Stalled Cargotec-Konecranes merger risks driving up prices, says UK competition watchdog

The Competition and Markets Authority has blocked a merger between Konecranes and Cargotec announced in 2020. Photo: Markku Ulander/Lehtikuva/AFP via Getty

Great Britain Competition and Markets Authority (CMA) has blocked a proposed merger between two Finnish freight companies due to “substantial” competition concerns.

Cargotec (CGCBV.HE) and Konecranes (KCR.HE) agreed to merge in October 2020.

The two companies planned to create a company that would offer a full range of services from providing warehouse forklifts to cranes that move containers onto trucks and ships.

The CMA said the companies were in “close competition for business” and customers would have few alternative suppliers after the merger.

He added that a thorough investigation found the €4.5bn (£3.42bn/$5bn) merger would harm competition in the supply of many container handling products.

“This loss of competition could have serious consequences for UK port terminals and other customers, including higher prices and lower quality products and services across a wide range of container handling products,” the dog said. on guard.

The Finnish cargo handling equipment specialists said they had abandoned the merger and related processes and would continue to operate separately following the regulator’s decision.

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Martin Coleman, chairman of the CMA survey group, said: “Container handling equipment is essential to the smooth running of UK ports, and events in recent years have shown us how quickly problems in the supply chain supply can cause problems for UK consumers and businesses.

“The solutions offered by Cargotec and Konecranes did not effectively address our concerns, which is why we had no choice but to block this merger to ensure that UK consumers and businesses are not more ill off as a result of the deal.”

The competition watchdog’s decision comes a month after the EU gave conditional antitrust clearance to the deal after the two Finnish firms in January offered to sell assets to address competition concerns .

By the end of 2021, Cargotec had recorded $63 million in merger-related transaction and integration planning costs and Konecranes had recorded $62 million.

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