AUGUST 2021 | NEWS
EUROPEAN COMMISSION BEGINS PHASE II REVIEW OF CARGOTEC, KONECRANES MERGER
T
he European Commission has started its Phase II review of the merger between Cargotec and Konecranes; with
completion of the merger expected at the end of H1 (first half) of 2022. Cargotec and Konecranes announced
in October last year it had signed a ‘combination agreement’, to combine through a merger, subject to regulatory and other approvals. Cargotec and Konecranes confirm it has filed for approval in many of the jurisdictions where the transaction requires regulatory review. The various competition authorities, including the European Commission (EC), the UK Competition and Markets Authority, the US Department of Justice and the Chinese State Administration for Market Regulation, are currently reviewing the proposed transaction. At the time of the announcement
Ilkka Herlin, chairman, Cargotec said sustainability has been high on its agenda since its beginnings and this merger enables it to become a global leader in sustainable material flow. “Our customers are increasingly seeking green solutions and together we will have better opportunities to solve customers’ challenges. I believe this is an excellent value creation opportunity both from a business perspective and shaping global trade for the better. The Future Company will be well-positioned to utilise these opportunities and
create strong value for its customers, employees and shareholders,” he added. Rob Smith, CEO, Konecranes said
the Future Company will have an ‘unparalleled product range’, global service network, intelligent technology and unwavering commitment to safety. “Supporting this will be top talent
from both Konecranes and Cargotec and a passion to lead in sustainable material flow to deliver the very best for our customers. The timing is right, and the logic and fit of this combination are compelling. Konecranes looks forward to starting this journey with Cargotec.” However, the European Commission is concerned the proposed acquisition may reduce competition in the supply of certain container and cargo handling equipment in Europe. ‘Cargotec and Konecranes are two
global leaders in the supply of container and cargo handling equipment. We will carefully assess whether the proposed transaction would negatively affect competition in the supply of this equipment, possibly leading to reduced choice and higher prices, to the detriment of European customers,” said Margrethe Vestager, executive VP, responsible for competition policy, The European Commission. Cargotec and Konecranes are the
largest European and both among the leading global manufacturers of container and cargo handling equipment, as well as providers of terminal
automation solutions. Container and cargo handling equipment include cranes, such as ship-to-shore cranes and gantry cranes, horizontal equipment to move containers from the quayside to the container yard, such as straddle and shuttle carriers and terminal tractors, as well as mobile equipment, such as reach stackers and forklifts. It is used in port terminals, in intermodal rail terminals and in various industries (e.g. steel mills or paper production). The EC said in a statement: ‘At this stage, the Commission is concerned the transaction may lead to a reduced choice and higher prices for customers in the European Economic Area for certain container and cargo handling equipment in gantry cranes; horizontal equipment; and mobile equipment. For each of these types of terminal equipment, the transaction would lead to high combined market shares in already concentrated markets, with limited or even no credible alternative suppliers remaining post-transaction. Cargotec and Konecranes continue to
work closely with the relevant authorities including the EC allowing to mitigate or eliminate preliminary concerns the EC has raised. The companies expect the Phase II review will continue during H2/2021 and are confident approvals will be made to allow completion of the transaction by the end of H1/2022. Until completion, both companies will operate fully separately and independently. The proposed transaction was notified
to the Commission on 28 May 2021. Cargotec and Konecranes have decided not to submit commitments during the initial investigation to address the Commission’s preliminary concerns. The Commission now has 90 working days, until November 10, 2021, to make a decision. The opening of an in-depth investigation does not prejudge the outcome of the investigation. In addition to the present transaction,
there are four other on-going phase II merger investigations: the proposed acquisition of Air Europa by IAG, the proposed acquisition of Willis Towers Watson by Aon and the proposed acquisition of Trimo by Kingspan Group and of DSME by HHiH.●
16 | August 2021 |
www.hoistmagazine.com
pic credit: Kalmar
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