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IP/99/356

Brussels, 26th May 1999

Commission clears take-over of Sundstrand by United Technologies (both USA)

The European Commission has approved a concentration by which the industrial group United Technologies Corporation (UTC) acquires sole control over Sundstrand Corporation. Both companies are US based. The newly formed company, HSSail Inc., will produce industrial compressors and aerospace products both for commercial and military applications, namely: aircraft flight actuation systems; auxiliary power units; starters for aircraft engines; environmental control systems for aircraft; and gas turbine engines. Given the companies' modest shares of markets where their activities overlap the proposed concentration does not create or strengthen a dominant position in any of the product markets concerned.

UTC is a global and diversified US based industrial group of companies. The UTC group includes Otis (elevators, escalators walkways and shuttle systems); Pratt & Whitney (commercial and military jet engines, rocket engines and space propulsion systems); UTC Flight Systems (flight and fleet control systems and propellers for commercial aircraft and commercial and military helicopters); UT Automotive (car components and systems); Carrier (heating, ventilation and air conditioning (HVAC) equipment for commercial, industrial and residential buildings); and turbo Power and Marine (industrial gas turbines).

Sundstrand is a US supplier of aerospace and industrial products such as aerospace electric, mechanic and power systems, pumps and enclosed gear drives.

UTC will integrate Sundstrand through a newly created subsidiary named HSSail Inc. The rationale of the operation is to enlarge UTC's range of products for aerospace applications. Through this operation UTC will be able to compete in world markets as an integrated company.

UTC's presence in the relevant aerospace product markets is quite small except for some environmental control systems (ECS) and gas turbine engines for aircraft applications. UTC is also market leader for a particular type of auxiliary power unit (APU) in the highest range (i.e. over 1,100 shaft power). However, Sundstrand is not active in any of the product markets where UTC has a major presence. Sundstrand's activity in aerospace products is relatively small even for APUs of the smallest ranges (i.e. below 550 shaft power).

Considering the above market situation the proposed concentration does not create or strengthen a dominant position of the parties in any of the products concerned. The Commission has therefore decided to approve the present concentration and to declare it compatible with the common market.


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