Commission, May 4, 2011, No M.6097

Dear Sir/Madam,

Subject:  Case No COMP/M. 6097-CATERPILLAR / BUCYRUS

Notification of 25 March 2011 pursuant to Article 4 of Council Regulation No 139/20041

Publication in the Official Journal of the European Union No C 108, 07.04.2011, p. 10

1.   On 25 March 2011, the European Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 ("Merger Regulation") by which the undertaking Caterpillar Inc. ("Caterpillar", United States of America) proposes to acquire sole control of the whole of Bucyrus International Inc. ("Bucyrus", United States of America) by way of purchase of shares.

I. THE PARTIES AND THE OPERATION

2.  Caterpillar is a global manufacturing company, active in the manufacture and sale of machinery, engines and related parts for machinery, including mining equipment. Through its subsidiary Caterpillar Financial, Caterpillar also provides financial services (capital leases) to its customers and dealers2.

3.  Bucyrus is a global manufacturing company engaged in the manufacture and  sale  of mining equipment as well as in the supply of parts and after-sales services for such equipment.

4.  As a result of the transaction, Bucyrus will ultimately become a wholly owned subsidiary of Caterpillar. It follows that the proposed transaction is a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

II.  EU DIMENSION

5.  The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million3 (Caterpillar: EUR 23,226 million; Bucyrus: EUR: 2,687 million). Each of them has a EU-wide turnover in excess of EUR 250 million (Caterpillar: EUR […]; Bucyrus: EUR: […]), but they do not achieve more than two-thirds of their aggregate EU- wide turnover within one and the same Member State. The notified operation therefore has an EU dimension in the sense of Article 1(2) of the Merger Regulation.

III. PRELIMINARY ASSESSMENT Relevant Markets

6. The Parties are active in various segments of the mining equipment industry, but generally focus on different product categories. In particular, both Parties are presently active in the supply of surface mining trucks and underground mining equipment, where Caterpillar and Bucyrus are specialized in equipment designed for use, respectively, in hard rock and soft rock4 settings. Bucyrus is also active in the market for hydraulic excavators for mining, a kind of digging and loading machine, from which Caterpillar withdrew in 2004, but announced its intention to re-enter in 2010. As to vertical relations, Caterpillar manufactures diesel engines for a wide range of applications, including mining equipment.

Product Market definition

Surface Mining Trucks

7.  According to the Parties, Surface Mining Trucks ("SMTs") constitute a single distinct relevant product market. This market has not previously been considered by the Commission. In the views of the Parties, SMTs distinguish themselves from other vehicles based on (i) the specific function for which they are engineered, i.e. the transport of overburden, rock and minerals in various types of surface mines; and (ii) their nominal payload capacity5, which ranges from 100 to 400 metric tonnes.

8. The Parties argue that a hypothetical subdivision could be made according to the different drive system employed in SMTs, i.e. mechanical or electric, but also that under general conditions, trucks equipped with either system perform the same function and can be considered substitutable products from the demand side.

9. The market investigation confirmed the parties' view that trucks with a nominal payload capacity below 100 metric tonnes are not engineered specifically for use in high production mining environments but rather used for different end applications, such as construction (e.g. road building) or earthmoving.

10. The Parties submit that, although payload capacity is relevant to distinguish SMTs from other smaller off-highway trucks, within SMTs, it is not meaningful to segment further by payload capacity, as this neither reflects their commercial practice nor the needs of individual customers

11. The market investigation provides an ambiguous picture as to this argument. On the one hand, payload is a significant factor in the purchasing decision. Customers typically look at a narrow range of payloads for a particular usage, driven by existing infrastructure, available loading equipment and cost of haulage. The more material that can be safely transported in one cycle, the lower the cost of transport, and thus the lower the ultimate cost per tonne of extracted minerals. Thus, mines need to ensure that excavator capacity and transport capacity (of the SMT) broadly correspond to each other, meaning that customers generally cannot easily switch to smaller transport equipment, as this would significantly raise the mining costs.

