The European Commission has approved a major takeover in Germany’s automotive components industry, clearing family- owned Schaeffler Group to take a main stake in stockmarket-listed Continental.

Schaeffler is mainly a maker of ball-bearings, whereas the bigger Continental has a focus on tyres and electronics. The 10 billion Euro (USD 14 billion) takeover bid, initially seen as hostile by Continental, has raised questions about whether the smaller company is strong enough to cope at a time when the business may have to retrench because of the recession. In Brussels, the Commission said after a four-week review that there was no overlap between the two businesses and a merger would not disturb free competition. It noted that Schaeffler bearings were used in Continental components but said there were enough other major bearings makers on the market.