Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels, 28.5.2020  
C(2020 ) 3595 final  
PUBLIC VERSION  
 
 
'To the notifying party  
 
Subject : Case M. 9447  – Hitachi /ABB  (Power Grid Division)  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,   
(1) On 20 April 2020 , the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which  
Hitachi Ltd (“Hitachi”, Japan) acquires  within the meaning of Article 3(1)(b) of 
the Merger Regulation  sole control of  ABB Management Holding AG  (“ABB 
(Power Grid Division) ” or “Target” , Switzerland), controlled by ABB Ltd 
(“ABB”)3. Hitachi is referred to as the “Notifying Party” and  Hitachi and  ABB 
(Power Grid Division)  collectively are designated hereinafter as the  “Parties ”. 
                                                 
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  
“Commu nity” by “Union ” and “common market ” by “internal market ”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C 136, 27.4.2020 , p. 7-8. 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and 
other  confidential information. The 
omissions are shown thus […] . Where 
possible the information omitted has been 
replaced by ranges of figures or a general 
description.  
 
 
2 1. THE PARTIES  
(2) Hitachi is a global company, headquartered in Japan and active in a variety of 
business segments including IT Solution,  Energy Solution, Industry Solution, 
Mobility Solution and SmartLife Solution.  
(3) ABB  (Power Grid Division) 's activities involve the development, engineering, 
manufacturing and sale of products, systems and projects relating to: (a) high 
voltage (“HV”) produ cts; (b) transformers; (c) power grid automation  (“GA”) ; 
and (d) power grid integration  (“GI”) .  
2. THE CONCENTRATION  
(4) The concentration relates to the proposed acquisition from ABB, of 80.1% of 
the issued share capital of ABB Management Holding AG of Switzerland, by 
Hitachi. It will result in the acquisition of sole control by Hitachi of the Target 
within the meaning of Article 3(1)(b) of the EU Merger Regulation (EUMR),  
following which ABB will retain 19.9% of the Target ( “the Proposed 
Transaction ”). 
(5) Prior to the Proposed Transaction, ABB will contribute its entire power grids 
business to the newly created Swiss legal entity ABB Management Holding AG, 
which will be the holding company for the Target Group.  As such, following the 
SPA signed by Hitachi and ABB on 17 December 2018, Hitachi will acquire 
80.1% of the issued share capital of the Target.    
(6) ABB will hold a non -controlling minority shareholding in the Target post -
transaction (19.9%). ABB will not acquire, or retain, any additional rights, 
whic h confer upon it the power to veto decisions which are essential for the 
strategic commercial venture of the Target.  
(7) Accordingly, the Proposed Transaction involves the acquisition of sole control 
of the Target by Hitachi within the meaning of Article 3(1)  (b) of the EUMR.  
3. EU DIMENSION  
(8) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million4 (Hitachi: EUR 99 647  million; ABB : 
[confidential details on the Target's worldwide turnover] ). Each of them has a n 
EU-wide turnover in excess of EUR 250 million  (Hitachi: [confidential  details 
on the Parties' EEA -wide turnover ]; ABB : [confidential  details on the Parties' 
EEA -wide turnover ]), but they do not achieve more than two -thirds of their 
aggregate EU-wide turnover wi thin one and the same Member State. The 
notified operation therefore has an EU dimension.   
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
 
 
3 4. MARKET DEFINITION  
(9) Hitachi and the Target are both active in the supply of electrical equipment for 
use in the transmission and distribution of electricity within power systems, 
including (i) HV products, (ii) transformers, (iii) GA products and (iv) GI 
products . The focus o f the assessment is on these four general product groups 
with several segments.5 The products are sold as part of turnkey systems or on a 
stand -alone basis for industries like power generation or transportation.6 
4.1. High voltage (HV) products  
(10) HV products are predominantly used in transmission networks, operating at high 
voltages (above 52 kV7) to transmit electricity over long distances.   
(11) HV products are usually installed in HV substations .8 The main components of 
HV substations are: (i) HV circuit breakers; ( ii) HV disconnectors; (iii) HV 
instrument transformers ; (iv) power transformers; and (v) HV or MV surge 
arresters.  These components in an HV substation must be insulated in order to 
prevent short circuits. This can either be done by installing the componen ts at a 
distance from each other, so they are air -insulated ( air-insulated switchgear 
substation , or “AIS substation”). Where less space is available, the switchgear 
units  of the substation are assembled within encapsulated enclosures infused 
with pressuri sed sulfur hexafluoride gas , so they are gas -insulated (“GIS 
substation”).9 
(12) HV products are also used in a variety of other power -system related 
applications, such as switching and protection of power transmission and 
distribution grids or power generation  plants, integration of renewables, 
enhancement of energy efficiency in industrial settings , and improvement of 
power quality in industry and power grids .  
(13) The Notifying Party has only limited activities in HV products, focusing on a 
few components: HV gas -insulated switchgear ( “GIS”), HV circuit breakers, 
and LV capacitors). The Target is an important producer of most HV products  
as well as certain MV and LV products and related services.10  
4.1.1.  Product market  
(A) The Commission’s decisional practice  
(14) In previous c ases, the Commission has  acknowledged the existence of a HV 
product market, subdivid ing electrical products and systems according to their 
respective voltage levels into three broad product segments:  
 Low Voltage (“LV”) products (<1 kV)  
                                                 
5  Form CO, paragraph 104.  
6  Form CO, paragraph 105.  
7  Case COMP/M.8678 – ABB/General Electric Industrial Solutions , para graph  6. 
8  Form CO, paragraph 124.  
9  Form CO, paragraph 125 et seq.  
10  Form CO, paragraph 130.   
 
 
4  Medium Voltage (“MV” ) products for distribution networks operating at 
voltages between 1kV and 52 kV;  
 HV products for transmission networks operating at voltages between 52 kV 
and 800 kV.  
(15) The Commission also considered whether individual HV products  might 
constitute a separate product market . However, the Commission has to date left 
open whether individual HV products belong to separate markets or whether 
they all belong to one overall market.11  
(16) Individual HV products previously considered by the Com mission are (i) HV 
switchgear (both AIS and GIS); (ii) HV circuit breakers; (iii) HV instrument 
transformers; (iv) HV disconnectors; and (v) HV coils.12  
(B) The Notifying Party’s view  
(17) The Notifying Party considers that the entire HV product area should be trea ted 
as one overall product market for all HV products and that it should not be 
further segmented, insofar as: (i)  customers tender on a project -based basis and 
do not specifically look for suppliers of specific products but rather expect 
suppliers to offe r a comprehensive product range; (ii)  from a supply -side 
perspective, customers will often require and purchase a variety of HV produc ts 
for one and the same project ; (iii) in a previous decision, which concerned a 
similar product portfolio as the Proposed  Transaction, the Notifying Party 
suggested an overall market for HV products on the basis of similar 
consideration s,13 and this approach was largely confirmed by the market 
investigation.14  
(18) Taking into account the Parties' activities in the HV area, this m arket would 
include but not be limited to HV switchgear (incl. GIS and AIS), HV circuit 
breakers, HV instrument transformers, HV disconnectors, HV surge arresters 
(incl. accessories), HV circuit breaker components and other HV products, HV 
cable accessories and HV capacitors, harmonic filters, and other  Reactive Power 
Compensation  (“RPC ”)15 products.  
(19) In any case, given Hitachi's de minimis position on a global and EEA -wide 
basis, t he Notifying Party submits that the exact product market definition  for 
HV products can be left open since , even if the Commission were to examine 
the Proposed Transaction on the basis of the narrowest plausible HV product 
segments, this would not give rise to any competition concerns on a global or 
EEA -wide basis .  
                                                 
11  Case COMP/M.8678 – ABB/ General Electric Industrial Solutions , para graph  6. Case COMP/M.5754 - 
Alstom Holdings / Areva T&D Transmission activities , decision  of 26 March 2010, paras. 52 -53. 
12  Case COMP/M.7278 - General Electric / Alstom (Thermal Power – Renewable Power & Grid Business) , 
decision of 8 September 2015, para. 1798, Case COMP/M.3653 - Siemens / VA Tech , decision of 13 July 
2005, para. 76-78. 
13  Case COMP/M.3653 - Siemens/VA Tech , paragraph 76.  
14  Case COMP/M.3653 - Siemens /VA Tech , paragraphs 77 to 79. Form CO, paragraph 195 et seq.  
15  RPC will be explained below in Annex I.  
 
 
5 (C) The C ommission’s assessment  
(20) In the market investigation , a majority of customers and competitors suggested a 
segmentation  of the market for HV products into the following :16 
- HV Instrument Transformers  
- HV Disconnectors  
- HV Switchgear , either overall or GIS and AI S separately  
- HV Circuit Breakers , either overall or HV d isconnecting circuit breakers and 
generator circuit breakers  separately.  
- (Competitors in addition also suggest a sub -segmentation for HV live -tank 
circuit breakers and HV dead -tank circuit breakers s eparately ). 
(21) At the same time, the market investigation confirmed the arguments of the 
Notifying Par ty regarding supply side substitutability. In particular, the results  
showed that  the same  suppliers typically supply all or most HV prod ucts in the 
sub-categories, with the possible exception of smaller suppliers that are more 
specialised .17 This would point to an overall market for HV products from a 
supply -side perspective.  
(22) In any event, out of the potential markets for each HV product listed in 
paragraph (20), the Proposed Transaction only results in horizontally affected 
markets related to  HV circuit breakers and HV generator circuit breakers  (a 
potential sub -segment of this potential market ) and vertically affected18 markets 
                                                 
16 Replies to eQuestionnaire – Customers, question 7; Replies to eQuestionnaire – Competitors, question 9.  
17  Replies to eQuestionnaire – Customers, question 11; and Question 11.2: the Parties’ main competitors 
Siemens, GE/Alstom, Artech, Schneider Electric, Hapam, Pinggao, Hyosung, and Mitsubishi Electric 
supply all/most HV products.  
18  An affected market consi st of all relevant product and geographic markets, as well as plausible alternative 
relevant product and geographic markets, if in the EEA territory (a) two or more of the parties to the 
concentration are engaged in business activities in the same relevant  market (“horizontal relationships”) 
and where the concentration will lead to a combined market share of 20 % or more ;  or (b) one or more of 
the parties to the concentration are engaged in business activities in a relevant market, which is upstream 
or dow nstream of a relevant market in which any other party to the concentration is engaged  (vertical 
relationships) , and any of their individual or combined market shares at either level is 30 % or more, 
regardless of whether there is or is not any existing sup plier/customer relationship between the parties to 
the concentration .  (See Section 6.3, Annex 1, Commission Regulation (EC) No 802/2004 of 21 April 
2004 implementing the Merger Regulatio n). 
 The Commission may presume that concentrations where the market share of the undertakings concerned 
does not exceed 25 % either in the common market or in a substantial part of it are not liable to impede 
effective competition and are compatible with the common market. (See recital 32 of the Merger 
Regulation and parag raph 18 of the Guidelines on the assessment of horizontal mergers under the Council 
Regulation on the control of concentrations between undertakings (OJ C 31, 5.2.2004, p. 5).  
 The Commission is unlikely to find concerns in non -horizontal mergers, be it of  a coordinated or of a non -
coordinated nature, where the market share post -merger of the new entity in each of the markets 
concerned is below 30 %  and the post -merger HHI is below 2 000 . Where a merged entity would have a 
market share just above the 30 % threshold on one market but substantially below on other, related, 
markets competition concerns will be less likely. (See paragraph 25  of the Guidelines on the assessment of 
non-horizontal mergers under the Council Regulation on the control of concentratio ns be tween 
undertakings (OJ C 265, 18.10 .2008, p. 6). 
 
 
6 related to HV AIS modules (downstream) and MV switchgear  and power 
transformers  (upstream).19 
(23) As the other HV products  do not give rise to any affected market, these will not 
be further discussed in this Decision.  
(24) In conclusion, the Commission will analyse the Proposed Transaction on the 
basis of all plausible product markets, but will leave the market definition open 
as the Proposed Transaction does not raise concerns on any plausible ma rket.  
4.1.2.  Geographic market  
(A) The Commission’s decisional practice  
(25) In previous decisions the Commission found that the market for HV products is 
at least EEA -wide.20  
(B) The Notifying Party’s view  
(26) Regarding the geographic market definition, the Notifying Party considers that, 
for all HV products, competition takes place on a global basis. As such, it agrees 
with the Commission’s previous findings that the relevant geographic market for 
HV products is at least EEA -wide.21 
(C) The Commission’s assessment  
(27) The results of the  market investigation point towards a worldwide market for all 
sub-segments of HV products, as a clear majority22 of customers23 and of 
competitors24 confirmed.  According to a majority of competitors ,25 HV products 
sold in other world regions are generally substitutable for the HV products used 
in the EEA, as they are produced in line with international (IEC) standards. 
Nevertheless, some technical requirements are speci fic to the area of 
installation, s uch as special seismic conditions or minimum ambient 
temperatures.26  
(28) Within the EEA, HV products do not differ across individual Member States, 
neither with regard to their technical specifications nor with regard to price, as 
                                                 
19  The exact market definition can be left open between MV products overall or each MV product (only MV 
switchgear is an input for HV AIS modules), as well as between transformers overall and each type of 
transformer (only power transformers are inputs for HV AIS), because even if the smallest plausible 
product definition would be taken, no serious doubts as to the compatibility of the transaction with the 
common market would arise.  
20  Case COMP/M.8678  - ABB/General Electric Industrial Solutions , paragraphs 28 et seq; Case 
COMP/M.6642 - Eaton Corporation/Cooper Industries , paragraph. 29 -30; Case COMP/M.5754 - Alstom 
Holdings/Areva T&D , paragraphs 69-72. 
21  Form CO, paragraph 264.  
22  “Majority” in this Dec ision stands for at least 50% of participants in the market investigation who replied 
to the question (excluding those that replied “not applicable”, or “I do not know”).  
23  Replies to eQuestionnaire – Customers, question 39.  
24  Replies to eQuestionnaire – Competitors, question 41.  
25  Replies to eQuestionnaire – Competitors, question 42.  
26  Replies to eQuestionnaire – Customers, question 40.  
 
 
7 confirmed by a majority of participants in the market investigation.27 
Geographical proximity to end -customers is not required to be successful in th e 
electrical equipment industry28 and transport costs only make up a small 
percentage of the purchase price of individual HV products (les s than 5% 
accor ding to a majority of customers ).29 National markets can thus be excluded 
for the purpose of the present case.  
(29) In conclusion , the exact definition of the market for HV products  can be left 
open between the EEA and worldwide, as the Proposed Transaction does not 
give rise to serious doubts as to its compatibility with the internal market or the 
functioning of the EEA Agreement on any of the two plausible geographic 
market definitions.  
4.2. Transformers  
(30) A transformer is the electromagnetic equipment  that transfers electricity from 
one electrical circuit to another and steps the voltage up or down as required .30 
There are two main types of transformers used within a power grid: power 
transformers and distribution transformers. Another type of transform ers, used 
in railway rolling stock applications, is traction transformers . 
(31) Transformers come in different sizes (large, medium and small), depending on 
the voltage and power rating covered, but categorisation varies from supplier to 
supplier. Transformers always consist of two main components: the steel core, 
and several winding coils. Together, the steel core and the winding coils form 
the "active part" of a transformer . 
(32) Transformers might be further sub -segmented within the three segments 
indicated above (power transformers, distribution transformers and traction 
transformers ): 
- Power transformers : generator step -up transformers; substation and system 
inertia transformers; HVDC converter transformers; power transformers used in 
industrial or special applications; and shunt reactors (and other types of reactors) . 
- Distribution transformers : liquid -filled distribution transformers; and dry -type 
distribution transformers . 
- Traction transformers : used for railway rolling stock applications, and come in 
different designs in terms of size, weight and power ratings . 
(33) The Parties ’ activities in transformers : 
                                                 
27  Replies to eQuestionnaire – Customers, questions 41 and 42; Replies to eQuestionnair e – Competitors, 
questions 43 and 44.  
28  Replies to eQuestionnaire – Competitors, question 47.  
29  Replies to eQuestionnaire – Customers, question 43.  
30  See description provided by ABB to the Commission in Case M.8678 - ABB/General Electric Industrial 
Solutions, Annex I, page 34 (IV). See also ABB glossary of technical terms, "Transformer" and 
"Distribution transformers" ( https://new.abb.com/media/glossary ). 
 
 
8 - The Target is active in the design, manufacture and sale of different types of 
transformers (such as power transformers, distribution transformers, and traction 
transformers) as well as specific transformer components (including, e.g., 
bushings and tap -changers) and related services .31 
- The Notifying Party has limited activities in transformers on a global basis. 
Although Hitachi has a transformer portfolio  which is similar to that of the 
Target, its sales of transformers are [outside the EEA]  and, in particular, it has no 
stand -alone sales of transformers in the EEA .32 In addition, Hitachi does not sell 
any transformer components externally.  
4.2.1.  Product market  
(A) The Commission’s decisional practice  
(34) In previous decisions the Commission has considered  whether power and 
distribution transformers constituted separate relevant product markets or 
whether they belong to  an overall market for transformers, while ultimately  
leaving the precise product market definition open .33 
(B) The Notifying Party’s view  
(35) The Notifying Party submits that the relevant product market is the overall 
transformers market since, ultimately, all transformers serve the same purpose, 
i.e. mainly to incr ease or decrease the voltage levels of electrical power for its 
efficient transport on transmission and distribution networks. Hitachi submits 
that it would be inappropriate to further segment the overall transformers market 
from a demand or from a supply -side perspective by voltage type, technology 
used (e.g., dry -type or liquid filled) or end -use application (e.g. utility vs. 
industrial customers, subsea or railway rolling stock), and that this is in line with 
the market investigation in Alstom Holdings/A reva T&D , in which a majority of 
respondents supported an overall transformers market.   
(36) In any event, the Notifying Party submitted information for the narrower 
product segments of (i) power transformers, (ii) distribution transformers overall 
(as well as  (ii.1) oil -filled distribution transformers, and (ii.2) dry -type 
distribution transformers); and (iii) traction transformers.  
                                                 
31  In addition, the Target provides captive a fter-sale services for its own transformers ( [confidential] % of the 
transformer service revenue) and to a limited extent service transformers of other OEM suppliers 
([confidential] % of the transformer service revenue). In 2018, the Target realized worldw ide revenues of 
approximately [confidential details on the Target's worldwide revenues generated from servicing 
transformers]  with servicing of its own and third -party transformers, of which approximately [confidential 
details on the Target's EEA -wide reve nues generated from servicing transformers]  represented sales in the 
EEA . 
32  Hitachi's activities mostly focus [outside the EEA] . [Confidential details on Hitachi's position on the 
worldwide market, and Hitachi's sales strategy for traction transformers] . In addition, Hitachi provides 
captive after -sale services, but only for its own transformers . 
33  See most recently Case COMP/M.8678 - ABB/General Electric Industrial Solutions , paragraph s 70 and 
73; Case COMP/M.3296 - Areva/Alstom T&D , paragraph 11, and Ca se COMP/M.5755 - Schneider 
Electric/Areva T&D , paragraph 8, Case COMP/M.5754 - Alstom Holdings/Areva T&D , paragraphs 59 -60; 
and Case COMP/M.3653 - Siemens/VA Tech , paragraph 76.  
 