12. On the other hand, the market investigation revealed that there is no precise delineation point between SMTs with different payloads which can be used to exactly distinguish between various functions, and which would in turn allow clear-cut, narrow segmentations of different markets or market segments. As such, it is possible that there is a continuum across the whole range of payloads. In other words, it will often be possible to substitute an SMT with a particular payload with others with somewhat lower and particularly with those of a somewhat higher payload, although it is in itself unlikely to be possible to substitute small SMTs with very high payloads (e.g. of 290 MT and above) with those loading only somewhat more than 100 MT (and vice versa). There are therefore generally customers with specific demand for each of those groups of SMT. One common categorisation offered by several respondents is small SMT with payloads of 100-200 MT, medium from above 200 – 289 MT and large with payloads of 290 MT and above . The exact market definition can be left open for the purpose of this decision. Market shares will be provided for one overall market for all payloads above 100 MT as well as for three sub- segments according to payload segmentations of 100-200 MT, 200-289 MT and 290 MT and above respectively.

13. The Commission has also examined the issue of whether there may be separate markets depending on different drive systems employed in SMTs, i.e. mechanical or electric. Mining trucks are powered by a diesel engine employing either a mechanical or electric drive system. A mechanical drive system uses a mechanical transmission system whilst in the case of an electric drive system, the diesel engine drives a generator or an alternator that provides power to the electric motors at the rear wheels.

14. The market investigation revealed that under general conditions, both systems perform the same function and can be considered substitutable products from the demand side. There were, however, submissions indicating that personal preferences and habits may determine a specific customer’s choice to opt for a mechanical drive rather than an electric drive mining truck (or vice versa). Those preferences can be mine-, firm- or  even nation- or continent wide due to path dependencies resulting from the type of vocation and training which the workforce received in the past. Customers therefore often seek to avoid using a mixed fleet for the same application, due to the different operational characteristics of the vehicles. Moreover, there are submissions from the market investigation which state that there are differences in the SMT's performances as a function of the environment: mechanical drive trucks have a technical advantage on slippery terrains, while electric drive trucks may achieve higher loaded retarding power, thus allowing for higher speed while going downhill. Furthermore, it seems that the latter characteristics are more important the higher the nominal payloads of the SMTs. There are indications that the trend is shifting towards electrical drive trucks when a payload of more than about 180-240 MT is concerned. However, despite these preferences, the majority of customers consider that both kinds of trucks are substitutable with each other. In any event, the question whether or not they define separate markets can be left open as competition concerns do not arise under  any possible market definition..

Underground Mining Equipment

15. The Commission has not previously considered the markets for underground mining equipment. The Parties define underground mining equipment as mining machines specially engineered for underground use. This requires the equipment to be much smaller in size (to fit into compact spaces), equipped with specific safety features, and specialized in cutting and digging features for the different mining methods.

16. The Parties argue that there are separate markets for each of the different pieces of mining equipment, and identified as relevant to the proposed transaction the following segments: (i) Hard Rock Load Haul Dumpers ("LHDs"); (ii) Coal and Soft Rock LHDs; (iii) Hard Rock Underground Mining Trucks ("UMTs"), and (iv) Coal and Soft Rock Underground Haulage Vehicles. These segmentations are based on (i) the different function of each piece of equipment and (ii) its application in either hard rock or soft rock settings.

17. In particular, the Parties submit that equipment used in hard rock mines differs from that used in soft rock mines in terms of breakout force, operating weight, horsepower, speed on grade and safety requirements (in particular explosion risks in dusty coal mines) and that, for these reasons, they are not substitutable by the end customers. Hard rock can be defined as igneous and metamorphic rock, while soft rock is sedimentary rock.

18. The market investigation largely confirmed the relevance of the distinction between hard and soft rock as regards the end use of the material considered and therefore that these types of equipment belong to separate relevant product markets. In any event, the exact scope of the market definition can be left open as competition concerns do not arise under any possible market definition.

Hydraulic Excavators

19. In a previous decision6, the Commission considered the market definition for digging and loading equipment and indicated that it could be segmented into: (i) hydraulic excavators having a weight of more than 90 metric tonnes; (ii) electric rope shovels with a capacity of 11.5 cubic metres upwards; and (iii) wheel loaders having an engine power exceeding 500 horsepower.

20. Although the market definition was left open, the Commission considered that, given the significant differences existing among these machines, it seemed reasonable to regard large-sized hydraulic excavators as a separate market. The Parties propose to follow this view.

21. In the present case, it is possible to leave open the exact definition of the relevant market as the transaction does not raise competition concerns regardless of the exact market definition considered.

