range of belts, hoses and other products.
German, British and Chinese regulators have approved the deal however Continental AG have run into trouble with US regulators who feel that the merge of the two companies would create a market-dominating position. In order to get approval from the US regulatory system one of Veyance’s units may have to be sold off, it has been said that Continental have found buyers to sell the Veyance air-spring division to.
Veyance operate globally in the market of rubber and plastic technology and had recorded sales at €1.5 billion in 2013. They provide: industrial hoses, hydraulics, power transmission products, automotive aftermarket parts, commercial truck aftermarket parts, air springs, conveyor belts, rubber tracks and much more. Veyance’s 27 plants around the world and 9,000 staff will be integrated into the ContiTech division of Continental AG when the merger is complete. This division accounts for over 10 percent of Continentals sales of €33.3 billion in 2013.
The merged companies are said to have combined sales of around €5.4 billion, employing 39,000 members of staff worldwide.