CELEX: 32015M7420
Language: en
Date: 2015-03-12 00:00:00
Title: Commission Decision of 12/03/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7420 - ZF / TRW) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 12.3.2015
C(2015) 1757 final

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|To the notifying party:                                            |

Dear Madam(s) and/or Sir(s),

Subject:    Case M.7420 – ZF/ TRW
Commission decision pursuant to Article 6(1)(b) in conjunction with Article 6(2) of Council Regulation  No 139/2004[1]  and  Article  57  of  the
Agreement on the European Economic Area[2]

 1) On 22 January 2015, the European Commission received a notification of a proposed concentration pursuant to Article 4 of Council  Regulation
    (EC) No 139/2004 (by which ZF Friedrichshafen AG (‘ZF’, Germany) acquires within the meaning of Article 3(1)(b)  of  the  Merger  Regulation
    sole control over TRW Automotive Holdings Corp. (‘TRW’, USA), by way of purchase of shares.

 2) The business activities of the undertakings concerned are:

    – for ZF: worldwide supplier of products for automotive and industrial applications. ZF’s automotive business concentrates on powertrain  and
      chassis technology,

    – for TRW: worldwide manufacturer of automotive components focused on active and passive safety technologies[3].

 3) ZF and TRW are designated hereinafter as the "Parties".

       The Parties

 4) ZF (the "Notifying Party") is active worldwide in the supply of  products  for  automotive  and  industrial  applications.  ZF's  automotive
    business concentrates on powertrain and chassis technology. ZF's automotive clients are  mainly  car  manufacturers,  also  called  original
    equipment manufacturers ("OEMs").

 5) TRW is active worldwide in the manufacturing and supply of automotive components, with a particular  focus  on  active  and  passive  safety
    technologies.

       The OperatIon and the concentration

 6) On 15 September 2014, ZF, TRW and ZF's wholly-owned subsidiary MSNA, Inc. entered into an agreement and plan of merger  by  which  TRW  will
    effectively merge with ZF's fully-owned subsidiary MSNA, Inc.[4] Accordingly, ZF will acquire sole  control  over  the  whole  of  TRW  (the
    "Notified Transaction"). The Notified Transaction therefore constitutes a concentration within the meaning of Article 3(1)(b) of the  Merger
    Regulation.

 7) The Commission notes that ZF entered into and closed a related transaction shortly before the Notified Transaction  that  has  removed  what
    otherwise would have led to a horizontal overlap in automotive steering systems between ZF and TRW. This transaction concerns  the  sale  of
    ZF's 50% stake in the ZF Lenksysteme GmbH ("ZF Lenksysteme"), a joint venture active in the design and manufacture of steering  systems,  to
    Bosch.[5] This transaction was declared compatible with the internal market by the Commission's decision of 24 October 2014.[6]

       EU DIMENSION

 8) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[7] (ZF: EUR 18 894.50 million;  TRW:
    14 068.55 EUR million). Each of them has an EU-wide turnover in excess of EUR 250 million (ZF: EUR [...] million; TRW: [...]  EUR  million),
    but they do not achieve more than two-thirds of their aggregate EU-wide turnover  within  one  and  the  same  Member  State.  The  Notified
    Transaction therefore has an EU dimension.

       competitive assessment

1 Product market definition

1 Horizontal markets

         Automotive components

 9) Both Parties are active in the manufacture and supply of automotive components. The Commission has previously concluded that each individual
    automotive component constitutes a separate product market.[8]

10) The Commission has further segmented these markets between components for light vehicles (under 6 tonnes) (“LV”), namely passenger cars  and
    light commercial vehicles[9] on one hand, and for heavy commercial vehicles (over 6 tonnes) (“HCV”), namely medium and heavy-duty commercial
    vehicles such as trucks, buses and trailers, on the other hand.[10] The Commission has still segmented the market between the supply to  OEM
    and original equipment suppliers and OES (“OESs”, i.e. companies active in  the  supply  of  branded  OEM  parts)  and  the  supply  to  the
    Independent After Market ("IAM", covering the supply of replacement components).[11]

11) On the basis of the above distinctions, horizontal overlaps would exist in  respect  of  the  Parties'  following  activities:  (i)  chassis
    components to OEMs and OESs as well as to the IAM; (ii) shock absorbers to the IAM; (iii) steering gears and steering pumps to the IAM; (iv)
    rubber-to-metal components to the IAM; and (v) electronic components.

12) The Commission notes that the following horizontal overlaps do not give rise to affected markets: the manufacture  and  supply  of  steering
    pumps sold to the IAM; rubber-to-metal components sold to the IAM; and the manufacture and supply of automotive electronic components. These
    markets will not be mentioned further in the present decision. The Commission also notes in this regard that ZF has recently sold its rubber-
    to-metal components business and that its activities are therefore limited to the re-selling (as opposed to manufacturing)  of  such  parts.
    Also, the Parties' activities in electronics do not overlap in relation to any individual component and are, therefore, complimentary.

13) Vertical links would also exist in respect of the Parties' following activities: (i) Transmission Oil Pumps (TRW)  and  Transmissions  (ZF);
    and (ii) LV tie rods (ZF and TRW) and LV steering systems (TRW).

    Chassis components

14) Chassis components are components that make up the linkage and suspension for the chassis of a vehicle. There are various types  of  chassis
    components, such as:

       a. suspension ball joints: form part of the connection between the wheels of a vehicle and the chassis. Suspension  ball  joints  allow  a
          wheel to pivot during turning, while remaining  securely  fixed  to  the vehicle’s chassis.  Suspension ball joints  are  connected  to
          control arms, which are  connected  to  the  chassis  frame.

       b. control arms: are connecters which attach to the rigid chassis frame at one end, and the wheel (via a  ball  joint)  at  the  other.  A
          conventional vehicle suspension has two control arms with a coil suspension spring sitting between them.

       c. tie rods: are rigid connectors forming the link between the individual wheels and the steering control mechanism.  A  conventional  tie
          rod is essentially straight, and has ball joints at each end. Tie rods are responsible for transfering steering commands to the wheels,
          and ensuring the wheels turn together.

       d. stabilizer links: connect wheels on opposite sides of a vehicle and force the wheels and suspension to raise or lower  to  roughly  the
          same height when cornering.  This ensures that the sides of the vehicle move up and down  together,  instead  of  independently  (i.e.,
          “swaying”), which could lead to the vehicle rolling over.

       e. torque rods: are used to prevent a vehicle’s axle (and therefore wheels) from moving forward or backwards relative to the chassis frame
          during acceleration or braking, respectively. Torque rods, combined with stabilizer links, confine (insofar as possible) the  motion of
          a vehicle’s wheels when force (either acceleration, braking or cornering) is applied to the wheel and suspension system.

       f. V-links: perform much the same function as torque rods, ensuring that the vehicle’s wheels are not able to move longitudinally (forward
          and backward) relative to the chassis frame during acceleration and braking. V-links also prevent lateral movement of the axle relative
          to the chassis. V-links are used primarily with solid rear axles, for instance, in semi-trailer tractors or flatbed vehicles with  twin
          axle assemblies. V-links, in combination with two trailing  links/torque rods, assume all axle control functions.

       g. drag links: are a form of steering connection most often found on vehicles with solid axles. The drag link converts the circular motion
          from the steering shaft into a linear motion to change the angle of the wheels.

15) Regarding the market for chassis components,[12] the Commission has previously considered that  a  market  exists  for  "structural  chassis
    assemblies"[13] within which the following sub-segments can be identified: (i) sub-frames and cross members; (ii) links  and  control  arms;
    (iii) large frames; and (iv) chassis components which do not belong to other categories. The Commission, however, has  ultimately  left  the
    exact product market definition open.

16) The Notifying Party agrees with the distinction between LV and HCV chassis components set out in paragraph 10 above. However, the  Notifying
    Party does not agree with the distinction between chassis components sold to OEM/OESs and to the IAM, as in most of the cases  there  is  no
    difference between the LV and HCV chassis components that ZF sells to OEMs/OESs and those it sells to the IAM in terms of design, inputs  or
    manufacturing processes. The Notifying Party also argues that chassis components should not  be  further  subsegmented  by  each  individual
    component, given the similarities in design and testing processes, basic design, raw materials, techniques and machinery as  well  as  sales
    and marketing.

17) The results of the market investigation indicated that each LV and HCV chassis components (LV: control arms,  tie  rods,  stabiliser  links,
    suspension ball joints; HCV: v-links, torque rods, tie rods, drag links) is a separate product market. Indeed,  respondents  indicated  that
    there is no substitutability between these products as they are not comparable in terms of price and technical characteristics and they  are
    also often tendered separately.[14]

18) In addition, bidding data submitted by the Notifying Party indicated that the OEMs organise separate tenders for  each  component  and  that
    these tenders are split even further, namely for LV ball joints into (i) compression ball joints and (ii) cross-axis ball  joints;  for  tie
    rods into (i) inner and (ii) outer tie rods; for control arms into (i) rear, (ii) front, (iii) upper, and (iv) lower and/or  (i)  aluminium,
    (ii) forged steel and (iii) stamped steel control arms. The Commission notes that it cannot be ruled out that such segmentations within each
    type of chassis component would constitute relevant product markets.

19) However, the exact product market definitions can ultimately be left open as the remedies proposed by the Notifying Party remove any serious
    doubts as to the compatibility of the Notified Transaction with the internal market, on any plausible alternative market definition.

20) For the purposes of assessing the Notified Transaction, in light  of  the  results  of  the  market  investigation  and  in  line  with  the
    Commission's previous decisional practice, the Commission will base its analysis of the Notified  Transaction  on  the  narrowest  plausible
    relevant market definitions according to which there is a horizontal overlap between the Parties' activities – namely aseparate  market  for
    each of the following chassis components: suspension ball joints, control arms, LV tie rods, HCV tie rods, stabilizer links, torque rods, v-
    links and drag links. These components are further segmented as between supplies to OEMs/OESs on the one hand and supplies to the IAM on the
    other.

    Shock absorbers

21) Shock absorbers are devices that help to control the impact and rebound movement of a vehicle's springs and suspension.

22) The Commission has previously considered shock absorbers[15] to constitute a separate relevant  market,  which  could  possibly  be  further
    segmented into sales to OEMs/OESs and to the IAM. The Commission has previously left the product market definition open.[16]

23) The Notifying Party considers that a distinction could be drawn between assembled suspension struts, shock absorbers and suspension springs.
    The Notifying Party also claims that shock absorbers may also form part of larger modules such as corner modules or complete axles.

24) However, as the Notified Transaction does not give rise to serious doubts as to its compatibility with the internal market  even  under  the
    narrowest alternative product market definitions, it is not necessary to conclude on the  exact  scope  of  the  product  market  for  shock
    absorbers.

    Steering system components

25) Although with the closing of the sale of the Notifying Party's stake in ZF Lenksysteme, the entire horizontal overlap between  the  Parties'
    activities in the manufacture and supply of steering systems has been removed, the Notifying Party will continue to purchase steering  gears
    for resale to the IAM. TRW is, to a small extent, also active in the manufacture and supply of steering gears to the IAM in the EEA.

26) Steering gears form the transition between the steering shaft, which connects to the steering wheel, and the steering linkages which connect
    to the wheels of the vehicle.  A gear attached to the steering column interacts with a gear attached to the  steering  linkage  (such  as  a
    pitman arm), allowing the rotary force applied by the operator of the steering wheel to be transferred into lateral  force  applied  to  the
    wheels. Steering gears in modern vehicles are typically part of a closed hydraulic system with the gears encased in  a  pressurised  vessel.
    This allows a drastic reduction in the force required to be applied to the steering wheel by the operator in order to turn the  wheels.  The
    hydraulic system within the steering gear is pressurised with a steering pump.

27) In its previous decisions, the Commission has left open whether steering system components, including steering  gears,  constitute  separate
    relevant product markets or whether they are encompassed by a wider steering systems market.[17] For the purpose of  the  present  decision,
    the precise delineation of the relevant product market can be left open, as the Notified Transaction does not give rise to serious doubts as
    to its compatibility with the internal market regardless of the precise market definition.

2 Vertical markets

         Steering systems (downstream market)

28) Steering systems are pre-assembled component systems that are part of a vehicles' overall steering capability. Having sold the stake in  its
    steering system joint venture ZF Lenksysteme, ZF is no longer active in the manufacture  and  supply  of  steering  systems.  TRW  currently
    manufactures steering systems.

29) Both ZF and TRW manufacture and supply tie rods to manufacturers of steering systems, which constitute an  input  thereto.  For  the  market
    definition assessment of tie rods please refer to paragraphs 14 to 20 above.

30) By the Notified Transaction, the Notifying Party  will  acquire  TRW's  steering  systems  business.  This  business  currently  covers  the
    manufacture and supply to OEMs/OESs in the EEA of (i) LV electronic power steering systems; (ii) LV hydraulic power  steering  systems;  and
    (iii) HCV hydraulic power steering systems. TRW's steering business currently  also  manufacturers  and  supplies  certain  steering-related
    components, including (i) LV steering columns; (ii) LV steering pumps; (iii) LV mechanical steering gears; (iv) HCV steering pumps; (v)  HCV
    steering gears; (vi) HCV steering columns; (vii) HCV intermediate steering shaft; and (viii) HCV column drives.

31) The Commission has previously analysed the steering systems market and considered that it could be segmented[18] into: (i) steering  columns
    and intermediate shafts; (ii) steering pumps; (iii) steering hoses; (iv) electronic power steering  ("EPS")  systems;  and  (v)  half  shaft
    components. The Commission considered the distinction between LV and HCV steering systems, as well  as  the  distinction  between  sales  to
    OEM/OESs and to the IAM.[19]

32) The Notifying Party agrees with these segmentations and submits that steering gears would fall within the wider product market for "steering
    columns and intermediate shafts" as segmented between steering gears for LVs and HCVs, and sales to OEMs/OESs and to the IAM.

33) For the purposes of the present case, the exact product market definition for steering systems can be left open as the Notified  Transaction
    does not give rise to serious doubts as to its compatibility with the  internal  market  under  any  alternative  plausible  product  market
    definition.

    Transmission oil pumps (upstream market)

34) Transmission oil pumps regulate the flow of fluids in a transmission and have a significant impact on gear changing quality, efficiency  and
    durability of the transmission.

35) TRW currently manufactures and supplies LV transmission oil pumps to  manufacturers  of  LV  automatic,  automated  manual  and  dual-clutch
    transmissions. ZF currently purchases LV transmission oil pumps for  inclusion  in  its  LV  automatic,  automated  manual  and  dual-clutch
    transmissions. TRW does not, however, currently supply ZF with such LV transmission oil pumps, as ZF's LV  transmissions  use  a  technology
    with which TRW's pumps are incompatible. Also, TRW does not manufacture or sell HCV transmission oil pumps.

36) The Commission concluded that transmission oils pumps[20] constitute a separate product market and considered  that  a  distinction  between
    sales to OEMs and the IAM is not relevant in relation to this product, as transmission oil pumps tended to last  for  the  lifetime  of  the
    vehicle.[21] Accordingly, no real IAM would exist for this product.

37) The Notifying Party considers that a sub-segmentation between transmission oil pumps using vane pump-technology  and  those  using  external
    gear pump-technology may apply, although it submits that the Notified Transaction does not raise concerns as to its compatibility  with  the
    internal market regardless of the precise definition of the relevant product market.

38) For the purposes of the present case, the exact product market definition can be left open, as serious doubts do not arise under any product
    market definition considered on the market for transmission oil pumps.

    Transmissions (downstream market)

39) Transmissions are part of a vehicle's powertrain, transferring power from the vehicle's engine to its wheels.

40) ZF currently manufactures LV automatic, automated manual and dual-clutch transmissions that include transmission oil  pumps  purchased  from
    third parties. As regards its HCV automatic and automated manual transmissions, ZF designs  and  manufactures  all  transmission  oil  pumps
    itself.

41) In past decisions[22] the Commission considered that there are different product markets for automatic and  manual  transmissions,  each  of
    which to be further divided between transmission for LVs and for HCVs.[23] The Commission has previously noted that automatic  transmissions
    are exclusively supplied to OEMs/OESs.[24] Similar to transmission oil pumps, a distinction between the OEM/OES and IAM  channels  therefore
    does not apply in relation to this product. The Commision ultimately left the exact product market definition open.

42) The Notifying Party submits that it is not necessary to reach a definitive view on the relevant product  market,  given  that  even  on  the
    narrowest basis (assuming separate relevant markets to exist for automatic, automated manual and  dual-clutch  transmissions)  the  Notified
    Transaction would not impede competition within the EEA.

43) For the purposes of the present case, the exact delineation of the market for transmissions can be left open  as  the  Notified  Transaction
    does not give rise to serious doubts as to its compatibility with the  internal  market  under  any  alternative  plausible  product  market
    definition.

2 Geographic market definition for both horizontal and vertical markets

44) The Commission has concluded in past decisions that the geographic scope of the markets for the sale of individual automotive components  to
    the OEMs/OESs market is, at least, EEA-wide[25] and that the geographic  scope  of  the  markets  for  the  sale  of  individual  automotive
    components to the IAM markets is at least national in scope[26], with a possible trend towards an EEA-wide market.

45) With regard to sales to OEMs/OESs, the Notifying Party submits that these markets have significantly widened over time,  especially  due  to
    the ease of transportation (including from countries outside the EEA), and therefore they should be considered global in scope or  at  least
    EEA-wide.