 
9 (37) In addition, with regard to components used for the manufacture of 
transformers, the Notifying Party  provided data for each of the transformer 
components that the Target sells externally (bushings, tap changers, 
measurement and safety devices, and insulation components and materials) , 
even though it submits that the relevant market should be the overall market for 
transformers (including components), and that it would not be appropriate to 
define separate markets for transformer components or sub -segment it by 
specific component products . 
(C) The Commission’s assessment  
(38) The vast majority of the respondents to  the Commission’s market investigation 
consider that , in light of their characteristics, price  and intended use, it is 
appropriate (both from a supply -side and demand -side substitutability point of 
view) to segment the market by transformer type into power  transformers, 
distribution transformers and traction transformers , and have not signalled that a 
further segmentation beyond that is warranted .34 
(39) In any event the precise product market definition can be left open since the 
Notifying Party provided market shares for the narrowest  plausible  
segmentations of  transformers according to the Commission’s previous 
assessments, i.e. for power35 and traction36 transformers separately, and for 
overall distribution transformers as well as for oil -filled and dry -type 
distribution transformers separately ,37 (as well as for each transformer 
component that the Target sells externally)38 and no competition concerns arise 
regardless of the ultimate product market definition.  
                                                 
34  Replies to eQuestionnaire – Competitors , question 14, e.g. a respondent stated that “ they are different 
solutions with different uses and voltages ” whilst another one stated that “ each category of transformer 
specified above requires specific design/manufacturing capabilities. Hence they need to be segregated ”, 
one stated that  “each transformer type has a different purpose on the market, a different end usage and a 
different strength for each manufacturer. Saying this, is important to have a segmentation for each type ”, 
and another one explained that “ different norms and regula tions apply to each segment ”. Only a minor 
fraction of respondents signaled that an overall market for transformers could be considered as the 
appropriate relevant product market, e.g. one stated that “ there is no clear definition between Power and 
Distrib ution Transformers and manufacturers handle this often differently. Transformers should be looked 
at as one single segment ”. Replies to eQuestionnaire – Customers , question 13, e.g. a respondent stated 
that “ each type of transformer has specific constraint s and characteristics (e.g: norms, standards, ….) for 
intended application ”, whilst another stated that “ there are different markets for each type of 
transformers ”.  
35  See most recently Case COMP/M.8678 - ABB/General Electric Industrial Solutions , paragraph 70. 
36  Case COMP/M.5754 - Alstom Holdings/Areva T&D Transmission  activities , paragraph  68. 
37  See most recently Case COMP/M.8678 - ABB/General Electric Industrial Solutions , paragraph  70. 
38  Bushings, tap changers, measurement and safety devices and insulation materials and components . 
 
 
10 4.2.2.  Geographic market  
(A) The Commission’s decisional practice  
(40) In previous cases the Commission considered that the relevant geographic 
market for transformers was at least EEA -wide in scope, possibly even 
worldwide, although the precise definition was left open.39 
(B) The Notifying Party’s view  
(41) In relation to the geograp hic scope of the market for transformers (and 
transformer components), Hitachi argues that it is global and that it can 
ultimately be left open since Hitachi is not active in the EEA.  
(42) In any event, the Notifying Party provided information on both an EEA -wide 
and global basis and for the narrowest segments within the area of transformers  
and for each transformer component that the Target sells externally .  
(C) The Commission’s assessment  
(43) The market investigation is not conclusive on whether the  relevant geograp hic 
market should be EEA -wide  or global.40 In any event, no horizontal concerns 
arise under either definition ( because  Hitachi  is not active in the EEA) .  For the 
purpose of the assessment of the only material vertical link (that for  traction 
transformers used for railway rolling stock ), the market shares at both the EEA 
and globally are similar and thus the competition analysis is applicable 
regardless of the precise geographic market definition . 
4.3. Railway rolling stock  
4.3.1.  Product market  
(A) The Commission’s decisional practice  
(44) In previous decisions the Commission has considered trains reaching  speeds 
equal to or higher than 250 km/h (high and very high -speed trains) as a separate 
product market, distinct from intercity trains which are incapa ble of achieving 
similar speeds. Moreover, the Commission has considered a potential further 
sub-segmentation between high -speed trains (top speed between 250 and 300 
km/h) and very high -speed trains (top speed greater than 300 km/h), while 
ultimately leav ing the precise product market definition open.41 
                                                 
39  See most recently Case COMP/M.8678 - ABB/General Electric Industrial Solutions , paragraph  74; Case 
COMP/M.5754 - Alstom Holdings/Areva T&D , paragraphs 69 -72.  
40  However, some customers have signalled that the marke t could be wider than the EEA, e.g. in relation to 
traction transformers one customer, when asked whether it could purchase from suppliers located outside 
the EEA or whether that would be difficult, replied that “ Mitsubishi is an example of an Asia supplie r” 
(correspondence with customer of 8 May 2020).  
41  Case COMP/M.8677 – Siemens/Alstom, paragraphs 105 and 106.  
 
 
11 (B) The Notifying Party’s view  
(45) The Notifying Party submits that the relevant product markets for railway 
rolling stock are (i) very high -speed trains (top speed above 300 km/h), (ii) high -
speed trains (top speed  between 250 and 299 km/h), and (iii) mainline railway 
rolling stock (intercity and regional trains).  
(46) In any event, the Notifying Party submitted information for the narrowest 
plausible  product segments of  (i) high -speed trains (top speed between 250 and 
299 km/h), (ii) very high -speed trains (top speed  equal to or  above 300 km/h), 
(iii) intercity/regional trains (top speed between 160 and 249 km/h), and (iv) 
commuter trains (top speed below 160 km/h), as well as for the broader  product  
markets of (v) all high-speed trains (including high -speed and very high -speed 
trains) and (vi) combined market for intercity/regional + commuter trains.  
(C) The Commission’s assessment  
(47) For the purpose of the present case, the Commission considers that the precise 
product market  definition can be left open since, for the purpose of the vertical 
assessment for traction transformers for railway rolling stock applications, the 
Proposed Transaction does not raise concerns even on the narrowest segments 
(in particular, in the segment for intercity/regional trains, where the Notifying 
Party is present) . 
4.3.2.  Geographic market  
(A) The Commission’s decisional practice  
(48)  In previous decisions the Commission has defined the relevant markets for high 
and very high -speed roll ing stock as at least EEA -wide (including Switzerland ) 
while not excluding the possibility of these markets being worldwide (excluding 
China, South Korea and Japan) and leaving the precise geographic market 
definition open.42 
(49) For regional trains43 and intercity trains44, the Commission has previously 
considered the market to be likely at least EEA -wide.  
(B) The Notifying Party’s view  
(50)  The Notifying Party submits that in its view, and in line with the geographic 
market definition in Siemens/Alstom , the geographic market for high and very 
high-speed trains is at least EEA wide, if no t worldwide (excluding China, Japan 
and Korea).  
(51) In any event, the Notifying Party also submitted information on a worldwide 
basis (including China, Japan and Korea) for all plausible segments.  
                                                 
42  Case COMP/M.8677 – Siemens/Alstom, paragraph 133.  
43  Case COMP/M.7871 – Bombardier/CDPQ/Bombardier Transportation UK , paragraph 24.  
44  Case COMP/M.5754 – Alstom Holdings/Areva T&D , paragraph 43.  
 
 
12 (C) The Commission’s assessment  
(52) For the purpose of the present case, the Commission considers that the precise 
geographic market definition can be left open since, for the purpose of the 
vertical assessment for traction transformers for railway rolling stock 
applications, the Proposed Transaction does not raise concerns either in the EEA 
or globally (in particular, given that both the upstream shares of the Target for 
traction transformers and the downstream shares of the Notifying Party in the 
different railway r olling stock segments are relatively similar in the EEA and 
worldwide) . 
4.4. Grid automation  
(53) GA is the digitali sation and automation of power grids and/or substations, which 
provide the ability to remotely control and monitor the operating conditions of 
primary  and secondary assets  of a transmission or distribution network  
throughout the entire  network. GA solutions consist of hardware and software 
products, systems and services.45  
(54) GA systems that digitalize and automatize power grid operations can be 
summarized  under the term "Power System Management Solutions".  GA 
solutions operating at substation level include products and systems that enable 
the automated monitoring, control and supervision of substation assets - these 
solutions are referred to as "Substation  Automation Systems" (SAS) . GA 
solutions operating at the enterprise level via the control center are used to 
manage the entire grid network composed of numerous substations, using 
SCADA software solutions to enable secure, efficient and optimized operatio n 
of the electric power system as a whole. They are therefore referred to as 
"Network Management Systems" (NMS).46  
(55) GA solutions also exist for Microgrids, i.e. distributed energy resources that can 
also operate in "islanded" mode (so -called "Microgrid Auto mation Systems" 
(MAS)). The automation system architecture is similar to SAS and NMS, but 
MAS additionally includes battery energy storage solutions (BESS) and a power 
conversion system (PCS).47 
(56) GA solutions can also include enterprise application software (“EAS”) solutions  
which help businesses improve their efficiency, reliability, safety and 
sustainability .48  In GA solutions, enterprise software is used in the control 
center to collect and manage data on the condition and availability of major 
plant equip ment, thus enabling plant operators to plan maintenance schedules 
more effectively and avoid unnecessary equipment inspections and unexpected 
breakdowns, which can cause expensive interruptions in production time. 
Business analytics solutions track, analyz e and manage data in support of 
corporate decision making processes .49 
                                                 
45  Form CO, paragraph 327.  
46  Form CO, paragraph 347.  
47  Form CO, paragraph 348.  
48  Form CO, paragraph 377.  
49  Form CO, paragraph 382.  
 
 
13 (57) The Target's GA business is divided into  (i) GA sys tems and products, including 
SAS, NMS , microgrid automation systems and communication systems; (ii) 
standalone GA products, including d ifferent GA components and software sold 
on a standalone basis; and (iii) enterprise application software (EAS).50 
Approximately [confidential details on the Target's br eakdown of GA sales] % of 
the Target’s GA sales are generated with system solutions.51 
(58) Hitachi  has only limited activities in GA on a global basis [mainly focusing 
outside the EEA] , and Hitachi does not offer GA products or systems in Europe. 
Hitachi's GA solutions are designed and developed [Confidential details on  
Hitachi's sales strategy  for GA products] . [Confidential details on  
Hitachi's sales strategy  for GA products] .52 
4.4.1.  Product market    
(A) The Commission’s decisional practice  
Energy Automation and Information Systems  
(59) The Commission has previously considered  an overall market for Energy 
Automation  and Information S ystems ( ‘EAIS ’) as a potential segment within the 
market for Transmission and Distribution.53  
(60) The Commission has also considered dividing the market for EAIS into two 
sub-segments:  i) power system management and ii) protection relays .54 
Furthermore,  the Commission has considered whether  a market exist s both in 
the turnkey area and at the level of individual components.55   
(61) The Commission has also  considered a potential sub-segmentation of power 
system  management into i) Substation  Automation Systems ( ‘SAS’) and ii) 
Network Management Systems ( ‘NMS ’), because they from a demand -side 
perspective perform different functions.56  
(62) Additionally, the Commission has considered  to do a further sub -segmentation 
of NMS into i) Energy Management  Systems  (‘EMS ’), ii) Distribution 
Management Systems  (‘DMS ’) and iii) Wide Area Monitoring Systems  
                                                 
50  Form CO, paragraph 342.  
51  Form CO, paragraph 343.  
52  Form CO, paragraph 344 -346. 
53  Case COMP/M.5755 – Schneider Electric/Areva T&D , paragraph 23; Case COMP/M.3296 – 
Areva/Alstom T&D , paragraphs 11 -15; Case COMP/M.3653 – Siemens/VA Tech , paragraphs 76 -78; and 
Case COMP/M.7278 – General Electric/Alstom , parag raph 1796.  
54  Case COMP/M.5755 – Schneider Electric/Areva T&D , paragraphs 24 -26; Case COMP/M.3653 – 
Siemens/VA Tech , paragraph 76; and Case COMP/M.7278 – General Electric/Alstom , paragraph  1797 .  
55  Case COMP/M.3653 – Siemens/VA Tech , paragraphs 77 -78. 
56  Case COMP/M.7278 – General Electric/Alstom , paragraph 1793.  
 
 
14 (‘WAMS ’).57 Ultimately, the Commission has left the final definition of the 
product market open  in all its previous decisional practice .58 
Enterprise Application Software   
(63) The Commissi on has previously considered a  market for the provision of 
enterprise application software ( ‘EAS ’) as a segment within  business software59. 
Furthermore, the Commission has considered further distinctions, ultimately 
leaving the market definition open.  These possible further distinctions are 
explained in the three paragraphs below.  
(64) The Commission has considered dividing  EAS into  the following sub -segments:  
i) Enterprise Resource Planning (‘ ERP’), ii) Customer Relationship 
Management ( ‘CRM ’), iii) Supplier Relationship Management ( ‘SRM ’), iv)  
Supply Chain Management ( ‘SCM ’), v) Product Lifecycle Management 
(‘PLM ’) and vi) Business Analytic s (‘BA’).60   
(65) Within the ERP segment,  sub-segments based on  functionality  have been 
considered , namely i) Financial Management Systems ( ‘FMS ’), ii) Human 
Resources ( ‘HR’) and iii) Enterprise Project Management ( ‘EPM ’).61 
Furthermore, the Commission has considered whether each of these three 
segments should be  subdivided  into two sub -segments, namely i) high -function 
solutions and ii)  mid-market solutions.62  
(66) Within the BA segment the Commission has in past cases considered a possible 
distinction between i) Performance Management Tools and Applications 
(‘PMT’) and ii) Data Warehouse Platforms  (‘DWP’) .63 PMT was itself 
considered as possibly divided between i) business intelligence ( ‘BI’), ii) 
Financial performance strategy management ( ‘FPSM ’) applications, iii) CRM 
analytics, iv) SCM analytics,  (v) service operations management applica tions, 
vi) workforce analytics, and vii) analytic spatial information management 
tools.64 BI has been considered as possibly sub-segmented into  i) Query, 
Reporting and Analysis (‘QRA’) tools on the one hand and ii) Advanced 
Analytics on the other.65  
                                                 
57  Case COMP/M.7278 – GE Alstom/Alstom , paragraph  1794.  
58  Case COMP/M.5755 – Schneider Electric/Areva T&D , paragraph 26; Case COMP/M.3296 – 
Areva/Alstom T&D , paragraph 15; Case COMP/M.3653 – Siemens/VA Tech , paragraph 78; and Case 
COMP/M.7278 – General Electric/Alstom , paragraph  1799;  
59  Case COMP/M.8274 – Cinven/Permira/Allegro/Ceneopara , paragraph 53.  
60 Case COMP/M.8274 – Cinven/Permira/Allegro/Ceneopara, paragraph 54; Case COMP/M.4944 – 
SAP/B usiness Objects, paragraph 7.  
61  Case COMP/M.5128 – Nordic Capital/TietoEnator , paragraph 15 ; and Case COMP/M.3216 – 
Oracle/PeopleSoft , paragraph 18.  
Case COMP/M.5128 – Nordic Capital/TietoEnator , paragraph  15; and Case COMP/M.8274 – 
Cinven/Permira/Allegro/Ceneopara,  paragraph 56 . 
63  Case COMP/M.4987 – IBM/Cognos , paragraph 10; and Case COMP/M.4944 – SAP/Business Objects , 
paragraph 9.  
Case COMP/M.4987 – IBM/Cognos , paragraph  11; and Case COMP/M.4944 – SAP/Business Objects , 
paragraph 10 .  
65  Case COMP/M.4944 – SAP/Business Objects , paragraph 11 and 16.  
 
 
15 (B) The Notifying Party’s view   
EAIS  
(67) The Notifying Party  submits  that the relevant product market is the overall EAIS 
market.66 However, the precise market definition can be left open as no concerns 
will arise under any plausible market definitio n.  
(68) According to the Notifying Party , Automation customers require the set -up of a 
complete solution and hence issue a call for tender s for an entire EAIS rather 
than for individual automation products, making it necessary for suppliers to 
offer a comprehensive range of prod ucts in order to be able to compete 
successfully on the market. Where products are sold on a stand -alone basis, 
those sales are usually made to other system integrators for a specific project.67 
(69) Furthermore , the Notifying Party argues that  a distinction between SAS and 
NMS or any further sub -segmentation is not appropriate, as the underlying 
system remains the same and there is a high degree of supply -side 
substitutability in relation to the automation products required (both hardware 
and sof tware).68 Likewise, after -sale services should not be considered a 
separate market, as they are inherent to and constitutive of the different products 
and systems which the Parties offer in the area of transmission and 
distribution .69  
(70) The Notifying Party  submits  that there is no separate market or segment for 
power network communication solutions, noting that the activities of the Parties 
in this area predominantly involve the supply of communication solutions in the 
context and as part of the provision of a  SAS or NMS system (i.e. the Parties do 
not focus on the supply of stand -alone communication systems).70  
(71) Furthermore, the Notifying Party  submits that products, systems and services for 
energy management solutions should fall within an overall market for E AIS 
including both power system management and single devices that are sold stand -
alone, such as e.g. protective relays, communication equipment and automation 
software.71 
EAS  
(72) The Notifying Party submits that the relevant product market should be the 
overall market for EAS.72 While there is business software with various 
different functionalities, there is no clear -cut line between those functionalities 
as often software solutions are tailored to the needs of a respective customer and 
                                                 
66  Form CO, paragraph 424.  The Notifying Party also submits that the narrowest plausible markets within 
the EAIS market are: i) Substation Automation Systems (‘SAS’), ii) Network Managemen t Systems 
(‘NMS’), iii) Microgrid Automation Systems (‘MAS’), and iv) stand -alone automation products  (Form 
CO, paragraph 425).  
67  Form CO, paragraph 394. 
68  Form CO, paragraph 395.  
69  Form CO, paragraph 39 7 
70  Form CO, paragraph 403.  
71  Form CO, paragraph  407. 
72  Form CO, paragraph 414.  
 
 
16 hence usually include more than just one functionality.73 In addition, supply -side 
substitutability between the single functionalities is high.74 However, given th at, 
in its view, ther e is an  absence of any concerns arising under all plausible 
market delineations, the Not ifying Party  submits that the market definition can 
ultimately be left open.75   
(C) The Commission’s assessment  
EAIS  
(73) The Commission considers  that the EAIS market can be segmented between 
power management systems and stand -alone products . Within power system 
management systems a segmentation between SAS and NMS can be considered, 
the latter potentially further divided between EMS, DMS and WAMS.  
(74) Furthermore, a separate segment for MAS can be considered as well as stand -
alone products for communication products o r systems, protective relays, 
automation software and remote terminal units (RTUs).  
(75) The results of the market investigation were mixed but generally supported a 
segmentation of the EA IS product market.76  
(76) However, in this case the Commission can leave the product market definition 
open as the Proposed Transaction does not raise competition concerns on any 
plausible market . 
(77) Given  the absence of any horizontally or vertically affected markets, the 
Commission will not further discuss this market.  
EAS  
(78) The resu lts of the market investigation were mixed but generally supported a 
segmentation of the EAS market .77 However, in this case the Commission can 
leave the product market definition open as the Proposed Transaction does not 
raise competition concerns on any p lausible market . 
(79) Given the absence of any horizontally or vertically affected markets, the 
Commission will not further discuss this market.  
                                                 
73  Form CO, paragraph 410.  
74  Form CO, paragraph 416.  
75  Form CO, paragraph 416.  
76  Replies to eQuestionnaire – Competitors, question 19 and Replies to eQuestionnaire – Customers, 
question 17.  
77  Replies to eQuestionnaire – Competitors, question 19 and Replies to eQuestionnaire – Customers, 
question 17.  
 
