The UK Competition & Markets Authority (CMA) has blocked the merger between Cargotec and Konecranes. Thus, Cargotec and Konecranes have decided to cancel the planned merger.
According to the CMA’s final report issued last week, the remedies - which would have removed all overlapping businesses of the two companies and were accepted by the European Commission (EC) - would not be effective in addressing the CMA’s concerns and thus the planned merger between Cargotec and Konecranes cannot be completed. The completion of the planned merger would have required approvals from all relevant competition authorities.
Ilkka Herlin, the chairman of Cargotec stated:“The Board of Cargotec is convinced that the merger would have created substantial value for the entire industry as well as shareholders by improving sustainable material flow. The combination would have created a strong European company enabling accelerated shared abilities to innovate without harming competition. We have done all we could to realise the merger and are disappointed that our plans have had to be abandoned. After a long and extensive regulatory review process and merger planning preparations it is time to shift our full focus on executing Cargotec’s own strategy and value-creation opportunities.”
Christoph Vitzthum, the chairman of Konecranes stated: The combination of Konecranes and Cargotec, as planned and announced on 1 October 2020, would have created a company that would have been greater than the sum of its parts. The merger control process has been extensive and the investigations thorough, and Konecranes Board of Directors is disappointed that the remedy package offered did not satisfy the concerns of all regulators. At the same time, we believe that further remedies would have not been in the best interest of Konecranes’ shareholders as they would have changed the strategic rationale of the transaction. Konecranes will continue to drive its strategy and pursue value-creation potential on a stand-alone basis. “
Cargotec and Konecranes will immediately cease the pursuit of the merger and the related processes and continue to operate separately as fully independent companies.