EUROPEAN COMMISSION C(2017) 1193 final To the notifying party: Subject:Case M.8190 - WEICHAI / KION

Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004 and Article 57 of the Agreement on the European Economic Area Dear Sir or Madam, (1)On 11 January 2017, the Commission received notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 by which the undertaking Weichai Power Co. Ltd. ("Weichai", China) acquires within the meaning of Article 3(1)(b) of the Merger Regulation control of the whole of the undertaking Kion Group AG ("Kion", Germany) by way of purchase of securities ("the Transaction"). Weichai and Kion are hereinafter collectively referred to as "the Parties". 1.The parties (2)Kion is a manufacturer of forklift trucks, warehouse equipment, and other industrial trucks. Kion operates on a worldwide basis and offers a full spectrum of forklift trucks in terms of size and lifting capacity, including internal combustion trucks and electric trucks as well as warehouse equipment. (3)Weichai is an automotive and equipment manufacturing group, incorporated under the laws of the People's Republic of China, which operates in three main business segments: (i) power assembly (engines, gears, gear boxes and axles), (ii) commercial vehicles, and (iii) automobile electronics and parts. (4)Weichai is controlled by SHIG within the meaning of the Merger Regulation. […]. (5)Through a 90/10 joint venture with Kion, Weichai controls Linde Hydraulics, active in the development, manufacturing, production, sale and marketing of hydraulic components (pumps, motors, valves, gears, gear drives and ancillary castings) some of which are used in the production of forklifts. 2.The operation (6)Kion's acquisition by Weichai was already notified to the Commission and cleared in 2014. The Transaction is a different concentration than the one cleared in 2014 since Weichai has in the meantime lost de jure control and will now acquire de facto control over Kion. (7)[Description of the transfer of de iure control after the 2014 transaction, the subsequent loss of that control and the acquisition of de facto control as a result of the current transaction]. [Description of the transfer of de iure control after the 2014 transaction, the subsequent loss of that control and the acquisition of de facto control as a result of the current transaction]. (8)[Description of the transfer of de iure control after the 2014 transaction, the subsequent loss of that control and the acquisition of de facto control as a result of the current transaction].

3.The concentration (9)As a result of the purchase of additional shares, Weichai will get the possibility of de facto exercising sole voting control over Kion, within the meaning of paragraph (59) of the Jurisdictional Notice, in the light of the attendance rate to Kion's shareholders' meetings registered in the past three years. (10)In accordance with Article 7(2)(b) of the Merger Regulation, Weichai has committed to not exercising the voting rights attached to any of the additional shares prior to obtaining clearance from the Commission, and has notified the acquisition of control to the Commission without delay. 4.EU Dimension (11)The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million (Weichai: EUR 7 380.1 million; Kion: EUR 5 098 million). Each of them has an EU-wide turnover in excess of EUR 250 million (Weichai: EUR 786 million; Kion: EUR 3 871.6 million), 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. 5.Relevant Markets 5.1.Introduction (12)There are no horizontal overlaps between the Parties' activities. The Transaction however gives rise to vertical relationships. (13)Kion is a manufacturer of counterbalanced forklift trucks ("CFTs"). Weichai manufactures and sells engines used in CFTs and, through Linde Hydraulics, is also active in the manufacture and supply of hydraulic components that are used in the production of CFTs. (14)The Transaction therefore gives rise to vertical relationships between Weichai's upstream activities in the manufacturing and supply of engines, and hydraulic components for CFTs on the one hand, and Kion's downstream activities in CFTs on the other hand. (15)Weichai supplies one specific engine to Baoli Forklift Company ("Baoli"), a subsidiary of Kion located in China, used in CFTs exclusively sold in China. The total turnover generated by these sales in 2015 was below […]. (16)Linde Hydraulics supplies hydraulic components to Kion for use in the production of CFTs sold in the EEA. Sales from Linde Hydraulics to Kion in 2016 amounted to approximately […]. 5.2.Market definitions 5.2.1.Downstream market: Counterbalanced forklift trucks (CFTs) (17)CFTs are person-operated material handling vehicles equipped with a fork or a ram for loading and transporting cargo, as well as a mast for moving cargo vertically. There is a variety of models differing in weight bearing capacity and type of engine, but all of them share common distinctive characteristics - they can carry goods in both horizontal and vertical directions, and have a maximum lift height in the range of four to six meters. (18)In previous decisions, the Commission has defined one product market for CFTs, notably based on the general supply side-substitutability: manufacturers generally produce the entire range of forklift trucks of various sizes, engines, and capacity ranges. The Notifying Party concurs with the Commission's previous analysis. (19)The Commission has previously defined the relevant geographic markets for CFTs to be at least EEA-wide. The Notifying Party concurs with the Commission's previous analysis. 5.2.2.Upstream market 1: manufacturing and supply of engines (20)The Notifying Party submits that from a demand-side perspective, the specific engine supplied to Baoli would not be compatible with other types of equipment. However, from the supply side, there are large manufacturers of engines for CFTs competing with Weichai, and manufacturers of other types of engines could also enter the market within a reasonably short time frame. The Notifying Party therefore submits that the relevant product market should be wider than the supply of engines for use in CFTs.