 
17 4.4.2.   Geographic market  
(A) The Commission’s decisional practice  
EAIS  
(80) The Commission has previously considered the plausible EAIS market s to be 
EEA -wide  or world -wide , but has ultimately left the precise geographic market  
definition open .78  
EAS 
(81) The Commission has considered the relevant geographic market for EAS to be 
EEA -wide or worldwide.79 With respect to CRM  and BA (including possible 
sub-segments) , the Commission has considered the market to be at least EEA -
wide and possibly worldwide .80  
(82) Concerning high function solutions for HR and FMS, the Commission has 
concluded  that the market is global.81 
(B) The Notifying Party’s view  
EAIS  
(83) The Notifying Party  submits that the relevant geographic market for EAIS is 
global and, in any event, far larger than a geographic area including the EEA. 
All product markets within GA are global in scope, as there are no trade barriers 
through technical standards, the vast majority of customers and the major 
suppliers are active at a global level, and transportation costs do not limit the 
ability of manufacturers to compete effectively in countries where they do not 
have production . However , the geographic market definition can be left open in 
this case, as Hitachi is not active in the EEA.82 
EAS 
(84) The Notifying Party  submits that the relevant geographic market for EAS (and 
its segments and sub -segments, if examined separately) is global and, in any  
event, far larger than a geographic area including the EEA. All product markets 
within GA are global in scope, as there are no trade barriers through technical 
standards, the vast majority of customers and the major suppliers are active at a 
global level,  and transportation costs do not limit the ability of manufacturers to 
compete effectively in countries where they do not have production . Howeve r, 
                                                 
78  Case COMP/M.5755 – Schneider Electric/Areva , paragraph 32; Case COMP/M.3296 – Areva/Alstom , 
paragraphs 17 -18; and  Case COMP/M.7278 – General Electric/Alstom,  paragraph  1803.  
79  Case COMP/M. 7334 – Oracle/Micros , paragraph 17; and Case COMP/M.5904 – SAP/Sybase , paragraphs 
29-30. 
80  Case COMP/M.3978 – Oracle/Siebel , paragraph 19 ; Case COMP/M.4944 – SAP/Business Objects , 
paragraph 18.  
81  Case COMP/M.3216 – Oracle/PeopleSof t, paragraph 179.  
82  Form CO, paragraph 430 and 436.  
 
 
18 the geographic market definition can be left open in this case,  as Hitachi had no 
sales in EAS in the past t hree years (2016 -2018).83 
(C) The Commission’s assessment  
EAIS  
(85) The Commission has in the past analysed the segments of the EAIS market at 
EEA and worldwide level. The majority of the respondents to the market 
investigation considered the plausible EAIS markets worldwide in scope.84 
However, as the Proposed Transaction does not raise competition concerns on 
any plausible ma rket the geographic market definition can be left open.  
(86) Given the absence of any horizontally or vertically affected markets, the 
Commission wi ll not further discuss this market.  
EAS 
(87) The Commission  has in the past analysed the segments of the EAS market at 
EEA and worldwide level. The majority of the respondents to the market 
investigation considered the plausible EAS markets to be worldwide in scope.85 
However, as the Proposed Transaction does not raise competition concerns on 
any plausible market the geographic market definition can be left open  
(88) Given the absence of any horizontally or vertically affected markets, even for 
the narrowest plausibl e combination of product and geographical market 
definitions, the Commission w ill not further discuss this market.  
4.5. Grid Integration  
(89) The Target’s Grid Integration (“GI”) business line is active in the design, 
manufacture and sale of HV substations, high vol tage direct current (HVDC) 
stations, flexible alternating current transmission systems (FACTS), and (high) 
power semiconductors as well as related services. Each of these products could 
be potentially sub -segmented into several other different markets. Thi s business 
line also includes charging infrastructure for buses , trams and electric vehicles, 
and power consulting services . Hitachi has de minimis  activities in GI on a 
global basis. In this business area, Hitachi's focus is on the manufacturing and 
supply of power semiconductors.86 
                                                 
83  Response to RFI 6, 9 April 2020.  
84  Replies to eQuestionnaire – Competitors, question 54 and Replies to eQuestionnaire – Customers, 
question 52.  
85  Replies to eQuestionnaire – Compe titors, question 54  and Replies to eQuestionnaire – Customers, 
question 52.  
86  Form CO, paragraph 440.  
 
 
19 4.5.1.  Product market  
T&D turnkey systems  
(A) The Commission’s decisional practice  
(90) In previous decisions relating to the overall m arket for transmission and 
distribution and its various components, the Commission has considered the 
overall market for transmission  and  distribution  and  its  various  components,  
both  when  they  are supplied individually or integrated into a syste m.87 
(91) In  one  decision,  while  the  market  definitions  were  ultimately  left  open,  
the following potential product markets were identified: (i) HV products, (ii)  
MV  products,  (iii)  power  transformers,  (iv)  transmission systems  and  
distributio n  systems,  (v)  energy  automation  and  information systems and 
(vi) transmission and distribution services.88 
(92) The Commission has considered in the past that the transmission and 
distribution systems could constitute a single market comprising the design  and 
installation of turnkey systems, either for transmission networks or for 
distribution networks, but ultimately left the market definition open.89 The 
Commission has previously considered identifying tentative product markets for 
HV turnkey projects (tr ansmission systems), as distinguished from MV turnkey 
projects (distribution systems).90 In another decision, the question whether the 
transmission and distribution systems together constitute a separate market, or 
whether the market for transmission system s should be considered as a separate 
market was left open.91 Also, the Commission has previously looked into the 
markets for HVDC and FACTS,92 but ultimately left the market definition 
open.93 
(B) The Notifying Party’s view  
(93) The Notifying Party submits that the re levant product market is the overall 
market for T&D turnkey systems , and that the narrowest plausible segments  
within this market are HVDC stations /systems , FACTS  and substations.  
(94) The Notifying Party submits that it would also be inappropriate to further 
segment the overall market for T&D turnkey systems from a demand or supply -
side perspective. This is because from a supply -side perspective, all major EPC 
companies in the T&D sector have the necessary  capabilities to offer all main 
types of T&D projects (including HVDC, FACTS and substations) and 
equipment and resources will typically be sourced externally as required. 
Whereas from a demand -side perspective, customers will set out the required 
                                                 
87  Case COMP/M.7278 - General Electric/Alstom paragraph  1792.  
88  Case COMP/M.3296 - Areva/Alstom T&D , paragraphs 11 -15. 
89  Case COMP/M.5754 - Alstom Holdings/Areva T&D, paragraph 62; Case COMP/M.3296 - Areva/Alstom 
T&D , paragraph 15.  
90  Case COMP/M.3653 – Siemens/VA Tech ; Case COMP/M.5754 - Alstom Holdings/Areva T&D , paragraph  
63. 
91  Case COMP/M.5754 - Alstom Holdings/Areva T&D, paragraph 65.  
92  Case COMP/M.4892 - Infineon/Siemens/JV , paragraph 17.  
93  Case COMP/M.4892 - Infineon/Siemens/JV , paragraphs 17 -19. 
 
 
20 specific ations for a project in the tender documents and it is not decisive which 
type of provider undertakes the project, as long as the specifications are met, and 
all major providers can do all types of projects. In addition, large -scale T&D 
projects often incl ude a combination of HVDC, FACTS and substations.  
(95) As regards HVDC, the Notifying Party maintains that neither HVDC, nor the 
following HVDC solutions – HVDC Light and HVDC Classic solutions, belong 
to separate product markets, for the following reasons . 
(96) HVDC Classic is the "traditional" HVDC technology, which operates with a 
power of more than 100 MW whereas, HVDC Light is a technology developed 
by ABB in the 1990s. While there are certain differences in the distance and 
power ranges that can be covered b y each of the systems, they are now largely 
interchangeable and it often depends on the customer's preferences and/or 
budget whether to choose a "classic" or "light" HVDC solution. Furthermore, 
from a supply -side perspective most large vendors now offer bo th types of 
HVDC solutions.  
(97) Moreover, each HVDC station is a tailored solution, depending on the 
requirements and characteristics of the respective project and the customer. A 
segmentation on the basis of these two technologies would not reflect the 
compl exity of these systems, and the variety of HVDC station offerings. Such 
systems are in practice largely customized to meet the needs of customers so 
that the exact composition and set -up of HVDC stations based on the same 
technology can differ . 
(98) The Notifyi ng Party  submits that it would not be appropriate to segment FACTS  
(into Series compensation  FACTS,  and the latter into a) fixed (Fixed Series 
Com pensation or Fixed SC), and b)  controlled Series compensation  FACTS;  and 
(ii) (Dynamic) Shunt compensation FAC TS, and the latter into : (i) static 
compensators (STATCOM), and (ii) static VAR compensators (SVC) ) for the 
reasons explained below.  
(99) First , the main intended use of any FACTS, irrespective of the technology used, 
is to boost transmission capacities withou t having to build or use new 
transmission lines or power generation facilities. Both Series Compensation and 
(Dynamic) Shunt Compensation are used to compensate power quality issues 
quickly through reactive power, ensuring higher grid stability.  
(100)  Second , both technologies use similar impedance devices, like capacitors or 
reactors, which are used to control voltage in the network.  
(101)  Third,  a segmentation by these technologies would not reflect the complexity 
and variety of FACTS offerings. Such systems are in  practice largely 
customized to meet the needs of customers so that the exact composition and 
set-up of FACTS based on the same technology can differ. The choice between 
series or shunt type of compensation is the result of plan optimization based on 
custo mer requirements and network characteristics.  
(102)  Fourth , just as the Target and Hitachi offer these technologies, other players in 
this space, such as Siemens, also offer different technologies to customers 
indicating a high degree of supply -side substitutab ility. 
 
 
21 (103)  The Notifying Party further submits that it is not appropriate to further 
differentiate between different types of substations within this segment for the 
following reasons.   
(104)  Substations are used in transmission and distribution networks to convert and 
transfer electricity from the power generation plant to the end -customer. 
Depending on the terrain, specific project, amount of energy supplied, budget, 
customer requirements, etc., the supplier will choose a substation setup that is 
suitable to meet t he requirements. However, the basic function of a substation is 
always the same, namely to convert and to transfer electricity.  
(105)  While substation setups can roughly be divided into AIS substations, GIS 
substations, and mobile substations, the additional exi stence of Hybrid 
Substations already shows that the distinction between the different types is 
blurred. There is no clear -cut distinction between AIS, GIS and Hybrid and 
there are many different setups that are possible and which use either more air -
insula ted or more gas -insulated equipment, depending on the respective project.  
(106)  In addition, substation -offerings are tender -based, and the EPC companies will 
source the required equipment according to the project specifications. From a 
supply and demand -side po int of view, there is no significant difference in 
supplying either an AI S or GIS (or hybrid) substation.  
(C) The Commission’s a ssessment  
(107)  The Commission conducted its market investigation on the basis of and in 
respect of the plausible sub -segments mentioned above . The market 
investigation examined whether sub -segmentation is warranted for the following 
products that could be offered within  HVDC stations , FACTS  and substations :94  
- segmentation of HVDC stations/systems into: (i) HVDC  Classic (the 
“traditional” HV DC technology, operating with a power of more than 100 MW),  
and (ii) HVDC Light/Plus (used for undersea cable links and long underground 
cable links,  with range from around 80 kV up to 320 kV) ; 
- segment ation of  FACTS into: (i) Series compensation  FACTS,  and the latter into 
a) fixed (Fixed Series Com pensation or Fixed SC), and b)  controlled Series 
compensation  FACTS;  and (ii) (Dynamic) Shunt compensation FACTS , and the 
latter into : (i) static compensators (STATCOM), and (ii) static VAR 
compensators (SVC) ; 
- segment ation of substations into: (i) AIS substation; (ii)  GIS subst ation; (iii) 
Hybrid substation; and (iv) Mobile s ubstation . 
(108)  The market investigation confirmed that T&D turnkey systems  could be viewed 
as a separate market , with the majority of customers and competitors confirming 
                                                 
94  For more information on these products please see Annex 1 . 
 
 
22 such an understanding .95 The results of the market investigation  on any plausible  
segmentations within T&D turnkey systems  were mixed.  
(109)  As regards T&D turnkey systems , the majority of c ustomers considered  that 
T&D turnkey systems  could be segmented between HVDC stations /systems, 
FACTS  and substations. For example, a customer explained that these segments 
require different knowledge. Another customer explained that the products 
require different supp ly chain s.96 On the other hand, competitors had divergent 
views whether HVDC stations /systems, FACTS  and substations are part of one 
market for T&D turnkey systems , or can be viewed as belonging to different 
markets. One competitor that opined that these products belong to different 
markets explained that there are different electronic engineering standards 
applicable to these products.97  
(110)  As regards a possible segmentation between HVDC  Classic  and HVDC 
Light/Plus , the market investigation also yielded mixe d results. While t he 
majority of customers considered that a segmentation between HVDC Classic 
and HVDC Light/Plus is warranted ,98 the majority of competitors were of the 
opposite view.99  
(111)  As regards FACTS sub -segmentation int o Series compensation  FACTS  and 
(Dynamic) Shunt compensation FACTS , the majority of customers considered 
that such a segmentation is not warranted.100 One customer explained that there 
is not a lot of difference between these two products, and another one that it is 
likely that these produ cts will be supplied by the same manufacturers.101 
Competitors were split in their view as to whether Series compensation  FACTS  
and (Dynamic) Shunt compensation FACTS  belong to the same market or not. 
Those who considered that the products should not be segm ented explained that 
these  different technologies have the same basic functionality and suppliers 
mostly offer several  technologies ; and that t hese products are complementary to 
secure the grid quality .102  
(112)  As regards the possible segmentation of Series compensation  FACTS  into fixed 
(Fixed Series Com pensation or Fixed SC), and controlled Series compensation  
FACTS, the majority of customers and competitors considered that such a 
segmentation is not warranted.103  
(113)  As regards the possible segmentation of  (Dyna mic) Shunt compensation FACTS  
into static c ompensators (STATCOM), and static VAR compensators (SVC) , 
                                                 
95  Replies to eQuestionnaire – Customers, questions 22 and 22.1; Replies to eQuestionnaire – Compe titors, 
questions 24 and 24.1.  
96  Replies to eQuestionnaire – Customers, questions 23 and 23.1.  
97  Replies to eQuestionnaire – Competitors, questions 25 and 25.1.  
98  Replies to eQuestionnaire – Customers, question 24.  
99  Replies to eQuestionnaire – Competitors, question 26.  
100  Replies to eQuestionnaire – Customers, question 25.  
101  Replies to eQuestionnaire – Customers, question 25.  
102  Replies to eQuestionnaire – Competitors, questions 27 and 27.1.   
103  Replies to eQuesti onnaire – Customers, questions 26 and 26.1; Replies to eQuestionnaire – Competitors, 
questions 28 and 28.1.  
 
 
23 customers and competitors were split in their view as to whether these products 
should belong to separate markets or not.104 
(114)  Finally, as regards the possible  segmentation of s ubstations into: (i) AIS 
substation s; (ii)  GIS subst ation s; (iii) Hybrid substation s; and (iv) Mobile 
substation s, the majority of customers considered that these products could be 
part of different markets.  For example, customers explained that prices of the 
products differ; there are d ifferent supply chain operating for these products; and 
not all suppliers can offer the various different design s.105  
(115)  Taking into account the Notifying Party's arguments and the results of the 
market investigation, the Commission considers that, in any case, the precise 
scope of the product market definition of T&D Turnkey systems  can be left 
open since the Proposed Trans action does not raise serious doubts on the 
narrowest plausible segmentation  within T&D turnkey systems , which in this 
case is HVDC stations , FACTS  and substations , and the further sub -
segmentation for  HVDC stations/systems  between HVDC  Classic and HVDC 
Light/Plus ; for FACTS between Series compensation FACTS (fixed (Fixed 
Series Compensation or Fixed SC), and controlled Series compensation FACTS) 
and (Dynamic) Shunt compensation FACTS (static compensators (STATCOM), 
and static VAR compensators (SVC)) ; and  for s ubstations between  AIS 
substation s, GIS subst ation s, hybrid substation s, and mobile s ubstation s. 
Power semiconductors  
(116)  Semiconductors are materials, such as silicon, which can act as an insulator, but 
are also capable of conducting electricity. Theref ore, they are a good medium 
for the control of electrical current . Semiconductors are at the heart of many 
devices which are produced by the Parties and can be found in virtually every 
electronic device today. They are rarely bought as end -products by cons umers. 
Rather, they are an input product for equipment manufacturers in virtually all 
sectors within the electronic equipment industry . 
(117)  The Proposed Transaction relates to power semiconductors (including high 
power semiconductors), which have a different f unctionality compared to 
general semiconductors.106 Power semiconductors include integrated circuits 
(ICs), discretes, as well as many other types of power semiconductors and 
modules. The Proposed Transaction relates to power discretes, such as diodes, 
rectifiers, transistors or thyristors, and modules  (the transaction relates to these 
products in the sense that one or both of the Parties produces them) . 
(118)  The overlap between the Parties' global offerings mainly relates to high power 
standard IGBT modules, where both Parties have a limited position at a global 
                                                 
104  Replies to eQuestionnaire – Customers, questions 27 and 27.1; Replies to eQuestionnaire – Competitors, 
questions 29 and 29.1.  
105  Replies to eQu estionnaire – Customers, questions 28 and 28.1; Replies to eQuestionnaire – Competitors, 
questions 30 and 30.1.   
106  While general semiconductors (operating in ranges of mW or µW) are used to control devices with 
millions of (low -power) switching functions,  power semiconductors (operating in ranges > 1 W) and high 
power semiconductors (operating in ranges > 1200 V / 300 A) only provide for one switch with high 
power.  
 
