Continental concludes Veyance acquisition

Hanover – ContiTech, part of Continental AG, has concluded its acquisition of the US rubber company Veyance Technologies Inc, of Fairlawn, Ohio, said a company announcement on 30 Jan.

On 29 Jan, said a ContiTech report, the Brazilian antitrust authority CADE (Council for Economic Defence) cleared the transaction with certain conditions, thus providing the approvals necessary for completion.

To address concerns expressed by certain antitrust authorities, Continental will divest Veyance’s air springs business in NAFTA and its current steel-cord belting business in Brazil.  A total of around 600 employees work in the operations that are to be divested.

Continental is aiming to boost its worldwide industrial business with the transaction, which is valued at €1.4 billion.

Veyance operates globally in the field of rubber and plastics technology. In 2013, it recorded sales of some €1.5 billion, around 90 percent of which were achieved in industry business.

The Veyance workforce at its 27 plants around the world totaled 8,500 at the end of 2013. The company generates around half of its sales in the US. Other important markets include Latin America, Africa, China and other countries in Asia.

Veyance product focus is on conveyor belts, hoses and power transmission belts. In 2013, ContiTech and Veyance together achieved sales totaling some €5.4 billion and employed around 38,000 staff worldwide.

“By integrating Veyance in our ContiTech division, we are expanding our global position in rubber and plastics technologies,” said Elmar Degenhart, chairman of Continental’s executive board in Hanover.

In addition, he added, this acquisition will bring Continental a significant step closer to its strategic goal of further increasing the proportion of industrial and end-customer business in its sales.

“Continental has financed the acquisition entirely from liquid funds and available lines of credit. Veyance will make an immediate positive contribution to the corporation’s profitability,” said Degenhart.

ContiTech head Heinz-Gerhard Wente added: “Veyance will complement ContiTech in markets in which we have been underrepresented up till now. Another very important point is that the acquisition will enable us to significantly expand our industrial and end-customer business and, as a result.”

According to Wente, the purchase would enable ContiTech to achieve a share of almost 60 percent of its sales outside the automotive original equipment sector.