European Commission Proposes Clearing Michelin/Continental Deal

08/20/96

Last Friday the European Commission announced its proposal to approve a joint venture between the Michelin and Continental tire companies, Reuters reported.

Acting under competition Regulation 17, the Commission said in Official Journal C 236 that it would seek comments from interested parties before making a final decision.

The commission said the two companies have proposed a 50/50 joint venture. Michelin would contribute the rights to the Uniroyal tyre trademark in Europe, and Continental would contribute an effective controlling interest in its production facilities for low-cost tires in Barum, Czech Rebpulic. Continental would also contribute a 25 percent interest in the basic capital of Vergoelst GmbH, an indirect wholly owned subsidiary, the Commission said.

The two companies would cooperate on recycling, retreading, tire and wheel assembly, logistics, and joint purchasing. They would not exchange information on production plans, industrial policy or product specifications, the Commission said.

The commission said, "In view of the above, the Commission proposes to adopt a favorable position with regard to the notified agreement."

Paul Dever -- The Auto Channel