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EC has `serious reservations` about Bosch buying Rexroth

01 September, 2000

The European Commission has expressed "serious reservations" over whether Bosch`s planned acquisition of Mannesmann Rexroth would be compatible with the operation of the single European market. After an initial investigation, the EC has decided that it needs to conduct a more detailed examination of the proposed Bosch-Rexroth deal and says that this will take "no longer than four months".

The Commission`s concerns centre on the market for hydraulic piston pumps in which both Bosch and Rexroth have strong positions. The EC`s initial investigations have revealed that Rexroth`s axial-piston pumps compete directly with Bosch`s radial-piston pumps.

"After listening to other players on the market, it was decided that it would not be enough for Bosch to promise to sell," the EC reports. "For this reason, the Commission has decided to undertake a more detailed examination of the Bosch/Rexroth case, which will last no longer than four months."

The EC investigation was sparked by Mannesmann`s announcement in April that it was selling its Atecs engineering arm to Bosch and Siemens who planned to split it, with Bosch taking over the Rexroth businesses and Siemens taking control of the VDO, Dematic and Sachs operations. They planned to run the Demag materials-handling business as a joint venture.

Earlier this month, the EC approved the Demag deal and has now given Siemens the go-ahead to take over the VDO and Sachs automotive businesses, and the Dematic logistics business (subject to Siemens selling Dematic`s postal sorting operation).

As part of its investigation into the proposed deal, the EC examined whether the joint acquisition of Atecs by Siemens and Bosch would encourage the two partners to co-ordinate their activities. But the Commission has concluded that the contractual agreements between the two companies will prevent Siemens from having any influence over Bosch/Rexroth, and will similarly prevent Bosch from influencing Siemens automotive operations.

The Siemens-Bosch deal still has to be approved by the anti-trust authorities in the US.

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