Cargotec and Konecranes cancel merger
5 May 2022The UK Competition & Markets Authority (CMA) has blocked the merger between Cargotec and Konecranes, claiming ‘the remedies, which would have removed all overlapping businesses of the two companies and were accepted by the European Commission, would not be effective in addressing the CMA’s concerns’.
The completion of the planned merger would have required approvals from all relevant competition authorities. As a result, Cargotec and Konecranes have decided to jointly cancel the planned merger.
“We have done all we could to realise the merger and are disappointed our plans have had to be abandoned. After a long and extensive regulatory review process and merger planning preparations it is time to shift our full focus on executing Cargotec’s own strategy and value-creation opportunities,” said Ilkka Herlin, chairman, Cargotec in a statement.
Cargotec and Konecranes obtained clearances for the planned merger from numerous competition authorities and the EC conditionally approved the planned merger in February. Also, the State Administration for Market Regulation in China and nine other jurisdictions approved the planned merger.
“These are global businesses that make significant sales to UK customers, which is why it is critical for us to ensure competition in the UK is protected,” said Martin Coleman, chair of the CMA inquiry group.
“Container handling equipment is key to the smooth running of UK ports, and events in recent years have shown us how quickly problems in the supply chain can cause problems for UK consumers and businesses.
“The solutions put forward by Cargotec and Konecranes failed to effectively address our concerns, which is why we were left with no choice but to block this merger in order to ensure that UK consumers and businesses are not worse off as a result of the deal,”
Following the announcement Cargotec says it is now refocusing its strategy on sustainability and growth across its profitable core businesses; such as Hiab, Kalmar Mobile Solutions and Kalmar’s horizontal transportation business.
The company has announced it will ‘initiate an evaluation of strategic options of MacGregor’, sustainable maritime cargo and load handling solutions, including a potential sale of the business.
Cargotec will also shift Kalmar’s focus towards mobile solutions and will start planning an exit from the heavy port cranes business. Going forward, Kalmar will offer industry shaping, eco-efficient cargo handling equipment and lifecycle services in the mobile equipment product categories, straddle and shuttle carriers as well as Bromma spreaders.
Hiab’s business portfolio will remain the same, but Cargotec plans to further accelerate the development of Hiab’s M&A pipeline.
Cargotec’s capital allocation priorities for the upcoming 12 months are planned to be an acceleration of M&A, research and development investments in electrification, robotics and digitalisation and Cargotec’s climate programme Mission Climate.
Jennifer Eagle, editor
