EU Commission probes Nidec’s acquisition of Embraco

The European Commission has launched an investigation into the merger of Nidec and Embraco over competitiveness fears.

This week (26 November), the European Commission launched an ‘in-depth investigation’ into the acquisition by Nidec of Embraco.

The two companies are leading global suppliers of hydrocarbon-based household and commercial refrigeration compressors.

Nidec, which bought SECOP – another leading supplier of hydrocarbon compressors – in 2017, purchased Embraco from white goods manufacturer Whirlpool for $1.08 billion (€890 million) in April.

"Refrigeration compressors are used not only in commercial applications but also in our homes, in fridges and freezers,” said EU Competition Commissioner Margrethe Vestager. “This industry is already highly concentrated, therefore the Commission will closely analyse the impact on competition of Nidec's proposed acquisition of Embraco, to ensure their customers and final consumers are not harmed due to higher prices or less choice."

The Commission concedes that Nidec has attempted to address competition concerns since the firm notified the EU executive of the transaction on 8 October 2018.

However, after the Commission had consulted other players in this market segment, it decided to investigate all possible ramifications of the potential sale.

The Commission has until 15 April 2019 to decide what to do. It has previously required companies to divest some of their portfolios, approved the sales with no changes, or split companies up.

By Charlotte McLaughlin

Nov 30, 2018, 12:36

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