The European Commission (COM) has approved the modified merger proposal of the two Finnish manufacturers of cargo handling equipment, following their promise to divest certain businesses.

Initially, COM had concerns that the merger would have substantially lessened competition and likely led to higher prices in the European Economic Area.

Specifically, COM was concerned with Cargotec-Konecranes' dominant position in rubber-tyred gantry cranes, straddle/shuttle carriers, and mobile equipment (particularly reachstackers, empty container handlers, and heavy-duty lift trucks).

To address the issue, Cargotec has decided to divest its full cranes and straddle/shuttle carrier business, including a manufacturing plant in Poland and a licence for the use of Cargotec's Kalmar brand for the divested product categories.

Konecranes will, in turn, divest its business for the manufacturing and commercialisation of reachstackers, full container handlers, empty container handlers, and forklift trucks. The decision includes production plants in Sweden and China and contracts with distributors.

"Cargotec and Konecranes are two global leaders of container and cargo handling equipment. Port terminal operators, logistics companies and a wide range of industrial players in Europe depend on this equipment to lift and carry containers and heavy loads. In the current container shipping industry landscape, we needed to make sure that this merger would not harm the supply chains by further price increases," Margrethe Vestager, COM's EVP in charge of competition policy, said.

She also underlined, "Following the remedies offered by the two companies, customers in Europe will continue to have sufficient choice of port equipment and will continue benefitting from competitive prices and a great choice of technology."

Other competition authorities (among others in the US, UK, Australia, New Zealand, Singapore, and Israel) are still scrutinising the merger proposal.