On Monday 21 September, the European Commission opened an in-depth investigation into the proposed acquisition of Eaton's hydraulics business (‘Eaton Hydraulics’) by Danfoss.
Both Danfoss and Eaton are leading manufacturers of hydraulic components globally and the merger would remove one of the main competitors.
Margrethe Vestager, executive vice-president responsible for competition policy, noted that manufacturers and distributors of agricultural and construction machinery “depend on access to these components at fair prices for their businesses to thrive”.
An investigation is being launched “to assess carefully whether the transaction could lead to negative effects for competition, less choice and higher prices for European customers”, explained Commissioner Vestager.
The Commission has identified preliminary concerns in relation to the combination of the companies' hydraulic components businesses for mobile machinery, also known as ‘mobile applications’.
The Commission is concerned that the transaction may lead to a reduced choice in suppliers, as well as higher prices, for certain hydraulic components for mobile applications, including hydraulic steering units, electrohydraulic steering valves, and orbital motors.
Furthermore, the initial market investigation suggests customers would not have sufficient buyer power to counteract any risk of price increases. (Original version in French by Lionel Changeur)