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EC launches probe into Siemens` bid for VA Tech

01 February, 2005

The European Commission has launched a detailed investigation into Siemens` planned takeover of VA Tech, Austria`s largest industrial group. The EC announcement came shortly after the VA Tech board accepted an increased offer from Siemens to take a 90% stake in VA Tech, paying the equivalent of €65 a share - €10 more than its original bid last September.

An initial investigation by the EC has found that the proposed acquisition "may create significant competition problems". According to the Competition Commissioner, Neelie Kraus, "this takeover is in a strategically important sector for the EU economy. It is therefore crucial that the Commission verifies that effective competition will be preserved in all the markets concerned."

One possible area of overlap is variable speed drives. VA Tech`s Elin subsidiary recently formed a joint venture with Schneider Toshiba Inverter to develop and manufacture high-power, general-purpose drives.

The EC has four months to make a decision on whether the takeover would impede competition within Europe.

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