BRUSSELS (Reuters) - German car parts maker Continental AG won permission from the European Commission on Thursday to buy Siemens AG's auto electronics unit VDO for 11.4 billion euros ($16.9 billion).
The deal ranks as the largest acquisition in the history of the global auto supply chain.
The European Union's executive arm said the companies for the most part made complementary products, therefore raising few competition concerns.
"There are overlaps on some specific product markets. The market investigation conducted in the affected upstream and downstream product markets revealed only limited potential competition concerns regarding certain specific markets for electronic control units," a Commission statement said.
The Commission said its investigation showed that sufficient supply alternatives existed.
Continental will become one of the top five global automotive suppliers, within reach of domestic rival and industry leader Robert Bosch GmbH, and double in size as a result of the deal.
The company, which already competes fiercely with Bosch in the lucrative field of electronic stability control brakes, will now also face off against its larger rival in Bosch's core business of advanced fuel-injection systems.
In addition to powertrain technology, Continental gains access to activities such as infotainment and cockpit panel electronics.
Based on 2006 data, the combined Continental-VDO would rank No. 5 on the Automotive News list of the top 100 global supplies with worldwide original-equipment automotive parts sales of $23.48 billion.