Cargotec and Konecranes have dropped their merger plans after the UK Competition and Markets Authority (CMA) rejected the deal.

Both the Finnish firms deliver a wide variety of container handling equipment and services to port terminals and other industrial customers across the world.

In October 2020, Cargotec agreed to combine operations with Konecranes in a $5bn deal.

Last year in November, the UK watchdog raised competition concerns over the merger.

After the Phase Two probe, the CMA concluded that the merger was expected to decrease competition in the supply of several container handling equipment products.

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Its investigation also found that both companies compete closely in the UK, which would result in few alternative suppliers for customers following the merger.

The deal was also said to result in an illegal consolidation in the manufacture and supply of four types of container handling equipment, including straddle carriers, rubber-tired gantry cranes, automated stacking cranes and rail-mounted gantry cranes.

The UK’s competition regulator also turned down the remedy packages offered by both companies due to the lack of important capabilities.

CMA inquiry group chair Martin Coleman said: “These are global businesses that make significant sales to UK customers, which is why it is critical for us to ensure that competition in the UK is protected.

“Container handling equipment is key to the smooth running of UK ports, and events in recent years have shown us how quickly problems in the supply chain can cause problems for UK consumers and businesses.”

Last month, the European Commission approved the merger under certain conditions.