46) With respect to sales to the IAM, the Notifying Party submits that the scope of the markets should be defined as EEA-wide,  since  customers
    are international wholesalers or pan-European buying groups, sourcing at EEA  level.  In  addition,  production  plants  located  in  a  few
    countries serve the entire EEA.

47) With specific regard to chassis components, the results of the market investigation indicate that the markets  for  HCV  chassis  components
    supplied to OEM/OES is EEA-wide. The majority of OEM/OES customers stated that they purchase HCV chassis components at EEA  level:[27]  this
    is because of the need to meet specific regional requirements and regulations and have suppliers close to their production sites.[28] For LV
    chassis components the results of the market investigation were inconclusive. Although some respondents indicated that they purchase at  EEA
    level in order to have the supplier close to their production site, others purchase at worldwide level and responded  that  their  technical
    specifications can generally be met regardless of the location of the supplier.[29]

48) As regards the sales to the IAM, the results of the market investigation indicated these would be national in scope.[30]

49) Taking into account both the results of the market investigation and the Commission's past decisions, the competitive  assessment  below  is
    conducted assuming for all product markets and possible sub-segments that LV and HCV sales to OEM/OES are EEA wide markets and that  LV  and
    HCV sales to the IAM are national markets.

50) For the purposes of the present case the exact geographic market definition can ultimately be left open as any serious doubts raised by  the
    Notified Transaction are addressed by the commitments proposed by the Notifying Party.

    3 Competitive assessment - horizontally affected markets

1 On the basis of the abovementioned product and geographic market definitions, the Notified  Transaction  will  lead  to  horizontally  affected
       markets in the potential sub-segments for: (1) the manufacture and supply of LV and HCV chassis  components  to  OEMs/OESs  at  EEA  level
       (including for each potential sub-segment for LV suspension ball joints, LV control arms, LV tie rods and  LV  stabilizer  links  and  HCV
       torque rods, HCV v-links, HCV tie rods, HCV drag links); (2) the manufacture and supply of LV and HCV chassis components sold to  the  IAM
       at national level; (3) the manufacture and supply of LV and HCV shock  absorbers  sold  to  the  IAM  at  national  level,  and;  (4)  the
       manufacture and supply of HCV steering gears sold to the IAM in Austria.The EEA OEM/OES market for LV and HCV chassis components

51) The Parties are the number 1 (ZF) and number 2 (TRW) players on each of the alternative overall markets for (i) the manufacture  and  supply
    of LV and HCV chassis components to OEMs/OESs in the EEA; (ii) the manufacture and supply of LV chassis components to OEMs/OESs in the  EEA;
    and (iii) the manufacture and supply of HCV chassis components to OEMs/OESs in the EEA.

52) As can be seen from the table 1 below, the Parties furthermore are the number 1 (ZF) and number 2  (TRW)  players  for  LV  suspension  ball
    joints to OEM/OES; player number 1 and number 4 for LV control arms to OEMs/OESs; and player number 1 and number  5  for  LV  tie  rods  and
    stabilizer links to OEM/OES. Consequently, other competitors have limited market shares, each of them with  market  shares  [0-5]%  in  most
    cases and in any case [10-20]%.

    Table 1 – OEM/OES sales of LV chassis components in the EEA

|LV Chassis Components to OEM/OES in EEA in 2013 (by volume  -        |                 |               |                  |
|captive production excluded)                                         |ZF               |TRW            |Combined          |
|LV Suspension Ball Joints                                            |[60-70]%         |[20-30]%       |[80-90]%          |
|LV Control Arms                                                      |[20-30]%         |[5-10]%        |[30-40]%          |
|LV Tie Rods                                                          |[50-60]%         |[0-5]%         |[50-60]%          |
|LV Stabilizer Links                                                  |[50-60]%         |[0-5]%         |[50-60]%          |
|All LV Chassis Components                                            |[40-50]%         |[5-10]%        |[50-60]%          |

       Source: Form CO

53) On the EEA market for LV suspension ball joints to OEM/OES, the Parties are players number 1 and number 2 and their  combined  market  share
    post-transaction will reach almost [90-100]% with an increment of [20-30]%. Other players on this market are THK/Rhythm ([0-5]%), Somic ([0-
    5]%), CTR ([0-5]%), Musashi ([0-5]%) and Iljin ([0-5]%).

54) On the EEA market for LV control arms to OEM/OES, the Parties are players number 1 and number 3 on the market[31] and their combined  market
    share post-transaction will be [30-40]% with an increment of [5-10]%. Other players on this market include Erdrich Umformtechnik ([10-20]%),
    Gestamp ([5-10]%), Fuchs ([5-10]%), Benteler ([5-10]%), Georg Fischer ([0-5])%.

55) On the EEA market for LV tie rods to OEM/OES, the Parties are players number 1 and number 6 on the market and their  combined  market  share
    post-transaction will be [50-60]% with an increment of [0-5]%. Other players on this market include JTEKT ([5-10]%),  CTR  ([5-10]%),  Somic
    ([0-5]%), THK/Rhythm ([0-5]%) and Musashi ([0-5]%).

56) On the EEA market for LV stabilizer links to OEM/OES, the Parties are players number 1 and number 5 and their combined  market  share  post-
    transaction will be [50-60]% with an increment of [0-5]%. Other players on this market include Inauxa ([10-20]%), THK/Rhythm ([10-20]%), HQM
    Sachsenring ([5-10]%), Mubea ([0-5]%) and Iljin ([0-5]%).

    Table 2 – OEM/OES sales of HCV chassis components in the EEA

|HCV Chassis Components to OEM/OES in EEA in 2013 (by volume -        |              |              |                  |
|captive production excluded)                                         |ZF            |TRW           |Combined          |
|HCV Torque Rods                                                      |[60-70]%      |[10-20]%      |[70-80]%          |
|HCV V-Links                                                          |[60-70]%      |[5-10]%       |[60-70]%          |
|HCV Tie Rods                                                         |[40-50]%      |[30-40]%      |[70-80]%          |
|HCV Drag Links                                                       |[40-50]%      |[10-20]%      |[60-70]%          |
|All HCV Chassis Components                                           |[50-60]%      |[10-20]%      |[70-80]%          |

       Source: Form CO

57) On the various potential sub-segments for HCV, the Parties are players number 1 and number 2 for torque rods, tie rods and drag  links,  and
    players number 1 and number 4 for v-links. With the exception of the market for v-links, where the Parties  face  two  competitors,  one  of
    which holds [20-30]% of the market. For each of the other markets the remaining competitors has only limited market shares ranging from  [0-
    5]% to [5-10]%.

58) On the EEA market for HCV torque rods to OEM/OES, the Parties are players number 1 and number 2 on the  market  and  their  combined  market
    share post-transaction will be [70-80]% with an increment of [10-20]%. The Parties competitors  on  this  market  include  Ditas  ([5-10]%),
    Tenneco ([5-10]%) and Kongsberg ([0-5]%)

59) On the EEA market for HCV V-links to OEM/OES, the Parties are players number 1 and number 4 on the market and their  combined  market  share
    post-transaction will be [60-70]% with an increment of [5-10]%.[32] Other players on this market include Kongsberg ([20-30]%) and Ditas ([5-
    10]%).

60) On the EEA market for HCV tie rods to OEM/OES, the Parties are players number 1 and number 2 on the market and their combined  market  share
    post-transaction will be [70-80]% with an increment of [30-40]%. Other players on this market include Ocap ([0-5]%), Ditas ([0-5]%), Pailton
    ([0-5]%) and Heyd ([0-5]%).

61) On the EEA market for HCV drag links to OEM/OES, the Parties are players number 1 and number 2 on the market and their combined market share
    post-transaction will be [60-70]% with an increment of [10-20]%. Other players on this market include Ocap ([0-5]%), Ditas ([0-5]%) and Heyd
    ([0-5]%).

       The Notifying Party's arguments

62) The Notifying Party submits that the Notified Transaction will not affect competition in the supply of chassis  components  in  the  OEM/OES
    segments in the EEA due to the following factors:

       i. TRW is not ZF’s closest competitor, and is a less significant competitive constraint on ZF than might  be  suggested  by  the  Parties’
       estimated market shares. With the exception of suspension ball joints, TRW’s share  of  other  chassis  components  is  modest  and  other
       competitors exert a more significant constraint on ZF than TRW;[33]

       ii. there is a large number of significant EEA-based suppliers of chassis components able to bid credibly against ZF and TRW and  in-house
       suppliers impose a significant constraint on LV component manufacturers;

       iii. OEMs exercise very substantial buyer power. OEMs are protected by strict contractual provisions on price and other terms, they do not
       tolerate any attempts of bundling or tying as they would  seek  alternative  sources  of  supply.  OEM  procurement  involves  competitive
       tendering.

       The Commission's assessment

63) The Commission concludes that the Notified Transaction will give rise to serious doubts as to its compatibility with the internal market  as
    a result of the horizontal overlap between the Parties activities in the markets for manufacture and supply of LV and HCV chassis components
    to OEMs/OESs in the EEA, for the reasons set out below.

64) First the results of the market investigation indicate that, contrary to the Notifying Party's arguments, TRW would actually be ZF's closest
    competitor.[34]

65) Second, the market investigation indicated that the competitive constraint exercised by other competitors would be  much  smaller  than  the
    Notifying Party's estimates. Specifically, in the case of HCVs  chassis  components,  the  Notifying  Party  would  virtually  be  the  only
    manufacturer available to provide the quality and quantities required by OEMs. In the case of LV chassis components, even though  there  are
    other suppliers, these competitors are much smaller than the Notifying Party.

66) Third, the market investigation showed that customers are - to a significant extent - dependent on the Parties for the supply of  the  above
    mentioned products, for the following reasons:

       a. customers face difficulties in finding other suppliers of equivalent quality to that of  the Parties';[35]

       b. the majority of respondents to the market investigation stated that over the last 5 years entry was limited for LV (VT2i, a  TRW  spin-
          off in France in 2013 and Superalloy Taiwan in 2014) and that no entry is expected in the coming 5 years for LV;[36]

       c. the majority of respondents indicated that over the last 5 years there was no entry for HCV. With regard to future  entry  on  the  HCV
          segment, the market investigation was inconclusive but it showed that ZF and TRW will still be indispensable for developing  new  parts
          regardless of such entry.[37]

67) Fourth, the market investigation has clearly shown that customers generally do not engage in multi-sourcing for LV or HCV chassis components
    and that, when they do multisource, this is limited to the Parties.[38]

68) Fifth, the results of the market investigation highlighted that the large majority of customers would not start producing LV nor HCV chassis
    components even in case of an increase on prices between 5 and 10%.[39] Therefore, the Commission considers that in-house production  of  LV
    and HCV chassis components does not, contrary to the Parties' arguments, exert a  competitive  constraint  nor  is  it  a  potential  future
    competitive constraint on the suppliers of chassis components.

69) Sixth, regarding the impact of the transaction, the large majority of customers considered that the transaction will impact  their  business
    for LV chassis components[40] and HCV chassis components.[41] The majority of customers considered that the intensity of competition in  the
    OEM/OES market would decrease post-transaction for LV chassis components [42] and for HCV chassis  components.[43]  The  large  majority  of
    customers stated that the price level in Europe for automotive chassis  components  on  the  OEM/OES  market  for  LV  would  increase  post
    transaction.[44] The large majority of customers also stated that the price level in Europe for automotive chassis components on the OEM/OES
    market for HCV would increase post transaction. [45]

70) Finally, in general, the market investigation indicated that the merger of two of the largest companies in the  production  of  LV  and  HCV
    chassis components would have a significant negative impact on the market. In particular, customers' replies  to  the  market  investigation
    showed that for LV chassis components the transaction would entail a reduction in the number of players in the market while for HCV  chassis
    components the transaction would lead to a monopolistic situation and would therefore limit competition on the market.[46]

71) In conclusion, the Commission considers that the transaction raises serious  doubts  as  to  its  compatibility  with  the  internal  market
    regarding the EEA OEM/OES market for LV and HCV chassis components, because: (i) TRW and ZF are closest competitors; (ii) customers  are   -
    to a significant extent - dependent on the Parties as it is difficult to find other suppliers of products of quality as high as the  Parties
    and entry is limited or non-existent and not expected to occur in the future; (iii) customers do not generally multi-source  from  suppliers
    other than the Parties; (iv) customers would not start producing LV nor HCV chassis components in-house; (v) customers considered  that  the
    transaction will have a significant negative  impact as the intensity of competition will decrease and  price  level  would  increase  post-
    transaction.

2 The national markets for LV and HCV chassis components sold to the IAM

72) As regards the manufacture and supply of both LV and HCV chassis components to the IAM, the following national markets are affected  by  the
    Notified Transaction: Belgium, Bulgaria, Croatia, Cyprus, Denmark, Estonia, Finland, Germany, Greece,  Hungary,  Italy,  Latvia,  Lithuania,
    Norway, Poland, Portugal, Romania, Slovakia, Slovenia, and Sweden.

73) As regards the manufacture and supply of LV chassis components to the IAM, the following national  markets  are  affected  by  the  Notified
    Transaction: Belgium, Bulgaria, Croatia, Cyprus, Denmark, Estonia, Finland, Germany, Greece,  Hungary,  Italy,  Latvia,  Lithuania,  Norway,
    Poland, Portugal, Romania, Slovakia, Slovenia, and Sweden.

74) As regards the manufacture and supply of HCV chassis components to the IAM, the following national markets  are  affected  by  the  Notified
    Transaction: Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia,
    Lithuania, the Netherlands, Norway, Poland, Portugal, Romania, and the United Kingdom.

75) As regards the overall market for LV and HCV chassis components sold to the IAM, in some countries the Parties' combined market  shares  are
    [50-60]% with increments ranging from [0-5]% to [20-30]%.[47] Estonia and Lithuania show the highest combined market shares of  respectively
    [80-90]% and [90-100]%, involving increments of respectively [10-20]% and [30-40]%.

76) The Parties' combined market shares in the IAM market for LV chassis components are  [30-40]%  in  most  of  the  EEA  countries  listed  in
    paragraph 74 above, with increments ranging from [0-5]% to [30-40]%.  In  particular,  Parties  have  the  highest  shares  in  Estonia  and
    Lithuania, with [80-90]% and [90-100]% respectively, and increments of [10-20]% and [30-40]% in each case.

77) The Parties' combined market shares in the IAM market for HCV chassis components are [30-40]%  in  most  of  the  EEA  countries  listed  in
    paragraph 75 above, with increments ranging from [0-5]% to [30-40]%. The Parties have the highest combined market shares in Italy  ([70-80]%
    with an increment of [20-30]%). On the other hand, a significant number of EEA countries show insignificant increments ranging  from  [0-5]%
    to [0-5]%.

       The Notifying Party's arguments

78) The Notifying Party argues that the Notified Transaction will not give rise to serious doubts as to  its  compatibility  with  the  internal
    market regarding chassis components sold to the IAM for the following reasons.

79) First, there would be extremely low increments in the Parties' estimated  combined  market  shares.  Second,  there  would  continue  to  be
    significant competition in these countries, as well as from neighbouring countries  and  the  rest  of  the  EEA.  Third,  there  are  large
    purchasing groups (the four largest being ADI, ATR, GAU, and Temot) that represent distributors throughout the EEA and give them substantial
    buyer power. Fourth, there are numerous large EEA-based distributors active in numerous member states. Consequently,  post-merger,  ZF  will
    face significant competitive constraints in the form of strong competition from existing competitors and strong customer groups.

       The Commission's assessment

80) The Commission considers that the Notified Transaction is unlikely to give rise to serious doubs as to its compatibility with  the  internal
    market as a result of the horizontal overlap between the Parties activities in the EEA-wide or national  markets  for  LV  and  HCV  chassis
    components sold to the IAM.

81) First, during the Commission's market investigation, no concerns were raised in relation to the manufacture and supply of chassis components
    to the IAM in the EEA. Some respondents explained in this regard that the Parties' components sold to the IAM are largely complementary  and
    that, therefore, the Notified Transaction would not impact competition in this sales channel.[48]

82) Second, the increment in the share of the Notifying Party in the various national markets for LV and HCV chassis components sold to the  IAM
    brought about by the Notified Transaction is generally low. Although the increment is significant in a limited number of EU  member  states,
    the Commission furthermore notes that the Parties' position in the IAM is subject to significant fluctuation. For example, between 2011  and
    2012, the Parties' combined share of the manufacture and supply of LV and HCV chassis components sold to the IAM in  Sweden  decreased  from
    [70-80]% to [50-60]%. Similarly, in Poland, the Parties combined share of the manufacture and supply of LV and HCV chassis  components  sold
    to the IAM decreased from [60-70]% to [40-50]% between 2011 and 2013. Such strongly fluctuating market shares run counter to the notion of a
    structural position held by the Parties on any national market.

83) Third, the Commission notes that several large centralised purchasing groups are active across all the  national  markets  for  LV  and  HCV
    chassis components sold to the IAM. These purchasing groups negotiate terms with automotive component manufacturers such as the  Parties  on
    behalf of wholesalers and distributors of spare parts. Given their degree of  concentration  and  geographic  coverage,  they  constitute  a
    significant force in negotiations with manufacturers of automotive spare parts.

