Snapshot: One step forward and one back for Kone-Cargotec merger

Photo 41360361 © Petar Dojkic | Dreamstime.com

The EC has given its provisional approval to the pending merger of listed Finnish container handling equipment manufacturers Cargotec and Konecranes.

Despite this however, the two companies said they were likely to miss their original merger deadline of mid-2022 as it remains to be cleared in other jurisdictions.

Premium has previously covered the difficulties the two companies may face with various competition authorities around the world, given the dominance the merged entity would have in certain markets.

In Europe these concerns principally revolved around the smaller container handling equipment types – particularly fork-lift trucks and reachstackers – and the respective port automation arms of the Konecranes and Cargotec subsidiary Kalmar.

“The European Commission has conditionally approved the planned merger between Cargotec and Konecranes.

“The approval – which follows the Commission’s extensive investigation and widespread consultation with market participants across Europe – is conditional on the divestment of Konecranes’ Lift Truck business and Cargotec’s Kalmar Automation Solutions. 

“Konecranes’ Lift Truck business includes its business for the manufacturing and commercialisation of reach stackers, full container handlers, empty container handlers, as well as forklift trucks. This includes manufacturing plants in Sweden and China, and contracts with distributors.

“Cargotec’ Kalmar Automation Solutions business consists of its full cranes and straddle/shuttle carrier business, including Kalmar’s manufacturing plant in Poland and a licence for use of Cargotec’s Kalmar brand for the divested product categories.

“The divestitures would eliminate overlaps between the parties’ Container Handling Equipment businesses but allow the combined company to combine other businesses and continue to be a strong player in all aspects of Container Handling Equipment,” a joint statement said.

While the EU and China – the world’s two largest port markets – have now given the green light to the deal, it continues to be scrutinised by other competition regulators, notably US, the UK, Australia and New Zealand.

“Cargotec and Konecranes are in continued dialogue with the relevant competition authorities. In this respect, the views of some of the authorities have turned out to be challenging.

“Therefore, the completion of the merger by the end of H1/2022 seems challenging and for now the companies do not give further comments on the timetable or the merger control processes.“