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Mergers: Commission approves proposed joint venture by Bosch, Deutz and Eberspächer

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The European Commission has cleared under the EU Merger Regulation the proposed creation of a joint venture by the German companies Bosch, Deutz and Eberspächer in the area of diesel exhaust after-treatment systems for mobile non-road machinery and special utility vehicles. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it.

Bosch is a leading global supplier to the automotive industry, in particular in the area of diesel systems. Deutz is active worldwide as a manufacturer of engines. Eberspächer's exhaust technology division supplies components for exhaust systems as well as complete exhaust systems for both cars and utility vehicles.

The joint venture, which will be jointly controlled by the parties, will develop, produce and sell complete diesel exhaust-gas after-treatment systems for non-road mobile machinery (such as excavators, wheel loaders and tractors, etc.) and for special utility vehicles manufactured in small series (such as road sweepers, mobile cranes, and waste collection vehicles, etc.). The exhaust systems offered by the joint venture will be based on a tool box principle with a fixed number of modular components which can be put together for a specific motor. The joint venture will also supply on a stand-alone basis active regeneration systems for diesel particulate filters (DPFs), which are a part of such exhaust systems.

The parties' activities would only overlap in a market for the manufacturing and supply of active regeneration systems for DPF which would include both burner-based active regeneration systems (such as the one to be used by the JV) and so-called HC dosers, which are currently supplied by Bosch. However, the Commission's investigation found that such overlap would not give rise to any significant concerns, in particular since there are other strong competitors on such market.

The Commission also carefully examined whether the concentration would give rise to any input or customer foreclosure concerns. However, the Commission in particular found that Bosch would not have the possibility and incentive to engage in input foreclosure strategies with regard to components of exhaust systems which competitors of the JV may need to source. This also applies to urea (or AdBlue) dosers, which contribute to reducing NOx emissions. While Bosch has a strong position in the urea doser segment, there are sufficient alternative suppliers.

The transaction was notified to the Commission on 26 February 2010. More information on the case will be available here.

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