This is how the commission commented on Kone’s giant deal – “Early”

On Wednesday, it was reported that a Finnish elevator company Kone and its German rival TK Elevator unite. Along with the machine, TKE is one of the world’s leading manufacturers of elevators and escalators.

The merger is expected to take place in 2027 at the earliest. In addition, the merger still requires, among other things, approvals from the authorities.

The merger of the two elevator and escalator giants would be such a revolution in the industry that the competition authorities might also be interested in it.

Kauppalehti asked the Commission’s Directorate-General for Competition (DG COMP), which oversees business transactions, whether the merger of Kone and TKE is being investigated.

The transaction has not yet been notified to the Commission, answered the Commission’s press officer responsible for competition and customs affairs Paula Clara Ritter‑Moschütz.

“This business arrangement has not been notified to the Commission so far, if the arrangement exceeds the notification threshold and is subject to notification to the European Commission, then we will look into the matter,” said Ritter-Moschütz.

The EU Merger Regulation obliges the Commission to investigate all transactions that exceed certain turnover limits. These deals must be approved by the Commission before execution.

The trade between Kone and TKE clearly exceeds the limits set in the regulation, in which case the trade needs the approval of the European Commission.

The main reason for the commission’s investigation is usually that the acquisition may weaken competition. The Commission examines whether a dominant market position is created or strengthened, which could lead to higher prices, lower quality or less innovation.

According to experts, it is possible that, for competitive reasons, the commission may demand that some parts of Kone’s and TKE’s trade be excluded from the merger.

The machine’s competitor Schindler has already announced that it will challenge the merger.

Kauppalehti asked the press representative of the Commission’s competition department, does it seem that the trade will create a market position that is too dominant for the European market?

“At this point it is too early to predict anything,” Ritter-Moschütz replied.