C/2024/7267 Prior notification of a concentration (Case M.11717 – SUMITOMO / EEW HOLDING / EEW OFFSHORE WIND EU HOLDING)

COMP-MERGER-REGISTRY@ec.europa.eu

Sumitomo Corporation (sumitomo) .   sumitomocorp ticker = 8053:TYO

The COCOO:   OBSERVATIONS

-sumitomo receives state aid , and therefore a selective advantage, from different nations, specially from Japan. This has contributed to today’s signification competition distortion in the global wind power installations industry. sumitomo and other Chinese corporations in this industry, today fully dominate globally and in many national markets.

-eew holding also recieves state aid from germany. if this deal is allowed, the combined selective advantages will add up.

-should the deal be cleared, the european commission would be responsible for allowing a potential risk that sumimoto would be using its dominant position to also abuse such dominance in the eu internal market.  As it has happened in other nations, sumitomo produces, relative to european standards, cheap but low quality products, that could easily end up in numerous dumping proceedings in the eu courts.

-sumimoto has been excluded from loans/investment by Norges bank, and is labelled as ‘unethical’ as it is included in the ‘ethical exclusions list’ .

– Sumitomo Electrical Industries (part of the proposed undertaking) features on the official Iranian vendor website.

-sumimoto is gradually acquiring and investing in rival firms and designing such deals to avoid hitting any thresholds.  This has led to a gradual process of ‘stealth consolidation’ in this industry which is in breach of competition laws and policies. More worryingly, growing consolidation in industries like the one that concerns us, where public safety is paramount, has the proven potential to result in a relaxation of quality and safety measures that could result in public harm.

– gleif.DASHBOARD.search  : EEW Energy from Waste GmbH:  parent relation: NON-CONFORMITY: FAILS TO HAVE APPROPRIATE (dir or ultimate) RELATION OR REPORTING EXCEPTION WITH VALID REASON. Therefore, sumimoto has failed its duty to disclose its ‘ultimate parent’ because the exemption that sumimoto requested is invalid. Consequently, the commission is under a duty to review this deal, because, without such review, it is impossible to know the full scope of the undertaking agreement networks that concern us in the proposed deal. The commission has a duty, before it may decide not to review the proposed deal, to learn not only of the organisational undertakings, but also of the financial ones.

-The 2030 Agenda’s urgency, is forcing the european wind power installation industry, to rush economies of scales to try to avert a gradual increase of demand over supply in the internal market, where chinese companies would the only companies in the world in a position to balance demand and supply in the internal market. Many eu offshore wind manufacturers already rely on china for their turbines, monopiles being used in european projects.  This is despite the number of unfair competition and cartel litigation lost in the past by sumitomo.

– sumimoto is composed of many companies some of which are potential direct rivals of european companies in the industry. clearing the proposed deal would bring to the internal market and additional source of industry concentration, as it would aggregate to the existing level of ‘stealth consolidation’. Sumimoto is rather a ‘trojan horse’ that should not be allowed to complete the proposed deal.

-For national security reasons, under the wider public interest, the commission is under a duty not to allow china, and in particular sumimoto, any opportunity to capture more market share in this industry.

– the commission is under a duty to promote the birth and health of industries in member states, to comply with the Treaty’s overarching objective, the internal market.

-Urgency of challenge has been brought home by string of recent breakthrough deals for Chinese OEMs in Europe: EU countries must find common answers to the challenge of cheap Chinese turbines, said Denmark’s climate and energy minister ahead of a meeting between North Sea nations on their plans for offshore wind. “For me as a Danish minister, and with the role the wind turbine industry has in our country, I’m of course concerned about whether European manufacturers are outperformed by state aid in a way which is unfair,” Danish minister Lars Aagaard told Reuters.

-Sany’s Europe director claimed Western wind giants ‘have left door open’ to Chinese by retreat from various markets. European turbine makers relying on China’s supply chain could soon be in for an unpleasant surprise, Sany’s Europe chief has warned, while hitting back at comments from WindEurope’s CEO and also the company the Chinese OEM’s executive described as the “most expensive turbine supplier on the face of the universe.” Europe’s wind sector, led by industry body WindEurope, has been sharply critical of Chinese OEMs in recent years, amid concerns they could outcompete local players on the continent with turbines allegedly subsidised unfairly by the Chinese state.

For all the above reasons it is our opinion that it would be impossible for the commission to make a reasonable decision to review or not to review. The commission has therefore a duty to review the proposed deal, as the commission is not, presently, in a position to make a balancing act between competition law/policy, and other possible interests, like environmental sustainability as imposed by the 2030 Agenda.

