The Bundeskartellamt has cleared the acquisition of ammunition specialist Ammotec by Beretta this week. Ammotec is a business division of the Swiss-based company RUAG International Holding AG. The acquirer Beretta Holding S.A. is an Italian manufacturer of firearms for a number of civilian, law enforcement and military purposes and also produces accessories and, to a lesser extent, ammunition.

Andreas Mundt, President of the Bundeskartellamt: “The acquisition of the ammunition specialist Ammotec by Beretta results in minor market share additions only in the area of ammunition for civilian purposes. Unlike Beretta, Ammotec does not manufacture firearms itself. A key aspect of our examination was Ammotec’s position as a major supplier of non-toxic ammunition for military and official purposes, which is in high demand by the German armed forces Bundeswehr. Manufacturers cooperate with ammunition specialists like Ammotec to test and develop their weapons. We have no reason to believe that access to non-toxic ammunition or its components could be restricted for competitors as a result of the merger.”

Germany, or rather the Bundeswehr, plays a special role in the use of non-toxic ammunition since it is a requirement in tender procedures due to environmental protection and occupational safety considerations. The Bundeskartellamt’s investigations focused on the question whether Ammotec might have incentives to restrict or end its cooperation with competing arms manufacturers in the future after the takeover by Beretta. The authority also examined whether there would still be incentives for Ammotec to supply specific components for non-toxic ammunition (so-called primer caps) to ammunition providers in the future.

Based on the investigations, there is nothing to suggest that the merger is likely to have a foreclosing effect on ammunition providers or arms manufacturers competing with Ammotec. Although Ammotec is currently the only provider of primer caps for non-toxic ammunition, the company would deprive itself of important sales opportunities if it restricted its supply. In addition, other providers may enter the market in the medium term. With regard to Germany, the merged entity does not directly benefit from supplying arms and ammunition from a single source. The Bundeswehr has so far procured these two product categories separately and has made sure that alternative providers are selected. Beretta itself has not yet worked as a contractor for the Bundeswehr.

The Bundeskartellamt cleared the merger plans within the one-month deadline of first-phase merger control.