The Commission has cleared under the EU Merger Regulation the proposed acquisition of the US-based telecommunications equipment manufacturer Andrew Corporation by the US-based coaxial cable manufacturer CommScope. The Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
CommScope manufactures cables and provides cable solutions for telecommunications systems and equipment. Andrew Corporation is active in the supply of base station antennas, cables and other equipment to wireless telecommunication operators and original equipment manufacturers.
The parties' activities overlap in the two markets for the manufacture and sale of 50 Ohm (50Ω) and 75 Ohm (75Ω) coaxial cables. 50? coaxial cables are used by wireless telecommunication service providers to connect the antennas located at the top of wireless base station towers to the radios and power sources located at adjacent antenna sites. 75Ω coaxial cables are used in telecommunication infrastructure, in particular by cable TV (CATV) operators. CommScope is active mainly in the production of 75Ω coaxial cables whereas Andrew produces almost exclusively 50Ω coaxial cables.
The Commission assessed the effects of the proposed merger both at an EEA and a global level. At the EEA level it found that in both product markets the overlaps would be minimal: CommScope has a very limited presence in Europe on the market for 50 ? cables, while Andrew's market share for 75 ? cables is below 1%.
Even if the market were worldwide, the increment brought by Andrew's activities in the 75? market would, again, be minimal (below 1%). For 50? cables, however, the combined share of the merged company would be above 50%. This is mainly due to the strong position both companies - particularly Andrew - enjoy in the US, where the transaction is currently being reviewed by the US Department of Justice. The Commission found, however, that the increase in the worldwide market share resulting from the merger would be in any case limited and that, after the merger, a wide choice of 50Ω coaxial cable suppliers would remain on the market.
The Commission also analysed a potential vertical relationship between the merging companies. CommScope manufactures bimetallic wires which are used in coaxial cables. The Commission found it highly unlikely that the vertical relationship between CommScope and Andrew could ultimately have a detrimental effect for customers by closing off or marginalising coaxial cable manufacturers, either at European or at global level. [4 December 2007]