Eaton gets green-light to buy Danfoss division, including Wroclaw factory

The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Eaton’s hydraulics business (Eaton Hydraulics) by Danfoss. The approval is conditional on full compliance with the commitments offered by Danfoss.

This decision follows an in-depth investigation of the proposed acquisition which combines the activities of Danfoss and Eaton Hydraulics. Danfoss and Eaton Hydraulics are both leading global manufacturers of hydraulic components used to make hydraulic systems for various kinds of machinery. The purpose of a hydraulic system is to make a machine move, by transferring energy from the point of source, e.g., an engine, to the point of use. The proposed transaction would remove one of the main competitors in this market.

During its in-depth investigation, the Commission gathered extensive information and feedback from competitors and customers of the merging companies.

Following its investigation, the Commission had concerns that the transaction, as initially notified, would have harmed competition, due to the combination of both companies’ hydraulic components businesses for mobile machinery, also known as ‘mobile applications’ (for example, agricultural and construction machinery).

To address the Commission’s competition concerns, Danfoss offered the following commitments:

  • The divestment of parts of Danfoss’ HSU, ESV and orbital motors businesses. These include Danfoss plants in Wroclaw (Poland), Parchim (Germany) and Hopkinsville (U.S.).
  • The structural divestiture will be complemented by the transfer of Eaton’s production lines for medium power orbital motors (HP and VIS models), Eaton’s Series 10 production line for HSUs, and production assets for Eaton’s ESV portfolio, to the Hopkinsville plant.
  • In order to enhance the competitiveness of the divestment business, and in addition to structural divestitures, Danfoss also committed to transfer additional Danfoss and Eaton technology for HSUs.

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