China Approves GM-Delphi Deal Following Conditions

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Sept. 30 – China’s Commerce Ministry has approved General Motors Co.’s plan to buy parts of auto parts maker Delphi under certain conditions that would prevent the two from monopolizing the industry.

These conditions include forbidding GM and Delphi to divulge trade secrets about Delphi’s clients as well as requiring Delphi to ensure it supplies parts to other automakers in a timely, reasonably priced and fair way, according to a ministry statement.

Delphi manages 17 wholly owned entities and joint ventures plus 21 manufacturing sites in the country. According to China’s anti-monopoly law, potentially important mergers and acquisitions deals that could have far-reaching effects in an industry must be placed under an anti-monopoly review pending approval.

Delphi used to be under the GM parts division before it separated to become the world’s second largest auto parts maker. In 2005,  the company declared bankruptcy and implemented massive factory closings and lay-offs.

The company was ordered by a New York court in July to hand control of the business to lenders and open the business to possible buyers. The buyback will see GM taking over Delphi’s global steering business and four plants in the United States.