On May 7, 2019, after an in-depth investigation, the FCO prohibited Heidelberger Druckmaschinen AG’s acquisition of sheet folding machine manufacturer MBO Maschinenbau Oppenweiler Binder GmbH & Co. KG (“MBO Group”). Based on an extensive market investigation, with a particular emphasis on customer feedback, the FCO found that the merger would have created a dominant position for Heidelberger Druckmaschinen AG and significantly impeded competition in the market for the manufacture and distribution of sheet folding machines for industrial printing processes.
Sheet folding machines are used in the final stage of the printing process (i.e., the print finishing) to fold printed paper or book-binding paper. The folded paper is then used to make books or brochures. The FCO found that industrial sheet folding machines constitute a single product market, distinct from other machines used in the print finishing stage. Customers had indicated that the relevant machines are substitutable and can be flexibly deployed. Therefore, a further subdivision of the market according to different print formats and performance levels was not justified.
According to the FCO, the merger would have allowed the European market leader Heidelberger Druckmaschinen AG to acquire its closest competitor leading to combined market shares far exceeding 50% in an already highly concentrated market with only four companies manufacturing and selling industrial sheet folding machines throughout the whole of Europe. Further, the FCO’s investigations revealed high barriers for new market entrants, because of the significant cost and time required to enter the market. In addition, the market is characterized by a high level of customer loyalty. Indeed, there have been no new market entries throughout the last 20 years. The parties did not offer remedies to address the FCO’s concerns.
The decision is final. It continues a recent series of prohibition decisions and withdrawals of merger filings in Germany.
 FCO Press Release, May 7, 2019, available in English here. A non-confidential version of the decision (B5-185/18) is only available in German here.
 The FCO’s Miba/Zollern prohibition decision (B5-29/18) in January 2019 (FCO Press Release, January 17, 2019, available in English here; see also German Competition Law Newsletter January – February 2019, p. 6, available in English here) marked the first prohibition decision since its CTS Eventim and Four Artist decision (B6-35/17) in November 2017 (FCO Press Release, November 23, 2017, available in English here) and was followed by a number of withdrawals of merger notifications in early 2019; see also German Competition Law Newsletter March – April 2019, p. 5 et seq., available in English here.