European Commission - Press release
Mergers: Commission approves acquisition of German genset manufacturer MWM by Caterpillar
Brussels, 19 October 2011 - The European Commission has cleared under the EU Merger Regulation Caterpillar's proposed acquisition of MWM, a German maker of reciprocating engine generator sets, or gensets, used for decentralised electricity production. Although Caterpillar of the US is active in the same field and the combined entity will be a formidable force to reckon with the in-depth investigation showed that it would continue to face competition from a number of companies in Europe and worldwide.
Commission Vice President in charge of competition policy Joaquín Almunia said: "After a detailed assessment of the markets involved, the Commission is satisfied that there will remain sufficient competition and that European consumers will not be negatively affected."
The Commission started an in-depth investigation in May 2011 (see IP/11/543) over concerns that the remaining competitors in the market may not exert a sufficiently strong constraint on the behaviour of the combined entity and that the latter may restrict access to the installation and servicing of its gensets. It has concluded that the combined entity’s market position is unlikely to give rise to unilateral anticompetitive behaviour. There will remain sufficiently strong alternative suppliers and conditions are such that new players could enter the market. The in–depth investigation also revealed that the merging parties are not close competitors, namely that other competitors compete more strongly than the merging parties between each other.
Moreover, the investigation indicated that the proposed transaction will not lead to significant changes in the structure of the market, due to the relative heterogeneity of the products and customers, and to the strong competition in research and development efforts aimed at increasing the electrical efficiency of gensets. Therefore, the merger is not likely to lead to coordinated effects.
Finally, the Commission found that the combined entity is unlikely to engage in a strategy to restrict access to bare gas engines, spare parts or gas gensets, because several other genset manufacturers represent a credible alternative for customers and none of them is capacity constrained.
The Commission, therefore, concluded that the proposed transaction would not significantly impede effective competition in the European Economic Area (EEA)1 or in any substantial part of it.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Art 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
More information on the case is available at:
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