Brussels (The Brussels Morning Newspaper) – European Commission approves acquisition of Kinetics by Exyte.
The European Commission has agreed unconditionally, under the EU Merger Regulation, to the proposed acquisition of Kinetics Holding GmbH (‘Kinetics’) by Exyte GmbH (‘Exyte’). The Commission figured that the transaction would not increase competition situations in the European Economic Area (‘EEA’).
Exyte is engaged globally in the design, engineering, procurement, and building of high-tech industries such as semiconductors. Kinetics delivers design and installation services as well as certain tools for production plants and laboratories.
What are the impacts of this acquisition on semiconductor markets?
The EU Commission examined the impact of the transaction in the EEA markets for services and products for semiconductors and other state-of-the-art technology manufacturing facilities.
The Commission discovered that, by acquiring Kinetics, Exyte would expand its sight and gain scale across the EEA for services and products for semiconductor manufacturers, which include: (i) general contractor services; (ii) certain installation services; (iii) certain equipment, in particular gas and chemical supply systems (‘Media Supply Systems’); and (iv) technical facility management services.
Exyte’s and Kinetics’ movements on these markets give upgrade to moderate horizontal overlaps in the markets for the provision of installation services and Media Supply Systems for semiconductor structures in the EEA, leading to an unproblematic combined position.
The transaction also gives height to vertical and conglomerate links. The Commission’s investigation notably demonstrated that Exyte has a strong market position as a general contractor for semiconductor installations in the EEA. Nevertheless, the Commission discovered that the transaction, as notified, would not significantly lessen competition in the relevant markets.
Why did the European Commission approve Exyte’s acquisition of kinetics?
In particular, the Commission found that the products and services delivered by Kinetics in the markets for installation services, Media Supply Systems and/or technical facility management services are not uncommon and are offered by a number of other market players. Competing providers of installation services and Media Supply Systems do not rely on Exyte as their customer. End-customers involved in the semiconductor manufacturing industry would persist in exerting effective countervailing buyer power. Technical facility management benefits are, if at all, sub-contracted following the completion of a manufacturing facility and therefore cannot be co-exited with Exyte’s general contractor services.
The Commission therefore deduced that the proposed merger would not raise competition concerns in any of the markets discussed in the EEA or any substantial part of it and approved the transaction unconditionally.
