Brussels, 26th March 1999
Commission clears Carrier/Toshiba joint venture
The European Commission has approved a global joint venture between Carrier Corporation and Toshiba Corporation, which will be active in the heating, ventilating, air-conditioning, compressor and cold chain (HVAC) sector. The joint venture will become market leader for residential and light commercial air-conditioning systems in the European Economic Area (EEA), but will compete with large world-scale manufacturers in this fast growing market. The operation will not therefore create or enhance a dominant position in the EEA.
Carrier, controlled by United Technologies Corporation, is a US based manufacturer of equipment for commercial, industrial and residential buildings. Toshiba manufactures and distributes high technology products and a variety of household appliances, such as air-conditioners.
Carrier and Toshiba will create a joint venture structured into two independent, jointly controlled companies, Toshiba Carrier Corporation (TCC) and Toshiba Carrier UK Limited, which will merge the parents' manufacturing and distribution operations in Japan and the UK respectively. TCC will ultimately be responsible for the joint venture's global distribution and HVAC product development operations.
The parties' activities in the EEA overlap only in the residential and light commercial (RLC) air-conditioning systems sector. Even though the new entity will become market leader after the merger, the Commission's enquiry showed that, even on the most narrowly defined market, the parties with a market share below 25%, will have to face current and potential competitors who can also supply the full range of RLC air conditioners. Moreover, the EEA market for such systems is still largely underdeveloped (5% of world-wide sales), compared to the United States and notably Japan (35% of world-wide sales). The Commission expects the market to grow rapidly, thus attracting even more competitors, and has therefore decided not to oppose the merger.