The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the US company Bandag by Bridgestone Americas Holding Inc, also of the US. After examining the operation the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Bridgestone is active worldwide in the tyre and rubber sector. In Europe, the company predominantly supplies new tyres to car manufacturers and tyre dealers and also has activities in the truck tyre retreading sector. Bandag sells tread and re-treading equipment to re-treading businesses, which operate as Bandag franchisees. Re-treading is the process that extends the life cycle of truck tyres by applying new tread to a worn truck tyre provided that the casing is still in sound condition. The proposed merger would bring together one of the largest new tyre suppliers and a major retreading company. Bridgestone's stated strategy is to combine these two businesses in order to compete effectively for more sophisticated truck fleet customers requiring integrated tyre management services.
The main horizontal overlap occurs between the parties with regard to the re-treading business, particularly the supply of re-treading material to independent businesses active in the re-treading of tyres. However, the Commission’s examination of the proposed merger showed that the horizontal overlaps between the activities of Bridgestone and Bandag are limited and that the transaction would not lead to major structural changes on the re-treading market. The combined firm would continue to face strong, effective competition from companies such as Michelin, Goodyear and Kraiburg. [29 May 2007]