 
24 level and in the EEA. In addition, both Parties also had minor sales of discretes 
(more specificall y: diodes / rectifiers) both globally and in the EEA .107 
(A) The Commission’s decision al practice  
(119)  In previous cases relating to semiconductors, the Commission distinguished 
between ICs, discretes, and sensors and actuators, respectively (and further sub -
segments , as applicable).108 The Commission also considered within  discretes a  
distinction  between  the  segments   for  RF  and  microwave,  power  transistors  
and  thyristors,  rectifiers  and  power  diodes,  and  small  signal  and  other  
discretes.109  
(B) The Notifying Party’s view  
(120)  The Notifying Party  submits that these cases relating to general semiconductors 
can give a rough indication as to how to further segment the relevant markets 
based on the relevant types of semiconductors available, as they are not dire ctly 
applicable to high power semiconductors which differ in functionality and in the 
relevant sub -types compared to general semiconductors . 
(121)  The Notifying Party submits that in the area of power semiconductors, a 
distinction can be made between discretes (including, e.g., thyristors and 
diodes/rectifiers) and modules. While it would also appear plausible to further 
segment discretes into thyristors, diodes/rectifiers, IGCT s, GTO s and GCTs as 
well as IGBT s, the Notifying Party maintains that it would not be  appropriate to 
distinguish between power, high power and extra -high power semiconductors  
for the following reasons . 
(122)  First, the basic functionality remains the same regardless of the exact (high) 
power level. Power s emiconductors provide for one switch wit h high power, as 
opposed to “general semiconductor s” that provide for millions of “low power ” 
switches . 
(123)  Second , the input material for all power semiconductors is the same (primarily 
silicon). Producing different  power semiconductors therefore does not req uire 
any substantive change in the materials used, or the manufacturing facilities.  
(124)  Third , there is no established standard or defined term as to where to draw the 
line between power, high power and extra high power - notably, also established 
industry re ports including IHS only provide sales data for power semiconductors 
overall rather than splitting between power and high power or power, high 
power, and extra high power. Suppliers such as the Target offer a wide range of 
product types with voltage rating s ranging (in the case of the Target) from 200 
to 8500 V and current ratings from 25 to 13500 A. Whether or not a product 
would qualify as power, high power or even extra high power would ultimately 
depend (apart from the definition of these categories) on  the required 
specifications of the customer on these two metrics. Moreover, the IHS reports 
                                                 
107  Form CO, paragraph 494.  
108  Case COMP/M.7585 - NXP Semiconductor/Freescale Semiconductor , paragraph  14. 
109  Case COMP/M.7585 - NXP Semiconductor / Freescale Semiconductor , paragraph  78. 
 
 
25 only distinguish between power levels (powers vs. high power) for two types of 
semiconductors, i.e., thyristors and diodes/rectifiers.  
(125)  Fourth , while there is a dif ference in suppliers for “general ” semiconductors and 
“power semiconductors ”, there is no such distinction between power, high 
power and extra high power. While certain suppliers (such as e.g. Hitachi) may 
focus on semiconductors that are usually provided at the lower end of the range, 
in principle, all suppliers are capable of providing power and high -power 
semiconductors as the underlying basic technology is similar.  
(126)  Fifth , while there is a difference between the types of semiconductors included 
in the c ategories of “general ” semiconductors and “power semiconductors ”, 
there is no such difference between the types of devices that are offered in 
power, hi gh power and extra high power. Furthermore, the types of 
semiconductors offered by the Parties can be bo th power and high power (or 
extra high power).  
(127)  Lastly , in terms of downstream use, parallel and multilevel connection of lower 
power semiconductors are increasingly used to better harvest the economy of 
scale of the lower power components.   
(128)  In any event, the Notifying Party submits that the market definition  can 
ultimately be left open.110  
(C) The Comm ission’s  assessment  
(129)  The Commission conducted its market investigation on the basis of and in 
respect of the plausible sub -segments of power semiconductors mentioned 
above.  
(130)  The majority of customers and competitors considered that power 
semiconductors could be segmented betwe en thyristors, diodes/rectifiers, 
integrated gate -commutated thyristors (IGCTs), gate turn -off thyristors (GTOs), 
gate-commutated thyristors (GCTs), transistors (insulated gate -bipolar 
transistors (IGBTs), IGBT dies, press-pack IGBTs, bipolar semiconductor s, 
IGBT modules, diode modules, Integrated Circuits (ICs), and modules of 
thyristors/diodes.111 Some customers and competitors further explained that 
there could be also other plausible segments of power semiconductors.112 
(131)  As regards plausible segmentation of power semiconductors as per different 
power levels (power, high power, extra high power), the market investigation 
yielded mixed results. The majority of customers considered that such 
segmentation is not warranted.113 On the other hand, the majority of comp etitors 
considered that power semiconductors could be further segmented into power, 
                                                 
110  The Notifying Party has provided data for various product splits of power semiconductors.  
111  Replies to eQuestionnaire – Customers, questions 30 and 30.1; Replies to eQuestionnaire – Competitors, 
questions 32 and 32.1.  
112  Replies to eQuestionnaire – Customers, questions 30 and 30.1; Replies to eQuestionnaire – Competitors, 
questions 32 and 32.1.  
113  Replies to eQuestionnaire – Customers, questions 31 and 31.1.  
 
 
26 high power, extra high power.114 Some competitors however did not consider 
such a segmentation appropriate. For example, a competitor  explained that the 
distinction between g eneral semiconductors and power semiconductors is 
sufficient to classify the use of the semiconductor, and a further distinction of 
power semiconductors is not needed. This  competitor  also explained that 
customers usually can choose between several options  of power semiconductor s 
depending on the topology used in the system and the design of the system in 
terms of buildi ng block, and t his makes a segmentation into power ranges 
difficult.115 
(132)  As regards a plausible segmentation of IGBT modules into (i) standard  IGBT 
modules and (ii) other (application -specific) IGBT modules, the majority of 
customers considered that this is not warranted.116 Competitors’ view on this 
question were split.117 For example, competitor s explained that the value of 
specific modules parameters differ per application, but they are usually not 
specific for one application ; It is not important to segment the IGBT, as specific 
modules are only for specific cases; the technology for the IGBT mo dules is the 
same .118 
(133)  Taking into account the Notifying Party's arguments and the results of the 
market investigation, the Commission considers that, in any case, the precise 
scope of the product market definition for power semiconductors can be left 
open since the Proposed Transaction does not raise serious doubts  on the 
narrowest plausible segmentation  within power semiconductors , which in this 
case are power semiconductor  discretes; power semiconductor modules; high -
power semiconductors; power diodes/rec tifiers (including  all power levels) ; high 
power diodes/r ectifiers ; power t hyristors (including all power levels) ; high 
power t hyristors ; standard IGBT m odules (which are only high power) ; 
thyristor/d iode modules (& rectifier b ridges) (which are only high power) ; 
GTOs, IGCTs & GCTs (which are only high power) ; press -pack IGBT m odules 
(which are only high power) ; discrete IGBTs (which are only high power) ; 
intelligent power m odules (IGBT -IPMS) (which are only high power) ; power 
integrated m odules (PIM/CIB) ( which are only high power) ; bipolar power 
transistors (which are only lower to medium power, but not high power) ; power 
ICs (which are only lower to medium power, but not high power) .119 
EV charging infrastructure  
(A) The Notifying Party’s view  
(134)  The Notifying Par ty submits that charging infrastructure for electric vehicles 
could form a distinct product market within the area of Grid Integration, without 
further distinguishing between the different vehicle types  e.g. (a) charging 
infrastructure for public transport ation  and (b) charging infrastructure for other 
                                                 
114  Replies to eQuestionnaire – Competitors, questions 33 and 33.1.   
115  Replies to eQuestionnaire – Competitors, question 33.1.  
116  Replies to eQuestionnaire – Customers, questions 32 and 32. 1.  
117  Replies to eQuestionnaire – Competitors, questions 34 and 34.1.  
118  Replies to eQuestionnaire – Competitors, question 34.1.  
119 None of the Parties have any activities in thyristor/diode modules (& rectifier bridges), intelligent power 
modules (IGBT -IPMS) , power integrated m odules (PIM/CIB) , bipolar power t ransistors , and p ower ICs . 
 
 
27 vehicles . Nevertheless, the Notifying Party submits that the precise market 
definition can be left open, as the Proposed Transaction will not raise any 
competitive concerns in relation to EV charging systems . 
(B) The Commission’s assessment  
(135)  The majority of customers and competitors considered that EV charging 
infrastructure could be viewed as a separate market within GI products.120 
(136)  Furthermore, the majority of customers considered that EV charging 
infrastructure could be segmented into (i) c harging infrastructure for electric 
vehicles for the public transpo rt (trams and buses), and (ii) c harging 
infrastructure for other electric vehicles types .121 Some customers explained that 
not all suppliers are capable of providin g (yet) the whole range of charging 
infrastructure. However, the majority of competitors were of the opposite view, 
and considered that such a segmentation is not warranted.122 
(137)  Taking into account the Notifying Party's arguments and the results of the 
market  investigation, the Commission considers that, in any case, the precise 
scope of the product market definition for charging infrastructure for electric 
vehicles can be left open since the Proposed Transaction does not raise serious 
doubts on the narrowest plausible segmentation  within charging infrastructure 
for electric vehicles , which in this case is charging infrastructure for electric 
buses used for public transportation . 
4.5.2.  Geographic market  
(A) The Commission’s decisional practice  
(138)  The Commission has considered in a previous case that the scope of the 
geographic market for transmission & d istribution ( T&D ) equipment  is at least 
EEA -wide.123 In another case, the Commission left open the question whether 
the geographic market for transmi ssion and distribution products is EEA -wide 
or worldwide in scope.124  
(B) The Notifying Part y’s view  
(139)  The Notifying Party submits that, in particular, HVDC stations and FACTS are 
tendered globally and all large suppliers are also active globally. The Notifying 
Party submits that the exact scope of the geographic market  for T &D turnkey 
systems  need not be defined in this case, as concerns will neither arise in case of 
an EEA -wide market definition (in which case there would not be an overlap 
between the parties, a s Hitachi is not active in T&D turnkey systems within the 
EEA) nor in case of a global market definition . 
                                                 
120  Replies to eQuestionnaire – Customers, questions 22 and 22.1; Replies to eQuestionnaire – Competitors, 
questions 24 and 24.1.  
121  Replies to eQuestionnaire – Customers, questions 29 and 29.1.  
122  Replies to eQuestionnaire – Customers, questions 31 and 31.1.  
123  Case COMP/M.3296 - Areva/ALSTOM T&D,  paragraph 1 7. 
124  Case COMP/M.7278 - General Electric/Alstom paragraph 1803.  
 
 
28 (140)  As regards semiconductors,  the market investigation in a recent Commission 
decision gave strong indications that the markets for semiconductors are 
worldw ide in scope (although the Commission has left open the precise scope of 
the geographic market).125  
(141)  The Notifying Party submits that the markets for power semiconductors are 
indeed global in scope and that all the larger providers are also active glo bally . 
(142)  The Notifying Party submits that the market segment for charging infrastructure 
for electric vehicles is global in scope. First, all major suppliers of charging 
infrastructure for electric vehicles are active globally and sell to customers on a 
global basis. Second, prices for charging infrastructures for electric vehicles are 
quoted on a global basis, and do not vary substantially according to geographic 
region. Third, manufacturers of electric vehicles generally apply a worldwide 
purchasing policy to most of their input products, including for the charging 
infrastructures . In any event, the Notifying Party submits that the precise 
geographic market definition can ultimate ly be left open in this case as  no 
concerns will arise under any plausible narr ower geographic market 
definition .126 
(C) The Commission’s assessment  
(143)  The results of the market investigation point towards a worldwide market for all 
sub-segments of GI products, as  a majority of customers127 and of competitors128 
confirmed. Accordin g to a majority  of competitors,  GI systems and products 
sold across different world regions  are substitutable (e.g., in  terms of product 
specifications , safety and industry standards) . Competitors  also explained that  
standards are similar across the world and supplier s can comply with the diverse 
standards .129 Both customers and competitors confirmed that suppliers of GI 
products participate in tenders across the whole of the world.130 
(144)  Within the EEA, competitors do not supply the same GI systems and/or product s 
at materially different prices (by 5 -10%) across individual Member States.131 
Transport costs for GI products across the EEA only make up a small percentage 
of the purchase price of individual GI products (less than 5% according to a 
majority of customers132 and between 5 -10% according to a majority of 
competitors133).  The majority of competitors explained that they participate in 
tenders for GI systems and products in the whole of the EEA,134 and this was 
                                                 
125  Case COM P/M.7585 - NXP Semiconductor / Freescale Semiconductor , paragraphs 58, 85, 99.  
126  The Target is only active in Switzerland, and Hitachi is not active in the market for charging infrastructure 
for electric vehicles anywhere in the world . 
127  Replies to eQuestionnaire – Customers, questions 59, 59.1, 67 and 67.1.  
128  Replies to eQuestionnaire – Competitors, questions 63, 63.1, 71 and 71.1.  
129  Replies to eQuestionnaire – Competitors, questions 63 and 63.1.  
130  Replies to eQuestionnaire – Customers, questions 61 and 61.1; Replies to eQuestionnaire – Competitors, 
questions 65 and 65.1.  
131  Replies to eQuestionnaire – Customers, question 63; Replies to eQuestionnaire – Competitors, question 
67.  
132  Replies to eQues tionnaire – Customers, question 66.  
133  Replies to eQuestionnaire – Competitors, question 70.  
134  Replies to eQuestionnaire – Competitors, question 68.  
 
 
29 also confirmed by customers.135 National markets can thus b e excluded for the 
purpose of the present case . 
(145)  In any event, there is no need to close the geographic market definition for GI 
products between the EEA and worldwide, as the Proposed Transaction does not 
lead to  serious doubts under any plausible  market definition.  
4.6. Inter net of things (IoT) platforms  
4.6.1.  Product market  
(146)  Hitachi has an IoT  platform called "Lumada" which can be used for the 
acceleration of digital solutions using field data from customer assets . 
(147)  Whilst the term “platform ” is used for man y sorts of platforms, the “real IoT 
platforms ” are so -called IoT Application Enablement Platforms, i.e. IoT 
platforms to develop and run industrial IoT applications .  In that sense, IoT 
platforms are comparable to operating systems, since , like an operatin g system, 
the platforms serve as a basis for the development and operation of software. In 
the context of industrial IoT, this software consists of industrial IoT applications  
that meet industrial customers’ growing needs .136 
(148)  The Commission has not yet consi dered the supply of IoT platforms such as the 
Lumada Platform in detail. However, the Commission has examined operating 
systems on several occasions.137 
(149)  The Notifying Party submits that the relevant product market for the purposes of 
assessing the Lumada Pla tform should be the market for the supply of IoT 
platforms, or, alternatively, a broader market for “infrastructure software ” 
(Infrastructure software is typically distinguished from other (secondary) 
software products such as middleware, application softw are and office software, 
and operating/browser softwar e). According to the Notifying Party, IoT 
platforms  constitute comprehensive solutions with many functionalities, as 
opposed to a specific solution for a particular functionality . In any event, the 
Notifying Party submits that the exact product market definition can be left open 
since the Proposed Transaction does not substantially affect the supply of IoT 
platforms.  
(150)  The majority of customers and competitors explained  that industrial IoT 
platforms should not be considered separately from other (non -industrial) IoT 
platforms .138 Market respondents explained that a  platform is rarely segment 
specific even though it can host apps that could be segment specific ; that such 
                                                 
135  Replies to eQuestionnaire – Customers, question 64.  
136  Form CO, paragraph 984.  
137  In terms of opera ting systems, the Commission has distinguished operating systems for different types of 
devices (PC vs. smart mobile devices (smartphones and tablets) vs. simple mobile devices such as PDAs), 
based on different hardware requirements and performance capacit ies, see Case COMP/M.6381 – 
Google/Motorola Mobility , paragraph 26 , referring to Case COMP/C -3/37.792 – Microsoft , paragraphs 
324-330. 
138  Replies to eQuestionnaire – Customers, questions 36 and 36.1; Replies to eQuestionnaire – Competitors, 
questions 38 an d 38.1.  
 
 
30 platforms can be employed for bot h industrial and non -industrial use; and that 
IoT platforms can span across different commercial segments .139 
(151)  The majority of customers and competitors confirmed that IoT platforms are 
part of a broader market for “infrastructure software” (infrastructure so ftware 
being the foundation and thus the infrastructure for the development and 
operation of secondary software).140  
(152)  Finally,  majority of customers and competitors  considered that IoT platforms are 
rather  a comprehensive solution with many different functio nalities, as opposed 
to a specific solution for a particular functionality .141  
(153)  Taking into account the Notifying Party's arguments and the results of the 
market investigation, the Commission considers that, in any case, the precise 
scope of the product mark et definition can be left open since the Proposed 
Transaction does not raise serious doubts on the narrowest plausible 
segmentation, which in this case is IoT platform s. 
4.6.2.  Geographic market  
(154)  The Notifying Party submits that the geographic scope of both the ma rket for 
IoT platforms or the broader market for infrastructure software is global in 
scope . According to the Notifying Party, l icensing agreements for IoT platforms 
such as the Lumada platform are generally concluded on a global basis and the 
objective conditions for competition are essentially the same across the world. 
Neither import restrictions, transport costs nor technical requirements constitute 
significant limitations. Certain country -specific limitations due to regulations 
may exist, but, as far  as the supply -side is concerned, they do not constitute an 
obstacle for swift supply on a global basis . 
(155)  The Commission market investigation gave strong indications that the market 
for IoT platforms is worldwide in scope, with the vast majority of competit ors 
and customers confirming such scope.142 Competitors and customers explained 
that the market conditions are the same worldwide, and that IoT platforms 
suppliers are active and offer the same platforms on a worldwide  basis . 
(156)  In any event, there is no need t o close the geographic market definition  for IoT 
platform s, as the Proposed Transaction does not lead to serious doubts under any 
plausible market definition  (EEA -wide or worldwide).   
 
 
                                                 
139  Replies to eQuestionnaire – Customers, questions 36 and 36.1; Replies to eQuestionnaire – Competitors, 
questions 38 and 38.1.  
140  Replies to eQuestionnaire – Customers, questions 37 and 37.1; Replies to eQuestionnaire – Competitors, 
questions 3 9 and 39.1.  
141  Replies to eQuestionnaire – Customers, questions 38 and 38.1; Replies to eQuestionnaire – Competitors, 
questions 40 and 40.1.  
142  Replies to eQuestionnaire – Customers, questions 68 and 68.1; Replies to eQuestionnaire – Competitors, 
question s 72 and 72.1.  
 
