European Commission opens investigation into Caterpillar/MWM deal

An investigation has been launched into the proposed acquisition of MWM Holding GmbH by Caterpillar.

The European Commission has announced the commencement of an in-depth investigation into the proposed acquisition of MWM Holding GmbH by Caterpillar.

It explained that both parties are "active" in the commercialisation of reciprocating engine generator sets, used for power generation.

Merger and acquisition consultants may be required, as the organisation has 90 days to come to a final decision on the impact the deal would have on the sector.

Commenting on the decision, Joaquin Almunia, commission vice-president in charge of competition policy, claimed the buyout would remove a "strong competitor" from the market.

"The Commission needs to make sure that effective competition is preserved, in order to maintain innovation and prevent harm to consumers," he said.

Regulators expressed concerns that the deal could stifle innovation in the sector, as well as hampering the market's ability to restrain the behaviour of Caterpillar.

This comes shortly after Caterpillar received the go-ahead from regulators on its deal with mining equipment specialist firm Bucyrus.