Diesel engines for mining application

22. Diesel engines such as those manufactured by Caterpillar can be used in a variety of applications and not only in mining equipment. The Commission has not defined the upstream and downstream markets to analyze vertical relations for the diesel engine industry. However, the relevant market definition can be left open in the present case since even when considering the market for engines within the narrowest framework of diesel engines for mining applications, the proposed transaction does not lead to serious doubts as to its compatibility with the internal market.

Geographic Market definition

23. The Parties submit that the markets for SMTs and underground mining equipment are at least EEA-wide. In the absence of previous decisions concerning these markets, the Parties submit that, in relation to the earth-moving and construction equipment business sector, the Commission has considered that there were indications that this sector was moving towards a global basis, as companies were active worldwide, there were low transportation costs and no tariff barriers,7 and that the same would apply to SMTs and underground mining equipment.

24. In a previous decision8, the Commission considered that the market for digging and loading equipment, including hydraulic excavators, was probably global but left the precise scope of the geographic market open. The Parties support this view and submit that the scope of this market is at least EEA-wide.

25. In line with the Commission's precedents (where the industry was considered in terms of potential horizontal overlaps), the relevant geographic market for diesel engines is at least EEA-wide, and probably global, given that conditions of competition are generally homogeneous across regions9.

26. The market investigation in the present case generally supported a finding that the market was global in scope, although a number of customers indicated that in certain areas or regions,  the   conditions  of   competition  might  be   specific  owing  to   the particular implantation of certain competitors in certain geographical areas which was relevant from the point of view of after-sales service and maintenance.

27. In this regard, while manufacturer relationships are often global in nature, there are indications that the market for the supply of SMTs may be narrower, particularly as the acquisition of SMTs is undertaken at the asset or site level. The boundaries of the  market will vary from case to case, but will typically be dictated by the ability of a vendor to provide after sales service and support within an acceptable time frame. In some cases, this may result in a market being limited to a narrower market than a worldwide one. However, it should be noted that the EEA comprises 1-2% of the overall world market size for SMTs - given this very small proportion, it could be excluded that it presents specific characteristics that would identify the EEA as a separate geographic market.

28. In the present case, the relevant geographic market can in any event be left open, since the transaction does not lead to serious doubts as to its compatibility with the internal  market irrespective of whether the geographic scope of the market is global, EEA-wide or even further delimited within the EEA.

Competitive assessment

Surface Mining Trucks

29. Worldwide, there are seven significant manufacturers of mining trucks. In an overall worldwide market, the market leader is Caterpillar (50-60%) and its strongest and closest competitor is Komatsu (20-30%). Smaller competitors are Belaz, Bucyrus and Hitachi (all less than 10%) and Liebherr, which focuses on large trucks (less than 5% of the overall market). These figures are somewhat overestimated as the market strength of the seventh supplier, the Chinese company Xiangtan Electric Manufacturing Corporation Ltd (“XEMC”), could not be estimated as it does not provide sales data to the relevant data provider.

30. The following table outlines the market shares in volume for the worldwide market as a whole and for a subdivision into the three categories specified in paragraph 12 above. Due to the lumpy nature of the sales, the Commission examined the market shares in the average of the years 2008 until 2010. If only 2010 was regarded, the shares of the parties would be somewhat lower.

SMTs, volume (units sold) and market share, 2008-2010

Source: Commission's Market investigation10

31. In the absence of significant overlaps between the parties,  a differentiation  between SMTs with either an electric or a mechanical drive system does not change the competition assessment. In the segment where Caterpillar is very strong (mechanical), Bucyrus is not active at all. In the segment of electrical drive systems, Caterpillar has only one truck model with an overall market share of less then 1% even in its respective payload segment of large SMTs where Bucyrus has a very modest market share of less than 5%.

32. Considering an overall worldwide market for SMTs, Caterpillar is the market leader, whilst Komatsu is the strongest competitor. Other competitors such as Bucyrus, Hitachi and Belaz have quite similar market shares of less than 10% whilst Liebherr is overall the smallest competitor in view of its specialisation in larger trucks. Whilst the situation in the medium segment corresponds to the overall picture, the merging parties are relatively strong in the small SMT segment. Contrary to that, in the large  market segment Komatsu has a stronger presence. In an overall worldwide market, Komatsu has gained significant market share from Caterpillar over the last several years - increasing by around 10 percentage points between 2007 and 2010.