 
31  
5. COMPETITIVE ASSESSMENT  
(157)  In the EEA  and/or globally , the activities of the Parties give rise to a number of 
affected  markets  in relation to HV products, transformers, and GI products . 
Specifically, the affected  markets  relate to: (i) three  HV product categories 
(including a number of plausible sub-segments  thereof)143, (ii) two transformer 
categories (including a number of plausible  sub-segments thereof)144, and (iii) 
two GI product  categorie s – HVDC and FACTS  (including a number of 
plausible sub -segments thereof) . 
(158)  The competitive assessment below addresses th e potential horizontal, vertical 
and conglomerate effects derived from the Proposed Transaction in the affected 
markets.   
5.1. The Notifying Part y’s view  
(159)  The Notifying Part y argue s that the Proposed Transaction will not give rise to 
any Significant Impediment to Effective Competition  (“SIEC”) on any market , 
for the following reasons:  
(i) The activities of the Parties are complementary, both as far as the scope of 
products are concerned, and in relation to their geographic presence (with 
Hitachi being active mainly [outside the EEA] , where the Target has minor 
activities at best).145 In the EEA, overlaps resulting from the activities of the 
Parties are limited.146 Even in these markets, t he Proposed Transaction  will 
only lead to small  market share increments and not  give rise to any 
substantive foreclosure effects.147 
(ii) Even on a global level, t he Parties do not consider each other close 
competitors and face competitive constraints from major suppliers such as 
Siemens, GE and Schneider. On the markets for transmission and dis tribution 
products as well as  turnkey solutions and related services, new Chinese and 
Korean suppliers are increasingly present.148 
(iii)On the newer markets for automation software and solutions, the companies 
face competition both from a large number of established IT companies and 
                                                 
143  Horizontally, in a global market for HV circuit breakers and HV generator circuit breakers. Vertically, 
both globally and in the EEA, in the market for HV AIS modules (downstream) and, in the EEA, the 
overall categor ies MV products (MV s witchgear in particular) and transformers (power transformers in 
particular) (upstream).  
144  Horizontally, in a global market for traction transformers. Vertically, both globally and in the EEA, in the 
overall category of transformers and for the segment of power transformers (with HVDC, FACTS and  HV 
AIS (Multifunctional) Modules ), as well as for the segment of traction transformers (with railway rolling 
stock (downstream), and bushings, tap changers,  measurement and safety devices, and insulation materials 
and components ( upstream).  
145  Form CO, paragraph  1085.  
146  Form CO, paragraph 1086.  
147  Form CO, paragraph 1090 . 
148  Form CO, paragraph 1087 . 
 
 
32 their competitors in the "traditional" fields, as well as additional pressure 
from several new entrants in t hese markets with low entry barriers. This 
pressure is exacerbated by the competitive nature of th e sector and strong 
downward pricing pressure from customers.  
5.2. Horizontal non -coordinated effects  
(160)  The Proposed Transaction would, based on the 2018 market sha re data, give rise 
to two horizontally affected markets, one  in relation to HV circuit breakers, and 
the other in relation to traction transformers, both in a global market.   
(161)  Market share data for these affected markets are available in Annex II  to this 
Decision (“Annex II”) . 
5.2.1.  HV products  
(162)  In the group of HV products, based on 2018 figures an affected market only 
arises on a global149 market for HV c ircuit breakers  and, in case of a further sub -
segmentation, HV generator circuit breakers.  
5.2.1.1.  HV circuit breakers an d HV generator circuit breakers  
(A) The Notifying Party’s view  
(163)  The Notifying Party argues that one overall market should be defined for HV 
products, as outlined in paragraph  (17). This market would not be affected either 
at EEA or at worldwide level. The Parties’ combined market shares in an 
worldwide market for HV products would remain below 20% in the past years 
([10-20]% in 2016, [10-20]% […] and [10-20]% in 2018). In  an EEA market 
for HV products, there would be no overlap as Hitachi is not present.  
(164)  A further segmentation leads to an affected market for HV circuit breakers and 
HV generator circuit breakers at worldwide level. However, o n an EEA -wide 
market , there woul d not be a horizontal overlap between the Parties as Hitachi is 
not present in the market for HV circuit breakers  within the EEA.   
(165)  The Notifying Party  also points  out that the market is highly competitive, given 
the presence of strong global suppliers for HV circuit b reakers (and relevant 
sub-segments),  notably GE/Alstom and Siemens, which both have market shares 
of more than 20 %, as well as Meclo and Schneider Electric.  
(B) The Commission’s assessment  
(166)  In a global market for HV circuit breakers, the Parties’ c ombined share was 
approximately [20-30]% in 2016 -2018 . Hitachi's worldwide market share was 
below [0-5]% in 2016, 2017 and 2018, and the increment would be de minimis . 
The five year average (2014 -2018) was higher, with a combined market share of 
the Partie s of [30-40]% at global level. Given Hitachi’s share of [0-5]% (over 
                                                 
149  On an EEA -wide market, there would be no overla p as Hitachi had no sales in the EEA in 2016 -2018.  
 Should read: ‘2017’  
 
 
33 the period 2014 -18), the increment in market share resulting from the Proposed 
Transaction would be small even when looking at a longer time frame.  
(167)  The pre -merger HHI for HV circuit breakers  on a worldwide sales basis in 2018 
was [2000 – 2500]  and the post -merger HHI w ill be  [2000 – 2500]  resulting in 
a delta of [50-60]. As such, the Parties’ activities in HV circuit breakers  meet 
the requirements of the filter contained at paragraph 20 of the Horizontal Merger 
Guidelines.  
(168)  A further horizontally affected markets would arise in the potential sub -segment  
of the market of HV generator circuit breakers . These markets are only 
horizontally affected  in a potential worldwide market, as Hitach i is not present 
in circuit breakers in the EEA . The Parties’ combined share in a worldwide 
market for HV generator circuit breakers was [40-50]% in 2018. Hitachi’s 
worldwide market share was below [0-5]% in 2016, 2017 and 2018, and the 
increment would be de minimis  ([0-5]%) in 2018.  
(169)  The pre -merger HHI for generator c ircuit breakers on a worldwide sales basis in 
2018 was [4000 – 4500]  whereas the post -merger HHI w ill be  [4000 – 4500]  
resulting in a delta of just [60-70]. As such, the Parties’ activities in generator 
circuit breakers meet the requirements of the filter contained at paragraph 20 
Horiz ontal Merger Guidelines.  
(170)  In addition, the arguments of the Parties that Hitachi and the Target do not 
compete in the EEA and that on a global level strong competi tors are present 
(see paragraph (159) ) were confirmed in the market investigation for HV 
products in general, without exceptions, and are thus also valid for HV circu it 
breakers and HV generator circuit breakers.  
(171)  First , the market investigation confirmed the argument of the Notifying Party 
that it and the Target  do not compete in HV products in the EEA. Hitachi is not 
considered an important supplier of HV products in the EEA, as confirmed by a 
majority of participants in the market investigation.150 In particular, Hitachi is 
not perceived as a key supplier of HV circuit breakers and HV generator circuit 
breakers by a majority of both customers and competitors,151 neither in the EEA 
overall nor in a part of it.152 Therefore the Proposed Transaction does not 
materially change the competitive structure of the market for HV circuit 
breakers and HV generator circuit breakers . 
(172)  Second , the Target’s  main competitors mention ed by most market participants 
are Siemens, GE/Alstom, Schneider Electric,153 with no major  difference s 
between countries in the EEA.154 As a customer explained, “[t]here is a 
                                                 
150  Replies to eQuestionnaire – Customers, question 73; Replies to eQuestionnaire – Competitors, question 
74.  
151  Replies to eQuestionnaire – Customers, question 75; Replies to eQuestionnaire – Competitors, question 
74.2.  
152  Replies to eQuestionnaire – Customers, question 76; Replies to eQuestionnaire – Competitors, question 
74.3.  
153  Replies to eQuestionnaire – Customers, question 72.  
154  Replies to eQuestionnaire – Customers, question 73; Replies to eQuestionnaire – Competit ors, question 
73.4.1.  
 
 
34 sufficiently large number of companies that manufacture HV products so that a 
select ion is possible at any time.”  The market investigation also showed that 
specialised or local suppliers of HV products are generally able to compete with 
large -scale suppliers such as the Target  and Hitachi .155 There are thus sufficient 
credible producers of HV circuit breakers and HV generator circuit breakers 
available throughout the EEA.  
(173)  Third , switching  from one supplier of HV products to another is easy. A very 
large majority of customers reported that they  had switched  supplier in the 
past.156 A clear majority of customers consider that they would retain sufficient 
alternative sources of supply and could switch to another supplier than the 
Target  or Hitachi  if the merged entity  were to supply at worse conditi ons after 
the Proposed Transaction is implemented.157 This would be the case for any 
subsegment of a HV product market, in any part of the EEA.158 The possibility 
to switch suppliers of any HV products , including HV circuit breakers and HV 
generator circuit breakers,  thus constitutes additional competitive constraints.  
(174)  Finally , none of the customers who participated in the market investigation 
expect the Proposed Transaction to have a negative impact on the markets for 
any HV products , including circuit break ers and generator circuit breakers .159 
(175)  Therefore, taking into account the Notifying Party's arguments and the results to 
the market investigation, the Commission concludes that the Proposed 
Transaction does not raise serious doubts as to its compatibility wi th the internal 
market as a result of horizontal non -coordinated effects with respect to  the 
affected HV product categories HV circuit breakers and its sub-segment, HV 
generator circuit breakers . 
5.2.2.  Transformers  
(A) The Notifying Party’s view  
(176)  The Notifying Party  submits that the appropriate data with which to assess 
traction t ransformers is the order basis, which allows for a more accurate 
comparison with the order -based railway rolling s tock share data. However, if 
reviewed on a sales basis, the Proposed Transac tion would only give rise to one 
horizontally a ffected segment in 2018  in the market for  traction t ransformers on 
a worldwide basis.   
(177)  The combined share of the Parties would be [40-50]% in 2018 with a de minimis  
increment from Hitachi of [0-5]%. Hitachi had no sales of traction t ransformers 
in the EEA in 2018 and, globally, [Confidential details on  Hitachi's position on 
the worldwide market for  traction  transformers] .  
                                                 
155  Replies to eQuestionnaire – Customers, question 89; Replies to eQuestionnaire – Competitors, question 
81.  
156  Replies to eQuestionnaire – Customers, question 93.  
157  Replies to eQuestionnaire – Customers, question 79.  
158  Replies to eQuestionnaire – Customers, questions 80 and 81.  
159  Replies to eQuestionnaire – Customers , question 169.  
 
 
35 (178)  There are no other horizontally affected mark ets or segments in 2018 within 
transformer s. On this basis, Hitachi submits that the Proposed Transaction will 
not give rise to any competition concerns . 
(B) The Commission’s assessment  
(179)  The Commission considers that, taking into account the Notifying Party's 
arguments and in particular the fact that H itachi had sales of traction 
transformers [outside the EEA] , and the minimal increment of market shares 
worldwide (below [0-5]%, and with an HHI delta brought by the Proposed 
Transaction below 150160). As such, the Parties’ activities in traction 
transformer s meet the requirements of the filter contained at paragraph 20 of the 
Horizontal Merger Guidelines.   
(180)  Also no respondent to the Commission’s market investigation raised any 
horizontal concerns with respect to the Parties’ combined activities in traction 
transformers. T he Commission  therefore  concludes that the Proposed 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with regard to horizontal non -coordinated effects in relation to 
transformer products.  
5.3. Vertical non-coordinated effects  
(181)  The Proposed Transaction gives rise or strengthens various  vertical relationships 
at EEA -wide or worldwide level. Hitachi  has a  limited presence in most 
products and, out of these , the relationships in the table below lead to  affect ed 
markets. All materially vertically affected markets result from one of the 
Parties’  relatively strong presence in five product markets: HV AIS modules, 
traction transformers, HVDC  and FACTS . Therefore  the analysis of vertical 
non-coordinated affects wil l focus on the analysis of these product groups.161 
  
                                                 
160  On a worldwide order intake basis both for  2018 and for the period 2013 -2018 . 
161  No vertical link arises in relation to input s for semiconductors (such as for example electronic adhesives 
and map molding support tape) as an upstream market and semiconductors as a downstream market. 
Hitachi Chemical which produces a number of input materials for semiconductors is no longer a 
subsi diary of and is no longer controlled by Hitachi as of 28 April 2020. Hitachi Chemical is now a 
consolidated subsidiary of Showa Denko. There is no information suggesting that that divestiture of 
Hitachi Chemical was caused by the Proposed Transaction  (Sour ce: Form CO, Parties’ response of 18 
May 2020 to Commission’s Request for information 11, Parties’ response of 19 May 2020 to 
Commission’s Request for information 13).  

 
 
37 5.3.1.  HV products: v ertical links in relation to HV AIS modules  
(182)  Both in the EEA and at worldwide level, two vertically affected markets arise 
because of the activities of the Target in HV AIS modules, a market which is 
downstream of the market for MV products (MV switchgear in particular) and 
transformers (power transf ormers in particular)  where Hitachi also has some 
very limited activities .   
(183)  In the EEA, the Target’s market share in HV AIS modules was [30-40]% in 
2018 ( [70-80]% in 2016 and [40-50]% in 2017).  In a worldwide market, the 
Target’s market share in HV AIS wa s [60-70]% in 2018 ( [80-90]% in 2016 and 
[70-80]% in 2017).  
(184)  As for the upstream markets, only Hitachi is present in the global market for 
MV switchgear, but its market shares in 2018 remained de minimis  below [0-
5]%. In the EEA, none of the Parties is active in MV switchgear. In a broader 
market encompassing all MV products, the Parties’ combined market shares in a 
worldwide market and in the EEA remain below 5% .162 
(185)  In the global market for power transformers, both Parti es are active, with a 
combined market share of [10-20]%. Hitachi’s market share is de minimis with 
[0-5]% in 2018. In a broader worldwide market encompassing all transformers, 
the Parties’ combined market share was [10-20]%. In the EEA, only  the Target  
is active in transformers.  
5.3.1.1.  No foreclosure  in relation to HV AIS modules  
(186)  The Notifying Party  argue s that the Proposed Transaction does not lead to a 
foreclosure risk given Hitachi’s very limited activities  in all plausible upstream 
markets and a decreasing position of the Target in the downstream marke t for 
HV AIS modules. Its market shares have been steadily decreasing in the last 
three years. A number of other large suppliers of HV AIS Modules , such as  
GE/Alstom, Pinggao or Siemens,  make the global industry increasingly 
competitive. Pinggao and Siemens gained shares in 2018. Moreover, the 
Notifying Party argue s that the market for HV AIS modules is a niche market 
with very limited global total market sizes.163  
(187)  In the upstream markets , following the completion of the Proposed Transaction, 
various credible competitors will pose additional competitive constraints. In the 
market for MV switchgear, highly competitive alternative suppliers who can 
equally offer MV switchgear, such as Schneid er Electric, Siemens, Eaton, 
Melco and Toshiba T&D.164 In the market for  power transformers, these 
include  GE/Alstom, Getra, Koncar Siemens, SGB, Tamini -Tes, Xian XD, and 
TBEA . These will continue to offer MV switchgear and power transformers to 
competing s uppliers of HV AIS modules and hence no input foreclosure will 
arise.165  
                                                 
162 Form CO, paragraph 637.  
163  Form CO, paragraph 1114.  
164  Form CO, paragraph 638a.  
165  Form CO, paragraph 636.  
 
 
38 (188)  In addition, the Notifying Part y notes that both MV switchgear and power 
transformers are input s to several other downstream applications beyond HV 
AIS Modules .166 For instance, power transformers are also an input for 
substations with customers such as Siemens, GE, Ocean Industry, Hyosung or 
Eico and hence no customer foreclosure can arise.167 
(189)  The Commission considers that the Proposed Transaction would not lead to a 
foreclosure risk, as Hitachi  will neither have the actual nor potential ability , nor 
incentive to either hamper or eliminate rivals' access to supplies or markets as a 
result of the Proposed Transaction.  
(190)  First , the Target ’s strong position in the downstream market for HV AIS is pre -
existing and the Proposed Transaction only leads to affected markets as a result 
of Hitachi’s presence on global markets, outside the EEA. Given that Hitachi’s 
shares even on these global markets ar e de minimis  in all plausible  upstream 
markets ( as outl ined in paragraphs (184) -(185) )), the Proposed Transaction 
would not materially alter the current market structure and the Parties’ 
competitive incentives.  
(191)  Second , the presence of credible competitors in both upstream and d ownstream 
markets was confirmed in the market investigation  for all HV products, hence 
also HV AIS , as described in paragraph (172) . As outlined in paragraph (173) , 
there are no barriers to switching in any category of HV products. This would 
pose an additional competitive constraint eliminating the Parties’ abilities and 
incentives to foreclose  rivals' access to supplies or markets . 
(192)  Finally , none of the customers who participated in the market investigation 
expect the Proposed Transaction to have an impact on competition, input or 
customer foreclosure, on the  markets for any HV products  (see also paragraph 
(174) (174) .168  
(193)  The Commission therefore considers that the Proposed Transaction does not 
raise serious doubts about its compatibility with the internal market in relation to  
the market for HV AIS modules as the Parties will have neither the ability nor 
the incentive for input or customer foreclosure . 
5.3.2.  Transformers: Vertical links in relation to traction transformers   
(194)  Railway  rolling stock manufacturers (including Hitachi) purchase traction 
transformers (inc luding from the Target) for use in their railway rolling stock.  
(195)  The Target supplies its traction transformers either directly to railway rolling 
stock manufacturers (“OEMs”) or to system integrators which incorporate the 
traction transformer into the wide r propulsion chain package which is then sold 
to OEMs. ABB  itself has a division, ABB Motion (not part of the Proposed 
Transaction) , which acts as a system integrator , i.e. as an  intermediary between 
the Target’s manufacture of traction transformers and th e OEM customers , 
which it offers as part of its propulsion systems . 
                                                 
166  Form CO, paragraph 638b (MV switchgear) and paragraph 636 (power transformers).  
167  Form CO, paragraph  636.  
168  Replies to eQuestionnaire – Customers , question 169.  
 
 
39 (196)  Although Hitachi's share in any of the plausible relevant markets in relation to 
railway rolling stock is below 30% worldwide and in the EEA, the Target's 
shares in the segment for tractio n transformers are above 30% both on a global 
and EEA -wide basis. Therefore , a vertically affected market arises (both 
globally and in the EEA) because of the activities of ABB in  traction 
transformers .   
(197)  In the upstream market  for traction transformers, t he Target’s market share was 
[50-60]% on average from 2013 to 2018  in the EEA; and [40-50]% on average 
from 2013 to 2018 globally. Hitachi is not active in traction transformers in the 
EEA, and has a de minimis  share in traction transformers globally ([0-5]% on 
average from 2013 to  2018 , [with sales outside the EEA] ). Moreover, sales are 
limited since Hitachi does not supply its traction transformers to third parties, 
except when the railway rolling stock operators ask the contract award winner to 
use H itachi traction transformers . 
(198)  At the downstream level  of railway rolling stock , Hitachi’s market share was 
below 10% regardless of the precise market segmentation, both in the EEA and 
globally. Hitachi’s presence is in fact minimal in most railway rolling stock 
segments both globally and in the EEA, and only in the segment of 
intercity/regional trains its market shares were higher, but still below 10% , both 
globally and in the EEA.  
(199)  More precisely, Hitachi’s market share in the EEA and Switzerland was, on 
average between 2014 and 2018: [0-5]% for very high speed trains, [0-5]% for 
high speed trains, [5-10]% for intercity/regional trains, and [0-5]% for 
commuter trains; whereas Hitachi’s market share globally (except in China, 
Japan and South Korea) was, on a verage between 2014 and 2018: [0-5]% for 
very high speed trains, [0-5]% for high speed trains, [5-10]% for 
intercity/regional trains, and [0-5]% for commuter trains.169 
(200)  The Notifying Party submits that the Proposed Transaction will not give rise to 
any signi ficant impediment to effective competition as a result of this vertical 
relationship, since there is no risk of input or customer foreclosure.170  
(A) No upstream input foreclosure for traction transformers  
(201)  With regard to input foreclosure, the Notifying Party claims that Hitachi will not 
have the ability or incentive to foreclose railway rolling stock competitors, 
since:  
                                                 
169  Note that Hitachi is mostly active in the segment of intercity/re gional trains, and has a minor/no presence 
in the segments for (very) high speed trains, which typically require the more sophisticated traction 
transformers . 
170  For all other technically  affected markets in the area of transformers (i.e. upstream: bushings, tap 
changers, measurement and safety devices, and insulation materials and components; and downstream: 
traction transformers), the Commission does not consider further these links on the basis that Hitachi’s  
individual shares in the respective markets are very limited (if not de minimis ) and the Target is already 
integrated, i.e. there would not be any merger -specific foreclosure effects or otherwise a negative impact 
on competition resulting from the tr ansaction .  
 
