Brussels, 19/09/2007 (Agence Europe) - On 19 September, the European Commission cleared the planned acquisition of Harman International Industries Inc of the US by private equity firm Kohlberg Kravis Roberts & Co (KKR), also of the US. Harman supplies audio products and electronic systems for the vehicle, consumer and professional industries. In the vehicle sector, Harman is a market leader in the design and manufacture of so-called "infotainment" systems and products for original equipment manufacturers (OEMs). Infotainment systems coordinate and integrate a broad range of information and entertainment functions and/or devices in vehicles, including GPS navigation, traffic information, voice-activated telephone, air conditioning and heating, music and films.
KKR is a private equity business whose affiliated funds have investments in a range of different businesses. One of these businesses is Avago Technologies which has recently taken over the commercial Polymer Optical Fiber (POF) division from the company Infineon Technologies AG, thereby becoming one of the main suppliers of automotive fibre optic transceivers (FOTs) that are certified for use in infotainment systems. The Commission therefore examined whether as a result of the planned deal, KKR, via its interest in Avago, would have the ability and incentive to restrict the supply of automotive FOTs to Harman's competitors.
The Commission's investigation showed that several companies are active or are currently entering the market for the supply of automotive FOTs. Customers therefore have a range of alternative suppliers, all offering technologically compatible FOTs.
As demand for automotive FOTs has increased in recent years and is expected to continue to do so, the Commission believes that even the potential loss of Harman as a customer would not alter these companies' plans to be active in the market. In addition, as Silver Lake Partners exercise joint control of Avago, the Commission adds that KKR is not able to coordinate the behaviour of Avago and Harman to its own advantage. (ab)