Tesla gets go-ahead to buy second German auto supplier

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·2-min read
Photo taken using drone
The construction site of the future Tesla Gigafactory in Gruenheide near Berlin, Germany. Photo: Hannibal Hanschke/Reuters

Electric carmaker Tesla (TSLA) has received official approval from Germany’s federal cartel office for its merger with ATW, an automotive supplier company based in the western German state of Rhineland-Palatinate.

The federal cartel office confirmed the approval to the German Press Agency, commenting only that it was a “merger.”

ATW specialises in battery-assembly lines and counts Volkswagen (VOW3.DE), Mercedes-Benz (DAI.DE), and BMW (BMW.DE) among its clients. The subsidiary of Canada’s ATS Automation Tooling Systems was facing closure in September, as a result of the coronavirus pandemic.

However, the takeover by Tesla appears to have saved around 200 jobs at the company. ATW is just 100 kilometers (62 miles) from Tesla Grohmann Automation, which Tesla acquired in 2016.

At the time of the $135m (£104m) takeover, Musk called it “our first acquisition of significance in our whole history.” Grohmann makes automated manufacturing systems for batteries.

WATCH: Tesla Giga-factory in Berlin

READ MORE: German government sees Tesla plant as catalyst for other large-scale projects

Tesla is currently building a Gigafactory, including a battery plant, in Brandenburg near Berlin. The plant, which Tesla is aiming to have ready by mid-2021, will aim to produce 500,000 vehicles a year at full capacity, and it has said it will create around 12,000 jobs.

READ MORE: Tesla’s value dropped by $50bn after Musk said cheaper battery is three years away

While politicians have lauded the construction of the Gigafactory as a job-creator and proof that Germany is an attractive place for foreign investment, the site has been targeted by locals protesting that it will contaminate water and damage the rural area.

The local water company said last week that it had temporarily switched off the plant’s water access, over unpaid water bills. A spokesperson for the water company told the Associated Press that “we can’t treat Tesla any differently than other customers” but that the water would be turned on again once the bill was paid.

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