84) Fourth, the Notifying Party indicated that TRW currently manufactures approximately half of its LV chassis  components  sold  into  the  IAM
    channel in the EEA [outside of the EEA] and would therefore not impact the EEA.[49]

85) Fifth, several strong competitors that are active across the EEA in the manufacture and supply of LV and HCV chassis components to  the  IAM
    remain post-merger. These include Bilstein and  Federal Mogul, which companies are active in virtually all affected IAM  chassis  components
    markets.[50]

86) The Commission considers that these points support the notion that barriers to enter the various national markets for  LV  and  HCV  chassis
    components sold to the IAM are generally low.

87) Finally, and in any event, any potential serious doubts to which the Notified Transaction may nonetheless  give  rise  in  relation  to  the
    horizontal overlap on the national markets for LV and HCV chassis components sold to the IAM will be addressed by  the  commitments  entered
    into by the Notifying Party; these namely include an IAM chassis components manufacturing capability of OES identical parts  (both  for  the
    Dačice and Krefeld manufacturing plants (see section V below)). The purchaser of the divestment business will accordingly be  free  to  sell
    OES identical chassis components into the IAM and, therefore, to continue to compete with the Notifying Party post-merger.

3 The national markets for LV and HCV shock absorbers sold to the IAM

88) As regards the manufacture and supply of LV and HCV shock absorbers to the IAM, the following national markets are affected by the  Notified
    Transaction: Belgium, Cyprus, Estonia, Finland, Germany, Hungary, Italy, Latvia, Lithuania, Romania, Sweden and the United Kingdom. In  each
    of these markets, the Notified Transaction will give rise to very moderate increments, ranging from [0-5]% to [5-10]%.

89) For the manufacture and supply of LV shock absorbers to the IAM, the following national markets are affected by  the  Notified  Transaction:
    Belgium, Cyprus, Estonia, Finland, Germany, Italy, Latvia, Lithuania, Sweden and the United Kingdom. In each of these markets, the  Notified
    Transaction will give rise to moderate increments, ranging from [0-5]% to [5-10]%.

90) For the manufacture and supply of HCV shock absorbers to the IAM, the following national markets are affected by the  Notified  Transaction:
    Belgium, Croatia, Estonia, Finland, France, Germany, Hungary, Italy, Latvia, Lithuania, the Netherlands, Poland, and  Romania.  In  each  of
    these markets, the Notified Transaction will give rise to increments ranging from [0-5]% to [10-20]%.

       The Notifying Party's arguments

91) The Notifying Party argues that the Parties have moderate market shares with very low  increments  and  that  they  will  continue  to  face
    significant competition from other suppliers in these countries, as well as from  neighbouring  countries  and  the  rest  of  the  EEA.  In
    addition, there are large distributors active across broad regions, and there are large purchasing groups with significant  buyer  power  in
    almost every EEA country.

       The Commission's assessment

92) The Commission considers that the transaction does not raise serious doubs as to  its  compatibility  with  the  internal  market  regarding
    horizontal overlaps in the national markets for LV and HCV shock absorbers sold to the IAM.

93) First, even when taking into account the potential narrower segment split by LV/HCV and taking into account a national geographic scope, the
    increments in the Parties' market shares are low, with the highest ΔHHI amounting to 496.

94) Second, several strong competitors that are active across the EEA in the manufacture and supply of LV and HCV chassis components to the  IAM
    remain post-merger. These include Monroe, KYB, Bilstein, Koni and Sabo, which are active  in  virtually  all  affected  IAM  shock  absorber
    markets.[51] This wide geographic coverage of both the Parties and their competitors furthermore points towards wider than national  markets
    for LV and HCV shock absorbers sold to the IAM. On an EEA-wide basis, the Parties individual and  combined  shares  are  significantly  more
    limited, with the highest ΔHHI amounting to 149.

95) Third and finally, the Commission notes that several large centralised purchasing groups are active across all the national markets  for  LV
    and HCV chassis components sold to the IAM. These purchasing groups negotiate terms with automotive  component  manufacturers  such  as  the
    Parties on behalf of wholesalers and distributors of spare parts.

4 The national markets for HCV steering gears sold to the IAM

96) The Parties' activities in the supply of steering systems components to the IAM only give rise to an affected  market  in  relation  to  HCV
    steering gears sold to the IAM in Austria. In Austria, the combined market  share  of  the  Parties  will  amount  to  [30-40]%  with  TRW's
    activities adding a negligible increment of [0-5]%.

97) Given the moderate market shares and the negligible increment on the IAM market for HCV steering gears, the Commission  considers  that  the
    Notified Transaction does not raise serious doubts as to its compatibility with the internal market as a result of the horizontal overlap in
    the IAM market for HCV steering gears in Austria.

Conclusion on horizontal effects

98) The Commission considers that the Notified Transaction does not raise serious doubts with regard to the horizontal relations in the national
    markets for LV and HCV shock absorbers sold to the IAM and steering gears sold to the  IAM.  However,  the  Commission  considers  that  the
    transaction raises serious doubts as to its compatibility with the internal market with regard to the markets for the supply of LV  and  HCV
    chassis components to OEM/OES at EEA level. Any potential serious doubts  deriving  from  the  national  markets  for  LV  and  HCV  chassis
    components sold to the IAM will be addressed by the commitments entered into by the Notifying Party in  relation  to  the  markets  for  the
    supply of LV and HCV components to OEMs/OESs.

    Affected vertical markets

Competition effects of a vertical merger

99) A vertical merger may potentially give rise, in particular, to two types of competition effects: input foreclosure and customer foreclosure.

100) Input foreclosure arises where, post-merger, the new entity would be likely to restrict access to the products or  services  that  it  would
    have otherwise supplied absent the merger, thereby raising its downstream rivals' costs by making it harder for them to obtain  supplies  of
    the input under similar prices and conditions as absent the merger.[52] Customer foreclosure may occur when a supplier  integrates  with  an
    important customer in the downstream market. Because of this downstream presence, the merged entity may foreclose  access  to  a  sufficient
    customer base to its actual or potential rivals in the upstream market (the input market) and reduce their ability or incentive to  compete.
    In turn, this may raise downstream rivals' costs by making it harder for them to obtain supplies of  the  input  under  similar  prices  and
    conditions as absent the merger.

101) In order for input or customer foreclosure to be a concern, three conditions need to be met post-merger: (i)  the  merged  entity  needs  to
    have the ability to foreclose its rivals; (ii) the merged entity needs to have  the  incentive  to  foreclose  its  rivals;  and  (iii)  the
    foreclosure strategy needs to have a significant detrimental effect on competition on  the  downstream  market  (input  foreclosure)  or  on
    consumers (customer foreclosure). In practice, these factors are often examined together since they are closely intertwined.

4 Competitive assessment - affected vertical markets

102) The Notified Transaction gives rise to the following vertically affected markets:

       i. the upstream EEA-wide market for the manufacture and sale of LV transmission oil pumps (TRW) and the EEA-wide  downstream  markets  for
       the manufacture and sale of LV automated manual, dual-clutch and automatic transmissions sold to OEMs/OESs;

       ii. the upstream EEA-wide market for the manufacture and sale of LV tie rods sold to OEMs/OESs and the downstream EEA-wide market for  the
       manufacture and sale of LV steering systems sold to OEMs/OESs.

       Transmission oil pumps (TRW) – Transmissions (ZF)

103) The Notified Transaction will give rise to vertically affected markets covering the manufacture and supply of LV transmission oil  pumps  to
    OEMs/OESs in the EEA and the manufacture and supply of LV automatic, automated manual and dual-clutch transmissions to OEMs/OESs in the EEA.
    At the upstream level, TRW currently has a market share of around [20-30]% (2013 figure both in terms of volume and value and regardless  of
    whether captive production is taken into account). At the downstream level, ZF currently has a share of between [50-60]% (2013 figure  based
    on volume and excluding captive production) and [70-80]% (2013 figure based on value and excluding captive production) of a market  for  the
    manufacture and supply of LV automatic and dual-clutch transmissions.

       The Notifying Party's arguments

104) The Notifying Party argues that the LV transmission oil pumps produced by TRW differ  from  those  used  by  ZF  for  inclusion  in  its  LV
    automated manual, dual-clutch and automatic transmissions. TRW's LV transmission oil pumps would use an external gear  technology  which  is
    incompatible with ZF's LV automatic, automated manual and dual-clutch transmission and, therefore,  must  be  regarded  as  belonging  to  a
    different product market. The Notifying Party explains in that regard that ZF uses so-called 'vane pumps' in its 8 and 9 speed transmissions
    in order to achieve a significant reduction in the torque required for operation, something that external gear  pumps  would  be  unable  to
    achieve to the same level.

105) In case TRW's LV transmission oil pumps would belong to a relevant product that is separate from LV transmission oil  pumps  that  use  vane
    pump technology as required by ZF, there would be no vertical relationship between the Parties.

106) In the event these different technologies were part of an overall "transmission oil pumps" market, the Notifying Party states that it  would
    hold an upstream market share of around [20-30]% (for TRW). Accordingly, the Notifying Party argues that the Notified Transaction would  not
    give rise to a risk of either input foreclosure or customer foreclosure insofar as this vertical overlap is concerned.

107) The Notifying Party further argues that it would not have the ability to engage in foreclosure as TRW does not, currently, manufacture vane-
    pump technology transmission oil pumps, compatible with ZF's transmissions. The Notifying Party would therefore face a significant lead time
    (amounting to at least 22 months) for the development of such compatible transmission oil pumps, required for ZF to switch its sourcing from
    external suppliers to TRW. Besides the need to develop the vane-pump technology in-house, ZF would also be required to go through a  lengthy
    testing process following a change of supplier, both in-house as well as with the relevant OEM  customer(s).  Also,  some  of  the  existing
    supply agreements entered into between ZF and third-party transmission oil pump suppliers would, in the case of  an  attempted  foreclosure,
    continue to constitute a financial cost (in the form of required payments of minimum guarantee-clauses or otherwise).

       The Commission's assessment

108) Notwithstanding the fact that TRW does not, currently, manufacture transmission oil pumps that are compatible  with  ZF's  LV  transmissions
    (i.e. those using vane technology), the Commission considers  that  the  Parties'  respective  activities  in  transmission  oil  pumps  and
    transmission do give rise to a vertically affected market. First, the cost for TRW to develop vane  technology  transmission  oil  pumps  is
    highly limited, amounting to only EUR […]. The Parties in this regard acknowledge that TRW could start  producing  such  pumps.  Second,  ZF
    currently competes at the downstream level with manufacturers of LV transmissions that do incorporate TRW's transmission  oil  pumps.  Third
    and finally, the Commission has previously established that transmission oil pumps constitute a separate relevant  product  market,  without
    considering a further delineation based on pump technology.[53]

    Input foreclosure

109) First, the Commission notes that TRW currently has a market share of around [20-30]% (in value)  in  the  market  for  the  manufacture  and
    supply of LV transmission oil pumps to OEMs/OESs in the EEA. Such share is unlikely to confer upon the merged entity a significant degree of
    upstream market power required for it to be able to significantly affect the availability of LV transmission oil pumps. The Commission  also
    notes that besides TRW, several other suppliers of LV transmission oil pumps are active in the EEA that could replace TRW in the event of an
    attempted input foreclosure, namely: SHW, Ixetic (Magna), KPSG, GPM, Marzocchi, Pompe, Caproni, FTE Automotive and Mahle.

110) Second, based on data on the costs of transmission oil pumps and sales of transmissions provided by the  Notifying  Party,  LV  transmission
    oil pumps represent less than [0-5]% of the price of, for example, LV automatic transmissions and  they  do  not,  therefore,  constitute  a
    significant cost factor that could have a negative impact on the propositions of the merged entity's downstream competitors. In this regard,
    the Commission notes that the Notifying Party similarly submits that transmission oil pumps generally account for only [0-5]% of the overall
    cost of a transmission.

111) Third, ZF currently relies fully on LV transmission oil pump suppliers other than TRW given that the latter's LV transmission oil pumps  use
    a technology that is incompatible with ZF's LV transmissions. Given that the Notifying Party explained that the merged entity would face  an
    absolute minimum lead time of [18-24] months to have TRW develop LV transmission oil pumps that are compatible with ZF's  LV  transmissions,
    the latter would itself continue to rely on third-party manufacturers of LV transmission oil pumps during a significant period of time after
    any attempted foreclosure of access to TRW's transmission oil pumps. Accordingly, ZF would not, during this transitional period, be able  to
    benefit from the foreclosure at the downstream level due to it not yet being able to internalise the  cost  of  TRW's  LV  transmission  oil
    pumps.

112) Finally, save for one OEM customer of LV transmissions, none of the respondents to the Commission's market investigation –  including  TRW's
    competing oil pump suppliers and ZF's customers for LV transmissions – expect the vertical integration  of  these  activities  to  have  any
    impact on either the supply of LV transmission oil pumps or on the price of LV automated manual and/or automatic transmissions.[54] This one
    respondent moreover considered the vertical integration of TRW's transmission oil pump capability with ZF's automatic transmission  business
    to possibly be pro-competitive, as it could provide a scope for cost reductions.[55]

    Customer foreclosure

113) First, the Commission notes that TRW does not currently produce LV transmission oil pumps  that  are  compatible  with  ZF's  LV  automatic,
    automated manual and dual-clutch transmissions. Therefore, the merged entity cannot immediately switch its sourcing of LV  transmission  oil
    pumps to TRW. Accordingly, ZF will not be able to immediately restrict access for suppliers of LV transmission oil pumps  to  a  significant
    downstream customer base, as is required by the Commission's non-horizontal guidelines for a vertical merger to be able to  affect  upstream
    competitors.[56]

114) Second, based on the information provided by the Notifying Party, the merged entity would face an absolute minimum lead  time  of  at  least
    [18-24] months for the development of LV transmission oil pumps that are compatible with ZF's LV transmissions  (i.e.  LV  transmission  oil
    pumps using vane pump-technology, rather than external gear-technology). This lead time includes the testing and certification exercise that
    ZF's OEM customers would require for allowing any change of sub-supplier under their current (mainly) open-ended contracts with ZF  for  the
    supply of LV transmission oil pumps. Given the involvement of the OEM customers,  the  cost  that  the  latter  will  face  in  testing  and
    certifying a new sub-supplier for transmission oil pumps, and given the significant lead time required, the  ability  of  ZF  to  engage  in
    customer foreclosure vis-à-vis its suppliers of LV transmission oil pumps with the  aim  of  increasing  the  prices  of  its  LV  automatic
    transmission is, therefore, limited.

115) Third, as already mentioned above, LV transmission oil pumps do not constitute a significant  cost  factor  relative  to  the  price  of  LV
    transmissions and are, therefore, unlikely to allow ZF to increase the prices of its LV automatic  transmissions,  rendering  any  attempted
    customer foreclosure devoid of purpose.

116) Finally, as already mentioned above, no issues were raised in this respect during the Commission's market investigation,  neither  by  TRW's
    competing oil pump suppliers, nor by ZF's customers for LV transmissions.

    Conclusion

117) In light of the above and on the basis of the evidence before it, the Commission considers that the Notified Transaction will not give  rise
    to serious doubts as to its compatibility with the internal market as a result of  the  vertical  link  between  TRW's  upstream  activities
    involving the manufacture and supply of LV transmission oil pumps to OEMs/OESs in the EEA  and  ZF's  downstream  activities  involving  the
    manufacture and supply of LV automatic, automated manual and dual-clutch transmissions to OEMs/OESs in the EEA.

       LV tie rods (ZF and TRW) – LV steering systems (TRW)

118) LV chassis components are an input to LV steering systems. Based on information provided by the Notifying Party  it  however  appears  that,
    currently, ZF's LV tie rod is the only product category of which a significant quantity is  supplied  to  third-party  LV  steering  systems
    manufacturers in the EEA. Indeed, ZF would currently supply around [80-90]% (both in terms of value and volume) of its LV tie rods  sold  in
    the EEA as a Tier 2[57] supplier to LV steering systems manufacturers, rather than directly to OEMs/OESs.[58]

119) At the narrowest possible product market definition, the Notified Transaction will  therefore  give  rise  to  vertically  affected  markets
    covering the manufacture and supply of LV tie rods sold into the OEM/OES channel in the EEA and the manufacture and supply of  LV  hydraulic
    and electronic power steering systems sold into the OEM/OES channel in the EEA. Both ZF and TRW are currently active on the  upstream  level
    in the manufacture and supply of LV tie rods, where they hold a combined market share of between [50-60]% (2013 figure based on  volume  and
    excluding captive production) and [70-80]% (2013 figure based on value and excluding captive production). TRW is  currently  active  on  the
    downstream level respectively in the manufacture and supply of LV hydraulic  power  steering  systems  to  OEMs/OESs  in  the  EEA  and  the
    manufacture and supply of LV electronic power steering systems to OEMs/OESs in the EEA where it holds respective market shares  of  [10-20]%
    (LV hydraulic power steering systems, 2013 figure based on volume) and [10-20]% (LV electronic power steering systems, 2013 figure based  on
    volume).

    The Notifying Party's arguments

120) The Notifying Party argues that the vertical link between the manufacture and supply of LV tie rods to OEMs/OESs  and  the  manufacture  and
    supply of LV steering systems will not raise any competitive concerns, because it will neither have the ability nor the incentive to  engage
    in input foreclosure in relation to LV tie rods, for the following reasons

121) First, the Notifying Party explains that any attempted foreclosure would risk its entire business with the OEM  car  manufacturers,  as  the
    latter might retaliate for any disruption caused to their production by any attempted foreclosure by the  Notifying  Party  of  LV  steering
    suppliers from LV tie rods.