33. This assessment does not change when considering the market share figures expressed in value. Value figures have been calculated using 2008-2010 volume data (units sold)  of each model of truck and the corresponding average price data provided during the market investigation. These figures are somewhat overestimated for all other parties if compared to those expressed in volumes since Belaz did not provide its price data and, hence, is not included. Nonetheless, the market positions of the Parties and their closer competitors have been cross-checked by comparing the ratio of proportionality of the sizes of their sales in Euros to those of the market shares measured in volumes. This exercise shows comparable figures. In particular, Komatsu is confirmed as being the strongest player after Caterpillar  in the overall market for SMTs and in the medium segment (in both cases, Komatsu’s market share is [30-40%] and Caterpillar's is [40-50%]) and has a stronger position in the large market segment ([50-60%]; Caterpillar: [20-30%]); in all the possible markets, Bucyrus and Hitachi have market share of less than 10% ([5-10%], with the exception of Bucyrus which has [0-5%] in the large segment), whilst Liebherr is a (small) player only in the overall market for SMTs ([0-5%]) and in the large segment ([5-10%]).

34. Irrespective of whether an overall market or subsegments are considered, the proposed transaction will not significantly alter the acquiring entity’s market position. This is not only due to the small merger specific increments but also due to the non-closeness of competition between Caterpillar and Bucyrus, which is outlined in further detail in the following paragraphs.

35. Caterpillar has traditionally focused on mining trucks based on mechanical drive trains. The firm offers eight different models of mining trucks, seven of them driven mechanically and only one electrically. Contrary to that, Bucyrus produces six mining trucks which are all based on electric drive systems.

36. Caterpillar uses breaking power, high traction control and the familiarity of the “Caterpillar”  brand  name  as  reasons  to  differentiate  itself  from  competitors,   while Bucyrus was the first manufacturer which introduced the AC drive system and uses as a selling point that its technologically less complex electric drive systems require lower maintenance and repair expenses, thereby providing a high haul productivity (in particular in comparison to mechanical drive systems).

37. In addition, Bucyrus and Caterpillar have different regional focuses. While Bucyrus has relatively stronger sales in China and Australia, Caterpillar has a stronger presence in North America and Latin America. In the EEA, which represents c.1-2% of the world market, Bucyrus has had no sales of any mining trucks in the last […].

38. Therefore, Bucyrus cannot be considered to be Caterpillar’s closest competitor. Indeed, this has been confirmed by a significant majority of respondents in the market investigation. Moreover, the product offerings of the two companies seem to be rather complementary. In this respect, customers did not raise substantiated concerns as  regards the proposed transaction – indeed, some of them rather welcomed the merger  due to the better product range which they believed the merged enterprise would be able to offer.

39. Apart from Komatsu and Hitachi, there are at least three additional mining truck manufacturers, i.e. Liebherr, Belaz and XEMC, that are likely to provide additional or increased competitive constraints on the merged entity:

40. Liebherr, specialised in large mining trucks, is expanding its mining truck range into somewhat lower payload models. In October 2010, the company announced its plans to invest more than US$ 20 million over the next five years to expand its truck manufacturing plant at Newport News, Virginia, thereby doubling Liebherr's manufacturing capacity by 2012. Moreover, the company is currently testing two mining trucks with a payload capacity of 218 and 290 MT.

41.  Belaz, a major supplier of mining trucks based in Belarus, has also outlined recent expansion plans. The company is also upgrading its manufacturing facility and has announced an increase in its output in the smaller segment (136 MT model) by 20%11. In addition, as specified on its website12, it has launched various new mining truck models, i.e. the 7517 model (with a nominal payload capacity of around 154 metric tonnes), the 7531 model (with a nominal payload capacity of around 240 metric tonnes), and the 7560 model (with a nominal payload capacity of 320-360 metric tonnes). These trucks are electric-drive and can be provided with the same engines (supplied by MTU) and drive-trains (supplied by General Electric) as used in Bucyrus’s mining trucks.  Thus, due to new models available from Belaz in the middle and large segment and the increased output in the small SMT segment, its market position is likely to improve in the coming years.

42. XEMC has traditionally operated in its home country of China. Recently, the company seems to be making efforts to expand its mining truck business abroad. One big mining company in Australia is currently trialling two 220 MT trucks at its mines. Similar to Belaz, XEMC’s trucks are electric-drive and available with the same third-party  supplied   engines   and   drive-trains   found   on   Bucyrus   mining   trucks. Customers responding to the Commission’s market investigation have also indicated that in the longer term, SMT business could be taken up by emerging market suppliers such as Belaz and XEMC.

