The ACCC is seeking views on court enforceable undertakings proposed by each of Cargotec and Konecranes in relation to their proposed merger.
The proposed undertakings in Australia are based on similar remedies Cargotec and Konecranes submitted to the European Commission.
In Australia, Cargotec’s Kalmar business and Konecranes’ Port Solutions business supply heavy equipment such as cranes, straddle carriers and reach stackers that move shipping containers to and from ships, trains and trucks. Their main customers are stevedores and other container handling companies. The ACCC released outlining its preliminary competition concerns including the reduction of straddle and shuttle carrier suppliers in Australia from two to one, and in gantry cranes suppliers from three to two.
“Cargo handling equipment is critical to the efficient operation of stevedores and terminal operators that handle the majority of Australia’s container freight. Cargotec and Konecranes are two of the key players in these markets, and for some types of equipment they face very little competition,” ACCC Chair Rod Sims said.
“The nature and structure of the undertakings are complex, involving splitting out business units from each of Cargotec and Konecranes and potentially selling them separately to different buyers.”
“A divestiture remedy made up of mix and match assets from both companies can increase the implementation risks and the effectiveness of the remedy. Accordingly, the ACCC needs to be satisfied that any prospective buyer for the divested Cargotec and Konecranes business units will be an effective, long-term competitor to the merged firm,” Mr Sims said.
The ACCC is seeking stakeholder views on the divestment package by 10 March 2022.
“The public consultation on a remedy proposal should not be viewed as a signal that the ACCC will accept the proposed divestment and not oppose the transaction.”
“We need to be satisfied that the divestiture undertakings proposed will address the competition concerns in Australia and replace the competition lost as a result of the merger,” Mr Sims said.
The ACCC is working closely with regulators in other countries who are also considering the merger.
More information is available on the ACCC website here:
Notes
A ‘mix and match’ divestiture remedy refers to an arrangement where both merger parties divest parts of their businesses to ensure the overall transaction does not result in a substantial lessening of competition in any market.
Background
A number of overseas competition regulators are considering the proposed merger between Cargotec and Konecranes. They include the Competition and Markets Authority (UK), Department of Justice (USA), European Commission, Israel Competition Authority, and New Zealand Competition Commission.
Cargotec is a Finnish publicly listed supplier of material handling solutions, ranging from container handling equipment and services to engineering solutions for the maritime industry.
In Australia, Cargotec’s Kalmar business supplies container handling equipment and services, including aftersales servicing and spare parts. Cargotec’s Inver Port Services business provides maintenance and specialised engineering services to the stevedoring industry.
Cargotec’s Bromma division supplies spreaders for use in container handling equipment. A spreader is the piece of equipment that grips the container.
Konecranes is a Finnish publicly listed supplier of material handling solutions, ranging from container handling equipment and services to solutions for the general manufacturing and processing industries.
In Australia, Konecranes’ Port Solutions business is involved in the sale of container handling equipment and terminal solutions. This includes Konecranes’ brands such as Noell (acquired as part of Konecranes’ acquisition of Terex’s Material Handling and Port Solutions business) for automated and manual straddle and shuttle carriers.
Konecranes mobile equipment is primarily supplied to customers by its distributor United Equipment.