122) Second, any attempted full internalisation of the supply of LV tie rods within the Notifying Party would free up a third-party  capacity  of
    […] LV tie rods that are currently supplied by the TRW Divestment Business (part of the commitments that the  Notifying  Party  has  entered
    into) to TRW's steering business. This capacity would exceed the demand of competing LV steering manufacturers  currently  supplied  by  the
    Notifying Party and would therefore render any attempted input foreclosure strategy ineffective.

123) Third, the Notifying Party states that over 50% of its LV tie rods are supplied on "End-of-Lifetime" contracts, which  would  mean  that  it
    faces significant penalties in case of an early termination of supply. This would limit the likelihood that the merged entity  will  attempt
    to engage in input foreclosure in relation to LV tie rods.

124) Fourth, the Notifying Party claims that it did not pursue an input foreclosure strategy when  it  still  owned  ZF  Lenksysteme,  while  the
    latter's shares of the relevant downstream markets for the manufacture and supply of LV steering systems exceeded those  held  by  TRW's  LV
    steering business. Accordingly, the Notifying Party argues that the additional profit that it could earn from pursuing an input  foreclosure
    strategy would arguably be less than was the case prior to the Notified Transaction when ZF jointly controlled ZF Lenksysteme.

125) Fifth and finally, the Notifying Party would require a significant period of time for implementing any foreclosure strategy in  relation  to
    LV tie rods (of between 12 and 24 months), which would involve a high risk of penalties under its agreements with customers and likely  lost
    investments that would further limit the likelihood of the merged entity engaging in any kind of foreclosure strategy in relation to LV  tie
    rods..

    The Commission's assessment

    Input foreclosure

126) First, the Commission notes that the Notifying Party will, by the proposed commitments below, divest TRW's chassis components business to  a
    suitable third-party purchaser. This means that in case the merged entity were to attempt to foreclose its steering competitors'  access  to
    LV tie rods by fully vertically integrating ZF's LV tie rod business with TRW's steering business, the divested chassis components  business
    would cease to supply TRW's steering business. This would accordingly free up a third-party capacity of around […] million LV tie  rods[59],
    which exceeds the demand for LV tie rods that the merged entity could foreclose. Indeed, information provided by the Notifying  Party  shows
    that ZF currently supplies only […] million LV tie rods to third-party manufacturers of LV steering systems. Accordingly,  post-divestiture,
    the merged entity will not have the ability to engage in input foreclosure in relation to LV tie rods supplied to OEMs/OESs in the EEA.

127) Second, the merged entity will not have the ability to immediately cease supplying its current customers of LV tie rods,  as  the  Notifying
    Party estimates that it would take up to 2 years to fully integrate its LV  tie  rod  production  with  TRW's  LV  steering  business.  This
    significant lead time during which a vertical integration would gradually occur limits the  merged  entity's  ability  to  engage  in  input
    foreclosure, as it would allow its competitors significant time to seek and/or develop alternative supply.

128) Third, due to the high proportion of ZF's LV tie rods that are supplied on "End-of-Lifetime" contracts, ZF would face significant  penalties
    if it sought to terminate the supply of LV tie rods prior to the end  of  these  contracts.  Such  financial  penalties  further  limit  the
    likelihood that the merged entity will attempt to engage in input foreclosure in relation to LV tie rods.

129) Fourth, the Commission notes that prior to the Notified Transaction, ZF had a 50% stake in ZF Lenksysteme, a competitor  to  TRW's  steering
    business. In 2013, ZF Lenksysteme accounted for market shares of [20-30]% and [20-30]% for the respective markets  for  LV  hydraulic  power
    steering systems supplied to OEMs/OESs in the EEA and for LV electronic power  steering  systems  supplied  to  OEMs/OESs  in  the  EEA.  As
    mentioned above, TRW held respective shares of [10-20]% and [10-20]% of these markets in 2013. The 50% interest  that  the  Notifying  Party
    held, pre-merger, in the market shares of ZF Lenksysteme are therefore similar to the 100% interest that it will hold in the  market  shares
    of TRW steering. Regardless of the pre-existing degree of vertical integration that ZF  had  via  its  joint  venture  ZF  Lenksysteme,  the
    Notifying Party sold a significant amount of its LV tie rods to competing producers of LV steering systems (i.e. around […]% of  ZF's  total
    sales of LV tie rods, or around […]% of ZF's total sales of LV tie rods to LV steering system suppliers[60]). The fact  that  the  Notifying
    Party appears not to have engaged in input foreclosure in relation to LV tie rods regardless of  it  being  vertically  integrated  with  ZF
    Lenksysteme further supports the conclusion that the merged entity is unlikely to do so in the future.

130) Finally, no concerns were raised during the Commission's market investigation in relation to this vertical overlap  involving  LV  tie  rods
    and LV steering systems.[61]

    Customer foreclosure

131) The Commission notes that the merged entity will hold a limited share of the markets for the manufacture and  supply  of  LV  hydraulic  and
    electronic power steering systems. In line with the Commission's non-horizontal guidelines, these market  shares  cannot  be  considered  to
    confer upon the merged entity an ability to engage in customer foreclosure as they imply that a sufficiently large  customer  base  that  is
    likely to turn to independent suppliers will remain post-merger. Such alternative  customers  include  ZF  Lenksysteme  (holding  respective
    market shares of [20-30]% and of [20-30]% for LV hydraulic and electronic power steering systems supplied to OEMs/OESs in  the  EEA),  JTEKT
    Corporation (holding respective market shares of [20-30]% and [10-20]% of the afore markets),  and  Thyssenkrupp  Presta  Steering  (holding
    respective market shares of [10-20]% and [5-10]% of the afore markets).

    Conclusion

132) In light of the above, and on the basis of the information before it, the Commission considers that the Notified Transaction will  not  give
    rise to serious doubts as to its compatibility with the internal market as a result of the vertical overlap between ZF's and TRW's  upstream
    activities involving the manufacture and supply of LV tie rods to OEMs/OESs in  the  EEA  and  TRW's  downstream  activities  involving  the
    manufacture and supply of LV steering systems to OEMs/OESs in the EEA. .

5 General conclusion on the competitive assessment

133) In light of the above, and on the basis of the information before it, the Commission considers that the transaction  raises  serious  doubts
    as to its compatibility with the internal market with regard to the markets for the manufacture and supply of LV and HCV chassis  components
    to OEM/OES at EEA level.

       PROPOSED REMEDIES

134) In order to render the Notified Transaction compatible with the internal market, the Notifying Party has modified the  Notified  Transaction
    by entering into the following commitments under Article 6(2) of the Merger Regulation, which are annexed  to  this  decision  and  form  an
    integral part thereof (the "Commitments"[62]).

135) Pursuant to the Commitments, the Notifying Party commits to divest TRW’s businesses  in  the  design,  manufacturing  and  sale  of  chassis
    components (including suspension ball joints, control arms, tie rods, stabilizer links, torque rods, v-links and drag links) for OEM and OES
    customers in the EEA to an independent and unconnected party (the "TRW Divestment Business").

136) The TRW Divestment Business includes the following:

    (i) Two manufacturing plants located respectively in the Czech Republic (Dačice, which includes the chassis components plant and a  regional
    chassis component technical support centre) and Germany (Krefeld) (together the "Plants"). The premises and all machinery used in the Plants
    will also be included in the TRW Divestment Business. The Plants cover both LV and HCV chassis components.

    (ii) The chassis components division of TRW's R&D facility, which is currently based in [Germany]. The  chassis  components  R&D  capability
    covers the development of new designs (included related single components), the development of the production process steps  and  production
    parameters, the provision of engineering services to the Krefeld  plant,  and  teams  for  testing  and  validation,  advance  manufacturing
    engineering, engineering, prototypes, purchasing, sales and for marketing.  The  Notifying  Party  commits  to  create  suitable,  separated
    premises for the [German Research] Facility within the existing TRW [Germany] site, or to procure a suitable site within a 40 km  radius  of
    the current TRW [Germany] site, until the R&D Facility is relocated to a permanent site selected by the purchaser.

    (iii) The ownership of and right to use the active worldwide patents listed in Annex 5.1 of the Commitments for the entire life of  each  of
    the individual patents and the know-how for the operation of the production lines, including the know-how regarding ball joints.

    (iv) All licences, permits and authorisations necessary to operate the Plants, develop, market,  process  and  sell  the  products  and,  in
    general, to carry on the TRW Divestment Business.

    (v) The transfer of all the testing, production assets and  contracts  which  are  currently  owned  by  the  TRW  Divestment  Business,  in
    particular: (i) production and engineering support, (ii) advertising and communication if required by the purchaser, (iii)  relevant  detail
    for customers and their lists and supplier lists.

    (vi) The transfer of key personnel, composed of: (i) 1 operations director based in North America  who  will  also  serve  as  hold-separate
    manager, (ii) 1 finance director based in North America (iii) 12 key individuals for Dačice; (iv) 9 key individuals for Krefeld  and  (v)  5
    key commercial executives for the R&D capability.

    (vii) The transfer of 2 sales engineers based in […], France, and one sales engineer based in […], Italy, as well as the following  function
    groups that together cover all of the […] and […] persons that are currently  employed  respectively  at  the  Dačice  and  Krefeld  plants:
    Management, Finance Controlling, HR, Logistic, Shipping/Receiving, Maintenance, Process Engineering, Production, NPI, Quality,  Tool  Store,
    Works Council.

    (viii) The customer list, sales, marketing and promotional information as well as the contracts and purchase agreements.  In  addition,  the
    Notifying Party commits to provide the relevant details of the customer base for the products manufactured and  commercialised  by  the  TRW
    Divestment Business during the 12 month period preceding the date of adoption of the Commission's decision.

    (xi) The supplier list and all current supply agreements for the inputs to chassis components for HCV and LV as well as the details  on  the
    supplier base of the TRW Divestment Business during the 12 month period preceding the date of adoption of the Commission's decision.

    (x) Transitional services on a reasonable cost-plus basis to be agreed with the purchaser,  to  facilitate  the  transfer  of  the  TRW  EEA
    Divestment Business for up to a period of […] months, if such services cannot be immediately provided either by the  purchaser  of  the  TRW
    Divestment Business or an external service provider.

137) In addition, the Notifying Party has entered into related commitments, inter alia regarding the separation of the  TRW  Divestment  Business
    from its retained businesses, the preservation of the viability, marketability and competitiveness of the TRW  Divestment  Business  in  the
    period prior to the transfer of the TRW Divestment Business to the purchaser, including the appointment of  a  monitoring  trustee  and,  if
    necessary, a divestiture trustee.

       ASSESSMENT OF THE PROPOSED REMEDIES

1 Framework for the Commission's Assessment of the Commitments

  138) Where a notified concentration raises serious doubts as to its compatibility with the internal market, the Parties may modify the notified
       concentration so as to remove the grounds for the serious doubts identified by the Commission with a view to having it declared compatible
       with the internal market pursuant to Article 6(1)(b) in conjunction with Article 6(2) of the Merger Regulation.

  139) As set out in the Commission Notice on Remedies,[63] commitments have to eliminate the Commission's serious doubts entirely, they have  to
       be comprehensive and effective from all points of view and they must be capable of being implemented effectively within a short period  of
       time, as the conditions of competition on the market will not be maintained until the commitments have been fulfilled.[64]

  140) In assessing whether or not commitments will restore effective competition, the Commission  considers  their  type,  scale  and  scope  by
       reference to the structure and the particular characteristics of the market in which the Commission has identified serious  doubts  as  to
       the compatibility of the notified concentration with the internal market.[65]

  141) Divestiture commitments are the best way to eliminate serious doubts resulting from horizontal overlaps of  the  Parties'  activities.[66]
       The divested activities must consist of a viable business that, if operated by a suitable Purchaser,  can  compete  effectively  with  the
       merged entity on a lasting basis and that is divested as a going concern.[67]

  142) The business to be divested must include all the assets which contribute to its current operation or which are  necessary  to  ensure  its
       viability and competitiveness and all personnel which are currently employed or which are necessary to ensure the business' viability  and
       competitiveness. Personnel and assets which are currently shared between the business to be divested and other businesses of the  Parties,
       but which contribute to the operation of the business or which are necessary to ensure its viability and  competitiveness,  must  also  be
       included. Otherwise, the viability and competitiveness of the business to be divested would be endangered. Therefore, the business  to  be
       divested must contain the personnel providing essential functions for the business, at least in a sufficient proportion to  meet  the  on-
       going needs of the business to be divested.[68]

  143) Furthermore, the intended effect of the divestiture will only be achieved if and once the business is transferred to a suitable  Purchaser
       with proven relevant expertise and ability to maintain and develop the business  to  be  divested  as  a  viable  and  active  competitive
       undertaking.

2 The Commission's market test and assessment of the Commitments

1 The results of the market test

144) The Commission launched a market test of the Commitments on 20.02.2015. Taken on a whole, save for the three  elements  discussed  below  at
    para. 122, the outcome of the market test was positive, for the reasons set out below:

 a. The majority of the respondents to the market test stated that the Commitments would be adequate to maintain sufficient competition  in  the
    various markets involving the manufacture and supply of LV and HCV chassis components to OEMs/OESs in the EEA;

 b. The majority of respondents to the market test considered that the scale and scope of the TRW Divestment Business is  sufficient  to  ensure
    its immediate and future viability and competitiveness on the various markets for the  manufacture  and  supply  of  chassis  components  to
    OEMs/OESs in the EEA,[69] and;

 c. The majority of respondents to the market test considered that the TRW Divestment Business constitutes an attractive offer  for  a  suitable
    purchaser.[70]

145) The market test underlined three important elements:

 a. The purchaser should already be active in the manufacture and supply of automotive components sold into the  OEM/OES  channel  in  order  to
    ensure the viability and competitiveness of the TRW Divestment Business.[71] The large majority of respondents to  the  Commission's  market
    test also explicitly excluded OEM car manufacturers and purely financial investors as potentially suitable purchasers of the TRW  Divestment
    Business;[72]

 b. Some respondents also stated that a wider scale of the TRW Divestment Business  would  enhance  its  ability  to  be  operated  as  a  fully
    standalone business and its viability. This concerns notably the US assets that are offered for  divestment  in  parallel  to  the  European
    business;[73] and

 c. A small minority of respondents stated that the viability of the TRW Divestment  Business  could  be  impaired  by  the  inability  for  the
    purchaser thereof to use the brands and/or logos that are currently held by TRW (or the right to sell products under TRW's name) in the  IAM
    channel.[74]

3  Assessment of viability of the Commitments

146) The Commission considers that the Commitments are sufficiently comprehensive and clear-cut to allow an experienced player in the  automotive
    sector to enter, and compete in, the various markets for the manufacture and supply of chassis components in the EEA.

147) First, the Commitments include two large manufacturing plants that should offer scope for expansion.[75] This was  confirmed  by  the  large
    majority of respondents to the market test.[76]

148) Second, the Commitments include (i) the ownership and right to use of any IP rights that are currently  used  by  TRW  in  relation  to  the
    manufacture and supply of chassis components, (ii) current customer and supply contracts, (iii) know-how, including for  ball  joints,  (iv)
    required transitional services, (v) all relevant licenses and permits, and (vi) all testing and production assets. The Commission  considers
    that this combination of tangible and intangible assets is  sufficiently  comprehensive  to  ensure  the  immediate  viability  of  the  TRW
    Divestment Business. This conclusion was also supported by the large majority of respondents to the Commission's market test.[77]

149) Third, the Commitments include the transfer of TRW's entire existing  chassis  components  R&D  capability  to  the  purchaser  of  the  TRW
    Divestment Business. An effective R&D capability is crucial to maintaining business with the large OEM  car  manufacturers.  The  Commission
    therefore considers that the obligation for the Notifying Party to ensure the transfer  of  a  substantial  number  of  TRW's  existing  R&D
    personnel is important. In this context, the Commission notes that the large  majority  of  respondents  to  the  Commission's  market  test
    considered the key personnel identified in Table 4 of the Commitments sufficient to ensure the viability  and  competitiveness  of  the  TRW
    Divestment Business.[78]

150) Fourth, the Dačice and Krefeld manufacturing plants currently produce some volumes of IAM chassis components that are  sold  […].  This  IAM
    capability can be used by the purchaser of the TRW Divestment Business to enter the various markets in  the  EEA  for  the  manufacture  and
    supply of chassis components to the IAM with original OES parts (so-called 'ident parts'), as the Commitments leave the  purchaser  free  to
    discontinue the existing supply relationship with TRW.[79] The purchaser of the TRW Divestment Business will be able to supplement these TRW
    ident parts with at least 90% of all IAM chassis components required by IAM customers, by turning to third-party manufacturers  that  engage
    in the reverse engineering of original automotive components  manufactured  by  OEMs  or  Tier  1  suppliers  (including  non-ident  chassis
    components that TRW developed specifically for sale to the IAM).[80] Indeed, the Parties indicate  that  neither  TRW  nor  the  third-party
    manufacturers hold any IPRs over the design of the original automotive components that are subject to this reverse engineering, leaving  the
    purchaser of the TRW Divestment Business free to source reverse engineered  IAM  chassis  components  or  to  engage  in  the  same  reverse
    engineering process itself. Finally, in order to facilitate the setting up of an IAM  business  by  the  purchaser  of  the  TRW  Divestment
    Business, the Notifying Party is willing to provide it with a complete list, including contact details, of all third party suppliers used by
    TRW and ZF and the products they supply to TRW and ZF.[81] The ability to enter the various national markets for the manufacture and  supply
    of LV and HCV chassis components to the IAM in the EEA constitutes a business opportunity that enhances the viability of the TRW  Divestment
    Business. An IAM presence is not, however, required to win business under requests for quotations for chassis components that  are  used  by
    OEMs/OESs.[82].

