Auto parts supplier Tupy agreed to restructure its acquisition of Teksid after the DOJ raised concerns that the merger could lead to higher prices and reduced quality and cost, according to the Justice Department. speed of production of essential components used in heavy engines.

As originally proposed, the agreement would have combined the two major suppliers of engine blocks and cylinder heads for heavy-duty engines with customers in North America. These components are key inputs for engines used in large trucks, construction and agricultural equipment, and many other vehicles.

Under the original agreement, Tupy would have acquired all of Teksid’s automotive iron components business from Teksid’s parent company, Stellantis NV. The initial acquisition included the Teksid plant and other assets in Mexico used to make iron blocks and heads for US auto customers. Following the restructuring, Tupy will only acquire Teksid’s steel activities in Brazil and Portugal. Teksid will maintain its steel operations in Mexico and continue to compete with Tupy to supply US customers.

“Tupy’s decision to restructure their merger is a victory for US engine makers and consumers,” said Acting Deputy Attorney General Richard A. Powers of the Department of Justice’s Antitrust Division. “I commend our team for their diligence in conducting a thorough investigation, demonstrating the division’s determination to enforce antitrust laws. As originally proposed, the transaction would have eliminated the competition that keeps prices low and quality high for vital industries such as transportation and agriculture.

Tupy SA, a Brazilian company headquartered in Brazil, is the largest supplier of iron blocks and heads for heavy-duty engines to customers in North America. Tupy has four iron foundries, two in Brazil and two in Mexico.

Teksid SpA, an Italian company headquartered in Italy, is a wholly-owned subsidiary of Stellantis, a multinational automobile manufacturer headquartered in Amsterdam, the Netherlands. Teksid is the second largest supplier of heavy duty engine blocks and heads in North America. Teksid has iron foundries in Mexico, Brazil, Poland and Portugal. Teksid is also part of a joint venture that owns an iron foundry in China.