43. In addition to these factors on the supply side, in this specific case, there is a range of large and sophisticated customers active worldwide, such as Rio Tinto, Vale or BHP Billiton. The market investigation highlighted that customers generally did not have any substantive concerns about any potential adverse impact of the transaction, although certain short-term adjustments regarding after-sales service could not be excluded. Indeed, as specified in paragraph 38 above, a number of customers in fact expect an improvement in the overall quality of offer of SMTs.

44. Moreover, competitors did not raise any substantive concerns and highlighted the increased competitiveness of the merged enterprise due to the complementary nature of the two businesses. Furthermore, it was stated that the merger would lead to a continuation of the development and use of electric drive trucks with alternating current drive technology.

45. If the market would be EEA wide or even narrower the proposed transaction would in addition not lead to significant anticompetitive effects since Bucyrus has not been active in the EEA for more than […] and there is thus no regional overlap between the Parties activities in the EEA or in parts of it. In the last three years, only Caterpillar and Hitachi sold a total of […] SMTs within the EEA. This represents less than 1% of the global SMT sales.

46. For the above-mentioned reasons, the proposed transaction will not cause a significant impediment of competition on the SMT market, irrespective of the precise geographic market definition. .

Underground Mining Equipment

47. As outlined above in paragraph 18, the market investigation largely confirmed that Hard Rock LHDs, Soft Rock LHDs, Hard Rock UMTs and Soft Rock Underground Haulage Vehicles can be considered as separate product markets. On this basis, there is no overlap between the Parties, given that Caterpillar and Bucyrus are specialized in equipment designed for use, respectively, in hard rock and soft rock settings.

48. Nonetheless, even if the distinction between hard and soft rock were not to be considered relevant, the parties’ combined market share would remain below 25%. The tables below show market share data for the two hypothetical relevant markets of, respectively, Hard and Soft Rock LHDs and Hard Rock UMTs and Soft Rock Underground Haulage Vehicles:

Hard and Soft Rock LHDs, volume (units sold)13  and market share, 2010

Source: the Parties' estimate

Hard Rock UMTs and Soft Rock Underground Haulage Vehicles, volume (units sold) and market share, 2010

Source: the Parties' estimate

49.  In these hypothetical markets, the increment is modest, and stronger players and a number of other smaller manufacturers are present in the market and will continue to provide a competitive constraint on the merged entity.

50. Therefore, in light of the above, the proposed transaction does not give rise to competition concerns as to underground mining equipment.

Hydraulic Excavators

51. Caterpillar is not active in the manufacturing and sale of hydraulic excavators, a market from which it withdrew in 2004, but announced its intention to re-enter on 18 June 2010. For the completion of its relaunch project (scheduled for […]), Caterpillar initially authorized […] for the development of a full line of hydraulic excavators, but has so far incurred sunk costs of […], which equates to […] of the total project costs. Moreover, shortly after the announcement in 2010, Caterpillar began negotiations with Bucyrus […]

52. As confirmed by the market investigation, the market for hydraulic excavators is characterized by intense competition. Bucyrus has an increasing market position at EEA level with [30-40%] in 201014, but only [10-20%] in the same year at worldwide level (decreasing). In this market, Bucyrus competes against Komatsu, Hitachi and Liebherr, all with a strong market presence and which will continue to provide a competitive constraint on the merged entity post-transaction. The tables below show market share data at global and EEA level in the last three years:

Hydraulic Excavators, volume (units sold) and market share, worldwide

Source: Parker Bay15

Hydraulic Excavators, volume (units sold) and market share, EEA

Source: Parker Bay

53. Therefore, whilst absent the merger, Caterpillar might be considered a potential entrant in the market for hydraulic excavators, the market will remain sufficiently competitive also post-merger notwithstanding any possible loss of potential competition.

Diesel engines for mining application

54.  As regards potential vertical issues relating to diesel engines, as is outlined below, the transaction does not raise competition concerns given the absence of ability of the merged entity to engage in input and customer foreclosure.

55. In 2010, Caterpillar's market share for the supply of diesel engines for mining applications on a worldwide level was [10-20%], rising to [20-30%] at EEA level. On this basis, the merged entity would not enjoy sufficient market power to influence the conditions of competition in the upstream market and thus prices and supply conditions in the downstream market. Moreover, the merged entity, just as Caterpillar now, will be constrained by various competitors, such as Cummins, MTU and Deutz, which collectively supplied almost [90-100%] of diesel engines for mining applications on a worldwide level in 2010 ([70-80%] at EEA level)16. Therefore, the risk of input foreclosure can be excluded.

