The European Commission has approved, under the EU Merger Regulation, the proposed merger between Cargotec and Konecranes.
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The approval is conditional on the divestiture of certain businesses. The decision follows an in-depth investigation into the proposed merger of Cargotec and Konecranes.
The two companies are the largest European and amongst the leading global manufacturers of container and cargo handling equipment, as well as providers of terminal automation solutions.
During its in-depth investigation, the Commission received feedback from a broad range of market participants, including terminal operators, and cranes and other container handling equipment manufacturers.
Following its market investigation, the Commission had concerns that the transaction, as initially notified, would have substantially lessened competition and likely led to higher prices in the European Economic Area, with respect to a number of container and cargo handling equipment types, in particular in the areas of: rubber-tired gantry cranes;
straddle/shuttle carriers; mobile equipment, and in particular reach stackers, empty container handlers and heavy-duty lift trucks (>10 tonne capacity).
For each of these areas, the merged entity would have very large market shares and only face competition from very few remaining competitors. European customers would not have effective access to new suppliers of container and cargo handling equipment, due to significant existing barriers to entry.
As a result, European terminals and industrial customers would have faced higher prices and reduced choice of these critical pieces of equipment.
To address the Commission's concerns the companies offered the following commitments:
• In the rubber-tired gantry cranes, and straddle and shuttle carriers markets, Cargotec committed to divest its full cranes and straddle/shuttle carrier business, including a manufacturing plant in Poland and a licence for use of Cargotec's Kalmar brand for the divested product categories.
• In the mobile equipment markets, including for mobile equipment spreaders, Konecranes committed to divest its business for the manufacturing and commercialisation of reach stackers, full container handlers, empty container handlers, as well as forklift trucks. This includes manufacturing plants in Sweden and China, and contracts with distributors.
The Commission therefore concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.
A number of competition agencies, including those in the US, the UK, Australia, New Zealand, Singapore and Israel, are still investigating the proposed merger. ■