On 21 January 2020, Danfoss announced that it had entered into an agreement to acquire Eaton’s Hydraulics business for a cash purchase price of US$3.3 billion. Danfoss and Eaton Hydraulics manufacture components for hydraulic systems used in mobile machinery, such as agriculture and construction machines.

The European Commission was notified of the transaction on 17 August 2020, and on 21 September 2020 an in-depth investigation was opened. Based on its investigation, the Commission was concerned that the transaction, as originally notified, might give rise to horizontal unilateral effects with respect to some hydraulic components.

Danfoss and Eaton retained NERA to assist them and their legal counsel throughout the transaction’s regulatory review process in the EU, the US, and other jurisdictions including Brazil, China, and Mexico. NERA supported the parties in a variety of compliance and affirmative workstreams.

The European Commission cleared the transaction subject to conditions on 18 March 2021. The US Department of Justice followed on 14 July 2021. To address the authorities’ competition concerns, Danfoss offered to divest parts of its business, including manufacturing plants in Poland, Germany, and the US.