CMA claims Cargotec/Konecranes merger will have detrimental effects

In response, Cargotec and Konecranes say they ‘disagree with the CMA’s provisional conclusions’ and will consider the contents of the CMA’s initial findings and continue to engage with the CMA.

In addition, Cargotec and Konecranes will continue the dialogue and cooperation with other relevant competition authorities, including the European Commission and the US Department of Justice, and are considering ways to mitigate some of the concerns raised by the different competition authorities.

Cargotec and Konecranes remain confident the merger will be completed by the end of H1/2022.

The Provisional Findings represent CMA’s provisional conclusions and is the main means the CMA uses to consult the merging parties and other stakeholders. It is not a formal request by the CMA or an offer of remedies by Cargotec and Konecranes.

The CMA launched an investigation into the deal in July, its first in-depth probe done in parallel with a review by the European Union since Brexit.

In its provisional findings, the CMA said it was concerned the deal could lead to lower service quality or higher prices for port terminals.

The CMA said: ‘The evidence gathered by the CMA consistently shows that Cargotec and Konecranes are both major suppliers of container handling equipment, competing closely for business in the UK, and that UK customers would have few remaining alternative suppliers after the merger. While Cargotec and Konecranes have suggested that there would be an increased competitive threat from Chinese suppliers in future, the independent inquiry group found that this would not be sufficient to prevent the significant loss of competition that the merger of two key established suppliers would bring about.’

“Container handling equipment plays a key role in the smooth running of UK ports, moving millions of containers each year to make sure that goods arrive safely on our shelves and British businesses are able to supply their customers overseas,” said Martin Coleman, chair of the CMA inquiry group.

“This is the first phase 2 investigation that the CMA has conducted in parallel with a review by the European Commission since we left the EU, and this has allowed us to focus specifically on how the merger affects people and businesses within the UK.

“We are currently concerned that this merger could lead to a reduced quality of service or higher prices for port terminals and other customers of container handling equipment. Our competition concerns need to be addressed to ensure that these customers are not worse off as a result of the deal, and there is no negative impact on UK consumers and businesses.

“The deal is being reviewed by a number of competition authorities. While each investigation is being carried out independently, the CMA has engaged closely with other agencies – and continues to do so – to help progress its investigation.”

The final report by the CMA is due by April 1, 2022.

A decision by EU antitrust regulators, which launched a full-scale probe in July over similar concerns raised by the CMA, is due by January. 13, 2022.