EU Clears Federal-Mogul to Buy Honeywell Friction Material Unit; With Conditions

By Frances Robinson

BRUSSELS--The European Commission Monday approved the proposed acquisition of the European part of Honeywell International Inc.'s (HON) friction material business by another large U.S. friction material manufacturer, Federal-Mogul Corp. (FDML), subject to conditions.

Both companies produce friction material, in particular brake pads for trucks and passenger cars. The clearance is conditional upon the divestment of the business at a German and a French factory producing brake pads for commercial and light vehicles.

In January, Honeywell agreed to sell its friction materials business unit to Federal-Mogul Corp.'s European business for roughly $155 million. The deal includes two plants in China and Romania.

As the soft economy slows revenue growth, Honeywell--a maker of aerospace, building-control and safety products--has focused on boosting its margins to improve its profit. The company has spent hundreds of millions of dollars in recent years to streamline itself, focusing largely on Europe.

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