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EC approves Danish Agro's acquisition of Konekesko's altic and Finnish agrimachinery busin

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Christian Fernsby ▼ | March 26, 2019
The European Commission has approved, under the EU Merger Regulation, the acquisition by Danish Agro of Konekesko's agricultural machinery distribution businesses in Finland, Estonia, Latvia and Lithuania.
Europe   The approval is conditional on the divestiture
The approval is conditional on the divestiture of Danish Agro's agricultural machinery distribution business in Estonia.

Danish Agro and Konekesko are both active in the distribution of agricultural machinery implements, spare parts and the provision of related after-sales services.

The Commission examined the effects of the proposed transaction on competition in the following markets, where the activities of Danish Agro and Konekesko overlap.

The Commission was concerned that the transaction, as notified, was likely to lead to higher prices and lower service quality for Estonian customers of forage harvesters and combine harvesters. In these markets, Konekesko (distributor for Claas agricultural machinery) and Danish Agro (distributor of John Deere agricultural machinery) are the leading distributors and have been competing closely with each other.

The Commission found that no competition concerns would arise with respect to all other markets where the companies' activities overlap, due to the presence of a sufficient number of alternative suppliers on those markets.

To address the Commission's concerns, the companies offered to divest Danish Agro's activities of distribution and sale of agricultural machinery implements, spare parts and provision of after-sales services in Estonia. These businesses are carried out by OÜ Baltic Agro Machinery, including in particular the distributorship agreement with John Deere.

The commitments fully address the Commission's concerns in relation to the distribution of forage harvesters and combine harvesters in Estonia and ensure that the divestment business will be a viable competitor to the merged entity.

Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns in Estonia. The decision is conditional upon full compliance with the commitments.