Competition approval has been granted by the European Commission to the planned acquisition by US-based automotive systems and components manufacturer Johnson Controls (JCI) of German car seat manufacturer CRH.
Brussels imposed no conditions on its permission, having concluded in an investigation there were sufficiently strong rival autoparts suppliers to provide strong competition to an expanded JCI.
“The parties will neither have the incentive nor the ability to close out non-integrated competitors from access to metal structures and mechanisms for car seats,” noted a commission communiqué. It added car manufacturers had significant power over car seat manufacturers, choosing suppliers and setting prices.
“These have an interest in keeping a sufficient number of potential suppliers…” noted the bureaucrats.
This is despite significant overlaps in JCI and CRH’s business. Both make car seat structures and related components such as seat adjusters and head rests, although JCI also makes car seat components, complete seats, and components such as door panels or headliners. JCI also supplies intermediate auto manufacturer suppliers as well as carmakers themselves. The commission concluded “their combined market shares will remain relatively moderate”.
This deal follows Johnson Controls’ December acquisition of German seat recliner specialist Keiper and the automotive sport and specialty seat business of US based Recaro.