 
40 - Railway rolling stock manufacturers  are typically large vertically integrated 
companies (e.g. Siemens, Alstom) or have sufficient alternatives  to the Target 
(e.g. Bombardier, Stadler).  
- Traction transformers represent a very small share of the total value of AC 
railway rolling stock, typically less than [0-5]%. 
- Railway rolling stock manufacturers and final customers (railway operators) 
have sufficient countervailing buyer power.  
- Most customers of the Target’s traction transformers  purchase  and use them for  
railway rolling stock  contracts for which Hitachi is not a competitor . 
- Competing railway rolling stock manufacturers generally bid in tend ers without 
having finalised the contract and terms for the supply of traction transformers so 
if they have won the project already, Hitachi would have no incentive to not 
supply the traction transformer for the project with a view to win the business 
itself. 
(202)  Moreover, the Notifying Party argues that e ven if Hitachi had the ability and 
incentive to foreclose rivals, there would be no significant effect on competition 
since such  a strategy would relate to a limited portion of the downstream market 
where Hita chi is active.  
(203)  The market investigation confirms that the Proposed Transaction is unlikely to 
lead to input foreclosure in the market for traction transformers , either in the 
EEA or globally.  One customer expressed concerns about possible input 
foreclosure  as the merged entity , post -Transaction, would have a strong position 
in traction transformers and be present in the market for railway rolling stock 
(particularly intercity  and regional trains ). However, for the reasons explained 
below, the Commission fin ds that this concern is not substantiated and 
concludes that foreclosure is unlikely.  
(204)  The Parties are unlikely to have post -Transaction the ability  to foreclose 
customers from sourcing traction transformers.  
(205)  First , the Target has a strong position in the  upstream market,171 but below 60% 
in both in the EEA and globally. In other words , the Target is not an 
unavoidable trading partner, and even if Hitachi  refused to supply the Target’s 
traction transformers to certain customers  post-Transaction , these would have 
sufficient alternatives to source their requirements from. Given the strong 
presence of vertically integrated companies in these markets and the possible 
entry of new players, the market share data on the merchant market is not 
necessarily an indicati on of market power as discussed below.  
(206)  There are multiple suppliers of traction transformers for railway rolling stock 
applications which represent credible alternatives to the Target  for traction 
transformers used across all segments of railway rolling s tock. Major traction 
transformers suppliers are global vertically integrated companies that also sell 
                                                 
171  Some respondents indicated that ABB is a key supplier of traction transformers,  Replies to eQuestionnaire 
– Competitors , question s 18.3 and 85.1.  
 
 
41 railway rolling stocks downstream (e.g. Siemens, Alstom, CRRC Zhuzhou, who 
use traction transformers captively but also sell them to third parties and 
represent a large portion of the merchant market demand),172 and long -
established and experienced non -vertically integrated companies such as JST, 
BNP, ETD, Fuji Electric, Mitsubishi Electric, Končar, and Toshiba .  
(207)  There are sufficient and credible alternative s, both globally and in the EEA.  In 
the EEA Siemens was the largest competitor with a market  share on average 
between 2013 and 2018 of [10-20]%, Alstom followed with a market share of 
[5-10]% and JST had a market share of [0-5]%. Globally Zhuzhou was the 
largest competitor with a market share on average between 2013 and 2018 of 
[10-20]%, followed by Siemens and Alstom with a market share of [5-10]% and 
[0-5]% respectively.  The market investigation also showed that these companies 
are credible alternatives to  the Target, with equivalent after -sale/support 
capabilities and technical qualifications.173 
(208)  Customers have largely confirmed during the market investigation that there are 
credible alternative suppliers to the Target , with a vast majority considering that 
they will retain sufficient alternative sources of supply and could switch to 
another supplier if the Parties were to supply at worse conditions after the 
Proposed Transaction.174 
(209)  Second , traction transformers suppliers and vertically integrated OEM 
competit ors have the possibility to expand the ir (in-house) production of traction 
transformers, and there are recent examples of such expansion. Vertically 
integrated players can expand their in -house production. For instance Si emens 
decided to expand its tractio n transformers ’ production [confidential details on 
the Target's position as a supplier to Siemens] ; and Alstom moved to in -house 
production and [confidential details on the Target's position as a supplier to 
                                                 
172  “Alstom’s growth has been so significant that Alstom advertises that it has the capacity to produce more 
than 400 traction transformer units per year, which is more than double Alstom’s average internal needs 
in the period 2016 -2018. As such, Alstom has expanded its in -house production not only for Alstom’s own 
internal use, but also as an increa singly active player on the market selling traction transformers to 
railway rolling stock companies ”, Notifying Party’s Reply to RFI 8 . 
173  For instance a customer currently sourcing traction transformers from the Target stated that it “ has 
already explored  other alternatives in the past, among others Mitsubishi, JST as good examples, so we 
believe other options are available ” (correspondence with traction transformers’ customer of 14 May 
2020).  
174  Replies to eQuestionnaire – Customers , question s 103, 103.1 and 104. Some customers explained that 
“competition is present in the transformer business ”, and that “ there are other suppliers in the market ”. 
Some other customers expressed doubts but overall were positive about the existence of alternatives, e.g. a 
customer stated that “ for traction applications that is something we are not fully sure but we believe we 
should find an additional partner/supplier in Europe ”. Another customer stated that “ there are few other 
alternatives on these solutions as JST and Mitsu bishi as relevant independent companies. Also Siemens is 
another potential supplier … ” and, when asked whether other suppliers had a similar offering to that of 
the Target, that e.g. “ Mitsubishi have references in all types of rolling stocks platforms actually running 
(…) with different technologies of materials and requirements for different application (…). In the case of 
JST they have solutions for all type of platforms (…) ”, and that alternative suppliers “ have the capacity to 
supply transformers fo r the different types of rolling stock platforms ” (i.e. for all railway rolling stock 
segments) (correspondence with customer of 7 and 8 May 2020).  
 
 
42 Alstom]  reduced its demand of traction transfor mers from the Target as a 
consequence.175  
(210)  Third , non-vertically integrated OEM competitors may start the in -house 
production of traction transformers , since there are no material barriers to entry 
in terms of access to raw materials, capacity constraints, i ntellectual property or 
regulatory aspects. In fact the barriers to entry would be lower for a railway 
rolling stock firm, as it would be able to more easily validate its own in -house 
design, and would face less risk as it has a guaranteed purchaser.176 
(211)  New companies could also enter the traction transformers’ market. The 
Notifying Party estimates that it would take a maximum of two years, if not less, 
for a non -established player to enter the market.177 Traction t ransformers are 
technically mature products  and there are no significant scale economies. As 
explained above, t here are n o significant barriers to entry; and while a traction 
transformer needs to be tested as part of a railway rolling stock comprehensive 
certification process, this is the case for all traction transformer brands due to 
testing  and certification requirements for each project.  In addition, there are 
examples of recent entry and expansions in the EEA, e.g. Mitsubishi Electric, or 
companies which are currently developing traction transf ormers, e.g. Turkish 
company Sönmez Transformer or Indian manufacturers such as HVEPL or JST 
Stesalit Transformers.  
(212)  Fourth, customers (either OEMs or system integrators) can switch their traction 
transformer supplier in a relatively short time. Years often  pass between the 
announcement of a railway rolling stock tender, the contract award and the first 
delivery of the railway rolling stock ; therefore, customer s of traction 
transformers can switch their supplier in the timeframe of one project .178 
Moreover, in  the railway rolling stock where Hitachi is mostly active 
(intercity/regional trains) the traction transformers required are typically less 
sophisticated than those for (high) speed trains, and therefore switching is easier 
in such a segment, as confirmed by the market investigation.179  
(213)  The market investigation confirmed that  the vast majority of  customers can and 
do switch their transfor mers suppliers.180 
                                                 
175 [Confidential details on the Target's position as a supplier to Alstom] . 
176 There are examples of this, suc h as collaborations between railway rolling stock manufacturers in order to 
supply traction transformers (e.g. Bombardier’s joint venture BNP, or Alstom’s joint venture EKZ, see 
https://www.bombardier.com/en/media/newsList/details.bt -20170807 -bombardiers -chinese -joint-venture -
to-provide -propulsion -and-control -equipment -for-nanchang -metro -01.bombardiercom.html ; and 
https://www.alstom.com/alstom -kazakhstan).  
177  Notifying Party’s Response to RFI 8.  
178  Notifying Party’s Response to RFI 8.  
179  One customer explained with regard to their ability to switch supplier for traction transformers that 
“complexity of the product differs from Commuter and Regional applications to HST or VHST, so for 
certain tenders and/or platforms the decision could be harder or simpler to take ” (correspondence with 
customer of 14 May 2020).  
180  Replies to eQuestionnaire – Customers, question 116: 77% of respondents indicated that they have in the 
past switched to a different supplier and some customers explained that “ varying on projects, we have 
used other suppliers for traction transformers ”.  
 
 
43 (214)   The Parties are also unlikely to have post -Transaction the incentive  to foreclose 
customers from sourcin g traction transformers.  
(215)  First , as explained above , traction transformers represent a small share of the 
total value of railway rolling stock, and are not generally  purchased  before the 
award of a contrac t for a certain railway rolling stock project. The market 
investigation confirmed that most suppliers have the ability to design the 
transformer according to the required functionality or specific requirements 
from the customer,181 and confirmed  the Parties ’ proposition that railway rolling 
stock manufacture rs are first awarded a contract and afterwards negotiate and 
even co -design with the selected traction transformer supplier.182  
(216)  In other words, Hitachi will not have an incentive to stop supplying ABB’s 
traction transformers to its competitors downstream. O nce the latter are awarded 
a project, a refusal to supply traction transformers to them would entail a loss of 
the upstream profit without any gain at the downstream level.  
(217)  Second , even if the sales of traction transformers were executed before the 
award of a railway rolling stock project, and Hitachi decided to not supply 
traction transformers to OEM customers also bidding for that project, this would 
(i) in principle not materialise in non -vertically integrated OEMs being excluded 
from the bid (since the y have alternative suppliers they can turn to, or produce 
in-house, see paragraphs  (205) -(211)  above), and (ii) even if non -vertically 
integrated companies were excluded from the bidding process, this would also 
increase the options of vertically integrated competitors to win the project. Since 
the diversion ratio from non -vertic ally integrated players is not 100% to wards  
Hitachi, it is unlikely that Hitachi would have the incentive to sacrifice  profits 
upstream  (the sale of traction transformers)  as this loss would not automatically 
and in all cases be  compensated by profits obta ined downstream (as a result of 
Hitachi winning the railway rolling stock project ).  
(218)  Third , the Notifying Party has indicated that it will continue supplying traction 
transformers to ABB Motion post -Transaction [Confidential details on future 
contractual a rrangements between the Parties]. As noted above, ABB Motion 
(not part of the Proposed Transaction) acts as a system integrator, i.e. as an 
intermediary between the Target’s manufacture of traction transformers and the 
OEM customers, which it offers as par t of its propulsion systems. [Confidential 
details on future contractual arrangements between the Parties].  Therefore, as a 
result of the Proposed Transaction, Hitachi will not acquire the relationships 
with ABB Motion's customers, which will continue to be served by ABB 
Motion. [Confidential details on future contractual arrangements between the 
Parties].  Finally, [Confidential details on future contractual arrangements 
between the Parties], the other two reasons given above for not finding a SIEC 
would s till apply, and the reasoning below would still apply.    
                                                 
181  Replies to eQuestionnaire – Competitors, question 17.  
182  Customers have confirmed this, e.g. a customer indicated that “ the usual process starts with the request 
for an offer for rolling stock vehicles of a customer, on which basis the manufacturer wo rks out a concept 
and simultaneously requests an offer from a traction transformer supplier. The manufacturer then submits 
the offer, gets awarded and finally is able to award the traction transformer supplier. In summary, the 
rolling stock award is done p rior to the purchase of the traction transformer ” (correspondence with 
customer of 8 May 2020) . 
 
 
44 (219)  Moreover, even if the Parties had the ability  and incentive  to foreclose rival 
railway rolling stock manufacturers from sourcing the Target’s traction 
transformers by raising its prices, such strateg y would not have a significant 
effect on the market. Even  if customers could not or decided not to switch to 
alternative suppliers, a hypothetical price increase of the Target’s traction 
transformers post -Transaction would in principle not translate into O EMs being 
foreclosed downstream to the benefit of Hitachi. In other words, increasing the 
Target’s traction transformers prices would not mean that OEMs cannot be 
awarded a railway rolling stock project (which Hitachi could therefore win). 
This is because traction transformers represent a small fraction of the railway 
rolling stock project’s total cost ( [typically less than [0 -5]%] according to the 
Notifying Party and in any event below 8%, as confirmed by the market 
investigation).183  
(B) No downstream customer  foreclosure for railway rolling stock applications  
(220)  The Parties submit  that there is also no risk of customer foreclosure in relation 
to traction transformers, since the Target is not active downstream in the 
manufacturing of railway rolling stock, and Hit achi does not currently source 
traction transformers from any supplier in Europe other than the Target, i.e. the 
purchases of traction transformers by Hitachi are effectively already internalised 
and the market structure will therefore remain unaffected as  the demand of 
Hitachi is already internalised.  
(221)  Moreover, even if Hitachi sourced from th ird party traction transformers  
suppliers, its market share in the downstream market for railway rolling stock, 
regardless of its precise segmentation, is not substan tial (its highest market share 
is that for intercity/regional trains , which was  in any event below  10% on 
average between 2014 and  2018 , both in the EEA and globally ). A foreclosure 
strategy is therefore not plausible even if the Parties had the incentive to do so, 
since traction transformers  suppliers would always be able to address a 
substantial proportion of the demand.  
(222)  The predominant view among the respondents of th e market investigation 
confirms that the Proposed Transaction would not have a substantial impact on 
the market, and the Commission did not receive any substantiated complaint.184 
                                                 
183  Notifying Party’s Response to RFI 8. A customer stated that, in their experience, “ the value of the traction 
transforme r lies between 4 -8%” (correspondence w ith customer of 8 May 2020) . 
184  Amongst customers who responded to the Commission’s market investigation, the vast majority 
considered that the Proposed Transaction would have a neutral effect, including on the supply of 
transformers ( Replies to eQuestionn aire – Customers, question 187). For completeness, only one customer 
expressed that Hitachi could have, post -Transaction, the incentive to weaken its competitors [Confidential 
details on the issues raised by the customer]  (correspondence with customer of 6 and 8 May 2020). 
However, the Commission asked subsequent questions to this and other respondents and excluded that the 
Proposed Transaction will likely enable or incentivise the merged entity to foreclose rival railway r olling 
stock manufacturers . [Confidential details on the issues raised by the customer] . Moreover, the same 
customer confirmed the Notifying Party’s argument that the rolling stock award is done prior to the 
purchase of the traction transformer (see paragr aph (215) ), and that the value of the traction transformer 
within the total value of a railway rolling stock project is below 8% (see paragraph (219) ). As explained 
above, other customers confirmed that there are sufficient suppliers of traction transformers as an 
alternative to the Target’s offering (see paragraph (208) ). 
 
 
45 (223)  The Commission therefore considers that the Proposed Transaction does not 
raise serious doubts about  its compatibility with the internal market as the 
Parties will have neither the ability nor the incentive to input or customer 
foreclose their competitors  in relation to the market for traction transformers 
used for railway rolling s tock.  
5.3.3.  Grid integration  
Vertical links in relation to HVDC  
Vertical link Overall HV products  – HVDC  
(224)  Under a narrower market definition looking at HVDC, affected markets could 
arise as a result of the combination of Hitachi’s activities in overall HV products  
at worldwide level  and t he Target’s activities in HVDC. The Target’s worldwide 
market share in HVDC was [30-40]% on the basis of average projects won in 
2008 -2018, whereas its market share in the EEA was [40-50]% on t he basis of 
that same parameter .185 The Target’s projects -based  market share  within the 
segment for HVDC Light  in 2008 -2018 was [50-60]% at worldwide level and 
[50-60]% at EEA -wide level. In HVDC Classic, the Target’s projects -based 
market share  in 2008 -2018 was [20-30]% at world wide level and [30-40]% at 
EEA -wide level.  
(225)  The Commission considers that the Proposed Transaction w ill not lead to a 
foreclosure risk, since the merged entity will neither have the ability nor the 
incentive to foreclose.  
(226)  Hitachi’s presence in overall HV pr oducts  is limited (with a market share of 
only [0-5]% in 2016 -2018 worldwide and [0-5]% in the EEA). In particular, 
there are no indications of  merger -specific foreclosure concerns, as the Target is 
already active both upstream and downstream pre -merger, a nd the addition of 
Hitachi’s market position in overall HV products  will not appreciably reinforce 
this position (the po st-merger share of the merged entity in overall HV products  
will be only [10-20]%, with an increment of only [0-5]% under a narrow 
product market definition at worldwide level ).   
(227)  Hitachi will have neither the ability nor the incentive to either hamper or 
eliminate rivals' access to supplies or markets as a result of the Proposed 
Transaction. There  are many alternative suppliers for overall HV products  
upstream (such as e.g. Siemens, GE /Alstom , Pinggao, Hyosung , and others ) and 
at the downstream level, there are other customers (such as e.g . HVDC suppliers 
Siemens and GE/Alstom).  
Vertical link overall MV products – HVDC  
(228)  Given the limited activities  of both Hitachi and the Target  in MV products ( the 
Parties ’ combined market share in 2018 was less than 5% both at worldwide and 
at EEA -wide level ), the fact that Hitachi is not active in MV products within the 
                                                 
185  Source: Form CO, Table 7.71a Worldwide projects and shares (excluding China and Japan ) within the 
segment for HVDC systems ; Table 7.72a  EEA -wide projects and shares with in the segment for HVDC 
systems . 
 
