The European Commission cleared on June 20th the proposed merger between Kenwood Corporation of Japan and Victor Company of Japan (“JVC”), both providers of electronics equipment. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

On May 12th, Kenwood Corporation and Victor Company of Japan, Ltd. agreed to merge their respective activities into a newly established joint holding company, which will be listed on the Tokyo stock exchange. Prior notification was received by the Commission on July 14th, and therefore published in the OJEU.

The Parties have decided to enter in this transaction in order to increase their sales and competitiveness in the dynamic and fiercely competitive consumer electronics industry. The transaction will enhance both companies ability to produce lower cost and higher quality products by generating significant cost saving and combining their complementary technologies and capabilities.

The general activities of the companies involved in the transaction are:

• Kenwood Corporation (Public, PINK:KNWCF) is a global provider of electronics equipment. Its business focuses on three product categories: car electronics, home electronics, and communication equipment (including handheld and mobile radios, transceivers, repeaters and base stations).
• JVC – Victor Company of Japan (Public, TYO:6792) is active world-wide in the research, development, manufacturing and sales of electronic products and accessories for private and professional use. JVC's business includes audio, visual, computer-related electronics and software, and media products.

The Commission’s examination of the proposed transaction showed that the horizontal overlaps between the activities of Kenwood and JVC are limited in most markets, that the new entity would continue to face several significant competitors in the markets for car electronics, home electronics and mobile electronics and that customers would continue to have access to a sufficient number of alternative suppliers.

The Commission has therefore concluded that the creation of the new entity would not give rise to any competition concerns in the markets concerned.