Concerns over Cargotec (CGCBV) and Konecranes (KCR) merger
14:11, 26 November 2021
The UK’s Competition and Markets Authority (CMA) has provisionally found that the proposed merger of Cargotec and Konecranes raises competition concerns in the supply of container-handling equipment.
In a press release published on Friday, the CMA highlighted that both firms offer a range of container-handling equipment and services to port terminals and other industry customers worldwide – and said that if they merged, it would significantly reduce alternatives.
The CMA noted what Cargotec and Konecranes had suggested: there would be an increased competitive threat from Chinese suppliers in the future. However, 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.
CMA comments
Martin Coleman, chair of the CMA inquiry group, commented on the findings.
“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,” he said.
Coleman also noted that it was the first phase two investigation that the CMA has conducted in parallel with a review by the European Commission since the UK left the EU, and said it had allowed the group 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,” he added.
Competition reviews
The release also noted that the deal was 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,” it added.
It also welcomed responses from interested parties to its provisional findings by 17 December 2021, and to its notice of possible remedies, which sets out potential options for addressing its provisional concerns, by 10 December 2021.
“These will be considered ahead of the CMA issuing its final report, which is due by 1 April 2022,” the CMA said.