 
46 EEA, and that the Target is already active both upstream and downstream pre -
merger, the Commission considers that the Proposed Transaction will not lead to 
a foreclosure risk, since the merged entity will neither have the ability nor the 
incentive to engage in input or cu stomer foreclosure.  
Vertical link HV switchgear  – HVDC  
(229)  Under a narrower market definition looking at HVDC, affected markets could 
arise (at worldwide level) as a result of the combination of Hitachi’s activities in 
HV switchgear and the Target’s activities in HVDC. The Target’s worldwide 
market share in HVDC was [30-40]% on the basis of average projects won in 
2008 -2018, whereas its market share in the EEA was  [40-50]% on t he basis of 
that same parameter . The Target’s projects -based  market share  within the 
segment for HVDC Light  in 2008 -2018 was [50-60]% at worldwide level and 
[50-60]% at EEA -wide level. In HVDC Classic, the Target’s projects -based 
market share  in 2008 -2018 was [20-30]% at worldwide level and [30-40]% at 
EEA -wide level.  
(230)  The Commission considers that the Proposed Transaction w ill not lead to a 
foreclosure risk, since the merged entity  will neither have the ability nor the 
incentive to foreclose.  
(231)  Hitachi’s presence in HV switchgear is limited (with a market share of only [5-
10]% in 2016 -2018 at worldwide level and [0-5]% at EEA -wide level ). In 
particular, there are no indications of  merger -specific foreclosure concerns, as 
the Target is already active both upstream and downstream pre -merger, and the 
addition of Hitachi’s market position in HV switchgear  will not appreciably 
reinforce this position (noting that the post -merger market share of the merged 
entity  in HV switchgear  will be [10-20]%, with an increment of just [5-10]%).  
(232)  Hitachi will neither have the actual nor potential ability, nor incentive to either 
hamper or eliminate rivals' access to supplies or markets as a result of the 
Proposed Transaction. There  are many alternative suppliers for HV switchgear  
upstream (such as e.g. Siemens, GE /Alstom , Pinggao,  and Hyosung ) and at the 
downstream level, there are other  HV switchgear  customers (such as e.g . HVDC 
suppliers Siemens and GE/Alstom ). 
Vertical link HV GIS  – HVDC  
(233)  Under a narrower market definition looking at HVDC, affected markets could 
arise as a result of the combination of Hitachi’s activities in HV GIS and the 
Target’s activities in HVDC (both under a worldwide and EEA -wide market 
definition). The Target’s worldwide market  share in HVDC was [30-40]% on 
the basis of average projects won in 2008 -2018, whereas its market share in the 
EEA was [40-50]% on t he basis of that same parameter . The Target’s projects -
based  market share  within the segment for HVDC Light  in 2008 -2018 was [50-
60]% at worldwide level and [50-60]% at EEA -wide level. In HVDC Classic, 
the Target’s projects -based market share  in 2008 -2018 was [20-30]% at 
worldwide level and [30-40]% at EEA -wide lev el. 
 
 
47 (234)  The Commission considers however that the Proposed Transaction w ill not lead 
to a foreclosure risk, since the merged entity  will neither have the ability nor the 
incentive to foreclose.  
(235)  Hitachi’s presence in HV GIS is limited ( in 2018 market share of [5-10]% at 
worldwide level and [0-5]% at EEA -wide level ), whereas the Target had a 
market share of [10-20]% at worldwide level and [10-20]% at EEA -wide level 
in 2018. T here are no indications of  merger -specific foreclosure concerns, as the 
Target is already  active both upstream and downstream pre -merger, and the 
addition of Hitachi’s market position in HV GIS will not appreciably reinforce 
this position . (The Commission also notes that the post -merger share of the 
merged entity  in HV GIS will  still remain cl early below 30%, with an increment 
of about [5-10]% under a narrow product market definition and wide geographic 
market definition).  
(236)  Hitachi will neither have the actual nor potential ability, nor incentive to either 
hamper or eliminate rivals' access to supplies or markets as a result of the 
Proposed Transaction. There  are alternative s in the  EEA and global suppliers for 
HV GIS upstrea m (such as e.g. Siemens, GE /Alstom , Pinggao , and others ) and 
at the downstream level, there are other  HV GIS customers (such as e.g . HVDC 
suppliers Siemens and GE /Alstom , and Chinese  companies ).  
Vertical link Transformers – HVDC  
(237)  In a broader worldwide mar ket encompassing all transformers, the Parties’ 
combined market share in 2018 was [10-20]% (the Target  – [10-20]%, Hitachi 
– [0-5]%). In the EEA, only the Target  is active in transformers with a  market  
share of [10-20]% in 2018 . 
(238)  In a narrower market for power transformers, both Parties are active, with a 
combined market share in 2018 of [10-20]% at worldwide level ( the Target  – 
[10-20]%, Hitachi – [0-5]%). In the EEA, only the Target  is active in  power  
transformers with a  market  share of [20-30]% in 2018 . 
(239)   The Target’s worldwide market share in HVDC was [30-40]% on the basis of 
average projects won in 2008 -2018, whereas its market share in the EEA was 
[40-50]% on the basis of that same parameter.  The Target’s projects -based  
market share  within the segment  for HVDC Light  in 2008 -2018 was [50-60]% 
at worldwide level and [50-60]% at EEA -wide level. In HVDC Classic, the 
Target’s projects -based market share  in 2008 -2018 was [20-30]% at worldwide 
level and [30-40]% at EEA -wide level.  
(240)  The Commission considers th at the Proposed Transaction w ill not lead to a 
foreclosure risk, since the merged entity will neither have the ability nor the 
incentive to foreclose.  
(241)  There are no indications of  merger -specific foreclosure concerns, as the Target 
is already active both upstream and downstream pre -merger, and the addition of 
Hitachi’s de minimis  market position in transformers  and power transformers 
will not appreciably reinforce this position . Furthermore, Hitachi is not active in 
transformers (and power transformers) in the EEA. Also, in  the market for  
 
 
48 (power ) transformers  there are  other suppliers such as  GE/Alstom , Koncar, 
SGB, Tamini -Tes, Xian XD, and others .  
Vertical links in relation to FACTS  
Vertical link Overall HV products  – FACTS  
(242)  Under a narrower market definition looking at FACTS (and sub -segments of 
FACTS) , affected markets could arise  as a result of the combination of Hitachi’s 
activities in overall HV products at worldwide level a nd the Target’s activities 
in FACTS. The Target’s  worldwide market share in 2018 in FACTS was [5-
10]%, and [30-40]% at EEA -wide  level . On the segment  for FACTS – Series 
Compensation , the Target’s market share in 2018 was [50-60]% at worldwide 
level, and on the segment for FACTS – (Dynamic) Shunt Compensation , the 
Target’s  market share in 2018 was [10-20]% at worldwide level and [30-40]% 
at EEA -wide level.  
(243)  The Commission considers that the Proposed Transaction w ill not lead to a 
foreclosure risk, since the  merged entity will neither have the ability nor the 
incentive to foreclose.  
(244)  Hitachi’s presence in overall HV products  is limited (with a market share of 
only [0-5]% in 2016 -2018 at worldwide level and [0-5]% at EEA -wide level ). In 
particular, there  are no indications of merger -specific foreclosure concerns, as 
the Target is already active both upstream and downstream pre -merger, and the 
addition of Hitachi’s de minimis  market position in overall HV products  will not 
appreciably reinforce this positi on.  
(245)  Hitachi will have neither the ability nor the incentive to either hamper or 
eliminate rivals' access to supplies or markets as a result of the Proposed 
Transaction. There  are many alternative suppliers for overall HV products  
upstream (such as e.g. Si emens, GE /Alstom , Pinggao, Hyosung , and others ) and 
at the downstream level, there are other customers (such as e.g . FACTS  
suppliers Siemens , GE/Alstom , and others ). 
Vertical link MV  products  – FACTS  
(246)  Given the limited activities  of both Hitachi and the Tar get in MV products ( the 
Parties ’ combined market share was less than 5% both at worldwide level and at 
EEA -wide level  in 2018 ), the fact that Hitachi is not active in MV products 
within the EEA, and that the Target is already active both upstream and 
downstream in MV products and FACTS pre-merger, the Commission considers 
that the Proposed Transaction w ill not lead to a foreclosure risk, since the 
merged entity will neither have the ability nor the incentive to engag e in input or 
customer foreclosure.  
Vertical link HV switchgear  – FACTS  
(247)  Under a narrower market definition looking at FACTS, affected markets could 
arise (at worldwide level) as a result of the combination of Hitachi’s activities in 
 
 
49 HV switchgear and […] activities in FACTS. […] worldwide market share in 
2018 in FACTS was [5-10]%, and [30-40]% at EEA -wide level.  On the segment 
for FACTS – Series Compensation , the Target’s market share in 2018 was [50-
60]% at worldwide level, and on the segment for FACTS – (Dynamic) Shunt 
Compensation , the Target’s  market share in 2018 was [10-20]% at worldwide 
level and [30-40]% at EEA -wide level.  
(248)  The Commission considers that the Proposed Transaction will not lead to a 
foreclosure risk, since the merged entity  will neither have the ability nor the 
incentive to foreclose.  
(249)  Hitachi’s presence in HV switchgear is limited (with a market share of only [5-
10]% in 2016 -2018 at worldwide level and [0-5]% at EEA -wide level ). In 
particular, there are no indications of  merger-specific foreclosure concerns, as 
[…] is already active both upstream and downstream pre -merger, and the 
addition of Hitachi’s market position in HV switchgear  will not appreciably 
reinforce this position.  
(250)  Hitachi will neither have the actual nor pot ential ability, nor incentive to either 
hamper or eliminate rivals' access to supplies or markets as a result of the 
Proposed Transaction. There  are many alternative suppliers for HV switchgear  
upstream (such as e.g. Siemens, GE /Alstom , Pinggao, Hyosung ) and at the 
downstream level, there are other  HV switchgear  customers (such as e.g . 
FACTS  suppliers Siemens , GE/Alstom , and others ). 
Vertical link M V switchgear  - FACTS  
(251)  Given the limited activity of Hitachi in MV switchgear ( worldwide market share 
of less than [0-5]% in 2016 -2018), and that Hitachi is not active in MV 
switchgear in the EEA, the Commission considers that the Proposed Transaction 
will not lead to a foreclosure risk, since the merged entity will neither have the 
ability no r the incentive to engage in input or customer foreclosure . 
Vertical link HV GIS – FACTS  
(252)  Under a narrower market definition looking at FACTS , affected markets could 
arise as a result of the combination of Hitachi’s activities in HV GIS and th e 
Target’s act ivities in FACTS . […] worldwide market share in 2018 in FACTS 
was [5-10]%, and [30-40]% at EEA -wide level.  On the segment for FACTS – 
Series Compensation , the Target’s market share in 2018 was [50-60]% at 
worldwide level, and on the segment for FACTS – (Dynamic) Shunt 
Compensation , the Target’s  market share in 2018 was [10-20]% at worldwide 
level and [30-40]% at EEA -wide level.  
                                                 
 Should read: ‘the Target’.  
 Should read: ‘the Target’.  
 Should read: ‘the Target’.  
 Should read: ‘the Target’.  
 
 
50 (253)  The Commission considers that the Proposed Transaction will not lead to a 
foreclosure risk, since the Parties will neither have t he ability nor the incentive 
to foreclose.  
(254)  Hitachi’s presence in HV GIS is limited (in 2018 market share of [5-10]% at 
worldwide level and [0-5]% at EEA -wide level ), whereas  the Target  had a 
market share of [10-20]% at worldwide level and [10-20]% at EEA -wide level 
in 2018 . In particular, there are no indications of  merger -specific foreclosure 
concerns, as the Target is already active both upstream and downstream pre -
merger, and the addition of Hitachi’s market position in HV GIS will not 
appreciably rein force this position ( noting that the post -merger share of the 
merged entity  in HV GIS will  still remain clearly below 30%, with an increment 
of about [5-10]% under a narrow product market definition and wide geographic 
market definition ).   
(255)  Hitachi will ne ither have ability, nor incentive to either hamper or eliminate 
rivals' access to supplies or markets as a result of the Proposed Transaction. 
There are alternative suppliers for HV GIS upstream (such as e.g. Siemens, 
GE/Alstom , Pinggao , others), and at th e downstream level, there are other  HV 
GIS custome rs (such as FACTS suppliers Siemens, GE/Alstom and others) .  
Vertical link Transformers – FACTS  
(256)  In a broader worldwide market encompassing all transformers, the Parties’ 
combined market share in 2018 was [10-20]% ([…] – [10-20]%, Hitachi – [0-
5]%). In the EEA, only the Target  is active in transformers with a  market  share 
of [10-20]% in 2018 . In a narrower market for power transformers, both Parties 
are active, with a combined market share in 2018 of [10-20]% at worldwide 
level ( […]– [10-20]%, Hitachi – [0-5]%). In the EEA, only […] is active in  
power  transformers with a  market  share of [20-30]% in 2018 .  
(257)  The Target’s  worldwide market share in 2018 in FACTS  was [5-10]%, and [30-
40]% at EEA -wide level . On the segment for FACTS – Series Compensation , 
the Target’s market share in 2018 was [50-60]% at worldwide level, and on the 
segment for FACTS – (Dynamic) Shunt Compensation , the Target’s  market 
share in 2018 was [10-20]% at worldwide level and [30-40]% at EEA -wide 
level.  
(258)  The Commission considers that the Proposed Transaction will not lead to a 
foreclosure risk, since the merged entity will neither have the ability nor the 
incentive to foreclose.  
(259)  There are no indications of  merger -specific foreclosure c oncerns, as the Target  
is already active both upstream and downstream pre -merger, and the addition of 
Hitachi’s de minimis  market position in transformers will not appreciably 
reinforce this position. Furthermore, Hitachi is not active in transformers (and  
power transformers) in the EEA. Also, in the market for  (power ) transformers  
                                                 
 Should read: ‘the Target ’. 
 Should read: ‘ the Target ’. 
 Should read: ‘the Target’.  
 
 
51 there are other suppliers such as GE/Alstom , Koncar, SGB, Tamini -Tes, Xian 
XD, and others , and there are other  FACTS suppliers such as Siemens, 
GE/Alstom and others . 
Conclusion on vertical non -coordinated effects in relation to  GI products  
(260)  With view of the above, the Commission concludes that the Proposed 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with regard to vertical non-coordinated effects in relation to any  Grid 
Integration products  including HVDC and FACTS,  and any plausible sub-
segments of these  products  (see Section 4.5 abov e). 
5.4. Conglomerate effects  
(261)  The Proposed Transaction involves a large number of products and applications 
across the area of Power Transmission and Distribution (“ T&D ”), in which both 
Parties are active.   
(A) The Notifying Party’s view  
(262)  The Notifying Party submit s that  the Proposed Transaction will not give rise to 
conglomerate concerns  in the area of T&D  for the following reasons:  
(i) In the area of T&D, closely related markets as a result of the 
Proposed Transaction would only arise in case of a worldwide 
geographi c market definition, as the Parties' activities have a different 
geographic focus  (as Hitachi is essentially not active in Europe or the 
EEA as far as T&D is concerned );  
(ii) Hitachi's worldwide  market share in relation to all plausible relevant 
product markets in the area of T&D in which it is active186 is low (if 
not de minimis ) and will only insignificantly add to the Target's 
market position before the Proposed Transaction ;  
(iii) In the few plausible product markets, in which - only under a narrow 
market  definition - the merged entity’ s comb ined share could be 
considered “significant”  in the sense of the Non -Horizontal Merger 
Guidelines, this share is either not increased a result of the Proposed 
Transaction (as there is no overla p), or the increment is mini mal;  
(iv)  At a worldwide  level, the combination of the Target's portfolio with 
Hitachi's concentrated activities does not give rise to any new 
combinations of products, that could be tied or bundled across the 
merged entity's portfolio, regardless of market s hares ;  
(v) To the extent it exists at all, the possibility to offer bundled or tied 
products would already exist for the Target pre-merger; also, the fact 
that the Target has so far not offered any bundles of T&D products 
pre-merger , despite already now havin g a comprehensive portfolio of 
                                                 
186 Certain HV, MV and  LV Products, Transformers, Grid Automation and Grid Integration including Power 
Semiconductors . 
 
 
52 products, suggests that such offerings are generally not likely to be 
attractive in the area of T&D ;  
(vi)  The main competitors of the merged entity in the area of T&D have 
comparable portfolios and could deploy effective and tim ely counter -
strategy in the event the Parties were able to bundle or tie their 
products ;  
(vii) As customers can pick and combine equipment based on 
relevant specifications  for projects, a bundled offer may be risky and 
unprofitable, if it does not meet customer s’ requirements.  
(263)  The Notifying Party also submits that the Proposed Transaction will not give 
rise to conglomerate concerns from the combination of Hitachi’s IoT solutions 
with the Target’s business activity such as for example  Grid Integration, HVDC 
stations, FACTS systems or substations offered by the Target , for the following 
reasons:  
(i) Customers are not interested in simultaneously buying GI products 
and an IoT platform, and may have developed their own IoT platform 
and solutions ;  
(ii) Technical b undlin g is not currently possible, and contractual tying 
would also not be a commercially realistic strategy ;  
(iii) Competitors could offer equally attractive bundles ;  
(iv)  Hitachi would have no incentive to bundle,  as it may incur 
significant losses ;  
(v) IT solutions represent a very small proportion of the Grid Integration 
system;  
(vi) Hitachi is not a leader on the market for IoT platforms  (there are other 
large undertakings, such as Dell EMC, Hewlett Packard Enterprise, 
IBM, and Lenovo, who are specialized IT companies );  
(vii) Bundling or tying would have no effect on prices and choice  
for products . 
(264)  The Notifying Party also submits that the Proposed Transaction will not give 
rise to conglomerate concerns as regards also the Parties’ semiconductors’ 
portfolio  for the following reasons .  
(265)  The Target offers a comprehensive portfolio of power and high power 
semiconductors prior to the Proposed Transaction .187 The Proposed Transaction 
                                                 
187  This includes also power semiconductors for MV power converters and drives . However, MV power 
converters and drives currently offered by ABB are not part of  the Target business and are outside of the 
scope of the Proposed Transaction. Almost all of ABB's MV (and LV) equipment business, with the 
exception of those products expressly mentioned in the Form CO (i.e., MV Surge Arresters, MV and LV 
Cable Accessorie s, and MV and LV Capacitors, Harmonic filters and Other RPC Products), will remain 
 
 
 
53 will not significantly alter or expand this offering and therefore not alter any 
incenti ve to engage in a foreclosure strategy on prices and choice for products. 
Hitachi submits that such a strategy would not make sense from either a 
technical or economic point of view  for the following reasons :188  
(i) While there are hundreds of different semicon ductor devices, 
customers usually use either one particular type of semiconductor 
device, or a project -based combination of different devices, in their 
equipment. High power semiconductor applications are complex and, 
to reduce prototyping, require evaluat ions and analyses to find the 
best possible semiconductor for customized settings and conditions. 
Finding the right device, or tailored combination of devices, is the 
key element of a successful project -based procurement process for the 
customer and normal ly requires a case -by-case assessment. 
Therefore, bundling or tying of certain devices does not make sense 
from a technical point of view. Rather on the contrary, tying or 
bundling products that do not perfectly match the customers' 
specifications for a pa rticular project bears the risk of losing those 
customers if they are unable to source the precise product (or 
combination of products) suitable for their needs ;  
(ii) The market for power semiconductors (including all power levels), as 
well as any plausible segment thereof, is highly fragmented with 
many established suppliers that can all supply the different types of 
power and high power semiconductors. The industry is co mpetitive 
and changes rapidly, allowing companies to enter or expand their 
share by bringing new products to the market. Any tying or bundling 
strategy would therefore not force a customer to buy the tied product, 
as they could switch to competing supplier s offering the same 
products without a tie or outside of a bundle ;  
(iii) For standard (non -integrated) IGBT modules in particular, the 
Parties' combined worldwide  market share in 2016 -2018 was in the 
range of [0-5]%-[5-10]% and they face competition from large r 
players such as Infineon Technologies, Mitsubishi, Fuji Electric, and 
Semikron, who equally supply other types of power and high power 
semiconductors.189 It is therefore possible for customers to switch 
suppliers for any given device ;  
(iv)  Customers for power  and high power semiconductors are large 
established players in both traditional and innovative industries, who 
enjoy a significant degree of countervailing purchasing power vis -à-
vis the semiconductor manufacturers ;  
                                                                                                                                                      
with ABB's Electrification ("EL") business post -transaction  (Parties’ response of 8 May 2020 to 
Commission’s Request for information 9).  
188  Parties’ response of 8 May 2020 to Commission’s Request for information 9.  
189  Per Table 7.84j at paragraph 1286 of the Form CO, the same applies with regard to the EEA, where the 
Parties' combined share in 2016 -2018 was similarly low (between [5-10]% -[5-10]% in 2016 -2018) and 
large playe rs are also active (e.g., Infineon Technologies, Semikron, Mitsubishi, Bosch, Vincotech).  
 
