BRUSSELS, Belgium (AP) — European Union antitrust regulators on Wednesday approved the acquisition of U.S.-based Solectron Corp. by Singapore's Flextronics International Ltd., saying the $3.6 billion deal did not pose any competition concerns.
The EU said the deal, announced in June, would not significantly impede effective competition in the 27-nation bloc.
It added that its investigation into the takeover found that the combined share of Flextronics and Solectron on the electronics market would be limited. It added the new joint firm would continue to face ''many vigorous competitors'' worldwide amid fierce competition that is driving down prices.
The EU reviews all mergers and takeovers by companies that do business within the EU to ensure they do not violate national or EU competition rules.
Both companies make a variety of electronic devices for companies looking to cut costs by outsourcing some of their manufacturing duties.
Their client lists include technology giants Cisco Systems Inc., Hewlett-Packard Co., Motorola Inc., and IBM Corp. Some of Flextronics' products include cell phone handsets, switches and routers for directing data over corporate networks, and Microsoft Corp.'s Xbox video game console.
Solectron's product lineup includes consumer set-top boxes and MP3 players, as well as navigation systems for cars and medical instruments.
The combined company will have more than $30 billion in annual sales, which analysts said will help Flextronics close the gap with Taiwan-based Hon Hai Precision Industry Co., which still holds a commanding lead as the world's largest contract electronics manufacturer. The combined company will have about 200,000 workers in 35 countries.
The deal is expected to close by the end of this calendar year.
Sharles of Solectron, based in Milpitas, Calif., near San Jose, closed at $3.71 Tuesday.