BRUSSELS -- European Union regulators said they would fully investigate car parts maker Knorr-Bremse's takeover bid for Sweden's Haldex as concessions offered by the German company were insufficient.
The decision creates another obstacle for Knorr-Bremse after Haldex's management dropped its support for the 5.5 billion crown ($673 million) all-cash takeover offer last month because of regulatory opposition.
The European Commission listed on Monday a number of areas where competition would be reduced following the deal, including in electronic braking systems, air disc brakes, anti-lock braking systems and air treatment systems.
"We want to ensure that Knorr-Bremse's takeover of Haldex does not restrict competition for these critical components which could lead to less innovation, for example in the development of automated driving, or to price increases for vehicle manufacturers, fleet operators and ultimately consumers," European Competition Commissioner Margrethe Vestager said in a statement.
The EU competition enforcer said Knorr-Bremse's offer of concessions had not addressed the concerns and therefore it had not sought feedback from rivals and users, confirming a Reuters story on July 5.
The Commission will decide by Nov. 30 whether to clear or block the deal.
Knorr-Bremse said the merger made commercial sense despite the possibility of major asset sales to address regulatory concerns. "The transaction follows a compelling rationale in spite of potential remedies. We remain committed to achieving merger clearance at acceptable terms as soon as possible," the company said in a statement.