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  • DATVF.ATLPHL
    1.629
    -0.046
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  • DATVF.CHIATL
    1.812
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  • DATVF.DALLAX
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  • DATVF.LAXDAL
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  • DATVF.SEALAX
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  • DATVF.PHLCHI
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  • DATVF.LAXSEA
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  • DATVF.VEU
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  • DATVF.VNU
    1.375
    0.035
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  • DATVF.VSU
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    79.060
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  • OTRI.USA
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  • OTVI.USA
    9,878.300
    80.300
    0.8%
  • TLT.USA
    2.650
    0.000
    0%
  • WAIT.USA
    140.000
    -16.000
    -10.3%
  • DATVF.ATLPHL
    1.629
    -0.046
    -2.7%
  • DATVF.CHIATL
    1.812
    0.077
    4.4%
  • DATVF.DALLAX
    1.072
    0.102
    10.5%
  • DATVF.LAXDAL
    1.384
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  • DATVF.SEALAX
    0.881
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  • DATVF.PHLCHI
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  • DATVF.LAXSEA
    1.900
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  • DATVF.VEU
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  • DATVF.VNU
    1.375
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  • DATVF.VSU
    1.228
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    8.6%
  • DATVF.VWU
    1.391
    -0.021
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  • ITVI.USA
    9,869.880
    79.060
    0.8%
  • OTRI.USA
    5.400
    -0.230
    -4.1%
  • OTVI.USA
    9,878.300
    80.300
    0.8%
  • TLT.USA
    2.650
    0.000
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  • WAIT.USA
    140.000
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EquipmentNewsTrucking Regulation

US seeks steering parts divestiture in WABCO-ZF merger

The U.S. Department of Justice (DOJ) announced it is requiring ZF Friedrichshafen AG (ZF) and WABCO Holdings Inc. to divest WABCO’s North American steering components business before it will approve their pending merger.

Without selling off that part of WABCO’s business, ZF’s proposed $7 billion acquisition of WABCO [NSYE: WBC], approved by shareholders last year, “would eliminate competition between the only two suppliers of steering gears used on large commercial vehicles in North America,” according to an antitrust lawsuit to block the deal filed by DOJ Thursday in U.S. District Court for the District of Columbia.

Along with the lawsuit, however, DOJ filed a proposed settlement “that would resolve the competitive harm alleged in the lawsuit,” the department stated. The settlement would have to be approved by the district court.

“The merger, as originally structured, would have given ZF a monopoly over an essential steering systems component used in trucks and buses that move products and people across the United States,” said Assistant Attorney General Makan Delrahim.

“Today’s settlement, which requires the divestiture of WABCO’s entire U.S. steering systems business, will ensure that commercial vehicle manufacturers continue to benefit from competition,” he added.

Under the terms of the settlement, ZF and WABCO must divest the entirety of WABCO’s R.H. Sheppard steering systems subsidiary, including its manufacturing facilities in Hanover, Pennsylvania, and Wytheville, Virginia, as well as other WABCO assets related to steering gears.

The gears direct the front wheels of trucks and buses and are a key component of advanced driver assistance system (ADAS) steering features, DOJ noted.

“ADAS steering features, such as lane-keeping assist, are already being implemented today, and are expected to be an area of continued importance as companies develop autonomous vehicle operations. The combination of ZF and WABCO would leave manufacturers of large commercial vehicles in North America without a sufficient competitive alternative for this critical input and likely result in higher prices, less favorable contract terms, and reduced research and development efforts.”

The proposed settlement, along with a competitive impact statement, will be published in the Federal Register, after which a 60-day public comment period will open for anyone wanting to submit written comments. The court can then enter a final judgment after determining whether the merger is in the public interest.

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John Gallagher, Washington Correspondent

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.

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