European Commission officials have approved the acquisition of automotive transmissions specialist, Getrag by Magna International through the EU Merger Regulation, despite there being certain overlaps between both supplier’s activities.
The commission found the companies coincide in the market for the manufacture and OEM supply of complete drive train assemblies for full-electric and hybrid-electric light vehicles as well as for the manufacture and OEM supply of its various sub-systems.
However, the EC ruled the overlaps were limited and a number of strong players would remain in the market after the merger.
“Furthermore, OEM customers have the possibility to retain in-house manufacturing capabilities for at least one sub-system of eDrive systems, in order to maintain their bargaining power vis-à-vis suppliers,” noted a commission statement.
“The commission therefore concluded the transaction would raise no competition concerns.”
Previous indications were Magna would acquire the 80-year old Getrag for EUR1.75bn (US$1.9bn)
Getrag is involved with dual-clutch transmissions (DCT), a sector expected to be one of the highest growth segments globally during the next decade.
just-auto’s automotive supplier research service, QUBE expects the number of DCTs fitted worldwide to grow significantly from 4.9m in 2014 to 12.7m by 2020 and 18m by 2030.
In 2014, west Europe and China were the most significant markets for the DCT, accounting for 1.7m and 1.5m units of volume respectively.
In addition to its wholly-owned operations, Getrag has joint-venture relationships with Ford, as well as Chinese auto makers Jiangling and Dongfeng.
Other Getrag customers include BMW, Daimler, Renault, Volvo and Great Wall. Including joint-venture locations, Getrag has around 13,500 employees and operates 13 manufacturing and 10 engineering centres in nine countries in Europe, Asia and North America.
Getrag’s 2014 consolidated sales were around EUR1.7bn, which excludes EUR1.6bn in sales generated in its non-consolidated joint-ventures.
“As part of our ongoing product portfolio review, we have identified the expansion of our powertrain business as a strategic priority,” said Magna CEO, Don Walker previously.
“Getrag is an excellent fit with this strategy. Getrag is a technology leader in a product area we believe is well-positioned to benefit from industry trends driving increased vehicle fuel-efficiency and reduced emissions.”