"The need for technologically innovative and industry-changing hydraulic solutions is as great as ever. We're very pleased to complete this significant investment in our core hydraulics business so we can serve our customers and partners even better than before," said Eric Alstrom, president of Danfoss Power Solutions. "Adding fluid conveyance and industrial applications are other assets gained through this transaction."
Divestments allay antitrust concerns
According to the U.S. Department of Justice, approval of the multi-billion dollar sale involving the two largest suppliers of orbital motors for mobile off-road equipment in the U.S. required Danfoss to divest orbital motor and hydraulic steering unit facilities located in Hopkinsville, Ky.; Parchim, Germany; and Wroclaw, Poland.
Eaton divested two orbital motor production lines and one hydraulic steering unit production line from facilities in Shawnee, Okla., and Eden Prairie, Minn.
The U.S. Department of Justice said in a news release that, absent these divestitures, the Danfoss-Eaton deal would have led to "higher prices, decreased quality of delivery and service, and diminished innovation."
The company to which the divested lines ultimately were sold was Interpump Group S.p.A., a provider of cylinders, pumps and valves with operations in North America, Europe, South America and Asia.
"Orbital motors and hydraulic steering units are essential components in equipment used in the agricultural, industrial and construction industries," said Acting Assistant Attorney General Richard A. Powers of the Justice Department's Antitrust Division. "The transaction, as originally proposed, would have led to higher prices and lower quality for original equipment manufacturers in these industries that are vital to the American economy.
"The remedy preserves competition in the manufacture and sale of these products for the benefit of equipment manufacturers and consumers."
The Justice Department filed the antitrust lawsuit July 14 in the U.S. District Court for the District of Columbia to block the Danfoss-Eaton transaction, but also filed the same day a proposed settlement.
The settlement was approved by the aforementioned court Aug. 2, resolving the competitive harm alleged in the antitrust lawsuit.