UK competition watchdog blocks USS5b Cargotec-Konecranes merger
2022-03-31
BRITAlN blocked a proposed merger between Finnish industrial machinery firms Cargotec and Konecranes after its competition watchdog found "substantial" competition concerns, according to Reuters.
Britain's Competition and Markets Authority (CMA) said its in-depth probe found the EUR4.5 billion (US$4.95 billion)merger would harm competition in the supply of many container handling products. Konecranes and Cargotec, which announced a merger of equals in October 2020, compete closely in the UK.
"This loss of competition could have serious consequences for UK port terminals and other customers, including higher prices and lower quality products and services across a wide range of container handling products,"CMA said in a statement. The CMA's move comes one month after the European Union gave the deal conditional antitrust approval after the two Finnish companies in January offered to sell assets to address competition concerns.
In addition. the State Administration for Market Regulation (the competition authority in China) and nine other jurnsdictions have approved the planned merger. In response to feedback received from the CMA the boards of directors of Caraotec and Konecranes carefully considered amending the remedy package offered to the EC further, as well as offering alternative remedy packages to address the concerns raised by the CMA. "The boards of directors did not, however, find any satisfactory solution which would have addressed the concerns of the CMA and which would have been in the best interest of the shareholders of Cargotec and Konecranes, and of the combined company, without jeopardising the rationale of the proposed merger as presented on October 1, 2020.
"As a consequence of the CMA's negative final report, the boards of directors Cargotec and Konecranes have therefore concluded that it is in the best interest of each of Caraotec and Konecranes and their respective shareholders that the merger is cancelled," the two companies said in a statement. Cargotec and Konecranes will immediately cease the pursuit of the merger and the related processes and continue to operate separately as fully independent companies, according to media reports.
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