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Johnson gets EC nod to buy automotive textile producer
23
Nov '10
The European Commission has approved under the EU Merger Regulation the acquisition of Michel Thierry Group (MTG), a manufacturer of automotive textiles, by Johnson Controls Inc. (JCI), a supplier of automotive components and systems. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

MTG is a manufacturer of automotive textiles based in France. Its products are mainly used for car seats but also for other car interior parts such as door panels. The automotive business of US based JCI includes the manufacturing of car seat components, the assembly of complete seats and the production of other interior car components such as door panels or headliners. The parties supply car manufacturers and, in the case of Michel Thierry Group, also so-called Tier 1 (direct) suppliers, such as JCI.

As a result of the planned transaction, JCI will acquire one of its main suppliers of automotive textiles.

The Commission's market investigation highlighted that, in view of credible alternative suppliers and customers, the parties will neither have the incentive nor the ability to close out non-integrated competitors from access to textiles or to manufacturers of interior components using textiles. Moreover, car manufacturers produce part of the textile components they use in-house.

The majority of textile suppliers and seat component manufacturers are chosen by the car manufacturers, who also determine the prices. These have an interest in keeping a sufficient number of potential suppliers of textiles and components. In light of the above, JCI's acquisition will not raise any competition concerns.

The transaction was notified to the Commission on 15 October 2010 for regulatory clearance under the EU merger control rules.

European Commission

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Courtesy: India ITME

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