DECISION: MERGER OF DAIMLER TRUCKS AG. AND AKTIEBOLAGET VOLVO FOR ESTABLISHMENT OF GREENFIELD JOINT VENTURE EVO TRUCK SDV AB

Published On - June 6, 2025

Registry ERCA Compendium of Decisions

DECISION EC/D.04/05/25 OF THE COUNCIL OF THE REGIONAL COMPETITION AUTHORITY OF ECOWAS REGARDING THE MERGER OF DAIMLER TRUCKS AG. AND AKTIEBOLAGET VOLVO (publ) FOR ESTABLISHMENT OF GREENFIELD JOINT VENTURE EVO TRUCK SDV AB (JVCo)

The Council of the Regional Competition Authority of ECOWAS,

MINDFUL of Supplementary Act A/SA.1/12/08 adopting of Community Competition Rules and the modalities of their application within ECOWAS;

MINDFUL of Supplementary Act A/SA.2/12/08 on the establishment, functions and operation of the ECOWAS Regional Competition Authority (ERCA);

MINDFUL of Supplementary Act A/SA.3/12/21 amending Supplementary Act A/SA.2/12/08 on the establishment, powers and functioning of ERCA;

MINDFUL of Regulation C/REG.21/12/21 on the powers and composition of the Council of ERCA;

MINDFUL of Regulation C/REG.23/12/21 on the rules of procedure for mergers and acquisitions in ECOWAS;

MINDFUL of Regulation C/REG.24/12/21 on the ERCA’s rules of procedure in competition matters;

MINDFUL of Enabling Rule PC/REX.1/01/24 on the Procedural Manuals of ERCA relating to its Council, in its Article 12 (3.d);

MINDFUL of the notification letter from Daimler Truck AG and Volvo Group dated 24 December 2024 and the supporting documents registered under number 906;

HAVING HEARD the Secretary of the Council during its session of 26 May 2025 on the facts, the procedures and the findings of the proposed merger;

CONSIDERING THE FOLLOWING:

I. FACTS AND PROCEDURE

I.1 The notification

  1. By letter dated 24 December 2024 and supporting documents registered under number 906, ERCA was notified by Daimler Truck AG and Volvo Group of their intended merger for the establishment of a greenfield Joint Venture EVO TRUCK SDV AB.
  2. In accordance with Article 2 (1.d) of Regulation C/REG.23/12/21 and subsequent texts, the notification of the acquisition was published in the Official Journal of the Community (Volume 1, February 2025), on the websites of the ERCA and the ECOWAS Commission, and in the relevant Member States (5 March 2025).

I.2 The Merger Operation

  1. Daimler Truck AG (Germany) and Volvo Group (Sweden), two global automotive manufacturers specialising in commercial vehicles and related equipment, have agreed to form a joint venture named EVO Truck SDV AB. The primary objective of the venture is to develop and commercialise a Software Defined Vehicle (SDV) platform that will enhance connectivity, automation, and personalisation in commercial vehicles. This platform is expected to launch in 2026.
  2. Although neither company currently has a physical presence in the ECOWAS region, both operate extensively through agents and distributors under various trade names. Their combined estimated market share in this region is derived, primarily from sales of heavy-duty trucks, spare parts, and related services.
  3. Daimler Truck AG, formed in 2021 after its separation from Mercedes-Benz Group, offers brands such as Freightliner, FUSO, and Mercedes-Benz, along with digital and financial services. Volvo Group, with operations in all the ECOWAS countries, owns brands like Renault Trucks, Volvo Penta, and SDLG, and is actively engaged in several global joint ventures.

II. ANALYSIS OF THE OPERATION’S MARKET IMPACT

II.1 Market Structure Overview

  1. The Software-Defined Vehicle (SDV) market, especially for commercial trucks, is technology-driven and distinct from traditional vehicle hardware markets. It emphasizes continuous R&D to meet evolving customer needs, particularly through automation and connectivity. High development costs and the need for advanced software capabilities create significant entry barriers, resulting in limited competition.

II.2. Regional Production Insights

  1. Although the proposed joint venture, EVO Truck SDV AB, is not yet active in the ECOWAS region, parent companies Daimler and Volvo have a presence. Daimler’s truck sales reached 526,053 in 2023, while Volvo delivered 246,272 trucks—a 6% increase year-over-year. However, neither company operates production facilities within ECOWAS.

II.3. Market Share Estimates

  1. Currently, Daimler and Volvo together hold a relatively small market share in the ECOWAS region across various product categories, including trucks and services. Since the joint venture is not yet operational, it holds no current market share in SDV platforms.

II.4. Key Competitors

  1. The SDV platform market includes established OEMs and tech companies, mainly in the passenger vehicle segment. Key players include:
  • OEMs: TRATON, PACCAR, IVECO, Tesla, Dongfeng, Tata Motors, etc.
  • Tech Companies: Google (Android Automotive), Apple, Bosch, Mobileye, Aptiv. These competitors are active in both upstream (ADAS software) and downstream (vehicle production) markets, though many are not focused on commercial trucks.

II.5. Industry Regulation

  1. The automotive sector is governed by global standards addressing environmental, safety, and operational aspects. Regulations are evolving to support the transition from fossil fuels to electric and software-defined vehicles. Key regulatory areas include emissions, safety, export controls, and compliance with local laws.

