The European Commission has cleared under the EU Merger Regulation the proposed acquisition by the Taiwanese company Foxconn of Sony entities producing televisions in Slovakia and Mexico.
After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Foxconn provides external assembly services, so-called electronic manufacturing services (“EMS”), for electronic products such as computers, mobile phones, or televisions to original equipment manufacturers (“OEM”). The Sony entities to be acquired in Slovakia and Mexico currently supply Sony’s in-house production of LCD televisions. As a result of the transaction, the production capacity of the Slovakian and Mexican entities will be transferred to Foxconn.
The Commissions examination of the proposed transaction showed that the overlaps between Foxconn and the Slovakian and Mexican entities in the assembly of electronic products are limited. Furthermore, the Commission found that after the operation Foxconn would continue to face several effective competitors. The Commission’s market investigation also confirmed that OEMs have a strong bargaining position vis-à-vis EMS providers. Therefore, the Commission concluded that the transaction would not raise competition concerns.
The transaction was notified to the Commission on 21 May 2010.