151) Fifth, the Commission notes that the TRW Divestment Business seems profitable with a positive normalized EBITDA and profit margin  for  2013
    and 2014, which are furthermore forecasted to increase […] and beyond.[83]

152) As mentioned above, the majority of respondents to the Commission's market test of the  Commitments  indicated  that  the  identity  of  the
    purchaser of the TRW Divestment Business is important to ensuring viability. In this regard, the Commission notes that, when  assessing  any
    proposed purchaser of the TRW Divestment Business, paragraph 17 of the  Commitments  requires  that  the  Commission  establishes  that  the
    purchaser has (i) the financial resources, (ii) the proven expertise, and (iii) the incentive to maintain and  develop  the  TRW  Divestment
    Business as a viable and competitive force in competition with the Notifying Party and other competitors.

153) In light of the results of the market test of the Commitments, the  Commission  will  therefore,  when  assessing  the  suitability  of  the
    purchaser of the TRW Divestment Business, take into account whether: (i) the purchaser has sufficient knowledge of  –  and  a  proven  track
    record in – the automotive component sector, and (ii) the purchaser's existing automotive component business(es) will offer sufficient scope
    to ensure the continued and future viability of the TRW Divestment Business. In this regard, the Commission  considers  that  the  purchaser
    must demonstrate the ability to effectively operate the TRW Divestment Business as a viable  and  competitive  force  in  the  relevant  EEA
    OEM/OES chassis components markets on the basis of an existing presence and proven track record in the automotive components  business  (not
    necessarily in the EEA).

154) In light of the importance of brand loyalty in the sale of chassis components to the IAM[84], the Commission considers  that,  in  case  the
    Notifying Party proposes a purchaser with no presence or experience in the automotive component business, it  would  be  important  for  the
    viability of the TRW Divestment Business to establish an IAM presence in the supply of  LV  and  HCV  chassis  components  within  the  EEA.
    Accordingly, the ability of the purchaser of the TRW Divestment Business to sell into the IAM will be a relevant  factor  in  assessing  its
    suitability.

155) Taking into account the reasons set out above, the Commission considers that the Commitments are  suitable  and  sufficient  to  remedy  the
    serious doubts raised by the Notified Transaction in the various markets involving  the  manufacture  and  supply  of  LV  and  HCV  chassis
    components sold to the OEM/OES and IAM channels in the EEA.

4 Conclusion on the Commitments

156) As described above, the Commitments consist in the divestiture of the Plants, a R&D facility and all associated  (tangible  and  intangible)
    assets, licenses and contracts. This is therefore a structural measure, suitable to remove the serious doubts identified by the  Commission,
    as it will remove the entire overlap between the Parties' activities in the manufacture and supply of  LV  and  HCV  chassis  components  to
    OEMs/OESs in the EEA. The Commitments will at the same time allow a third-party with a proven track record in the automotive sector to enter
    the market for the manufacture and supply of LV and HCV chassis components to OEMs/OESs in the  EEA.  The  third  party  will  benefit  from
    existing customer contracts as well as from important R&D  and  manufacturing  capabilities  that  should  offer  scope  for  expansion.[85]
    Therefore, the Commitments keep the pre-merger structure of the markets for the manufacture and supply of LV and HCV chassis  components  to
    OEMs/OESs in the EEA.

157) In light of all of the foregoing, and on the basis of the evidence before it, the Commission considers that  the  Commitments  are  suitable
    and sufficient to remove all serious doubts as to the compatibility of the Notified Transaction  with  the  internal  market  and  with  the
    functioning of the EEA agreement in the various markets involving the manufacture and supply of LV and HCV chassis components  sold  to  the
    OEM/OES and IAM channels in the EEA.

       Conditions and Obligations

  158) Pursuant to the first sentence of the second subparagraph of Article 6(2) of the Merger Regulation,  the  Commission  may  attach  to  its
       decision conditions and obligations intended to ensure that the undertakings concerned comply with the commitments they have entered  into
       vis-à-vis the Commission with a view to rendering the concentration compatible with the internal market.

  159) The achievement of the measure that gives rise to the structural change of the market is a condition, whereas the implementing steps which
       are necessary to achieve this result are generally obligations on the Parties. Where  a  condition  is  not  fulfilled,  the  Commission's
       decision declaring the concentration compatible with the internal market and the EEA Agreement no longer stands.  Where  the  undertakings
       concerned commit a breach of an obligation, the Commission may revoke the clearance decision in accordance with Article 6(3) of the Merger
       Regulation. The undertakings concerned may also be subject to fines and periodic penalty payments under Articles 14(2) and  15(1)  of  the
       Merger Regulation.

  160) In accordance with the basic distinction between conditions and obligations, the decision in this case is conditional on  full  compliance
       with the requirements set out in Section B of the Commitments, which constitute conditions. The remaining  requirements  set  out  in  the
       other Sections of the Commitments are considered to constitute obligations.

  161) The full text of the Commitments is annexed to this Decision as Annex I and forms an integral part thereof.

       CONCLUSION

  162) For the above reasons, the Commission has decided not to oppose the Notified Transaction as modified by the Commitments and to declare  it
       compatible with the internal market and with the functioning of the EEA Agreement, subject to  full  compliance  with  the  conditions  in
       section B of the Commitments annexed to the present decision and with the  obligations  contained  in  the  other  sections  of  the  said
       Commitments. This decision is adopted in application of Article 6(1)(b) in conjunction with Article 6(2)  of  the  Merger  Regulation  and
       Article 57 of the EEA Agreement.

For the Commission
(Signed)
Margrethe VESTAGER
Member of the Commission

                                                               COMP/M.7420 - ZF/TRW

                                                                  COMMITMENTS BY
                                                             ZF FRIEDRICHSHAFEN AG TO
                                                             THE EUROPEAN COMMISSION

                                                                 19 February 2015

                                                             SULLIVAN & CROMWELL LLP

                                                                1 New Fetter Lane
                                                                 London EC4A 1AN
                                                              Tel: +44 20 7959 8900
                                                              Fax: +44 20 7959 8950
                                                      COMMITMENTS TO THE EUROPEAN COMMISSION

Pursuant to Article 6(2) of Council Regulation (EC) No. 139/2004 (the “Merger Regulation”), ZF Friedrichshafen AG (the “Notifying Party”)  hereby
enters into the following Commitments (the “Commitments”) vis-à-vis the European Commission (the “Commission”)  with  a  view  to  rendering  the
Notifying Party’s proposed acquisition of sole control of TRW Automotive Holdings Corp. (“TRW”  and,  together  with  the  Notifying  Party,  the
“Parties”) (the “Concentration”) compatible with the internal market and the functioning of the EEA Agreement.

This text shall be interpreted in light of the Commission’s decision pursuant to  Article  6(1)(b)  of  the  Merger  Regulation  to  declare  the
Concentration compatible with the internal market and the functioning of the  EEA  Agreement  (the  “Decision”),  in  the  general  framework  of
European Union law, in particular in light of the Merger Regulation, and by reference to the  Commission  Notice  on  remedies  acceptable  under
Council Regulation (EC) No. 139/2004 and under Commission Regulation (EC) No. 802/2004 (the “Remedies Notice”).

       Definitions

1 For the purpose of the Commitments, the following terms shall have the following meaning:

   Affiliated Undertakings: undertakings controlled by the Notifying Party and/or by the ultimate parents of the  Notifying  Party,  whereby  the
   notion of control shall be interpreted pursuant to  Article  3  of  the  Merger  Regulation  and  in  light  of  the  Commission  Consolidated
   Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings.

   Assets: the assets that contribute to the current operation or are necessary to ensure the viability and competitiveness of the TRW Divestment
   Business as indicated in Section B, Paragraphs 6(a), (b) and (c) of these Commitments and described more in detail in the Schedule.

   Chassis Components: the chassis components described in section 5.2.1 of the Form CO in which there is horizontal overlap between the Parties,
   as specified in the Form CO.  TRW refers to Chassis Components as “linkage and suspension” components.

   Closing: the transfer of the legal title to the TRW Divestment Business to the Purchaser.

   Closing Period: the period ending on the later of (i) […] months from the approval of the Purchaser and the terms of sale by  the  Commission;
   and (ii) […] hours after the time that all merger control approvals required for the sale of the TRW Divestment Business to the Purchaser have
   been granted.

   Confidential Information: any business secrets, know-how, commercial information, or any other information of a proprietary  nature  that  is:
   (i) not in the public domain; or (ii) not reasonably necessary for performance of an arm’s length transaction between ZF Friedrichshafen AG or
   its affiliates.

   Conflict of Interest: any conflict of interest that impairs the Trustee’s objectivity and independence in discharging  its  duties  under  the
   Commitments.

   Divestiture Trustee: one or more natural or legal person(s) who is/are approved by the Commission and appointed by the Notifying Party and who
   has/have received from the Notifying Party the exclusive Trustee Mandate to sell the TRW Divestment Business to  a  Purchaser  at  no  minimum
   price.

   Effective Date: the date of adoption of the Decision.

   First Divestiture Period: the period of […] months from the Effective Date.

   Hold Separate Manager: the person appointed by the Notifying Party for the TRW Divestment Business to manage the day-to-day business under the
   supervision of the Monitoring Trustee.

   Key Personnel: all personnel necessary to maintain the viability and competitiveness of the TRW Divestment Business, as listed in Table  4  of
   the Schedule, including the Hold Separate Manager.

   Monitoring Trustee: one or more natural or legal person(s) who is/are approved by the Commission and appointed by the Notifying Party, and who
   has the duty to monitor the Notifying Party’s compliance with the conditions and obligations attached to the Decision.

   Notifying Party: ZF Friedrichshafen AG, a company incorporated under the laws of Germany, with its registered office  at  Hauptverwaltung  und
   Zentrale Forschung und Entwicklung, 88038 Friedrichshafen, Germany.

   Personnel: the individuals listed in Section (f) and Section (g) of the Schedule.

   Purchaser: the entity approved by the Commission as acquirer of the TRW Divestment Business in accordance with the criteria set out in Section
   D.

   Purchaser Criteria: the criteria laid down in Paragraph 17 of these Commitments that the Purchaser must fulfil in order to be approved by  the
   Commission.

   Sale and Purchase Agreement: the binding agreement concerning the sale of the TRW Divestment Business to the Purchaser.

   Schedule: the schedule to these Commitments describing in more detail the TRW Divestment Business.

   Trustees: the Monitoring Trustee and the Divestiture Trustee, as the case may be.

   Trustee Divestiture Period: the period of […] months from the end of the First Divestiture Period.

   TRW: TRW Automotive Holdings Corp., a company incorporated under the laws of Delaware, with its registered office at 12001 Tech Center  Drive,
   Livonia, Michigan 48150.

   TRW Divestment Business: TRW’s business in the design, manufacturing and sale of certain Chassis Components, which TRW refers  to  as  linkage
   and suspension components, for light vehicles and heavy commercial vehicles, as more particularly described in Section  B  and  the  Schedule,
   which the Notifying Party commits to divest within the period provided for in Section B.

       The Divestment commitments

   Commitment to divest

1 In order to maintain effective competition, the Notifying Party commits to divest, or procure the divestiture of, the TRW  Divestment  Business
         by the end of the Trustee Divestiture Period as a going concern to the Purchaser and on terms of sale  approved  by  the  Commission  in
         accordance with the procedure described in Paragraph 18 of these Commitments.

2 To carry out the divestiture of the TRW Divestment Business, the Notifying Party commits to find a Purchaser and to enter into a final  binding
         sale and purchase agreement for the sale of the TRW Divestment Business within the First Divestiture Period. If the Notifying Party  has
         not entered into such an agreement at the end of the First Divestiture Period, the Notifying Party shall grant the  Divestiture  Trustee
         an exclusive mandate to sell the TRW Divestment Business during  the  Trustee  Divestiture  Period  in  accordance  with  the  procedure
         described in Paragraph 30 of these Commitments.

3 The Notifying Party shall be deemed to have complied with the commitment in Paragraph 2 of these Commitments if:

1 by the end of the Trustee Divestiture Period, the Notifying Party or the Divestiture  Trustee  has  entered  into  a  final  binding  sale  and
       purchase agreement and the Commission approves the proposed Purchaser and the terms of sale as being consistent with  the  Commitments  in
       accordance with the procedure described in Paragraph 18 of these Commitments; and

2 the Closing of the sale of the TRW Divestment Business to the Purchaser takes place within the Closing Period.

4 In order to maintain the structural effect of the Commitments, the Notifying Party shall, for a period of 10 years after Closing, not  acquire,
         whether directly or indirectly, the possibility of exercising influence (as defined in Paragraph 43 of the Remedies Notice, footnote  3)
         over the whole or part of the TRW Divestment Business, unless, following the submission of a reasoned request  by  the  Notifying  Party
         showing good cause, and accompanied by a report from the Monitoring Trustee, the Commission finds that the structure of the  market  has
         changed to such an extent that the absence of influence over  the  TRW  Divestment  Business  is  no  longer  necessary  to  render  the
         Concentration compatible with the internal market.

   Structure and definition of the TRW Divestment Business

5 The TRW Divestment Business consists of TRW’s European business active in the design, development, manufacturing and sale  of  certain  Chassis
         Components, which TRW refers to as linkage and suspension components, for light vehicles  and  heavy  commercial  vehicles  to  original
         equipment manufacturers and original equipment suppliers, including all customers of such business regardless of location. The legal and
         functional structure of the TRW Divestment Business, as operated to date, is described in the Schedule.   The  TRW  Divestment  Business
         will include all assets and staff that  are  dedicated  to  the  current  operation  or  are  necessary  to  ensure  the  viability  and
         competitiveness of the TRW Divestment Business, in particular:

1 all tangible and intangible assets (including intellectual property rights);

2 all licences, permits and authorisations issued by any governmental organisation for the benefit of the TRW Divestment Business;

3 all contracts, leases, commitments and customer orders of the TRW Divestment Business; all customer,  credit  and  other  records  of  the  TRW
       Divestment Business; and

4 the Personnel.

6 Where required by the Purchaser and as part of the Commitments, the Notifying Party is prepared to provide certain transitional services  on  a
         reasonable cost-plus basis to be agreed with the Purchaser and with the consent of the Monitoring Trustee to facilitate the transfer  of
         the TRW Divestment Business.  If they cannot be immediately provided either by the  Purchaser  or  an  external  service  provider,  the
         Notifying Party is prepared to offer the following potential transition services for up to a period of […] months and within  the  scope
         of such services as TRW currently provides to the TRW Divestment Business:

1 indirect purchasing services for (a) the Krefeld plant and (b) the Chassis Components research and  development  (“R&D”)  capability  currently
       based in [Germany] (together with the Chassis Components purchasing and sales and marketing teams located in  [Germany]  ,  the  “[German]
       Facility”);

2 human resources management services for the [German] Facility;

3 maintenance services for the test and validation and prototype shop for the [German] Facility;

4 IT-related and information systems related (e.g., SAP, 3D CAD, or PDM) support services for the (a) Dačice  and  Krefeld  plants  and  (b)  the
       [German] Facility;

5 logistics services for the [German] Facility; and

6 receivables/payable/payroll processing for (a) the Dačice and Krefeld plants and (b) the [German] Facility.

7 The transitional services identified in Paragraphs 7(a) - 7(f) of these Commitments comprise the services currently provided centrally  by  TRW
         to the TRW Divestment Business[86] and which the TRW Divestment Business may require in order to  commence  its  independent  operation.
         With the exception of the services listed in the final sentence of this Paragraph, ZF is prepared to offer any other services  currently
         provided centrally by TRW to the TRW Divestment Business on the terms identified in Paragraph 7 of these Commitments.  Such transitional
         services will not include marketing, public relations, quote process support, legal or finance services,  which  cannot  practically  be
         provided by ZF to a competitor.

       Related commitments

   Preservation of viability, marketability and competitiveness

1 From the Effective Date until Closing,  the  Notifying  Party  shall  preserve,  or  procure  the  preservation  of,  the  economic  viability,
         marketability and competitiveness of the TRW Divestment Business, in accordance with good business practice, and shall minimise  as  far
         as possible any risk of loss of competitive potential of the TRW Divestment Business. In particular, the Notifying Party undertakes:

1 not to carry out any action that might have a significant adverse impact on the value, management or  competitiveness  of  the  TRW  Divestment
       Business or that might alter the nature and scope of activity, or the industrial or commercial strategy or the investment  policy  of  the
       TRW Divestment Business;

2 to make available, or procure to make available, sufficient resources for the development of the TRW Divestment  Business,  on  the  basis  and
       continuation of the existing business plans;

3 to take all reasonable steps, or procure that all reasonable steps are being taken, including appropriate incentive schemes (based on  practice
       in the TRW Divestment Business), to encourage all Key Personnel to remain with the TRW Divestment Business, and not to solicit or move any
       Personnel to the Notifying Party’s remaining business. Where, nevertheless, individual members of the Key  Personnel  exceptionally  leave
       the TRW Divestment Business, the Notifying Party shall provide a reasoned proposal to replace the  person  or  persons  concerned  to  the
       Commission and the Monitoring Trustee.  The Notifying Party must be able to demonstrate to the Commission that  the  replacement  is  well
       suited to carry out the functions exercised by those individual members of the Key Personnel. The replacement shall take place  under  the
       supervision of the Monitoring Trustee, who shall report to the Commission;

4 to create a suitable, separated premises for the [German] Facility within the existing TRW [German] site, or to procure a suitable site  within
       a 40 km radius of the current TRW [German] site, until the [German] Facility is relocated to a permanent site selected by  the  Purchaser;
       and

5 to use its reasonable best efforts, to the extent permitted by law, to facilitate the transfer  to  the  Purchaser  of  the  employees  at  the
       [German] Facility not identified as being Key Personnel in Table 4.  The Notifying Party will encourage these employees  to  transfer  and
       provide their relevant contact details as desired by the Purchaser, or otherwise make such employees available to the  Purchaser,  subject
       to compliance with all applicable laws.

