STOCKHOLM/MUNICH (Reuters) - German car parts maker Knorr-Bremse [STELLG.UL] said on Friday it would continue its pursuit of Haldex (HLDX.ST), despite the Swedish company’s management withdrawing its support for a takeover because of expected regulatory opposition.
Shares in the Swedish brake systems maker Haldex fell 7.2 percent on Friday following the announcement that management had backed away from endorsing the Knorr-Bremse takeover.
“Based on the feedback from the Competition Authority, the Haldex board considers the probability of regulatory approval so low that the board has decided not to assist Knorr-Bremse in the continued competition investigations,” Haldex said in a statement.
Knorr-Bremse made a 4.86 billion Swedish crown ($575 million) all-cash bid for its Haldex in September, trumping an offer from Germany’s ZF [ZFF.UL].
The two German rivals had both wanted to buy Haldex, lured by its expertise in brake systems for trucks and trailers which car suppliers want to develop into autonomous driving systems.
But the deal has taken longer than expected to receive regulatory approval. This week Knorr-Bremse said it would seek another extension of its offer after the European Commission indicated it was likely to launch an in-depth review.
Knorr-Bremse said on Friday it disagreed with Haldex’s board, however, and called on the Swedish company to hold an extraordinary shareholders’ meeting to vote on the matter no later than July 28.
“Knorr-Bremse has neither received indications nor reason to believe that the initiation of a Phase II investigation will have a negative impact on the feedback which market participants provide to the EU Commission,” it said in a statement.
It said it was willing to offer the Commission significant remedies to ease any antitrust concerns and had already received indicative bids from several interested parties for assets that could be divested.
“Knorr-Bremse believes that there would be even more interested buyers but has so far limited the number of participants in the process,” it said, without providing details on the assets to be divested or the possible buyers.
ZF reiterated on Friday that it had walked away from a bidding war with Knorr-Bremse, even as it remains a large shareholder in Haldex having amassed a 20 percent stake.
“We have taken note of the situation and are assessing it. We said last year we have ended the bidding process. There is no change to this strategy,” a ZF spokesman said, adding that ZF would continue to act as a “responsible shareholder”.
Reporting by Olof Swahnberg in Stockholm, Edward Taylor in Frankfurt and Irene Preisinger in Munich; Editing by Robin Pomeroy and David Clarke