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Proposed Merger between Cargotec Corporation and Konecranes Plc
26 October 2021
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Reference: | CCCS 400-140-2021-007 |
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Notifying Party: | Cargotec Corporation and Konecranes Plc |
Notifying Date: | 15 October 2021 |
Summary of transaction: | (i) the names of the merger parties; (a) Cargotec Corporation (“Cargotec”); and (b) Konecranes Plc (“Konecranes”) (collectively, the “Parties”). (ii) a description of the transaction; The notification relates to the proposed merger between Cargotec and Konecranes (the “Proposed Transaction”). (iii) a description of the business activities of the merger parties worldwide and in Singapore; Konecranes Konecranes is a Finnish public limited liability company headquartered in Hyvinkää, Finland, and its shares are listed on Nasdaq Helsinki. Konecranes is specialised in lifting solutions for various applications. It offers material handling solutions for general manufacturing and process industries, container handling equipment and respective automation solutions and many kinds of services and spare parts. Konecranes’ business activities in Singapore primarily relate to the sale of container handling equipment such as empty container handlers. In addition, Konecranes is also active in the marketing and selling of industrial lifting equipment such as cranes, hoists and providing related services such as maintaining, replacing and upgrading the said equipment. Konecranes also trades in, installs and maintains building maintenance units, mechanical carpark systems, indoor warehouse trucks, aerial working platforms and serialised construction equipment in Singapore. Cargotec Cargotec is a Finnish public limited liability company seated in Helsinki, Finland, and its B-shares are listed on Nasdaq Helsinki. Cargotec offers many kinds of material flow solutions, ranging from cargo and load handling equipment (manual and automated) to engineering solutions for the maritime industry. Its main activities are divided into three businesses: (i) Cargo handling equipment and terminal solutions are offered by Kalmar, (ii) on-road load handling equipment is provided by Hiab and (iii) solutions and services for the maritime industry are provided by MacGregor. Cargotec’s business activities in Singapore mainly relate to the sale of container handling equipment such as automated guided vehicles, terminal tractors, empty container handlers and reach stackers. The full range of equipment supplied by Cargotec globally is available for sale to Singapore customers. (iv) a description of the overlapping goods or services, including brand names; The Parties submit that, based on their respective sales data for the period from 2018 to 2020, they only overlap in the supply of empty container handlers (“ECH”) in Singapore. Separately, with reference to the period 2010 - 2021, the Parties submit that they have supplied or sought to supply the following products in Singapore: AGVs, automated RTGs, ECH and RS shall be collectively referred to as the “Overlapping Goods”.
(v) a description of substitute goods or services; The Parties submit that close substitutes for the Overlapping Goods supplied by the Parties would be the Overlapping Goods supplied by other competing manufacturers, such as:
(vi) The applicant’s views on: (a) definition of the relevant market(s); The Parties submit that the primary relevant market for the purpose of the CCCS’s review of the Proposed Transaction should be the market for the global supply of ECH. For completeness, and based on the information in section (v) above, the Parties have also considered:
The above shall be collectively referred to as the “Relevant Markets”. (b) the way in which competition functions in this market; The Parties submit that competition in the Relevant Markets is characterised by the following megatrends:
(c) barriers to entry and countervailing buyer power; and Barriers to entry The Parties submit that there are no significant factors that serve as barriers to entry for the Relevant Markets, either in Singapore or globally. This is in view of the following:
Countervailing buyer power According to the Parties, customers of container handling equipment are large and sophisticated buyers with significant buyer power, such as terminal operators and container shipping lines. (d) the competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant). Non-coordinated effects The Parties submit that the Proposed Transaction will not give rise to any non-coordinated effects as the Merged Entity will be sufficiently constrained from exercising market power, and that the Proposed Transaction will not lead to a substantial lessening of competition within any of the Relevant Markets for the following reasons:
Coordinated effects The Parties submit that the Proposed Transaction will not give rise to any concerns of coordinated effects in the Relevant Markets, for the following reasons:
Vertical effects The Parties submit that Cargotec supplies spreaders which are used as inputs by downstream manufacturers of cranes and mobile equipment, including Konecranes. However, the Parties submit that the Proposed Transaction will not lead to any vertical effects for the following key reasons:
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Status: | The Parties withdrew their Application on 30 March 2022, notifying CCCS that they have decided to abandon the Proposed Transaction. In view of this, CCCS has ended its assessment of the Proposed Transaction. |