Antitrust Law Daily Wrap Up, ACQUISITIONS & MERGERS NEWS: EC clears Honeywell’s acquisition of Elster, with conditions, (Dec 21, 2015)
Organizations Mentioned:Elster Group | Honeywell | Honeywell International, Inc.
By Linda O’Brien, J.D., LL.M.
The European Commission (EC) has approved under the European Union (EU) merger regulation the proposed acquisition of Elster by Honeywell, subject to divestment of Honeywell's gas metering business, the EC announced today.
Honeywell is a U.S. diversified technology and manufacturing company that is active worldwide in three business segments: (1) aerospace, (2) automation and control solutions, and (3) performance materials and technologies. The company manufactures and distributes integrated systems and components such as valves, burners and meters for heating applications and the measurement and regulation of gas flows.
Elster is a German global supplier of integrated systems and components such as valves, burners, and meters for heating applications and the measurement and regulation of gas flows. Elster also manufactures and supplies electricity and water metering products.
The activities of Elster and Honeywell overlap in a number of areas, namely residential heating products (valves and electronic boards for boilers), industrial heating products (industrial burner systems and their components), and metering products, which are products for the upstream/mid-stream gas sector. The Commission's market investigation confirmed that the transaction did not raise competition concerns with regard to the first two areas of residential heating products and industrial heating products.
However, the Commission's market investigation identified competition concerns with regard to several upstream/midstream gas metering markets—the EEA-wide markets for turbine gas meters used for billing purposes, as well as gas flow computers and gas chromatographs that operate by the Digitale Schnittstelle für Gasmessgeräte (DSFG) protocol. The DSFG protocol is a data protocol for gas metering equipment that is prevalently used by customers in German speaking areas. As a result of the transaction, gas transmission system and distribution system operators that buy gas metering products would have only one other significant provider of gas meters in addition to the new merged entity.
To eliminate any competition concerns, Honeywell offered to divest to an independent purchaser all shares in a plant manufacturing gas meters and located in Butzbach, Germany, including all tangible and intangible assets as well as personnel. The divestiture completely eliminates the overlap of the parties' activities and allows a purchaser to develop the acquired assets in competition with the merged entity, according to the EC.
Companies: Honeywell International, Inc.; Elster Group
News: AcquisitionsMergers Antitrust