Konecranes and Cargotec respond to merger concerns
December 13, 2021 By Crane & Hoist Canada staff
Konecranes and Cargotec have submitted a remedy package to the European Commission to mitigate concerns raised by competition authorities regarding the merger of the two companies.
The remedy package includes a commitment to divest Konecranes’ lift truck business and Cargotec’s Kalmar Automation Solutions.
The proposed divestitures would eliminate overlaps between Konecranes’ and Cargotec’s container handling equipment businesses, while allowing the merged company to combine others and continue to be a strong player in all aspects in container handling equipment.
In November, the Competition & Market Authority of the United Kingdom announced its Provisional Findings and published its Notice of Possible Remedies regarding the planned merger of Konecranes and Cargotec. In its report, the CMA provisionally concludes the transaction may result in a substantial lessening of competition in several product markets.
Konecranes and Cargotec understand the commission will now examine the proposed remedy package and may conduct a customary market testing.
Konecranes and Cargotec are confident that the proposed remedies appropriately address the concerns raised by the commission. Should clearance be obtained based on the offered remedy package, the merger would proceed comprising of Konecranes’ Industrial Equipment and Service businesses as currently operated, Cargotec’s MacGregor and Hiab businesses as currently operated as well as the operations of Konecranes’ Port Solutions and Cargotec’s Kalmar businesses other than the areas subject to remedy discussions.
The companies understand the commission will now examine the proposed remedy package and may conduct a customary market testing.
The final decision on possible divestitures of any businesses as well as possible terms and conditions will be confirmed after the commission’s review and market testing process, as well as further proceedings with the other competent authorities. The possible divestitures are further subject to various local legal requirements.
The companies have started an assessment of possible external buyers to identify alternatives to satisfy the authorities’ requests and to support the future development of these businesses.
Further announcements on the approval processes will be made in due course once further decisions on possible material approval conditions and possible divestitures are made.
Until all merger closing conditions are met and the transaction completed, both companies continue to operate fully separately and independently.
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