   Hold-separate obligations

2 The Notifying Party commits, from the Effective Date until Closing, to keep the TRW Divestment Business separate  from  the  businesses  it  is
         retaining and to ensure that unless explicitly permitted under these Commitments (including, but  without  limitation,  Paragraph  9  of
         these Commitments): (i) management and staff of the businesses retained by the Notifying Party have no involvement in the TRW Divestment
         Business; (ii) the Key Personnel and Personnel of the TRW Divestment Business have no  involvement  in  any  business  retained  by  the
         Notifying Party and do not report to any individual outside the TRW Divestment Business.

3 Until Closing, the Notifying Party shall assist the Monitoring Trustee in ensuring that the TRW Divestment Business is managed  as  a  distinct
         and saleable entity separate from the businesses which the Notifying Party is retaining. Immediately after the adoption of the Decision,
         the Notifying Party shall appoint a Hold Separate Manager. The Hold Separate Manager, who shall be part  of  the  Key  Personnel,  shall
         manage the TRW Divestment Business independently and in the best interests of the  business  with  a  view  to  ensuring  its  continued
         economic viability, marketability and competitiveness and its independence from the businesses retained by the Notifying Party. The Hold
         Separate Manager shall closely cooperate with and report to the Monitoring Trustee and, if  applicable,  the  Divestiture  Trustee.  Any
         replacement of the Hold Separate Manager shall be subject to the procedure laid  down  in  Paragraph  9(c)  of  these  Commitments.  The
         Commission may, after having heard the Notifying Party, require the Notifying Party to replace the Hold Separate Manager.

   Ring-fencing

4 The Notifying Party shall implement, or procure the implementation of, all necessary measures to ensure that it does not, after  the  Effective
         Date, obtain any Confidential Information relating to the TRW Divestment Business, and that any Confidential Information relating to the
         TRW Divestment Business obtained by the Notifying Party before the Effective Date will, save as permitted by the last two  sentences  of
         this Paragraph 12, be eliminated and not be used by the  Notifying  Party.  This  includes  measures  vis-à-vis  the  Notifying  Party’s
         appointees on the supervisory board and/or board of directors of the TRW Divestment Business. In particular, the  participation  of  the
         TRW Divestment Business in any central information technology network shall be severed to the extent possible, without compromising  the
         viability of the TRW Divestment Business. The Notifying Party may obtain or keep information relating to  the  TRW  Divestment  Business
         which is reasonably necessary: (x) for the divestiture of the TRW Divestment Business, or (y) the disclosure of which to  the  Notifying
         Party is required by law to enable the Notifying Party to comply with any legal or regulatory obligation.

   Non-solicitation clause

5 The Notifying Party undertakes, subject to customary limitations, not to solicit, and to procure that Affiliated Undertakings do  not  solicit,
         the Key Personnel transferred with the TRW Divestment Business for a period of two years after Closing.

   Due diligence

6 In order to enable potential purchasers to carry out a reasonable due diligence of the TRW Divestment  Business,  the  Notifying  Party  shall,
         subject to customary confidentiality assurances and dependent on the stage of the divestiture process:

1 provide to potential purchasers sufficient information as regards the TRW Divestment Business; and

2 provide to potential purchasers sufficient information relating to the Personnel and allow them reasonable access to the Personnel.

   Reporting

7 The Notifying Party shall submit written reports in English on potential purchasers of the TRW Divestment  Business  and  developments  in  the
         negotiations with such potential purchasers to the Commission and the Monitoring Trustee no later than 10 days after the  end  of  every
         month following the Effective Date (or otherwise at the Commission’s request).  The Notifying Party shall submit a list of all potential
         purchasers having expressed interest in acquiring the TRW Divestment Business  to  the  Commission  at  each  and  every  stage  of  the
         divestiture process, as well as a copy of all the offers made by potential purchasers within five days of their receipt.

8 The Notifying Party shall inform the Commission and the Monitoring Trustee on the preparation of  the  data  room  documentation  and  the  due
         diligence procedure and shall submit a copy of any information memorandum to the Commission and the Monitoring  Trustee  before  sending
         the memorandum out to potential purchasers.

       The Purchaser

1 In order to be approved by the Commission, the Purchaser must fulfil the following criteria:

1 the Purchaser shall be independent of and unconnected to the Notifying Party and  its  Affiliated  Undertakings  (this  being  assessed  having
       regard to the situation following the divestiture);

2 the Purchaser shall have the financial resources, proven expertise and incentive to maintain and develop  the  TRW  Divestment  Business  as  a
       viable and active competitive force in competition with the Notifying Party and other competitors; and

3 the acquisition of the TRW Divestment Business by the Purchaser must neither be likely to create, in light of the information available to  the
       Commission, prima facie competition concerns nor give rise to a risk that the implementation  of  the  Commitments  will  be  delayed.  In
       particular, the Purchaser must reasonably be expected to obtain all necessary approvals from the relevant regulatory authorities  for  the
       acquisition of the TRW Divestment Business.

2 The final binding Sale and Purchase Agreement (as well as ancillary agreements) relating to the  divestment  of  the  TRW  Divestment  Business
         shall be conditional on the Commission’s approval. When the Notifying Party has reached an agreement with a purchaser, it shall submit a
         fully documented and reasoned proposal, including a copy of the final agreement(s), within one week to the Commission and the Monitoring
         Trustee. The Notifying Party must be able to demonstrate to the Commission that the purchaser fulfils the Purchaser  Criteria  and  that
         the TRW Divestment Business is being sold in a manner consistent with the Commission’s Decision and the Commitments. For  the  approval,
         the Commission shall verify that the purchaser fulfils the Purchaser Criteria and that the TRW Divestment Business is being  sold  in  a
         manner consistent with the Commitments including their objective to  bring  about  a  lasting  structural  change  in  the  market.  The
         Commission may approve the sale of the TRW Divestment Business  without  one  or  more  Assets  or  members  of  the  Personnel,  or  by
         substituting one or more Assets or members of the Personnel with one or more different assets or different personnel, if this  does  not
         affect the viability and competitiveness of the TRW Divestment Business after the sale, taking account of the proposed purchaser.

       Trustee

   I.  Appointment procedure

1 The Notifying Party shall appoint a Monitoring Trustee to carry out the functions specified in these Commitments for a Monitoring Trustee.  The
         Notifying Party commits not to close the Concentration before the appointment of a Monitoring Trustee.

2 If the Notifying Party has not entered into a binding Sale and Purchase Agreement regarding the TRW Divestment Business  by  one  month  before
         the end of the First Divestiture Period, or if the Commission has rejected a purchaser proposed by the Notifying Party at that  time  or
         thereafter, the Notifying Party shall appoint a Divestiture Trustee. The appointment of the Divestiture Trustee shall take  effect  upon
         the commencement of the Trustee Divestiture Period.

3 The Trustee shall:

1 at the time of appointment, be independent of the Notifying Party and its Affiliated Undertakings;

2 possess the necessary qualifications to carry out its mandate, for example have sufficient relevant  experience  as  an  investment  banker  or
       consultant or auditor; and

3 neither have nor become exposed to a Conflict of Interest.

4 The Trustee shall be remunerated by the Notifying Party in a way that does not impede the independent and effective fulfilment of its  mandate.
         In particular, where the remuneration package of a Divestiture Trustee includes a success premium linked to the final sale value of  the
         TRW Divestment Business, such success premium may only be earned if the divestiture takes place within the Trustee Divestiture Period.

        Proposal by the Notifying Party

5 No later than two weeks after the Effective Date, the Notifying Party shall submit the name or names of one or more natural  or  legal  persons
         whom the Notifying Party proposes to appoint as the Monitoring Trustee to the Commission for approval. No later than  one  month  before
         the end of the First Divestiture Period or on request by the Commission, the Notifying Party shall submit a list of one or more  persons
         whom the Notifying Party proposes to appoint as Divestiture  Trustee  to  the  Commission  for  approval.  The  proposal  shall  contain
         sufficient information for the Commission to verify that the person or persons proposed as Trustee fulfil the requirements  set  out  in
         Paragraph 21 of these Commitments and shall include:

1 the full terms of the proposed mandate, which shall include all provisions necessary to enable the Trustee to fulfil  its  duties  under  these
       Commitments;

2 the outline of a work plan which describes how the Trustee intends to carry out its assigned tasks;

3 an indication whether the proposed Trustee is to act as both Monitoring Trustee and Divestiture  Trustee  or  whether  different  trustees  are
       proposed for the two functions.

        Approval or rejection by the Commission

6 The Commission shall have the discretion to approve or reject the proposed Trustee(s) and to  approve  the  proposed  mandate  subject  to  any
         modifications it deems necessary for the Trustee to fulfil its obligations. If only one name is  approved,  the  Notifying  Party  shall
         appoint or cause to be appointed the person or persons concerned as Trustee, in accordance with the mandate approved by the  Commission.
         If more than one name is approved, the Notifying Party shall be free to choose  the  Trustee  to  be  appointed  from  among  the  names
         approved. The Trustee shall be appointed within one week of the Commission’s approval, in accordance with the mandate  approved  by  the
         Commission.

        New proposal by the Notifying Party

7 If all the proposed Trustees are rejected, the Notifying Party shall submit the names of at least two more natural or legal persons within  one
         week of being informed of the rejection, in accordance with Paragraphs 19 and 25 of these Commitments.

        Trustee nominated by the Commission

8 If all further proposed Trustees are rejected by the Commission, the Commission shall nominate  a  Trustee,  whom  the  Notifying  Party  shall
         appoint, or cause to be appointed, in accordance with a trustee mandate approved by the Commission.

   II.      Functions of the Trustee

9 The Trustee shall assume its specified duties and obligations in order to ensure compliance with the Commitments. The Commission  may,  on  its
         own initiative or at the request of the Trustee or the Notifying Party, give any orders or instructions  to  the  Trustee  in  order  to
         ensure compliance with the conditions and obligations attached to the Decision.

        Duties and obligations of the Monitoring Trustee

10 The Monitoring Trustee shall:

1 propose in its first report to the Commission a detailed work plan describing how it intends to monitor compliance  with  the  obligations  and
       conditions attached to the Decision;

2 oversee, in close cooperation with the Hold Separate Manager, the ongoing management of the TRW Divestment Business with  a  view  to  ensuring
       its continued economic viability, marketability and competitiveness and monitor compliance by the Notifying Party with the conditions  and
       obligations attached to the Decision. To that end, the Monitoring Trustee shall:

1 monitor the preservation of the economic viability, marketability and competitiveness of the TRW Divestment Business, and the holding  separate
             of the TRW Divestment Business from the business retained by the Notifying Party, in accordance with Paragraphs 9 and 10  of  these
             Commitments;

2 supervise the management of the TRW Divestment Business as  a  distinct  and  saleable  entity,  in  accordance  with  Paragraph  11  of  these
             Commitments;

3 with respect to Confidential Information:

– determine all necessary measures to ensure that the Notifying Party does not after the Effective  Date  obtain  any  Confidential  Information
  relating to the TRW Divestment Business,

– in particular strive for the severing of the TRW Divestment Business’ participation in a central information technology network to the  extent
  possible, without compromising the viability of the TRW Divestment Business,

– make sure that any Confidential Information relating to the TRW Divestment Business obtained by the Notifying Party before the Effective  Date
  is eliminated and will not be used by the Notifying Party, and

– decide whether such information may be disclosed to, or kept by, the Notifying Party because the disclosure is reasonably necessary  to  allow
  the Notifying Party to carry out the divestiture of the TRW Divestment Business, or because the disclosure is required to enable the Notifying
  Party to comply with any legal or regulatory obligation;

4 monitor the splitting of assets and the allocation of Personnel between the TRW Divestment Business and the Notifying Party or  its  Affiliated
             Undertakings;

3 propose to the Notifying Party such measures as the Monitoring Trustee considers necessary to ensure the Notifying Party’s compliance with  the
       conditions and obligations attached to the Decision, in particular the maintenance  of  the  full  economic  viability,  marketability  or
       competitiveness of the TRW Divestment  Business,  the  holding  separate  of  the  TRW  Divestment  Business  and  the  non-disclosure  of
       competitively sensitive information;

4 review and assess potential purchasers of the TRW Divestment Business as well as the progress of  the  divestiture  process  and  verify  that,
       dependent on the stage of the divestiture process:

1 potential purchasers receive sufficient and correct information relating to the TRW Divestment Business and  the  Personnel  in  particular  by
             reviewing, if available, the data room documentation, the information memorandum and the due diligence process, and

2 potential purchasers are granted reasonable access to the Personnel;

5 act as a contact point for any requests by third parties in relation to the  Commitments,  in  particular,  potential  purchasers  of  the  TRW
       Divestment Business;

6 provide to the Commission, sending the Notifying Party a non-confidential copy at the same time, a written report within 15 days after the  end
       of every month that shall cover the operation and management of the TRW Divestment Business, as well as the splitting of  assets  and  the
       allocation of Personnel, so that the Commission can assess whether the TRW Divestment Business is held in a  manner  consistent  with  the
       Commitments and, with respect to the TRW Divestment Business, the progress of the divestiture process  as  well  as  the  availability  of
       potential purchasers;

7 promptly report in writing to the Commission, sending the Notifying Party a non-confidential  copy  at  the  same  time,  if  it  concludes  on
       reasonable grounds that the Notifying Party is failing to comply with these Commitments;

8 within one week after receipt of the documented proposal referred to in Paragraph 18 of these Commitments, submit to  the  Commission,  sending
       the Notifying Party a non-confidential copy at the same time, a reasoned opinion as to the suitability and independence  of  the  proposed
       purchaser and the viability of the TRW Divestment Business after the Sale and as to whether the TRW  Divestment  Business  is  sold  in  a
       manner consistent with the conditions and obligations attached to the Decision, in particular, if relevant, whether the Sale  of  the  TRW
       Divestment Business without one or more Assets or not all of the Personnel affects the viability of the TRW Divestment Business after  the
       sale, taking account of the proposed purchaser; and

9 assume the other functions assigned to the Monitoring Trustee under the conditions and obligations attached to the Decision.

11 If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the Monitoring Trustee and the Divestiture Trustee  shall
         cooperate closely with each other during, and for the purpose of, preparation for, the Trustee Divestiture Period in order to facilitate
         each other’s tasks.

        Duties and obligations of the Divestiture Trustee

12 Within the Trustee Divestiture Period, the Divestiture Trustee shall sell the TRW Divestment Business at no  minimum  price  to  a  Purchaser,
         provided that the Commission has approved both the  Purchaser  and  the  final  binding  Sale  and  Purchase  Agreement  (and  ancillary
         agreements) as in line with the Commission’s Decision and the Commitments in accordance with Paragraphs 17 and 18 of these  Commitments.
         The Divestiture Trustee shall include in the Sale and Purchase Agreement (as well  as  in  any  ancillary  agreements)  such  terms  and
         conditions as it considers appropriate for an expedient sale in the Trustee Divestiture Period. In particular, the  Divestiture  Trustee
         may include in the Sale and Purchase Agreement such customary representations and warranties and indemnities as are reasonably  required
         to effect the sale. The Divestiture Trustee shall protect the legitimate financial interests of the  Notifying  Party,  subject  to  the
         Notifying Party’s unconditional obligation to divest at no minimum price during the Trustee Divestiture Period.

13 During the Trustee Divestiture Period (or otherwise at the Commission’s request), the Divestiture Trustee shall provide the Commission with  a
         comprehensive monthly report written in English on the progress of the divestiture process. Such reports shall be  submitted  within  15
         days after the end of every month with a simultaneous copy to the Monitoring Trustee and a non-confidential copy to the Notifying Party.

   III.     Duties and obligations of the Notifying Party

14 The Notifying Party shall provide and shall cause its advisers to provide the Trustee with all such co-operation, assistance  and  information
         as the Trustee may reasonably require to perform its tasks. The Trustee shall have full and complete access  to  any  of  the  Notifying
         Party’s or the TRW Divestment Business’ books, records, documents, management  or  other  personnel,  facilities,  sites  and  technical
         information necessary for fulfilling its duties under the Commitments, and the Notifying Party shall provide the  Trustee  upon  request
         with copies of any document.  The Notifying Party shall make available to the Trustee one or more offices on their premises and shall be
         available for meetings in order to provide the Trustee with all information necessary for the performance of its tasks.

