To avoid a scenario where there's a lack of competition, Magna International Inc.'s planned takeover of bankrupt supplier Wilhelm Karmann GmbH's roof division was blocked by German antitrust regulators.
Last Wednesday, Andreas Mundt, president of the German Federal Cartel Office (FCO), said that the market in Europe for convertible roof systems is "already highly concentrated."
He thinks that a Magna-Karmann tie-up would mean that there would only be two big providers. They worry that if the acquisition were allowed, the market for convertible roofs would be dominated by Magna/Karmann and Webasto. The Germany-based Webasto had recently acquired the roof unit of German supplier Edscha.
Mundt said that it's probable that the lack of competition would lead to higher prices. In 2009, the value of Europe's convertible roof business was about 600 million euros (about $733 million).
In a March interview with Automotive News Europe, Guenter Apfalter, president of Magna International Austrian unit Magna Steyr, was asked if carmakers were concerned about the potential lack of competition.
He said that the OEMs, which make convertible cars, are actually supportive of the deal. He added that the OEMs think that the industry needs a "strong company in the roof business with a strong financing backing." [via autonews]