Mergers: Commission approves Konecranes' acquisition of Terex's crane and container handling business, subject to conditions
European Commission - Press release
Brussels, 8 August 2
The European Commission has cleared under the EU Merger Regulation the acquisition by Konecranes of Terex's crane and container handling business, MHPS. The decision is conditional on the divestment of Konecranes' Stahl subsidiary, which supplies industrial cranes, crane components and spare parts.
Konecranes is a global supplier of lifting equipment, headquartered in Finland. US-based Terex's Material Handling & Port Solutions segment (MHPS) supplies industrial cranes, crane components, crane services and container handling equipment. The proposed transaction would bring together Konecranes and Terex's MHPS, creating the world's leading provider of hoists, industrial cranes and handling solutions.
The Commission's preliminary investigation found that the transaction, as initially notified, would create significant overlaps between Konecranes' and Terex's activities in the supply of electric chain hoists and wire rope hoists, which are components used to build cranes, as well as standard cranes and container handling equipment.
The investigation further showed that the transaction would have risked significantly reducing effective competition in the markets for electric chain hoists and wire rope hoists in the European Economic Area (EEA), and in particular in Germany and France.
The Commission’s concerns were based on the very large combined market shares of the merged entity, the intense competition between Konecranes and Terex's MHPS products before the proposed transaction and the sole presence of Abus as the only other major alternative supplier active across the EEA. Moreover, customers raised concerns about the risk of price increases for both electric chain hoists and wire rope hoists in the EEA, and in particular in Germany and France.
The proposed commitments
In order to address the Commission's competition concerns, Konecranes offered to divest its entire Stahl global business for hoists, cranes and other handling materials, including the associated production facility based in Germany.
This divestment removes the whole overlap in Germany and more than half of the overlap in France for both electric chain hoists and wire rope hoists. At EEA level, the divestment removes completely the overlap for wire rope hoists and halves the overlap for electric chain hoists.
Furthermore, Konecranes and Terex are not allowed to close their deal until the Commission has approved the buyer(s) of the assets put up for sale.
As a result of the commitments proposed by Konecranes, the intensity of competition in the markets for electric chain hoists and wire rope hoists at European and national level will be preserved. In particular, the commitments ensure that the purchaser of the Stahl business immediately enters and/or expands into these markets. The Commission has therefore concluded that the transaction, as modified by the commitments, no longer raises competition concerns.
Given the global reach of the companies' activities, the Commission co-operated closely with the Antitrust Division of the Department of Justice (DoJ) in the US. While the EU and US market structures for cranes and cranes' components differ, the co-operation involved regular exchanges of views and evidence in relation to the likely impact of the transaction on their respective markets.
Merger control rules and procedures
The transaction was notified to the Commission on 17 June 2016.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
General public inquiries: Europe Direct by phone 00 800 67 89 10 11 or by email
Source: Europa.eu (Copyright European Commission)