Brussels, 26/02/2007 (Agence Europe) - On Friday 23 February he European Commission approved the proposed acquisition of Hydro Castings, the European casting operation of Norsk Hydro ASA, by the Mexican company Nemak.
The purchaser, Nemak, is controlled by Alfa S.A.B. de C.V. (Mexico), internationally active in the production of aluminium castings for the automotive industry, with a focus on the production of cylinder heads and engine blocks. Within the EEA, Nemak supplies mainly cylinder heads. Hydro Castings consists of four Europe-based production facilities of Norsk Hydro ASA that manufacture castings for the automotive industry, mainly cylinder heads and engine blocks.
Although both parties supply car manufacturers within the EEA with aluminium cylinder heads for cars, the merged entity would not obtain market power (i.e. obtain the ability to raise prices profitably). Car manufacturers often produce cylinder heads themselves. Therefore, independent cylinder head suppliers are subject to extensive competitive pressure from the car manufacturers' in-house production. The market investigation of the Commission also revealed that sufficient production capacity is available on the market. Consequently, the Commission has concluded that the proposed transaction would not give rise to a significant reduction of competition. (cd)