IP/11/536
Brussels, 5 May 2011
Mergers: Commission clears acquisition of Bucyrus by Caterpillar
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of US mining equipment manufacturer Bucyrus by Caterpillar, another US firm. Whilst the transaction will result in high combined market shares worldwide, the increase in market share accounted for by Bucyrus is relatively low. Furthermore, Caterpillar and Bucyrus are not generally viewed as each other's closest competitors and several other large players will remain on the market.
Caterpillar is an international company headquartered in the USA which is active in particular in the manufacture and sale of machinery, engines and related parts for machinery, including mining equipment. Bucyrus is also an American company, which makes and sells mining equipment. It also supplies parts and after-sales services for such equipment.
The Commission examined several issues in a number of markets, with a particular focus on the market for surface mining trucks. This market is relatively concentrated, with only a few large players active in the production of this type of truck. However, the European Economic Area accounts only for a very small part of the global market in this product and Bucyrus does not sell any mining trucks in Europe. Whilst the transaction will result in high combined market shares worldwide, the additional increase in market share accounted for by Bucyrus is relatively low. Furthermore, Caterpillar and Bucyrus are not generally viewed as each other's closest competitors and several other large players will remain on the market.
The Commission also examined a range of potential vertical issues, in particular whether the links arising from the proposed transaction between the diesel engine manufacturing activities of Caterpillar and the activities of Bucyrus would give rise to competition concerns. The Commission's examination showed that this would not be the case as Caterpillar would not be able to shut out its competitors as sufficient alternative sources of supply exist.
In light of the above and the absence of any significant concerns expressed in the market investigation, the Commission concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it.
The transaction was notified to the Commission for regulatory clearance in the EEA on 14 March 2011.
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). The Commission clears the vast majority of mergers without conditions and only accepts remedies or prohibits mergers when the notified transaction would lead to a significant impediment to competition and make consumers worse off.
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).
Further information on the case will be available at:
http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_6097
