Cargotec/Konecranes offer ‘possible divestitures’ to EC to Satisfy Competition Concerns10 December 2021
Cargotec and Konecranes have submitted commitments to the European Commission (EC) to satisfy competition concerns
The two companies have continued active dialogue and cooperation with relevant competition authorities, and have been considering ways to mitigate the concerns raised by the competition authorities to secure approvals to complete the merger of Cargotec and Konecranes.
As such, they have submitted a remedy package to the European Commission comprising a commitment to divest Konecranes’ Lift Truck business and Cargotec's Kalmar Automation Solutions.
The proposed divestitures would eliminate overlaps between the parties’ Container Handling Equipment businesses but allow the combined company (the “Future Company”) to combine others and continue to be a strong player in all aspects in Container Handling Equipment.
Cargotec and Konecranes understand the EC will now examine the proposed remedy package and may conduct a customary market testing.
Cargotec and Konecranes are confident the proposed remedies appropriately address the concerns raised by the EC. 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 divestments, if made in line with the proposed commitments, will not change the industrial logic behind the combination of Cargotec and Konecranes. The Companies will announce the expected high-level financial impact of the proposed remedies once information is available on the exact scope and possible ancillary arrangements relating to the possible remedy divestments in due course.
The final decision on possible divestitures of any businesses as well as possible terms and conditions thereof will be confirmed only after the EC’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. Cargotec and Konecranes have started an assessment of possible external buyers to identify the best 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.
Cargotec and Konecranes remain confident that the merger will be completed by the end of H1/2022. Until all merger closing conditions are met and the transaction completed, both companies continue to operate fully separately and independently.