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Teksid
Teksid Ironblocks Funfrap 800

DOJ Forces Change in Tupy-Teksid Deal

July 5, 2021
The takeover of iron foundries has been reduced in value by 67% after federal officials moved to prevent the Brazilian metalcaster from dominating heavy-duty engine production in North America.

The U.S. Department of Justice has cleared Brazilian foundry group Tupy S.A. to proceed with a scaled-down acquisition of Teksid SpA iron foundries from its parent company, automaker Stellantis NV, for €67.5 million. (or $80.1 million.)

Tupy is the largest supplier of cast-iron heavy-duty engine blocks and cylinder heads to North American customers, and it owns two iron foundries in Brazil and two in Mexico. In the current form of the deal, Tupy will acquire the Teksid iron foundries in Brazil and Portugal, and Teksid will retain its iron foundry in Mexico.

The government had challenged the purchase first announced in 2019 on antitrust concerns. Stellantis’ predecessor Fiat Chrysler Automobiles had agreed to sell the entire ferrous foundry portion of Teksid for €210 million ($250 million), including plants in Brazil, Mexico, Poland, and Portugal, as well as Teksid's interest in a joint venture in China, an engineering office in Italy, and a sales office in the U.S.

Teksid's aluminum casting were not included in the proposed transaction.

In 2020, FCA merged with the PSA Group to form Stellantis.

“Tupy’s decision to restructure their merger is a victory for American engine manufacturers and consumers,” stated acting assistant attorney general Richard A. Powers, of DOJ’s Antitrust Division. “I commend our team for their diligence in conducting a thorough investigation, a testament to the division’s resolve to enforce the antitrust laws. As originally proposed, the transaction would have eliminated competition that keeps prices low and quality high for vital industries such as transportation and agriculture.”