15 The Notifying Party shall provide the Monitoring Trustee with all managerial and administrative support that  it  may  reasonably  request  on
         behalf of the management of the TRW Divestment Business. This shall include all administrative support functions  relating  to  the  TRW
         Divestment Business which are currently carried out at headquarters level. The  Notifying  Party  shall  provide  and  shall  cause  its
         advisers to provide the Monitoring Trustee, on request, with the information submitted to potential purchasers, and in  particular  give
         the Monitoring Trustee access to the data room documentation and all other information  granted  to  potential  purchasers  in  the  due
         diligence procedure. The Notifying Party shall inform  the  Monitoring  Trustee  on  possible  purchasers,  submit  lists  of  potential
         purchasers at each stage of the selection process, including the offers made by potential purchasers  at  those  stages,  and  keep  the
         Monitoring Trustee informed of all developments in the divestiture process.

16 The Notifying Party shall grant or procure that its Affiliated Undertakings grant comprehensive powers of  attorney,  duly  executed,  to  the
         Divestiture Trustee to effect the sale (including ancillary agreements),  the  Closing  and  all  actions  and  declarations  which  the
         Divestiture Trustee considers necessary or appropriate to achieve the Closing, including the appointment of advisers to assist with  the
         sale process. Upon request by the Divestiture Trustee, the Notifying Party shall cause the documents required for effecting the sale  of
         the TRW Divestment Business and the Closing to be duly executed.

17 The Notifying Party shall indemnify the Trustee and its employees and agents (each an “Indemnified Party”) and  hold  each  Indemnified  Party
         harmless against, and hereby agrees that an Indemnified Party shall have no liability  to  the  Notifying  Party  for,  any  liabilities
         arising out of the performance of the Trustee’s duties under the Commitments, except to the extent that such liabilities result from the
         wilful default, recklessness, gross negligence or bad faith of the Trustee, its employees, agents or advisers.

18 At the expense of the Notifying Party, the Trustee may appoint advisers (in particular for corporate finance or legal advice), subject to  the
         Notifying Party’s approval (this approval not to be unreasonably withheld or delayed) if the Trustee considers the appointment  of  such
         advisers necessary or appropriate for the performance of its duties and obligations under the Mandate, provided that any fees and  other
         expenses incurred by the Trustee are reasonable. Should the Notifying Party refuse to approve the advisers proposed by the Trustee,  the
         Commission may approve the appointment of such advisers instead, after having heard the Notifying  Party.  Only  the  Trustee  shall  be
         entitled to issue instructions to the advisers. Paragraph 35  of  these  Commitments  shall  apply  mutatis  mutandis.  In  the  Trustee
         Divestiture Period, the Divestiture Trustee may use advisers who served the  Notifying  Party  during  the  Divestiture  Period  if  the
         Divestiture Trustee considers this in the best interest of an expedient sale.

19 The Notifying Party agrees that the Commission may share Confidential Information proprietary to the Notifying Party and  the  TRW  Divestment
         Business with the Trustee. The Trustee shall not disclose such information and the principles contained in Article 17 (1) and (2) of the
         Merger Regulation apply mutatis mutandis.

20 The Notifying Party agrees to the contact details of the Monitoring Trustee being published on the website of  the  Commission’s  Directorate-
         General for Competition and the Notifying Party shall inform interested third parties, in particular any potential purchasers of the TRW
         Divestment Business, of the identity and the tasks of the Monitoring Trustee.

21 For a period of ten years from the Effective Date the Commission may request all information from  the  Notifying  Party  that  is  reasonably
         necessary to monitor the effective implementation of these Commitments.

   IV.      Replacement, discharge and reappointment of the Trustee

22 If the Trustee ceases to perform its functions under the Commitments or for any other good cause, including the exposure of the Trustee  to  a
         Conflict of Interest:

1 the Commission may, after hearing the Trustee and the Notifying Party, require the Notifying Party to replace the Trustee; or

2 the Notifying Party may, with the prior approval of the Commission, replace the Trustee.

23 If the Trustee is removed pursuant to Paragraph 40 of these Commitments, the Trustee may be required to continue in its function until  a  new
         Trustee is in place to whom the Trustee has effected a full handover of all relevant information. The new Trustee shall be appointed  in
         accordance with the procedure referred to in Paragraphs 19-26 of these Commitments.

24 Unless removed pursuant to Paragraph 40 of these Commitments, the Trustee shall cease  to  act  as  Trustee  only  after  the  Commission  has
         discharged it from its duties after all the Commitments with which the Trustee has been entrusted have been  implemented.  However,  the
         Commission may at any time require the reappointment of the Monitoring Trustee if it subsequently appears  that  the  relevant  remedies
         might not have been fully and properly implemented.

       The review clause

1 The Commission may extend the time periods foreseen in the Commitments in response to a request from the Notifying  Party  or,  in  appropriate
         cases, on its own initiative. Where the Notifying Party requests an extension of a time period, it shall submit a  reasoned  request  to
         the Commission no later than one month before the expiry of that period, showing good cause. This request  shall  be  accompanied  by  a
         report from the Monitoring Trustee, who shall, at the same time send a non-confidential copy of the report to the Notifying Party.  Only
         in exceptional circumstances shall the Notifying Party be entitled to request an extension within the last month of any period.

2 The Commission may further, in response to a reasoned request from the Notifying Party showing good  cause  waive,  modify  or  substitute,  in
         exceptional circumstances, one or more of the undertakings in these Commitments. This request shall be accompanied by a report from  the
         Monitoring Trustee, who shall, at the same time send a non-confidential copy of the report to the Notifying Party. The request shall not
         have the effect of suspending the application of the undertaking and, in particular, of suspending the expiry  of  any  time  period  in
         which the undertaking has to be complied with.

       Entry into force

1 The Commitments shall take effect upon the date of adoption of the Decision.

   [Signed]
   duly authorised for and on behalf of
   ZF Friedrichshafen AG

                                                                     SCHEDULE

2 The TRW Divestment Business includes two manufacturing plants located respectively in the Czech Republic (Dačice) and Germany  (Krefeld).   The
         Purchaser will also acquire TRW’s Chassis Components research and development (“R&D”) capability.  The R&D capability is currently based
         in [Germany] and also includes Chassis Components purchasing, sales and marketing teams, (together, the “[German]  Facility”).[87]   The
         TRW Divestment Business will also include two sales engineers based in […], France, and one sales engineer based in […], Italy[88].

3 The TRW Divestment Business will include assets, contracts and other elements necessary to allow the Purchaser to run it as  a  self-sufficient
         business.  Each of the plants and the TRW Divestment Business itself has its own management, including a plant manager and a  management
         team (in charge of finance, human resources, quality, logistics and production) that handle the internal activity of  the  plants.   The
         TRW Divestment Business is also able to manufacture all of its own Chassis Component products, as explained below.

4 None of the production assets or intangible assets that form part of the TRW Divestment Business are shared with other TRW entities.

5 Therefore, the TRW Divestment Business has the capability to operate independently from the Notifying Party.

6 In accordance with Paragraph 6 of these Commitments, the TRW Divestment Business also includes:

      (a)   the following main tangible assets:

   I. Dačice

7 The TRW Divestment Business in Dačice at the following address:

Strojírenská 160
380 01 Dačice
Czech Republic

8 The TRW Divestment Business in Dačice is composed of two facilities:[89]

1 the Chassis Components plant; and

2 the technical support centre.

9 The Dačice Chassis Components site has a total size of […] m2, of which […] m2 are covered, including […]  m2  dedicated  to  production.   The
         Dačice Chassis Components site underwent the following recent refurbishments:  […].[90]

10 Currently, the Dačice Chassis Components plant has a total production capacity of approximately […] pieces.

11 The Dačice Chassis Components plant’s 2013 capacity and production volume for these products is as shown below:

|                                                                                                   |
|Control Arms     |[…]                |[…]                   |[…]                |[…]               |
|Suspension Ball  |[…]                |[…]                   |[…]                |[…]               |
|Joints           |                   |                      |                   |                  |
|Tie Rods         |[…]                |[…]                   |[…]                |[…]               |
|Pillow Ball      |[…]                |[…]                   |[…]                |[…]               |
|Joints[92]       |                   |                      |                   |                  |
|Stabilizer Links |[…]                |[…]                   |[…]                |[…]               |
|Total            |[…]                |[…]                   |[…]                |[…]               |
|Heavy Commercial Vehicles                                                                          |
|V-Links          |[…]                |[…]                   |[…]                |[…]               |
|Torque Rods      |                   |[…]                   |[…]                |[…]               |
|Total            |[…]                |[…]                   |[…]                |[…]               |

  II. Krefeld

12 The TRW Divestment Business in Krefeld at the following address:

Heidbergsweg 100
47809 Krefeld
Germany

13 The TRW Divestment Business in Krefeld is composed of one plant which produces only Chassis Components  for  both  light  vehicles  and  heavy
         commercial vehicles.

14 The Krefeld plant has a total size of […] m2, of which […] m2 are covered.

15 All raw materials, stocks, work in progress and semi-finished and finished goods related to the TRW Divestments Business will  be  transferred
         to the Purchaser.

16 The premises and the machinery of the TRW Divestment Business will also be transferred as part of the Commitments.  These  include  production
         assets, such as robots, hydraulic presses, assembly presses, computer numerical control machines, automated material  feeding  machines,
         and testing and validation assets, such as various stiffness, rotational, articulation, wear, fatigue, sealing, corrosion test rigs  and
         chambers.

17 Currently, the Krefeld Chassis Components plant has a total production capacity of approximately […] pieces.

18 The Krefeld Chassis Components plant’s 2013 capacity and production volume for these products is as shown below:

|                                                                                                               |
|Control Arms            |[…]                 |[…]                   |[…]                  |[…]                 |
|Suspension Ball Joints  |[…]                 |[…]                   |[…]                  |[…]                 |
|Total                   |[…]                 |[…]                   |[…]                  |[…]                 |
|Heavy Commercial Vehicles                                                                                      |
|Drag Rods,              |[…]                 |[…]                   |[…]                  |[…]                 |
|Tie Rods,               |                    |                      |                     |                    |
|Stabilizer Rods         |                    |                      |                     |                    |
|Ball Joint Ends         |[…]                 |[…]                   |[…]                  |[…]                 |
|                        |                    |                      |                     |                    |
|Total                   |[…]                 |[…]                   |[…]                  |[…]                 |

      (b)   the following main intangible assets:

19 There are no intangible assets part of the TRW Divestment Business besides the active worldwide patents listed in Annex 5.1.

20 TRW is not aware of any IP rights that are currently shared by the TRW Divestment Business and TRW’s non-Chassis Components  businesses  being
         retained by ZF.  However, ZF will provide the Purchaser with a worldwide, irrevocable, perpetual,  royalty-free  licence  for  any  such
         rights if identified.

      (c)   the following main licences, permits and authorisations:

21 The Purchaser will also acquire all licences, permits and authorisations necessary to  operate  the  plants,  develop,  market  and  sell  the
         products and, in general, to carry on the TRW Divestment Business.

      (d)   the following main contracts, agreements, leases, commitments and understandings

22 The Purchaser will acquire all the testing and production assets and testing contracts  which  are  currently  owned  by  the  TRW  Divestment
         Business, unless expressly excluded.  In particular:

   Production and Engineering Support

23 The Purchaser will acquire legal title or equivalent to the land and buildings of both  the  Dačice  and  Krefeld  manufacturing  sites.   The
         Purchaser will also acquire legal title or equivalent to the land and buildings of the Dačice technical support centre.   The  Purchaser
         will acquire the know-how for the operation of the lines, including the know-how regarding ball joints, and the active worldwide patents
         listed in Annex 5.1.  Because the Purchaser will be assigned the entire right, title and interest to the patents listed  in  Annex  5.1,
         the duration of the rights will be for the entire life of each of the individual patents, as indicated in column G of the annex.[94]

24 The Purchaser will also acquire the [German] Facility.[95]  The R&D team is responsible for the development  of  new  designs,  including  the
         related single components such as plastic bearings, sealing systems, grease, surface coatings, dimensions and  the  related  tolerances.
         The R&D team is also responsible for the development of the production  process  steps  and  production  parameters.[96]   The  [German]
         Facility that will be part of the TRW Divestment Business will be able to provide all necessary engineering  services  for  the  Krefeld
         plant.

25 The [German] Facility includes testing and validation, advance manufacturing engineering, engineering, and prototype, and also purchasing  and
         sales and marketing teams, all located in [Germany].  These chassis teams are composed of […] employees entirely  dedicated  to  Chassis
         Components.

26 The Purchaser will also acquire all licences, permits and authorisations necessary to  operate  the  plants,  develop,  market  and  sell  the
         products and, in general, to carry on the TRW Divestment Business.

27 In addition, the Purchaser will acquire the personnel of the TRW Divestment Business,  including  employees  who  are  indispensable  for  the
         operation and viability of the TRW Divestment Business.

   Advertising and Communication

28 If required by the Purchaser, TRW will transfer to the Purchaser appropriate advertising and  communication  materials  relating  to  the  TRW
         Divestment Business (removing any TRW logos or brands).

   Customer Relations

29 Relationships with customers are conducted via supply agreements.

30 The Purchaser will acquire the customer list for the TRW Divestment Business, sales, marketing and promotional  information  as  well  as  the
         contracts and purchase orders.  In particular, the Notifying Party will provide relevant details of the customer base for  the  products
         manufactured and commercialised by the TRW Divestment Business during the […] month period preceding the Effective Date.  The  Notifying
         Party will also provide relevant details of the customer base for all contracts for components to be  produced  by  the  TRW  Divestment
         Business but that have not yet begun production.

   Supplier Relations

31 The Purchaser will acquire the supplier list for the TRW Divestment Business as well as supplier  contracts.   In  particular,  the  Notifying
         Party will provide relevant details of the supplier base for the TRW Divestment Business during  the  […]  month  period  preceding  the
         Effective Date.  As indicated above, the Notifying Party is prepared to offer transitional indirect purchasing services to  the  Krefeld
         plant and the [German] Facility.

      (e)   the following customer, credit and other records:

32 Please see Paragraphs 21 - 30 of these Commitments.

      (f)   the following Personnel:

33 Each plant has its own management resources, which include a plant manager and a management team (in charge  of  finance,  quality,  logistics
         and production) handling the internal activity of the plant.  Day-to-day customer relations and logistics are  managed  locally  at  the
         plant.  Certain services, however, are currently provided centrally by TRW.  In particular, TRW centrally provides:

1 both direct and indirect material purchasing;[97]

2 marketing, public relations, and quote process support;

3 common support services such as legal, finance, IT, human resources, and health safety and environment support,  intercompany  sales  function,
       patent/intellectual  property  management,  quality  and  quality  management  (i.e.,  audit,  certification  and  process  control),  and
       facility/pool car management; and

4 failure mode and effect analysis (“FMEA”) services and engineering change management system.[98]

34 In addition, as described in Paragraph 7(a) the [German] Facility is currently  located  in  [Germany].   The  TRW  Divestment  Business  will
         include the [German] Facility.  The Parties are in the process of determining how the [German] Facility would be transferred as part  of
         the TRW Divestment Business.  The TRW Divestment Business will also include two sales engineers based in  […],  France,  and  one  sales
         engineer based in […], Italy.[99]

35 The Notifying Party is ready to use all reasonable endeavours to make available to the Purchaser any Personnel identified in Paragraphs  35  -
         41 of this Schedule.

[German] Facility

36 In particular, the Notifying Party is ready to use all reasonable endeavours to transfer to the Purchaser the key employees  of  the  [German]
         Facility listed in Table 4.

37 The following table shows the number of Personnel at the [German] Facility (excluding students):

                                                Table 1 – Personnel at the [German] Facility[100]
|Personnel Category                           |Employees[101]                                  |
|Management                                   |[…]                                             |
|Purchasing                                   |[…]                                             |
|Sales                                        |[…]                                             |
|Programme Management                         |[…]                                             |
|Engineering[102]                             |[…]                                             |
|Global R&D                                   |[…]                                             |
|Total                                        |[…]                                             |

   Dačice

38 In particular, the Notifying Party is ready to use all reasonable endeavours to transfer to the  Purchaser  the  top  management  of  the  TRW
         Divestment Business in Dačice listed in Table 4.

39 The following table shows the number of Personnel at the Dačice plant  (excluding  students).   The  Notifying  Party  is  ready  to  use  all
         reasonable endeavours to transfer these categories of Personnel to the Purchaser:

                                                   Table 2 – Personnel at the Dačice plant[103]
|Personnel Category                           |Employees[104]                                  |
|Management                                   |[…]                                             |
|Finance                                      |[…]                                             |
|HR                                           |[…]                                             |
|IT                                           |[…]                                             |
|Logistic                                     |[…]                                             |
|Maintenance                                  |[…]                                             |
|NPI (Programme Management)                   |[…]                                             |
|Process Engineering                          |[…]                                             |
|Production                                   |[…]                                             |
|Purchasing                                   |[…]                                             |
|Quality                                      |[…]                                             |
|Warehouse                                    |[…]                                             |
|Others (LPO, Union)                          |[…]                                             |
|Technical Support Center Dačice              |[…]                                             |
|Engineering[105]                             |                                                |
|Technical Support Center Dačice Global R&D   |[…]                                             |
|Total                                        |[…]                                             |

   Krefeld

40 In particular, the Notifying Party is ready to use all reasonable endeavours to transfer to the  Purchaser  the  top  management  of  the  TRW
         Divestment Business in Krefeld listed in Table 4.

