According to a final report by the UK's Competition and Markets Authority (CMA) on March 29, the remedy - which would eliminate all overlapping operations of the two companies and be accepted by the European Commission (EC) - will not effectively address the Cargotec & Konecranes board of directors The CMA's concerns and the planned merger between Konecranes and Cargotec could not be completed, the statement wrote. Previously, the merger plan has been approved by China's State Administration for Market Regulation and nine other major regulators, as well as conditional approval from the European Union.
The CMA found that "the expected merger between Cargotec Corporation and Konecranes Plc is likely to result in a significant reduction in competition as
Consequences of horizontal unilateral effects in the supply of the following types of equipment in Europe (including the United Kingdom (Europe)):
(a) Rubber Tyred Gantry Cranes (RTGs);
(b) Automatic Stacking Cranes (ASC);
(c) Shuttle Cars (ShC) and Straddle Carriers (SC);
(d) Empty Container Handlers (ECH);
(e) Heavy Duty Forklifts (HDFLTs);
(f) Reach Stackers (RS); and
(g) Automated Terminal Tractor (ATT).”
According to the CMA's final report, the remedies that would eliminate all overlapping operations of the two companies and accepted by the European Commission would not effectively address the CMA's concerns, so the planned merger between Cargotec and Konecranes could not be completed.
Completion of the planned merger requires approval from all relevant competition authorities, the companies said in a joint statement.
"As a result, Cargotec and Konecranes have decided today to cancel the planned merger," the director said.
Konecranes and Cargotec have the same origin. When the Finnish company KONE (KONE) underwent a large-scale reorganization in 1994, Konecranes was split into an independent company. In 2005, KONE was split into Cargotec and ( new) KONE two public companies. The merger will bring Konecranes back to the arms of Finland's wealthiest family, the Herlins, in a deal potentially worth up to 4.5 billion euros.
The two giants who share the same business are the leaders in the port machinery industry. If the two merge, they will have little impact on the market share in the field of quay cranes, but they will have a market share in tire cranes, automated tire cranes, and automated rail cranes. The rate will be in the leading position in the industry, the market share in the field of straddle carriers will reach almost 100%, and it will also become the world's first in the field of port handling equipment such as reach stackers and stackers.
Konecranes Chairman Christoph Vitzthum said: "As planned and announced on October 1, 2020, the combination of Konecranes and Cargotec will create a company that is greater than the sum of its parts.
"The merger control process was extensive and the investigation was thorough, and the Konecranes board is disappointed that the remedial package offered has not met all regulators' concerns.
“At the same time, we believe that further remedies are not in the best interests of Konecranes shareholders, as they would alter the strategic rationale of the transaction. Konecranes will continue to advance its strategy and pursue its value creation potential on an independent basis.
Ilkka Herlin, Chairman of Cargotec, commented: "The Board of Cargotec believes that the merger will create considerable value for the entire industry as well as shareholders by improving sustainable logistics. The merger will create a strong European company that will accelerate without compromising competition. Share innovation capabilities.
"We have done everything possible to achieve the merger and are disappointed to have to abandon our plans. After a long and extensive regulatory review process and preparation of the merger plan, it is time to shift our full focus to executing Cargotec's own strategy and creating value opportunity."
On March 29, 2022, the two companies announced that the CMA believes that the remedies will not address monopoly concerns and prevent the merger. Konecranes and Cargotec believe that there is no solution that simultaneously addresses the concerns of the CMA, is in the best interests of both companies and the combined company, and does not compromise the original intent of the merger, which requires approval from all relevant regulatory agencies. The company decided to cancel the merger plan. Both parties believe that the cancellation of the merger is in the best interests of their respective companies and shareholders, and will continue to operate independently and execute their own strategies. As of the end of 2021, Konecranes and Cargotec have included 56 million euros and 57 million euros in the related transaction and planning integration costs of the merger, respectively. The total transaction cost of 125 million euros is still valid. The two parties will follow up when appropriate. Report final transaction costs.