 
54 (v) Even if the merged entity were to tie or bundle its semiconductor 
devices as a result of the Proposed Transaction, it is therefore 
unlikely that such strategy would be successful or result in any anti -
competitive foreclosure effects . 
(B) The Commission’s assessment  
(266)  The Commission has investigated whether the Proposed Transaction could give 
rise to conglomerate effects in relation to the combination of the Parties’ 
activities and has reached the conclusion that it does not raise serious doubts in 
this regards for the following reasons.  
(267)  As far as the  area of T&D is concerned, the Target is already offering a 
comprehensive portfolio of products for various applications worldwide . As the 
Parties' portfolios are largely complementary the Proposed Transaction will not 
result in new opportunities to bundle  products.190 
(268)  Customers confirmed that , generally speaking,  neither ABB nor Hitachi 
currently ties or bundle s its products.191 In the few cases where ABB  does, 
bundling is a result of the negotiations with the customer.192 The tendency to sell 
products in a bundle thus “varies from customer to customer and even within 
customer, from project to project”.193 Many customers explained that there is a 
widespread “preference to mix and match to avoid dependency towards 
suppliers”.194 The merged entity will thus not be able to exercise any leverage 
from the breadth of its portfolio.  
(269)  Customers also indicated that products supplied by ABB and /or Hitachi will not 
be more attractive even if a wider choice of those products were  to be avai lable 
from the merged entity post -Transaction.195 This again confirms that, therefore, 
the enlarged portfolio is unlikely to give leverage to the merged entity.  
(270)  Customers also indicated that even if post-transaction Hitachi were to tie or 
bundle some of its products,  they would have sufficient suppliers to purchase the 
products separately at competitive conditions .196 Customers explained that they 
have a multitude of other suppliers to choose from, such as for example 
Siemens, Schneider, GE, Mitsubishi,  and others.  Competitors also indicated that 
enough competition  would remain in the market even in a hypothetical 
tying/bundling strategy of the merged entity , and that competitors would be able  
to compete with a combined offer  of the merged entity ,197 as we ll as that 
customers will have sufficient suppliers to purc hase the products  from  
                                                 
190 Form CO, paragraph 945.  
191  Replies to  eQuestionnaire – Customers, questions 170 and 171.  
192  Replies to eQuestionnaire – Customers, question 170.2.  
193 Replies to eQuestionnaire – Competitors, question 156.  
194  Replies to eQuestionnaire – Customers, question 184.  
195  Replies to eQuestionnaire – Customers, question 177.  
196  Replies to eQuestionnaire – Customers, question 176.  
197  Replies to eQuestionnaire – Competitors, question 147.  
 
 
55 separately at competitive conditions .198 As a result, the merged entity  will still 
face competition post -Transaction.  
(271)  IT solutions represent  (such as Hitachi’s Lumada Platform)   a (very small) 
proportion of the value of an HVDC system (or any other Grid Integration 
system) .199 Hitachi is not a leader on the market for IoT platforms and other 
large undertakings, such as Dell EMC, Hewlett Packard Enterprise, IBM, and 
Lenovo, who are  specialized IT companies with significant buying power and 
leverage are equally present in this sector.200 
(272)  The majority  of the participants in the market investigation did not have  any 
conglomerate concerns in particular as regards the combination of Hitachi’s IT 
solution portfolio and/or Hitachi’s IoT platform s olutions ( Lumada Platform) 
with the ABB product offerings.201 A customers for example clarified that it is 
unlikely that ABB  products would be offered exclusively together with 
Hitachi’s IoT Platform solutions , and even in such a scenario, there are  other 
supply resources comparable to ABB products .202 
(273)  The Target already offers a comprehensive portfolio of power and high power 
semiconductors prior to the Proposed Transaction,203 and this will not be 
significantly changed post -merger.204 A competitor for example  explained that 
“Hitachi already has Power semiconductor, therefore the addition of the ABB 
portfolio does not give an over pr oportional benefit.”205 
(274)  Customers  and competitors  explained that the Parties have a number of 
competitors for the supply of power  semiconductors , such as for example  
Infineon, Melco,  Mitsubishi , ON Semi, and STM .206 
(275)  Customers also explained that they are not obliged to procure certain GI systems  
and products together, in bundle  (GI systems/products include power 
semiconductors) ,207 which confirms that bundling of GI systems/products 
(including power semiconductors) are not attractive for customers.  In this 
regar d, a competitor explained “ We offer a range of products which are needed 
within the system our customers are manufacturing, e.g. for an  industrial drive 
we offer the power switches, the gate drivers, sensor and so forth. Nonetheless, 
these are  interchangea ble with the corresponding products from other 
players .”208 
                                                 
198  Replies to  eQuestionnaire – Competitors, question 148.  
199  Form CO, paragraph 1032.  
200  Form CO, paragraph 1034.  
201  Replies to eQuestionnaire – Customers, questions 180, 181 and 182; Replies to eQuestionnaire – 
Competitors, question 152, 153, 154.  
202  Replies to eQuestionnaire – Customers, question 180.1.  
203  Form CO, paragraphs 495 to 499.  
204  Parties’ response of 8 May 2020 to Commission’s Request for information 9.  
205  Competitor’s reply to eQuestionnaire – Competitors, quest ion 152.1.  
206  Replies to eQuestionnaire – Customers, question 146, 146.1. Replies to eQuestionnaire – Competitors, 
question 119.  
207  Replies to eQuestionnaire – Customers, question 155.  
208  Competitor’s reply to eQuestionnaire – Competitors, question 128.1.  
 
 
56 (276)  Customers also considered that they have some degree of buyer power in GI 
systems/products (including power semiconductors), which could be qualified as 
medium buyer power.209 
(277)  Taking into account the Notifying Party’s arguments and the results of the 
market investigation, the Commission takes the view that, with respect of any of 
the Parties’ product categories and considered plausible sub-segments thereof, 
the Proposed Transact ion is unlikely to raise serious doubts as to its 
compatibility with the internal market as a result of conglomerate effects.  
6. CONCLUSION  
(278)  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 and Article 57 of the EEA Agre ement .  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President  
 
 
                                                 
209  Replies to eQuestionnaire – Customers, question 164.  
 
 
57 ANNEX I  
Relevant product categories210 
I. MV Product categories and considered sub -segments  
 
 
 MV Switchgears  are electrical equipment used to control, protect, and regulate the flow of 
electrical power in a transmission or distribution network. MV Switchgears are available for 
both AC environments and DC environments. MV AC Switchgears are used in 
Transmission a nd Distribution networks or industrial settings. MV DC Switchgears are used 
in fixed Substations which feed power to railway power lines (so -called Traction 
Substations) or in industrial settings which operate on DC power (e.g., mines or cranes).  
 
 
II. HV Prod uct categories and considered sub -segments  
 
 HV Switchgear  is a combination of pieces of electrical equipment (i.e.  HV circuit breakers, 
HV instrument transformers, HV disconnectors, and control & protection equipment) which 
controls and regulates the flow  of electricity in a transmission network to protect it from 
short circuits or overload currents.  
 
 HV GIS  (HV gas -insulated switchgear): refers to a compact metal encapsulated switchgear 
unit consisting of high voltage components which can be safely opera ted in confined spaces.  
 
 HV AIS  (HV air -insulated switchgear)  modules  refers to the primary components used in 
an AIS substation.  
 
 HV circuit breakers  are used in substations  to interrupt the flow of electricity where 
necessary to isolate the affected part of the network.  
 
 Live-tank circuit breakers  (LTBs) : the switching unit is located in an insulator bushing 
which is live at line voltage (or some voltage above ground ) 
 
 Dead-tank circuit breakers ( DTBs) : the switching unit is located within a metallic 
container which is kept at earth potential (grounded). Insulated bushings allow the current 
transformers to be placed on the incoming/outgoing conductors.  
 
 Generator circuit br eakers (GCBs) are used in power generation plants to protect electric 
generators and power transformers.   
 
 Disconnecting circuit breakers ( DCBs ) provide the functionality of a circuit breaker and a 
disconnector  in one single unit and are commonly considered a sub -type of an LTB.  
 
 HV Instrument Transformers  are devices that step down the voltage or current to reduced 
secondary voltage or current so that it can be measured in order to protect primary 
equipment (es pecially the circuit breaker or power transformer).  
 
                                                 
210  Source: Form CO.  
 
 
58  HV Disconnectors  are mechanical safety switch devices which provide, in an open position, 
an insulating distance. They are mainly used to protect personnel and ensure that an 
electrical circuit is comple tely de -energised and isolated for service or maintenance 
purposes, after the circuit has been interrupted by a HV circuit breaker.  
 
 Surge arresters  are used to protect installations (transmission lines, substations, etc.) and 
other primary equipment, such  as power transformers, from atmospheric and switching over 
voltages resulting from lightning strikes to transmission lines, manoeuvres in the electrical 
system or internal faults in the system by limiting the maximum overvoltage to a level safe 
for the eq uipment to be protected.  
 
 Cable accessories  include joints, connectors, and terminations used to link various pieces of 
equipment in different voltage settings.  
 
 Capacitors  (also referred to as a "condenser") are multi -purpose devices that can store 
electr ical charge in the form of an electric field. Capacitors are used to improve the power 
quality of HV, MV and LV electrical networks by eliminating disturbances and improving 
the power factor in line with grid requirements (RPC). A single capacitor is calle d a 
"capacitor unit"; a number of capacitor units connected in parallel are called a "capacitor 
bank".  
 
 Harmonic filters  are used to reduce the issue of harmonics (oscillations in the base power 
frequency, typically 50 or 60 Hz), which is a disturbance ("p ollution" or "noise") of the 
voltage or current in electrical lines that disrupts the flow of electricity. Such electrical noise 
can result in fires/equipment burnout, intermittent or mal -operation of sensitive electronic 
equipment, failure of capacitors a nd other problems.  
 
III. Transformers  
 
 A transformer  is the electromagnetic piece of equipment that transfers the electricity 
(characterised by a certain voltage and electric current level) from one electrical circuit to 
another (often, but not necessarily, of another voltage and electric current level) thr ough the 
coupling of a magnetic core. Transformers therefore are used to transfer energy from one 
AC power circuit to another and to increase ("step -up") or reduce ("step -down") voltage as 
required.  
 
 Power transformers  are components in power networks. The y are used in substations and, 
alongside the switchgear units, are considered a primary piece of the system of the 
substation, ensuring the integrity of the power system and availability of power to the end -
user. They are also usually the biggest cost fact or in a substation.  
 
 Distribution transformers  provide the final voltage transformation in the electricity 
distribution system, stepping down the voltage used in the distribution lines to the level used 
by residential premises, factories and similar.  
 
 Liqu id-filled distribution transformers  contain a liquid (usually oil), which is used to 
insulate the windings (copper or aluminium conductors) of the transformer and to keep the 
transformer temperature at a specific operating level.  
 
 Dry-type distribution tr ansformers  do not require a liquid, such as oil, to cool down the 
electrical steel core and winding coils; the winding coils of dry -type distribution 
 
 
59 transformers are simply cooled by normal air ventilation and use resin as insulation (they 
thus do not con tain dangerous fluids and require no special fire proof vaults or venting of 
toxic gases).  
 
 Traction transformers  are a component of a rail locomotive's traction chain, i.e., they are 
used in railway rolling stock applications including high -speed, commute r and regional 
trains, locomotives, tram -trains and AC metros.  
 
 Bushings  are cylindrical insulating components (usually made from porcelain) that house a 
conductor. This enables a conductor to pass through a grounded enclosure, such as a 
transformer tank ( the physical shell of a transformer), a wall or other physical barrier, to 
connect electrical installations. In the case of a transformer, bushings protect the conductors 
that connect a transformer's steel core to the power system it serves through channel s in the 
transformer's housing.  
 
 Tap changers are used to adjust the performance of transformers by changing the turn ratio 
between the windings in a transformer. Adjusting the tap changes the voltage level of the 
transformer's input or output. This is essential for stabilization of the network voltage under 
variable load conditions. Tap changers may be paired with motor drive mechanisms to drive 
the connected on -load tap changer or large de -energized tap changer to a higher or lower tap 
of a transformer . 
 
 Measurement and safety devices  monitor a transformer's health and improve safe, reliable 
and efficient operation of the transformer. Measurement and safety devices address various 
types of variables, including humidity, liquid levels, temperature, press ure and flow as well 
as monitor systems and related metal accessories (such as connectors and fuses). The 
Target's measurement and safety devices also include mechanical c omponents, valves, and 
eDevices . 
 
 Insulation materials and components  are a vital par t of transformers, as they must 
withstand the operating temperatures that occur during the transformer's operating life. 
Insulation materials and components include composite insulators, insulation and winding 
kits (i.e., insulation of a transformer's acti ve part), and other insulation components made 
from pressboard and other materials such as paper, composites, or flexible and rigid 
laminates. Insulation materials and components are also used in other (non -transformer) 
applications.  
 
 
IV. Grid Integration  
 
 T&D Turnkey Systems. The turnkey project -related GI business vertically integrates HV 
products, transformers and GA solutions, depending on the specific needs of a project.  
 
 HVDC  stations . HVDC is a technology used for transmitting electricity (flowing in DC) 
between two grid systems, and is considered to be the most advanced solution for the 
transmission of energy over long distances by overhead transmission lines or (underground 
or submarine) power cables. The HVDC system converts electricity generated as  AC to DC 
through a HVDC station, to be able to transmit electrical power in the latter format. At the 
other end of the system, DC is converted back to AC by another HVDC station so that the 
electricity can be fed back into the AC transmission or distribut ion network.  
 
 
 
60  HVDC Classic . HVDC Classic is the “traditional” HVDC technology, operating with a 
power of more than 100 MW. HVDC Classic is used for: (i) long undersea cable links (> 50 
km); (ii) long overhead lines (> 600 km); (iii) interconnection of diff erent grids of networks; 
(iv) where control of transmitted power is of importance; and (v) combinations of the above . 
 
 HVDC Light/Plus . HVDC Light is a technology developed by ABB in the 1990s. It is used 
for: (i) undersea cable links and (ii) long underground cable links, and is not adapted for 
overhead lines. It is often used in off -shore installations or wind farms, due to the smaller 
size of the stations and its ability to stabilize the AC voltage at the terminals. HVDC Light 
also allows for a co nnection of isolated loads, and has a relatively short delivery. HVDC 
Light systems range from around 80 kV up to 320 kV . 
 
 FACTS . FACTS (Flexible Alternating Current Transmission Systems) refers to 
technologies that can be installed in new or existing powe r transmission and distribution 
lines to enhance the security, controllability and flexibility of an AC power system and to 
increase its capacity.  
 Series compensation FACTS . Series compensation uses capacitors and reactors to 
introduce voltage in series wi th the line. Their major task is to reduce the inductivity of the 
transmission line. They supply or consume variable reactive power. Series compensation 
can be either fixed (Fixed Series Compensation or Fixed SC) or controlled.  
 Fixed (Fixed Series Com pensa tion or Fixed SC) FACTS . These FACTS are useful for 
optimizing performance in very large bulk transmission corridors (typically longer than 200 
km). 
 Controlled Series compensation  FACTS . These FACTS, usually called Thyristor 
Controlled Series Capacitor (TCSC), are especially useful for damping power oscillation 
over interconnections between transmission grids.  
 (Dynamic) Shunt compensation FACTS  also uses variable impedance devices like 
capacitors or reactors, here to introduce current in shunt with the line, which is in phase with 
the line voltage. The technologies can also be combined to either create a series -shunt -
compensation  or a series -series compensation. Examples for such systems i nclude static 
compensators (STATCOM)  or static VAR compensators (SVC) . 
 Static compensators (STATCOM ). Installing a STATCOM at one or more suitable points 
in a grid will increase power transfer capability by enhancing voltage stability and 
maintaining a sm ooth voltage profile under different network conditions. Its ability to 
perform active filtering is also very useful for improvements in power quality.  
 Static VAR compensators (SVC) . SVC will typically regulate and control the voltage to 
the required set point under normal steady state and contingency conditions and thereby 
provide dynamic, fast response reactive power following system contingencies (e.g., 
network short circuits, line and generator disconnections). In addition, SVC can also 
increase transf er capability, reduce losses, mitigate active power oscillations and prevent 
over voltages at loss of load.  
 Substations . Substations are key installations in the power grid that facilitate the efficient 
flow of electricity within the grid as well as the co nnection of power plants to the grid. They 
also interconnect transmission lines (including those with different voltage levels, such as 
transmission and distribution networks), link end -consumers to these networks and protect 
the grid from risks (e.g., sho rt circuit).  
 
 
 
61  AIS substation.  Substation which  contains air -insulated switchgear.   
 
 GIS substation.  Substation which  contains gas -insulated switchgear.  
 
 Hybrid S ubstation.  Substation which contain both gas - and air -insulated switchgear . 
 
 Mobile Substation . Mounted on skids, trailers or in containers for rail, road or air 
transportation, these substations come in the form of ready -to-connect, complete assemblies 
and are designed for grid code compliance and easy mobility. The solutions are available for 
voltage levels up to 420 kV and all power ratings, and ensure reliable and high -quality 
energy supplies.211 
 
 Power semiconductors . Semiconductors are materials, such as silicon, which can act as an 
insulator, but are also capable of conducting electricity. The Proposed Transaction relates to 
power semiconductors (including high power semiconductors). While general 
semiconductors (operating in ranges of mW or µW) are used in integrated circuits, 
memories and other to control devices such as computers or washing m achines with millions 
of (low -power) switching functions, power semiconductors (> 1 W) and high power 
semiconductors (> 1200 V / 300 A) only provide for one switch with high power.  
 
 EV charging infrastructure . Charging infrastructure for electric vehicles.  The Target 
offering relates to offering relates to EV charging stations (TOSA), which are fast charging 
stations with a mechanical arm that can be used to fast -charge buses or trams by driving 
them under it.  
 
  
                                                 
211  See https://new.abb.com/substations/mobile -substations .