The South Korea’s Fair Trade Commission has approved Autoliv’s take over of the airbag and safety belt business units of Delphi Korea.
In the article ‘Autoliv to Merge Delphi’s Airbag and Safety Belt Units‘, Korea’s Maeil Business reports -
With this takeover, Autoliv is set to emerge as the South Korea’s No.1 airbag and safety belt manufacturer. Autoliv will take the largest portion of 48.2 percent in the domestic airbag market after the takeover, outpacing Hyundai Mobis (39.9 percent).
“There is a limited chance for competition restriction in the future as other market competitors have enough capacity for additional production even when Autoliv reduces its supply and Hyundai Mobis forms a vertical supply relationship with Hyundai Motor and Kia Motors, its largest customers.” the commission explained.
The safety belt market, where the top three companies are accounting for nearly 79.9 percent of market share is assumed to fall into a competition restriction case in accordance with the nation’s monopoly regulation.
However, the trade commission authorized the takeover by saying: “The fact that those top three companies’ market shares have been declined to the 65 percent level from 82 percent for the recent three years shows that the market concentration ratio is being eased.”
At the end of January, Autoliv released the following press release regarding the acquisition -
Autoliv to acquire Delphi passive safety operations in Asia
(Stockholm, January 28, 2010) — Autoliv Inc. (NYSE: ALV), the worldwide leader in automotive safety, has agreed to acquire substantially all of Delphi’s Occupant Protection Systems (OPS) operations in Korea and China.
These operations are expected to generate approximately US$250 million of annualized sales in 2010.
Under the terms of the Asian agreement announced today, Autoliv will acquire substantially all of Delphi OPS operations in Korea and China.
The transaction includes intellectual property, physical assets and a highly skilled workforce of approximately 600 associates in Korea and China. Existing customers include HKMC (Hyundai, Kia)Chery and Tata.
In the fourth quarter 2009, Autoliv separately acquired assets related to Delphi’s OPS operations in Europe and North America. These transactions are expected to add approximately US$150 million to Autoliv sales during 2010.
“We are very satisfied to have now finalized agreements to acquire virtually all of Delphi OPS operations worldwide,” stated Jan Carlson, President and CEO of Autoliv.
“This most recent agreement further improves our already strong market position in Korea and China and reinforces our growth strategy for Asia,” added Carlson.
About Autoliv
Autoliv Inc., the worldwide leader in automotive safety systems, develops and manufactures automotive safety systems for all major automotive manufacturers in the world.
Together with its joint ventures, Autoliv has 80 facilities with approximately 34,000 employees in 28 vehicle-producing countries. Sales in 2008 amounted to US $6.5 billion.
The Company’s shares are listed on the New York Stock Exchange (NYSE: ALV) and its Swedish Depository Receipts on the OMX Nordic Exchange in Stockholm (ALIV sdb).
About Delphi
Delphi is a leading global supplier of electronics and technologies for autos, commercial and other vehicles. Delphi has more than 100,000 employees at 270 locations and 24 engineering centers in 32 countries.
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