STOCKHOLM -- The board of brake systems firm Haldex recommended to shareholders today that they accept a takeover bid from German rival Knorr-Bremse, but again flagged risks the offer could face problems with competition authorities.
Knorr-Bremse and fellow German auto supplier ZF Friedrichshafen have been locked in a bidding war over Haldex since early September, but ZF dropped out of the battle last month after failing to win majority stake.
"The board believes that the Knorr-Bremse offer is clearly recommendable, provided Knorr-Bremse obtains all necessary regulatory approvals and clearances to complete its offer," it said in a statement.
The companies have been looking to buy Haldex to gain access to its expertise in brakes for trailers as they seek to develop integrated autonomous driving systems for commercial vehicles.
Haldex's board had previously recommended ZF's bid, despite it being lower than Knorr-Bremse's, due to concerns that the latter offer would face obstacles on competition grounds.
"We still see a considerable risk that authorities will demand a lot from Knorr-Bremse when it comes to fixing the market situation that will arise with this," Haldex acting chairman Magnus Johansson told Reuters.
"And we still don't have enough assurances from Knorr-Bremse that they have plans for that."
Knorr-Bremse, which makes braking systems for rail and commercial vehicles, is offering 125 crowns per share for Haldex, corresponding to 5.53 billion crowns ($614 million). The offer expires on Dec. 5.
Knorr-Bremse holds 14.9 percent of shares in Haldex, according to its latest disclosure in September. Haldex shares traded flat at 117 crowns at 11:15 CET.