Addendum: evidence in the form of links and excerpts

https://www.lobbyfacts.eu/datacard/eew-energy-from-waste-gmbh?rid=060318238252-62&sid=193699

-https://www.globaltradealert.org/intervention/123002/financial-grant/japan-government-announces-state-aid-to-sumitomo-electric-industries-for-producing-silicon-carbide-wafers:

-ANNOUNCEMENT 19 Nov 2024: In November 2024, the Japan Bank for International Cooperation (JBIC) signed a USD 180 million agreement with Sumitomo Metal Mining for the development of the Quebrada Blanca copper mine in Chile

-The two buyer’s credit agreements between JBIC and Danish Ultrabulk Shipping A/S was signed on 1 October 2014 and has a total maximum value of USD 18.6 million. Additionally, the loan is co-financed by a private financial institution amounting to an approximate value of USD 37.3 million. The governmental agency Nippon Export and Investment Insurance will provide an insurance for the co-financed portion. The loan finances the purchase of two bulk carriers, built by Japanese Oshima Shipbuilding Co., Ltd., from Japanese Sumitomo Corporation. In this context, JBIC stated: “These loans are intended to support the export of ships built by Japanese shipbuilders which perform a significant role in the regional economy and associated industries, including mid-tier enterprises and small and medium-sized enterprises (SMEs). Thus, these loans will contribute to maintaining and strengthening the international competitiveness of the Japanese shipbuilding industry.” Buyer’s credit agreements: JBIC provides direct loans named buyer’s credit to overseas importers. Loans are obtained if it finances the purchase of Japanese machinery, equipment or technology in specific eligible sectors. The Bank hereto stated that these loans are intended to “positively contribute to Japanese companies”. Further information can be found on the Bank’s website under export loans.e to Japanese companies”. Further information can be found on the Bank’s website under export loans. The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets and from foreign subsidiaries

–apan: JBIC announces a USD 180 million loan agreement with …

https://www.sumitomocorp.com/en/jp/about/company/scgroup/region/region01    =  MAYOR SUBSIDIARIES AND ASSOCIATED COMPANIES.

wolrdlii.org   : cartels by sumitomo and/or their subsidiaries or undertakings :

1. SUMITOMO/ITOCHU/TOYO/AK&N (Merger) – COMP/M4769 [2007] ECComm 209 (20 August 2007)
   (From Commission of the European Communities; 
2. Sumitomo Metal Industries v Commission (Competition) [2006] EUECJ C-405/04 (12 September 2006)
   (From Court of Justice of the European Communities (including Court of First Instance Decisions); 127 KB)   
3. Sumitomo Metal Industries v Commission (Competition) [2006] EUECJ C-403/04 (12 September 2006)
   (From Court of Justice of the European Communities (including Court of First Instance Decisions); 127 KB)   
4. Sumitomo Electric Industries and J-Power Systems v Commission (Competition – European market for power cables – Judgment) [2018] EUECJ T-450/14 (12 July 2018)
   (From Court of Justice of the European Communities (including Court of First Instance Decisions); 94 KB)   

marketresearch.com: sumitomo : Sumitomo Corp other Key Recent Developments :
Oct 15,2024: Sumitomo Corporation Group Establishes Joint Venture to Develop Renewable Energy Projects in Virginia, United States
Sep 24,2024: Asyad Group, OQ Alternative Energy, and Sumitomo Corporation ME Chart Ambitious Course to Establish Oman as a Global Low-Carbon Fuel Bunkering Hub
Sep 13,2024: Sumitomo Corporation Establishes Renewable Energy Development and Supply Company in India
Sep 13,2024: Sumitomo Corporation Establishes Renewable Energy Development and Supply Company in India

Company To Pay $150 Million And To Cease And Desist From Further Violations: The Commodity Futures Trading Commission (CFTC) today announced that it was issuing an order, in connection with settling the matter by consent, finding that Sumitomo Corporation of Japan (Sumitomo) manipulated the copper market in 1995 and 1996.

-The court did allow a claim of unfair competition under California law to proceed, and it allowed similar claims under Florida and Hawaii law, to the extent the claims are not premised upon fraudulent conduct.