56. Even if the merger were to result in Bucyrus replacing its current external purchases of mining engines with internal production volumes, this is unlikely to constitute a risk of foreclosing competing producers from access to a critical source of demand (and thus to lead to a reduction in the ability or incentives of third party mining engine producers to compete) given that Bucyrus is not a very significant consumer of diesel engines17. Nor would it raise the costs of downstream competitors by making it harder for them to obtain mining engine supplies at similar prices and conditions to those in place prior to the proposed transaction. On this basis, the risk of customer foreclosure can also be dismissed.

57.  Considering these elements and the fact that during the course of the market investigation, the vast majority of respondents expressed no concerns, it is concluded that the proposed transaction does not raise any vertical concerns.

IV.  CONCLUSION

58.  For the above reasons, the European Commission has decided not to oppose the notified operation and to declare it compatible with the internal market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation.

1                     OJ L 24, 29.1.2004, p. 1 ("the Merger Regulation"). With effect from 1 December 2009, the Treaty  on the Functioning of the European Union ("TFEU") has introduced certain changes, such as the replacement of "Community" by "Union" and "common market" by "internal market". The terminology of the TFEU will be used throughout this decision.

2                     Caterpillar does not perform any maintenance and repair services itself, the maintenance and repair of Caterpillar’s mining equipment being generally performed by independent local dealers (or, outside the EEA, by other third parties).

3                     Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the Commission Consolidated Jurisdictional Notice (OJ C95, 16.04.2008, p1).

4                     "Hard rock" is defined as all igneous and metamorphic rocks (such as rocks used to extract gold, silver, iron, copper, zinc, nickel, lead, diamonds, platinum and palladium) and "soft rocks" as all sedimentary rocks (such as those from which coal, oil shale, salt, potash and gypsum are extracted).

5                     i.e. the amount of material that can be loaded into the dump body of the mining truck and subsequently transported.

6                     See Case COMP/M.674 – Demag/Komatsu of 25 December 2005.

7                     See Case COMP/M.1094, Caterpillar/Perkins Engines of 23 February 1998.

8                     See Case COMP/M.674 – Demag/Komatsu of 25 December 2005.

9                     See Cases COMP/M.3113, GE/Jenbacher of 14 April 2003; COMP/M.1094, Caterpillar/Perkins Engines of 23 February 1998; COMP/M.4336, Mann/Scania of 20 December 2006.

10                  In order to protect business secrets contained in the replies to the market investigation, market share figures are indicated in ranges.

11                  http://www.belaz.by/en/press/news/2011/our_achievements/ http://www.belaz.by/uploads/userfiles/files/Press-reliz_eng.pdf

12                  http://www.belaz.by/en/catalog/products/dumptrucks/

13                  Industry data by value are not available.

14                  It should be noted that the increasing market position of Bucyrus has been accompanied by a decrease of more than 40% of the market volume.

15                  Parker Bay is a mining industry consultancy that collects and collates data on shipments of mining equipment to surface mines based on information from various parties, including manufacturers, component and service suppliers, mining companies, news reports and relevant websites. Some   suppliers

– including OMZ, Taiyuan, Belaz and XEMC – do not report shipment figures to Parker Bay. The market share data may thus overestimate the shares of the Parties.

16                  Currently, Caterpillar does not supply diesel engines to third party equipment manufacturers of SMTs and it supplies diesel engines for hydraulic excavators and LHD […]. Therefore, already prior to the proposed transaction, the manufacturers of these pieces of mining equipment purchase diesel engines from other engine manufacturers.

17                  In 2010, Bucyrus purchased globally around [0-5%] of the total amount of diesel engines for mining applications ([5-10%] on an EEA level). Therefore, even if there were a redirection of demand resulting from Bucyrus switching its mining engine purchases from other producers to Caterpillar in order to obtain the economies associated with lower transaction costs and the reduction/elimination of double marginalisation, it can be excluded that the merged entity would have the ability to deny access to a sufficient proportion of the demand for mining engines. This is supported by the fact that the engines being purchased by Bucyrus are also incorporated into other applications and, hence, for most engines, the customer-base is wider than those customers active in the mining segment.