Antitrust Law Daily Wrap Up, ANTITRUST NEWS: European Commission clears Crane’s acquisition of MEI, subject to divestitures, (Jul 19, 2013)

By Tobias J. Gillett, J.D., LL.M.

The European Commission has approved Crane Co.’s acquisition of fellow unattended payment systems manufacturer MEI Group, subject to the divestiture of certain products and related assets in Canada and Germany, the Commission announced today.

The EC’s preliminary investigation had shown that the proposed transaction between the two U.S. companies, as originally notified to the EC on May 31, 2013, would have raised competition concerns in the European Economic Area (EEA) because the combined entity would have possessed “very high market shares” for certain types of unattended payment systems, including coin changers, used predominantly in vending machines, and banknote recyclers and acceptors for transport applications, such as ticket vending machines in public transport and pay-on-foot terminals in parking lots.

In response to the EC’s concerns, Crane committed to divest a coin changer product line manufactured in Germany by National Rejectors, a part of Crane, but only as to sales to EEA customers, and a banknote recycler and acceptor product line manufactured in Canada by CashCode, also a part of Crane, as well as certain production assets. Crane also committed not to close the proposed transaction until it had entered a binding agreement to sell the divested businesses to a purchaser approved by the EC. The EC concluded that the divested businesses would be viable, and that the commitments would resolve its competition concerns.

More information about the case can be found on the EC’s website in the public case register under the case number M.6857.

Crane Co. statement. Following the EC’s announcement of its approval, Crane released a statement reporting the EC’s conditional clearance. The statement notes that the “remedies would affect less than 10 percent of the aggregate sales of the combined businesses,” but that “[t]he time required to implement the required remedies would shift the anticipated closing of the acquisition into the fourth quarter of 2013.” The statement notes that the staff of the FTC has recommended approval of the transaction without conditions, and that the FTC is expected to vote on that recommendation on July 22.

However, the statement observes that, since “the aggregate sales of the two product lines exceed the $15 million threshold set forth in the Stock Purchase Agreement providing for the MEI acquisition, Crane Co. is entitled not to close absent reaching a mutually satisfactory agreement with the sellers.” Although Crane expects its negotiations with Bain Capital and Advantage Partners, the representatives of MEI, to continue, it states that “no assurance can be given that a mutually satisfactory adjustment to the transaction terms will be achieved.”

Companies: MEI Group; Crane Co.

News: Antitrust