-https://curia.europa.eu/juris/recherche.jsf?language=en#    >>

CURIA: EEW ENERGY FROM : In Case C‑580/21:   EEW Energy from Waste Großräschen GmbH v  MNG Mitteldeutsche Netzgesellschaft Strom GmbH.    eew engery holdings was found to restrict entry to new potential competitors, on the basis that: priority access to the electricity grid enjoyed by electricity generating installations using renewable energy sources must be granted not only to installations producing electricity exclusively from renewable energy sources, but also to those producing from both renewable and conventional energy sources.  Article 16(2)(c) of Directive 2009/28 : must be interpreted as meaning that an installation which produces electricity from both renewable and conventional energy sources enjoys priority access to the grid solely in respect of the proportion of electricity produced from renewable energy sources. It is for the Member States to establish the detailed rules for applying that priority access, by setting transparent and non-discriminatory criteria which, whilst taking into account requirements relating to the maintenance of reliability and safety

-Sumitomo Corporation Group Establishes Joint Venture to Develop Renewable Energy Projects in Virginia; Expanding Over 1.5 GW of Solar Power Projects in a Key IT Infrastructure Hub and Data Center Cluster

Sumitomo Corp is an integrated trading company. It operates through six business segments: Metal Products, which includes various metal products, such as steel products and non-ferrous metal products; Transportation & Construction Systems, which is engaged in transactions involving ships, aircrafts, transportation systems, motor vehicles, construction equipment, and related components and parts; Infrastructure, which is engaged in a range of overseas infrastructure development projects, such as power generation, renewable energy business and others; Media and Digital, which is engaged in cable television (TV) operations and movie business, among others; Life and Real Estate, which includes food supermarkets, healthcare-related businesses, facility and fund management, real estate business and others, and Mineral Resources and Chemical, which is engaged in the development and trading of mineral and energy resources and commodity derivative transactions.

EUROSTAT >> WINDPOWER:

https://ec.europa.eu/eurostat/web/main/search/-/search/estatsearchportlet_WAR_estatsearchportlet_INSTANCE_bHVzuvn1SZ8J?p_auth=9qqSgHKn&_estatsearchportlet_WAR_estatsearchportlet_INSTANCE_bHVzuvn1SZ8J_text=Wind+powered+electricity+generating+capacity+increased+by+over+150%25+in+the+EU25+since+2000

ec:   Candidate case for simplified procedure (Text with EEA relevance) (C/2024/7267)3.12.20241. On 26 November 2024, the Commission received notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (1).This notification concerns the following undertakings:— Sumitomo Corporation (‘Sumitomo’, Japan),— DiScho Vermögensverwaltung GmbH & Co. KG, previously EEW Holding GmbH & Co. KG (‘EEW Holding’, Germany). EEW Holding currently wholly-owns EEW Offshore Wind EU Holding, which holds the shares of (i) EEW Special Pipe Constructions GmbH (‘SPC’), (ii) AWS Schäfer Technologie GmbH (‘AWS’), (iii) EEW Management Services GmbH (‘MS’), and (iv) EEW Offshore Wind Holding Komplementär GmbH (‘EEW Komplementär’). EEW Offshore Wind EU Holding together with SPC, AWS, MS, and EEW Komplementär are referred to as the ‘Target’.Sumitomo and EEW Holding will acquire within the meaning of Article 3(1)(b) and 3(4) of the Merger Regulation joint control of the whole of the Target. The concentration is accomplished by way of purchase of shares.2. The business activities of the undertakings concerned are the following:— Sumitomo is a global trading and investment company. It is active in trading and investment in a range of business activities in Japan and around the world, including steel, automotive, transportation and construction of systems, diverse urban development, media and digital, lifestyle, mineral resources, chemical solutions and energy transformation,— EEW Holding is a German asset managing partnership. It is active, through the Target, in the production of both monopiles used in wind farms and machinery to produce and/or process pipes (including monopiles).3. On preliminary examination, the Commission finds that the notified transaction could fall within the scope of the Merger Regulation. However, the final decision on this point is reserved.Pursuant to the Commission Notice on a simplified treatment for certain concentrations under Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (2) it should be noted that this case is a candidate for treatment under the procedure set out in the Notice.4. The Commission invites interested third parties to submit their possible observations on the proposed operation to the Commission.Observations must reach the Commission not later than 10 days following the date of this publication. The following reference should always be specified:M.11717 – SUMITOMO / EEW HOLDING / EEW OFFSHORE WIND EU HOLDING

YAHOO.FIN.search    >>   YAHOO.FIN: SUMITOMO/EEW  >>  August 20, 2024 :  In This Article: SSUMY :

