The European Commission has given the go-ahead for Siemens` proposed acquisition of Flender, the German manufacturer of electrical and mechanical drives. After a "careful" examination of the takeover, the EC says it did not identify "any serious threat to competition" across Europe as a whole, or in any significant part of it.

As well as producing mechanical power transmission equipment such as gears, couplings and geared motors, Flender also supplies inverters, generators and motors. The EC`s investigation showed that horizontal overlaps between Siemens` and Flender`s activities were limited and that the combined firm will face strong competition from several rivals with significant market shares, including ABB, Alstom, Schneider, Danfoss, WEG, VEM and Emerson.

The Commission also studied the vertical integration of Flender`s gears business with Siemens` wind turbine, steam turbine and railway businesses, and concluded that there was no risk of competition being reduced in these areas, because there are alternative sources of supply.

Following the EC decision, Siemens is integrating Flender into its Automation & Drives group and has created a new "mechanical drives" division, which will be headed jointly by Flender`s chief executive, Dr Winfried Walzer (who will be responsible for technical matters) and Jürgen Glasemann (who will be responsible for the commercial side). Glasemann, who was previously head of business administration in A&D`s systems engineering division, led the preparation for integrating Flender into Siemens - and will continue to be responsible for this.

Siemens is paying Flender`s previous owner, Citigroup Venture Capital Equity Partners, €1.2bn for the company. Flender, which achieved sales of €1.012bn in 2003/2004, employs about 6,700 people - 65 of them in the UK.

Flender`s former subsidiaries Winergy, Loher and Graffenstaden will remain legally autonomous. The only parts of Flender that will not be integrated into A&D`s new mechanical drives division, are its Drives & Automation business, which will be integrated into A&D`s standard drives division, and Loher, which will join the A&D large drives division.

A&D president Helmut Gierse says that the acquisition "will allow us to offer our customers integrated solutions and systems across the entire drives range from a single source - we have a globally unique range of products and services, from the controller, through converters and motors, right up to gear systems.

"By integrating mechanical drives engineering into our systems," he adds, "we will not only gain a share in the fast-growing market sector for gear systems, but we will also further expand our position as the leading global vendor of systems and solutions in industrial automation overall."