According to T&N, the proposed acquisition would establish the combined company as a credible developer and supplier of piston assemblies in all major automotive manufacturing centers throughout Europe. In order to remedy any competitive concerns arising from its acquisition of Kolbenschmidt, T&N proposes to divest Kolbenschmidt's interest in ML-KS Bearings Inc. as soon as it may legally do so. ML-KS is a joint venture between Kolbenschmidt and Metal Leve, a Brazilian company that manu- factures a range of automotive engine components. T&N contem- plates transferring its share in Kolbenschmidt to a FTC-approved trustee until T&N acquires control over Kolbenschmidt, then transferring Kolbenschmidt's shares in ML-KS to the trustee pending divestiture. Comments on the application will be accepted for 30 days, until July 19.
T&N plc, headquartered in Manchester, England, designs, manufactures and sells a variety of industrial products, including engine components for both passenger cars and heavy duty trucks. Kolbenschmidt, headquartered in Neckarsulm, Germany, owns 50 percent of the shares in ML-KS, which has a factory in Greensburg, Indiana. ML-KS manufactures a limited range of engine bearings that are sold to original equipment manufacturers principally for use in heavy duty trucks. ML-KS also sells a small amount of thinwall engine bearings in the United States purchased from Kolbenschmidt.
Prior FTC approval of the acquisition is required under a 1990 consent order settling charges that T&N plc's acquisition of JP Industries, Inc. violated antitrust laws. The FTC alleged that the acquisition would substantially lessen competition or tend to create a monopoly in the manufacture and sale of thinwall and tri-metal heavywall engine bearings in the United States. One of the provisions in the consent order requires T&N to obtain FTC approval for 10 years before acquiring any interest in a company that manufactures or sells certain engine bearings in the United States.
In its application, T&N states that the focus on the transaction is a product that is outside the scope of the FTC consent order -- piston assemblies -- and that the "proposed transaction will have no competitive impact on the engine bearing business in the U.S. because there will be no increase in concentration after the divestiture. Nor will there be any effect on competition pending divestiture." The application notes that the transaction would enhance T&N's ability to supply integrated assemblies composed of pistons, piston rings and piston pins to German automobile manufacturers, and states that "conditional approval will allow the main portion of the proposed transaction to go forward, while avoiding any adverse effect on competition in the design, manufacture or sale of engine bearings in the U.S."
Comments should be addressed to the Office of the Secretary, Federal Trade Commission, 6th Street & Pennsylvania Avenue, N.W., Washington, D.C. 20580.
Copies of application, as well as other documents associated with this case, are available from the FTC's Public Reference Branch, Room 130, same address as above. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov
(FTC Docket No. C-3312)