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Commission approves Nidec's acquisition of Embraco subject to conditions

Christian Fernsby ▼ | April 12, 2019
The European Commission has approved the proposed acquisition by Nidec of Embraco, Whirlpool's refrigeration compressor business.
Europe   Following its in-depth market investigation the Commission had concerns
The approval is conditional on compliance with Nidec's commitments.

Following its in-depth market investigation the Commission had concerns that the transaction as notified would have reduced competition and resulted in higher prices and less choice.

The Commission found that demand for variable speed refrigeration compressors for household applications is set to increase significantly, as appliance manufacturers seek to produce refrigerators that are more energy efficient and environmentally friendly.

In the coming years, there is limited entry expected of new market participants in the EEA market, including from China.

The Commission did not find competition concerns regarding fixed speed refrigeration compressors for household applications, where Nidec and Embraco's combined market position is more limited, and there are many more competitors active.

Nidec decided to address the Commission's competition concerns by proposing a set of commitments.

In particular:

Nidec offered to divest its refrigeration compressor business for both household and light commercial applications.

This includes plants in Austria, Slovakia and China and removes the entire overlap between Nidec and Embraco in the markets where the Commission had identified competition concerns.

Nidec also committed to make available to the purchaser of the divestment business significant funding for future investments in the facilities.

This funding is dedicated to investments in production lines in Nidec's plants in Austria and Slovakia.

The amount made available is equal to the capital expenditure that Nidec would have committed to the two plants without the transaction.

The Commission considers that this will ensure the future viability and competitiveness of the Austrian and Slovak plants.

Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in the EEA and worldwide.

The Commission's decision is conditional on full compliance with the commitments.