Delphi Automotive Systems/Lucas Diesel - Automotive components

Background Acquisition by Delphi Automotive Systems Co-operation (Delphi) of control of the whole of Lucas Diesel Systems. Delphi is a supplier of automotive components. Lucas Diesel develops, manufactures and sells diesel fuel injection equipment worldwide.

Assessment The Commission cleared the operation as it does not lead to any overlap in the parties’ activities. The operation does not lead to any addition of market shares, and therefore does not raise any competition concern.

As an ancillary restriction, the Commission accepted a five-year non-compete clause as well as a series of agreements designed to separate Lucas Diesel from the vendors and to allocate intellectual property rights coupled with licence agreements. The Commission accepted these as directly related and necessary for the implementation of the concentration.

A licence is granted from Lucas Ltd to Lucas Diesel so as to guarantee the transfer to the acquirer of the full value of the assets. A licence is also granted from Lucas Diesel to Lucas Ltd so as to cope with the break-up of a formal economic entity.

Further, the agreement contains purchase and supply obligations for electronic control units, for a period lasting until the end of life or marketing cycle of a particular product. These were also cleared as ancillary restraints.

The Commission did not accept as an ancillary restraint the obligation imposed on Delphi not to sell or market certain hand-held diagnostic devices obtained from Lucas After Market Operation divisions. This was not considered necessary for the implementation of the operation. (Case n° COMP/M.1784, decision of 05/01/00, public version available February 2000.