41 The following table shows the number of Personnel at the Krefeld plant (excluding  students).   The  Notifying  Party  is  ready  to  use  all
         reasonable endeavours to transfer these categories of Personnel to the Purchaser:

                                                  Table 3 – Personnel at the Krefeld plant[106]
|Personnel Category                           |Employees[107]                                  |
|Management                                   |[…]                                             |
|Finance Controlling                          |[…]                                             |
|HR                                           |[…]                                             |
|Logistic                                     |[…]                                             |
|Shipping/Receiving                           |[…]                                             |
|Maintenance                                  |[…]                                             |
|Process Engineering                          |[…]                                             |
|Production                                   |[…]                                             |
|NPI                                          |[…]                                             |
|Quality                                      |[…]                                             |
|Tool Store                                   |[…]                                             |
|Works Council                                |[…]                                             |
|Total                                        |[…]                                             |

42 For the avoidance of doubt, those engineers employed at the Dačice technical support centre and the [German]  Facility  which  are  shared  or
         work exclusively for TRW Steering will not form  part  of  the  TRW  Divestment  Business.   There  are  no  other  shared  or  seconded
         personnel.[108]

      (g)   the following Key Personnel:

43 The Notifying Party considers that the following Key Personnel are necessary  to  maintain  the  viability  and  competitiveness  of  the  TRW
         Divestment Business, and should therefore be the subject of Paragraph 9(c) of these Commitments:

                                                             Table 4 – Key Personnel
|Position                                                                   |Name                                           |
|TRW North America                                                                                                          |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[German] Facility - Key Commercial Executives                                                                              |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[German] Facility - Key Engineering Personnel                                                                              |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|Dačice                                                                                                                     |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|Krefeld                                                                                                                    |
|[…]                                                                        |[…][109]                                       |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |
|[…]                                                                        |[…]                                            |

      (h)   the arrangements for the supply with the following products or services by the Notifying  Party  or  Affiliated  Undertakings  for  a
      transitional period of up to […] months after Closing:

44 Please see Paragraph 7 of these Commitments.

45 The TRW Divestment Business (for the purpose of the Commitments) will not include:

1 Any manufacturing facilities other than the plants indicated above (in particular, the TRW Divestment Business in Dačice will not  include  the
       engine components business sold to Federal-Mogul Corporation);

2 The ownership of any IP rights that are not used exclusively in connection with the TRW Divestment Business as presently  being  conducted  and
       operated by TRW;[110]

3 Any brands or logos currently held, as owner or licensee, by TRW or any rights  to  sell  the  products  manufactured  in  the  TRW  Divestment
       Business with the TRW name;

4 Any rights to www.trw.com, www.trwczech.cz, or www.trw.de or any other websites or domain names owned by TRW or the Notifying Party;

5 Books and records required to be retained by TRW or the Notifying Party pursuant to any statute, rule, regulation or ordinance,  provided  that
       the Purchaser(s) shall, to the extent needed, receive a copy of the same and shall be permitted access to the original of such  books  and
       records upon reasonable request during normal business hours;

6 General books of account and books of original entry that comprise TRW or its affiliated undertakings permanent accounting or tax records;

7 Any customers (and associated customer information) not specifically listed in Annex 5.8; and

8 Certain employees currently employed by TRW who are not essential for the viability  of  the  TRW  Divestment  Business  (such  as,  e.g.,  the
       steering engineers employed at the Dačice technical support centre or the steering engineers working for TRW’s [German] Facility).

46 If there is any asset or personnel which is not be covered by Paragraph 2 of this Schedule but which is both used (exclusively or not) in  the
         TRW Divestment Business and necessary for the continued viability and competitiveness of the TRW  Divestment  Business,  that  asset  or
         adequate substitute will be offered to potential purchasers.

                                                                    Annex 5.1
                                                     TRW Automotive Corp.’s Worldwide Patents

                                                                       […]
                                                                    Annex 5.8
                                                     TRW Automotive Corp.’s Shared Customers
                                                                       […]

-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
('TFEU') has introduced certain changes, such as the replacement of 'Community'  by  'Union'  and  'common  market'  by  'internal  market'.  The
terminology of the TFEU will be used throughout this decision.

[2]   OJ L 1, 3.1.1994, p.3 ("the EEA Agreement").

[3]   Publication in the Official Journal of the European Union No C 28, 28.01.2015, p. 10.

[4]   Form CO, annex 2 – Agreement and Plan of Merger among TRW Automotive Holdings Corp., ZF Friedrichshafen AG and MSNA, Inc. of  15  September
2014.

[5]   The Notifying Party confirmed that this transaction closed on 9 February 2015. Following closing, there is no  longer  an  overlap  between
the activities of ZF and TRW in the manufacture of steering-related products.

[6]   Commission decision in case COMP/M.7418 – Bosch / ZF Lenksysteme of 24 October 2014, OJ/C-354.

[7]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
C95, 16.04.2008, p1).

[8]   COMP/M.6714 – U-Shin / Valeo CAM, para.6.
[9]   COMP/M.4336 – MAN / Scania, para.14.
[10]  COMP/M.4456 – Mahle / Dana EPG, para. 13; COMP/M.5799 – Faurecia / Plastal, para. 7, COMP/M.6714 – U-Shin / Valeo CAM, paras.7, 9.
[11]  COMP/M.4456 – Mahle / Dana EPG, para. 10; COMP/M.5799 – Faurecia / Plastal, para. 7; COMP/M.6714 – U-Shin / Valeo CAM, para. 7.
[12]  COMP/M.6207 – Gestamp / TKMF.
[13]  COMP/M.6207 – Gestamp / TKMF, para.11-15.
[14]  Responses to Commission's questionnaire to customers, Q. 4, Q.5, Q.6, Q.7 and Q.8.

[15]  Shock absorbers are typically oil, hydraulic fluid or gas-filled piston cylinders which act to dampen  the  vibrations  of  the  heavy-duty
suspension springs which absorb the vibrations and impacts transmitted from the road to the wheels,  in  order  to  ensure  the  wheels  maintain
contact with the road surface, and that the vehicle does not move excessively.

[16]  IV/M.134 – Mannesmann / Boge, para. 9; COMP/M.1959 – Meritor / Arvin, para.9, 10.
[17]  IV/M.1291 – Bosch / ZF Friedrichshafen, paragraphs 10 and 12, and; M.5500 – General Motors / Delphi Steering Business, para. 13.

[18]  COMP/M.5500 – General Motors / Delphi Steering Business, para.12.

[19]  COMP/M.5500 – General Motors / Delphi Steering Business, paras. 15, 17.

[20]  Transmission oil pumps circulate transmission fluid throughout the transmission in order to cool and lubricate the mechanism.

[21]  COMP/M.6748 – Magna / Ixetic, para.17 – 22.
[22]  COMP/M.5518 – Fiat / Chrysler; COMP/M.2603 – ZF Fredrichshafen / Mannesmann Sachs; COMP/M.2066 – Dana / Getrag; and IV/M.1368 – Ford / ZF.
[23]  COMP/M.2603 – ZF Fredrichshafen / Mannesmann Sachs, para. 15; IV/M.1368 – Ford / ZF, para.12.
[24]  COMP/M.2603 – ZF Fredrichshafen / Mannesmann Sachs.

[25]  COMP/M.1587 – Dana / GKN, para. 16 (despite no direct reference to OEM); COMP/M.1959 – Meritor / Arvin, para.  11;  COMP/M.3789  –  Johnson
Controls / Robert Bosch / Delphi SLI, para. 10; M.5500 – General Motors / Delphi Steering Business, para. 23  (despite  no  direct  reference  to
OEM); COMP/M.5799 – Faurecia / Plastal, para. 15; COMP/M.6714 – U-Shin / Valeo CAM, para. 32.
[26]  COMP/M.1959 – Meritor / Arvin, para. 11; COMP/M.3789 – Johnson Controls / Robert Bosch / Delphi SLI, para. 12. COMP/M.2939 – JCI / Bosch  /
VB Autobatterien JV, p. 6 infra.
[27]  Responses to Commission's questionnaire to customers, Q. 10.

[28]  Responses to Commission's questionnaire to customers, Q. 10, Q.12 and Q.13.

[29]  Responses to Commission's questionnaire to customers, Q. 9 and Q.13.

[30]  Call between the Commission's services and  an IAM customer of 18 November 2014.

[31]  When considering market shares by value ZF would be player 1 with [20-30]% and TRW player 2 with [10-20]% and competitors would be  Erdrich
Umformtechnik ([5-10]%), Gestamp ([5-10]%), Fuchs ([5-10]%), Benteler ([5-10]%), Georg Fischer ([0-5]%).

[32]  When considering market shares by value ZF would be player 1 with [60-70]%  and  TRW  player  3  with  [5-10]%  and  competitors  would  be
Kongsberg ([20-30]%) and Ditas ([5-10]%).

[33]        The Parties claim that in the EEA, Gestamp Automoción S.A. (“Gestamp”),  Raufoss,  and  Martinrea  Honsel  Germany  GmbH  (“Martinrea
Honsel”) exert a more significant constraint on ZF than TRW in the supply of control arms  for  LV;  THK,  Inauxa,  HQM  and  CTR  exert  a  more
significant constraint on ZF than TRW in the supply of stabilizer links for LV; and CTR exerts a more significant constraint on ZF  than  TRW  in
the supply of tie rods.

[34]  Responses to Commission's questionnaire to customers, Q. 17 and Q.18.

[35]  Responses to Commission's questionnaire to customers, Q. 14 and 15.

[36]  Responses to Commission's questionnaire to customers, Q. 20.

[37]  Responses to Commission's questionnaire to customers, Q. 19.

[38]  Responses to Commission's questionnaire to customers, Q. 16.

[39]  Responses to Commission's questionnaire to customers, Q. 23 and 24.

[40]  Responses to Commission's questionnaire to customers, Q. 25.1.

[41]  Responses to Commission's questionnaire to customers, Q. 25.2.

[42]  Responses to Commission's questionnaire to customers, Q. 26.1.

[43]  Responses to Commission's questionnaire to customers, Q. 26.2.

[44]  Responses to Commission's questionnaire to customers, Q. 27.1.

[45]  Responses to Commission's questionnaire to customers, Q. 27.2.

[46]  Responses to Commission's questionnaire to customers, Q. 31.

[47]  Bulgaria, Croatia, Cyprus, Estonia, Finland, Germany, Greece, Italy, Latvia, Lithuania, Poland, Portugal, Romania, Slovakia,  Slovenia  and
Sweden.

[48]  Responses to Commission's questionnaire to customers, Q. 28.1, and; call between the Commission's services  and   an  IAM  customer  of  18
November 2014.

[49]  Form CO, para. 128.

[50]  Form CO, annex 16.

[51]  Form CO, Annex 16.

[52]  See, for instance Guidelines on the assessment of non-horizontal mergers under the Council Regulation  on  the  control  of  concentrations
between undertakings, OJ C 265, 18.10.2008, p. 6 (‘Non-Horizontal Guidelines’), paragraph 31.

[53]  COMP/M.6748 – Magna / Ixetic.

[54]  Responses to Commission's questionnaire Q1 – Customers – Automotive Chassis Components (OEM/OES), Q. 29 and Q. 30.

[55]  Responses to Commission's questionnaire Q1 – Customers – Automotive Chassis Components (OEM/OES), Q. 29.1

[56]  Non-Horizontal Guidelines, para. 60.

[57]  For each specific new vehicle ('project') of an OEM car manufacturer, both Tier 1 and Tier 2 automotive components  suppliers  are  active.
Tier 1 suppliers will be the winner of the OEM's tender for a specific component or system. Tier 2 suppliers are  those  that  supply  automotive
components to Tier 1 suppliers, for inclusion into  a  bigger  assembly  ('system')  of  automotive  components.  In  some  cases,  the  OEM  car
manufacturer will, when awarding a specific project to a Tier 1 supplier, also identify which Tier 2 suppliers are to  be  used  by  the  Tier  1
supplier at hand. This process is known as 'directed buying' by OEM car manufacturers. Automotive component suppliers often  act  interchangeably
as a Tier 1 and Tier 2 supplier for different components.

[58]  Form CO, Annex 27.

[59]  According to the LV tie rod intra-company sales figures for TRW's Dačice and Krefeld plants, contained in annex 5.8 to the commitments.

[60]  Form CO, annex 27.

[61]  Responses to request for information of 23  January  2015  sent  under  Article  11  of  the  Merger  Regulation  to  LV  steering  systems
manufacturers, and; Commission's questionnaire Q1 – Customers – Automotive Chassis Components (OEM/OES).

[62] The Notifying Party submitted the commitments on 19 February 2015.

[63]  Commission Notice on remedies acceptable under Council Regulation (EC) No  139/2004  and  under  Commission  Regulation  (EC)  No  802/2004
  (2008/C 267/01), (the "Commission Notice on Remedies").

[64]  Commission Notice on Remedies, paragraph 9.

[65]  Commission Notice on Remedies, paragraph 12.

[66]  Commission Notice on Remedies, paragraph 17.

[67]  Commission Notice on Remedies, paragraph 23.

[68]  Commission Notice on Remedies, paragraphs 25 and 26.

[69]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 3 and 6.
[70]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, question 20.
[71]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 3, 6, 21, 22 and 23.

[72]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 22 and 23.

[73]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 3, 6, 21, 22 and 23.
[74]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 11 and 21.

[75]  Form RM, page 8 and 10.

[76]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 7 and 8.

[77]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 7-19.

[78]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 15 and 16.

[79]  Form RM, footnotes 7 and 12.

[80]  Parties' response to the Commission's request for information of 10 March 2015, question 2.

[81]  Parties' response to the Commission's request for information of 10 March 2015, question 2.

[82]  Parties' response to the Commission's request for information of 10 March 2015, question 1.

[83]  Form RM, para. 66, and; Parties' response to the Commission's request for information of 9 March 2015, question 1.

[84]  Form CO, para. 639.

[85]  Responses to Commission's questionnaire Q2_Questionnaire to Competitors and Customers on commitments offered by ZF  Friedrichshafen  AG  of
20 February 2015, questions 7 and 8.

[86]  Please see Paragraph 32 of the Schedule hereto.

[87]  The [German] Facility is currently co-located with TRW Steering in [Germany], but separately managed under a Chassis Components  management
      team.  The [German] Facility will be separated from the current [German] location.  All of the [German] Facility, including  personnel  and
      purchase, and sales and marketing teams, will transfer with the TRW Divestment Business.

[88]  These sales engineers are currently co-located with other TRW activities in France and Italy,  but  will  be  separated  and  relocated  to
      different sites (in the course of being identified).

[89]  The Dačice site also hosts a facility that is part of TRW’s engine components business.  TRW is in the process of selling this business  to
Federal-Mogul Corporation (as a result of which the part of the Dačice site dedicated to  engine  components  will  be  leased  to  Federal-Mogul
Corporation).  The Commission cleared the  transaction  on  15  December  2014  (Case  COMP/M.7400  –  Federal-Mogul  Corporation  /  TRW  Engine
Components).  Closing of this transaction occurred on […] February 2015.

[90]  […].

[91]  Considering […] shifts a day and […] days per week.

[92]  Pillow ball joints are a type of suspension ball joints.

[93]  Considering […] shifts a day and […] days per week.

[94]  The Purchaser will assume licence agreements currently in place and grant a licence back as needed to support TRW’s non competing  steering
business in […] which manufactures tie rods for steering gears.  TRW’s production of tie rods in […] is exclusively  for  captive  use  by  TRW’s
steering business and is not used to supply any third party customers.  The […] facility has a nominal capacity of […] million  units  per  year,
and is currently producing […] million units per year for the TRW steering business.  TRW’s […] facility  does  not  produce  any  other  Chassis
Components.

[95]  The [German] Facility is currently co-located with TRW Steering in [Germany], but separately managed under a Chassis Components  management
team.  The [German] Facility will be separated from the current  [German]  location.   All  the  [German]  Facility,  including  personnel,  will
transfer with the TRW Divestment Business.

[96]  The development of new designs and the production process steps and parameters is called the “bookshelf.”

[97]  “Direct material purchasing” refers to material used in the physical part  of  the  Chassis  Components  which  is  part  of  the  bill  of
materials.  “Indirect material purchasing” refers to all other material used to support making the physical part (such as sundries).

      […].

[98]  FMEA is a systematic technique for failure analysis.  engineering change management is a standard change management system (i.e.,  checking
      data required for a drawing change (engineering, operation, purchasing, and sales items) to make sure that  all  information  is  available
      before a requested change is implemented.
[99]  These sales engineers are currently co-located with other TRW activities in France and Italy,  but  will  be  separated  and  relocated  to
different sites (in the course of being identified).

[100]       As of 31 December 2014.

[101]       Including Key Personnel.

[102]       Of the […] engineering personnel in the [German] Facility, […] are assigned to R&D on HCV Chassis Components and […]  to  R&D  on  LV
Chassis Components.

[103]       As of 31 December 2014.

[104]       Including Key Personnel.

[105]       Excluding the steering engineers which are not part of the TRW Divestment Business.

[106]       As of 31 December 2014.

[107]       Including Key Personnel.

[108]       Besides […] (see footnote 24) and the personnel providing the services described in Paragraph 32 of this Schedule.
[109]       […]. TRW is currently searching for a permanent plant manager who will be part of the TRW Divestment Business.  […].

[110]       As noted in Paragraph 18 of this Schedule, the Purchaser will acquire the know-how for the operation of the TRW  Divestment  Business
      production lines and the active worldwide patents listed in Annex 5.1.

-----------------------
 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE