German auto parts maker ZF Friedrichshafen has opted to offer concessions in a strategy designed to ensure the European Union will approve its ongoing bid to purchase US competitor TRW Automotive Holdings for $13.5 billion.

The major bid would ensure that the newly formed company would become the second-largest auto parts supplier in the world, in a bid to rival the larger Germany-based Robert Bosch GMBH. The European Commission has set a March 12 date for the decision over the acquisition instead of the initial February 25 as it weighs in the deal – with the delay posted on the official website by the EU executive on Friday. It also revealed that the German parts maker submitted its concessions on Thursday – which is probably the cause for the announced delay. The filling did not provide any details about the concessions offered by ZF to secure its massive deal with the US company. Additionally, last September ZF Friedrichshafen offered German industrial group Robert Bosch the possibility to purchase the former’s steering systems unit in a drive to ensure there would be no possible regulatory concerns over the TRW deal.

The globalization experienced by automakers – with numerous mergers and acquisitions in recent years and with regional businesses “married” for more comprehensive business policies – has also taken by storm the supplier sector. Analysts and industry experts foresee more such deals could be in line in the near future, as the parts makers try to ensure their survival. TRW produces car safety products, including brakes and airbags and has among its biggest clients Ford, GM and the Volkswagen Group. ZF Friedrichshafen on the other hand builds chassis components to Audi, BMW Group and several other carmakers.

Via Automotive News Europe


Please enter your comment!
Please enter your name here