EC clears acquisition of MKM by KME
The Commission concluded that the acquisition raises no competition concerns in the European Economic Area or any substantial part of it.
This decision follows an in-depth investigation of KME's proposed acquisition of MKM.
The proposed transaction would combine KME and MKM, both active in the manufacturing and marketing of copper and copper alloy products, including rolled products made of copper and copper alloys, and copper tubes (including sanitary copper tubes).
Rolled products are used as an input in a wide variety of applications, including electrical transformers, semiconductors, heat exchangers, and roofing materials. Sanitary copper tubes are used for drinking water installations, radiator connections, surface heating and cooling and sanitary gas installations.
KME and MKM mainly sell copper and copper alloy products, and compete with each other only in some market segments and geographical areas, in particular with regards to pure copper rolled products in the European Economic Area (EEA) and sanitary copper tubesin some EU Member States. The Commission opened an in-depth investigation to assess whether the overlaps in these two areas might result in price increase for customers.
For rolled products made of copper and copper alloys the investigation showed that the merged entity would not be able to increase prices because:
KME and MKM would have only a relatively low combined market share and will not be market leaders.
KME and MKM compete with each other essentially only in certain lower–end segments of the market, where a number of other vertically integrated competitors are also active and where barriers to compete for existing rolled products producers are relatively low.
As regards the segments in question, the merging companies' competitors have substantial excess capacity, particularly in roofing copper, which is also a declining segment.
For sanitary copper tubes, the investigation also found that the merged entity would not be able to raise prices, because there is a large number of credible competitors in the EEA and in various Member States with significant free manufacturing capacity. These competitors would also be able to enter and expand across national borders into other national markets.
Therefore, the Commission concluded that the transaction would not raise competition concerns in the EEA or any substantial part of it and cleared the case unconditionally. ■