Japan’s Sumitomo Corporation has acquired an equity stake in EEW Offshore Wind Holding to enhance its monopile manufacturing capabilities. This strategic partnership brings together Sumitomo’s extensive expertise in the international steel market with EEW’s specialised focus on offshore wind energy infrastructure. Sumitomo Corporation steel products SBU [secondary building units] general manager Takuro Horikoshi stated: “We are excited to partner with EEW, enhancing our role in the offshore wind market.  “This investment aligns with our commitment to contributing to green transformation and global shift to renewable energy.”   EEW Offshore Wind Holding, a German family-run business, has been restructured into three new holding companies to better organise its group activities according to business segments.   The monopile production at Rostock (EEW SPC) and the associated mechanical engineering activities at AWS Schäfer in Siegen, Germany, are now under the umbrella of EEW Offshore Wind Holding.   The newly established EEW Management Services will absorb the services previously offered by EEW Holding, aligning with the new divisional structure.   The additional two holding companies, EEW Pipe Solutions Holding and EEW AOS Holding, will manage the group’s other business areas and locations.   Despite the changes, the existing management team of the group will continue to lead the operations.   EEW Holding is set to transition into a purely asset-managing entity, renaming itself to DiScho Vermögensverwaltung, and will cease to provide services or act as a parent company.   The partnership with Sumitomo, which employs 80,000 people across 65 countries, signifies a confident step towards addressing future challenges in the offshore wind sector.  EEW assured its customers that the quality of large-scale monopile projects will remain consistent and reliable.   Sumitomo’s investment in EEW Group is a result of a long-standing business relationship, and the completion of this transaction is pending approval from relevant EU authorities.   EEW Group managing partner Christoph Schorge stated: “In order to continue to secure our position as global market leader, to continue to enable healthy growth and to be able to draw on sufficient resources to successfully handle large-scale projects, we, the owner families of Schorge and Dietze, have decided to bring a trusted strategic partner on board for this division.”

SP.RATINGS.ACTIONS.search     disclosure.sp.global :

• In our view, Germany-based EEW Energy from Waste GmbH’s (EEW)’s credit metrics will remain subpar for a ‘BBB’ rating, as we now anticipate adjusted debt to EBITDA at 3.0x-3.8x over the next three years, compared with around 2.3x previously.
• The company has materially increased its investment plan into growth- and decarbonization projects and is expected to spend about €300 million in 2024 and €200 million in 2025 in capex, which is significantly above last year’s expectation.
• In addition, we now forecast an EBITDA margin of around 31%-33% in 2024, which is slightly below the historical average of around 34%.
• Since earnings will not be sufficiently high to fund EEW’s investment plan, we now expect a more rapid debt increase than previously assumed. We now expect EEW’s S&P Global Ratings-adjusted debt to increase to about €900 million by year-end 2025, compared with €686 million in 2023 as a higher share of capital expenditure (capex) will need to be debt funded.
• We therefore lowered to ‘BBB-‘ from ‘BBB’ our long-term issuer credit rating on EEW.
• The stable outlook reflects our view of the company’s strong market position within the energy from waste (EfW) market as well as its continued benefit from the medium-term contract structure with its customers, and that we expect debt to EBITDA in the 3x-4x range.

FRANKFURT (S&P Global Ratings) July 11, 2024–S&P Global Ratings today took the rating actions listed above. Weak financial measures led us to downgrade EEW by one notch to ‘BBB-‘ and revise downward its financial risk profile assessment to significant from intermediate.

We expect EEW’s earnings to be insufficient to funds its expanding investment plan into growth projects, further adding pressure on its financial metrics.

We expect the company’s waste reception volumes to remain stable over the forecast horizon, as they are covered by long- and medium-term contracts with municipalities as well as commercial and industrial (C&I) clients

We recognize the support provided by BEHL but continue to assess EEW as non-strategic to its parent

geow.tracker  = Global Energy Ownership Tracker

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SUMITOMO.search: ACQUISITIONS

sumitomo.search:EWS HOLDINGS

OPEN.SANCTIONS (OS):

united.v.nuclear.iran  :

Norges Bank Investment Management observation and exclusion of companies

-NORGES.BANK.website>> ethical.exclusions :Norges Bank decides on the exclusion of companies from the fund’s investment universe, or to place companies on an observation list. Exclusions as of 1 January 2015 are the decision of Norges Bank’s Executive Board. Exclusions previous to this date are decisions made by the Ministry of Finance. The decisions are based on recommendations from the Council on Ethics appointed by the Ministry of Finance. For the product-based coal criterion, decisions are based on recommendations from Norges Bank Investment Management. Exclusions are regulated by the Guidelines for the observation and exclusion of companies from the Government Pension Fund Global, adopted by the Ministry of Finance on 18 December 2014. The following alphabetical overview shows companies that are currently excluded or under observation. Latest update: 3 December 2024