The European Commission has approved unconditionally, under the EU Merger Regulation, the proposed acquisition of WABCO by ZF. The Commission concluded that the transaction would raise no competition concerns in the European Economic Area.
ZF and Wabco are both manufacturers of various commercial vehicle components, in particular for medium and heavy commercial vehicles (“MHCV”). The companies’ product portfolios are largely complementary in the MHCV market. ZF’s focus is on steering, chassis and driveline products such as transmission systems, for both cars and commercial vehicles, while Wabco’s focus is on braking and active safety technologies for commercial vehicles.
The Commission’s investigation
The Commission assessed the impact of the transaction on multiple markets.
During its investigation, the Commission received feedback from a large number of customers and competitors.
The Commission’s investigation found that the transaction is unlikely to hinder effective competition in the markets for the following products:
- Transmission systems: Wabco provides AMT-controllers, clutch actuators and clutch servos as inputs to transmission systems, and ZF purchases or manufactures such inputs internally. Given that there are other actual or potential alternative sources of supply at both levels of the market, the Commission found that the transaction does not give rise to competition concerns.
- Clutches for air compressors: Wabco manufactures air compressors and ZF produces clutches used in air compressors. Based on an analysis of specific supply and sourcing relationships and dynamics on these markets, the Commission found that the transaction does not give rise to competition concerns.
- Control levelling valves for cabin air suspension systems: Wabco sells control levelling valves directly to truck manufacturers. ZF sells cabin suspension systems to truck manufacturers without the control levelling valve. The Commission found no competition concerns given that alternative suppliers of control levelling valves and air suspension systems exist in the market.
- Automated driver assistance solutions (“ADAS”): ZF provides cameras and radars needed for ADAS functions such as lane departure warning or automatic emergency braking. ZF sells these products to truck manufacturers or companies such as Wabco who then incorporates these in their ADAS solutions. The ADAS sphere is developing and will gradually move towards automated driving. There are many companies active in this area and the Commission considers that the transaction will not prevent competitors to ZF and Wabco from developing ADAS solutions and offering these in the market.
The Commission therefore concluded that the transaction would raise no competition concerns, as ZF will continue to face effective competition after the transaction on the relevant markets, and cleared the case unconditionally.
Companies and products
ZF Friedrichshafen AG, based in Germany, is a global technology company that develops, manufactures and distributes products and systems for passenger cars, commercial vehicles and industrial technology.
Wabco Holdings Inc., a US company with headquarters in Switzerland, is a global supplier of braking control systems, technologies and services that improve safety, efficiency and connectivity of commercial vehicles including trucks, buses and trailers.
Merger control rules and procedures
The transaction was notified to the Commission on December 9, 2019.
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).
A non-confidential version of today’s decision will be available on the Commission’s competition website, in the public case register under the case number M.9383.