II.6 Definition of the Relevant Market

a. Product Market Definition

11. The relevant product market includes SDV platforms for commercial trucks, encompassing R&D, production, and distribution of embedded operating systems and ADAS technologies. Consumer preferences are shifting toward software-based solutions, enabling advanced customisation and automation features. This high-tech market is defined by:

  • Vision and perception software for ADAS
  • SDV platform components
  • Automotive ECUs
  • Light to heavy trucks
  • Urban and intercity buses
b. Geographic Market Definition

12. While the Joint-Venture targets a global market, its products will also be distributed within ECOWAS through Daimler and Volvo’s existing channels. The region is considered homogenous enough for a unified market approach, though local distribution networks will adapt to specific country conditions.

III. CONCLUSION

III.1 Legal Analysis

a. Applicable Legal Framework

13. The legal framework for the control of business mergers and acquisitions within ECOWAS is based on two fundamental texts:

  • Supplementary Act A/SA.1/12/08 of 19 December 2008, on Community Competition Rules;
  • Regulation C/REG.23/12/21 of 10 December 2021, on mergers and acquisitions within ECOWAS.
  1. Moreover, the evaluation follows the modalities set out in implementing instruments, particularly the Implementing Regulation PC/REX.1/01/24 and the Guidelines on mergers and acquisitions.
  2. According to the above provisions, ERCA is competent to examine any merger or acquisition that:
  • is likely to have anti-competitive effects in one or more Member States;
  • may affect trade or investment between ECOWAS Member States;
  • involves companies operating in more than one country within the common market.
  1. These provisions aim to prevent any merger or acquisition from hindering, restricting or distorting competition within the common market, or harming intra-community trade and consumer welfare.
b. Admissibility of the Notification

17. The parties’ notification of the acquisition was reviewed in accordance with established legal criteria. The following conditions were met:

  • The companies involved (Daimler Truck AG and Volvo Group) operate in at least two ECOWAS Member States;
  • Their combined turnover within the common market exceeds 20 million Units of Account (UA).
  1. These conditions being met, ERCA is justified in reviewing the transaction.

III.2 Market Competition Status

  1. Nature of the Market and Transaction:
  • The transaction is a Joint Venture (JV), which is a horizontal merger, aimed at pooling resources for SDV platform development.
  • It does not create immediate anti-competitive effects, as the parent companies are not direct competitors in the SDV platform segment for commercial vehicles.
  1. Market Structure and Dynamics:
  • The SDV sector is nascent and growing, with moderate concentration in upstream (software, hardware) and downstream (vehicle manufacturing) segments.
  • The market remains open and diverse, populated by various players including OEMs, Tier 1 suppliers, and tech firms.
  • The JV will focus on commercial trucks, while many competitors are centered on passenger vehicles.
  1. From Competition Perspectives:
  • No significant risk of market foreclosure was identified.
  • The JV will occupy a niche market, reducing the likelihood of displacing existing players.
  • Survey results indicate that the general consensus is pro-competitive, citing benefits in pricing, quality, and innovation.
  1. Consumer Feedback:
  • Positive expectations dominate even though concerns exist
  1. Risk Factors Identified
  • Long-term risk of dominance if the JV gains disproportionate influence.
  • Increased market concentration could lead to lock-in effects.
  • Dependency on JV technologies may grow if innovation centralizes excessively.
  1. Mitigating Measures:
  • Information firewalls between Daimler and Volvo to prevent collusion.
  • The JV’s scope excludes differentiating layers (e.g., user interfaces), reducing horizontal overlaps.
  • Ongoing regulatory oversight recommended to monitor future developments.
  1. Conclusion:
  • The JV is entering a young, competitive, and unconcentrated market.
  • No immediate threat to competition is identified.
  • Benefits to consumers and the industry are expected, particularly through innovation and efficiency.
  • Approval is recommended without conditions, although continued monitoring is advised to prevent potential long-term anti-competitive risks.
  1. THEREFORE, the Council endorses the evaluation by ERCA Executive Directorate, which demonstrates that the transaction is not likely to hinder competition or adversely affect consumer welfare in the relevant product or geographic markets, and

 DECIDES

Article 1 – Approval

The Merger of Daimler Truck AG and Volvo Group to establish a Greenfield Joint Venture, EVO TRUCK SDV AB is approved unconditionally.

Article 2 – Integration into Regional Market Dynamics

EVO TRUCK SDV AB must align with market dynamics and adapt its offerings to meet the specific needs of consumers in ECOWAS Member States.

Article 3 – Post-Transaction Monitoring

The Executive Directorate of ERCA is tasked with post-transaction monitoring to ensure that EVO TRUCK SDV AB commercial strategy remains in line with the principles of free competition within the region.

Article 4 – Entry into Force, Notification and Publication

This Decision enters into force on the date of its signature. It shall be notified to the parties and published in the Official Journal of the Community.

 

Done in Abidjan, this day of 26 May 2025.

FOR THE ERCA COUNCIL

 

 Dr. Juliette TWUMASI-ANOKYE

THE CHAIRPERSON