Completed acquisition by RBS Acquisition Corporation of Rexnord Corporation

No. ME/1055/03

A report under section 125(4) of the Fair Trading Act 1973 on the advice given on 26 February 2003 to the Secretary of State for Trade and Industry under section 76 of the Act

The parties

RBS Acquisition Corporation is a subsidiary of the Carlyle Group. The Carlyle Group is a private global equity investment group which undertakes private equity investments through a number of different funds.

Rexnord Corporation is a group of several companies, with manufacturing facilities world-wide. Rexnord Corporation is a global supplier of power transmission components, conveying equipment, bearings, chains, couplings, drives, motor brakes and idlers. The gross world-wide assets of Rexnord Corporation were £718.2 million at 31 March 2002.

Jurisdiction

The merger satisfies the assets test of the FTA. The ECMR does not apply.

Assessment and recommendation

There is no horizontal overlap between the Carlyle Group's portfolio of companies and Rexnord Corporation. Minor vertical supply links exist between Rexnord Corporation and two other Carlyle Group portfolio companies, however these links raise no competition issues.

No competition or other public interest issues are raised by this merger. On these grounds, we recommend that this merger is not referred to the Competition Commission.

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