Mergers: Commission approves Assa Abloy’s acquisition of Agta Record, subject to conditions

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The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Agta Record by Assa Abloy. The approval is conditional on the implementation of a remedy package by Assa Abloy. Assa Abloy and Agta Record are two of the main Original Equipment Manufacturers (OEMs) of automatic pedestrian doors (including automatic swing, sliding and revolving doors) in the European Economic Area (EEA), and significant OEMs of industrial doors (including high-speed doors), for which they also provide after-sales services. Assa Abloy is also an important supplier of Access Control Systems (ACS) and related components in the EEA. The Commission’s investigation The Commission had concerns that the proposed transaction, as originally notified, would have significantly reduced competition in:

• the supply of different types of automatic pedestrian doors in various Member States, including Austria, Czechia, Finland, France, Hungary, Iceland, the Netherlands, Slovenia and the United Kingdom, and
• the supply of industrial high-speed doors in France.

These concerns also extended to the provision of after-sales services, including maintenance, repair and overhaul of the products in question. The merged entity would have been either the largest supplier or the second largest supplier of those products in the relevant countries, with limited constraints from competitors. The Commission was therefore concerned that the proposed acquisition would harm competition and lead to increased prices for intermediary and final customers. The Commission also investigated issues raised by third parties in relation to the supply of ACS and related components, an area in which Agta Record is not directly active, as well as the supply of locks and other components. The proposed remedies To address the Commission’s concerns, Assa Abloy offered the following commitments:

• The divestment to a competing OEM of Agta Record’s automatic pedestrian door business in the Netherlands, Austria, Hungary and Slovenia and of Assa Abloy’s automatic pedestrian business in the United Kingdom and France. The divestment package also includes a licence to market Agta Record’s automatic pedestrian door products and/or use of Agta Record’s brands in Czechia, Finland and Iceland and an overall license to access and use Agta Record’s technology in connection with the manufacturing of automatic pedestrian doors.
• The divestment of Agta Record’s industrial high-speed door business located in France.

In addition, Assa Abloy has committed to supply spare parts and related technical information and servicing tools on fair and reasonable terms for a period of at least ten years in a range of EEA countries, including by means of an online marketplace. These commitments eliminate the Commission’s concerns in relation to the proposed transaction. In particular, they remove the overlaps between the companies’ activities in each of the national markets for which the Commission had concerns. Therefore, the Commission concluded that the proposed transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments. Companies and products Assa Abloy, based in Sweden, manufactures and sells a broad range of access solutions, including automatic pedestrian doors, automatic industrial doors, locks, sensors, as well as access control systems and related components. Assa Abloy also provides after-sales services for its products. Agta Record, based in Switzerland, manufactures, supplies and services automatic pedestrian doors, with limited activities in industrial doors. Assa Abloy currently owns a non-controlling 38.75% interest in Agta Record. Merger control rules and procedures The transaction was notified to the Commission on 9 January 2020. The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it. The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). This deadline is extended to 35 working days in cases where remedies are submitted by the parties, such as in this case. More information will be available on the Commission’s competition website, and in the Commission’s public case register under the case number M.9408.