COMMISSION DECISION of 31/08/1998 declaring a concentration to be compatible with the common market (Case No IV/M.1289 - HARBERT MANAGEMENT/DB/BANKERS TRUST/SPP/ÖHMAN) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

Brussels, 31.08.98

Dear Sirs,

Subject : Case No IV/M.1289 - HARBERT MANAGEMENT/DB/BANKERS TRUST/SPP/ÖHMAN

1. On 5/08/98, the Commission received a notification of a proposed concentration by which the undertakings Harbert Managament (HM), Deutsche Bank (DB), Pyramid, Försäkringsbolaget SPP (SPP) and Öhman Junior AB (Öhman) acquire joint control of the undertakings Telaris and Telaris Subsidiaries, currently owned by Telia.

2. After examination of the notification, the Commission has concluded that the notified operation falls within the scope of Council Regulation (EEC) No 4064/89 and does not raise serious doubts as to its compatibility with the common market and with the functioning of the EEA Agreement.

I THE PARTIES

3. HM is a special investment vehicle formed for the purpose of the notified operation. It is owned by MarRay Corporation, an asset holding company. Pyramid is a special investment vehicle formed for the purpose of the notified operation. It is owned by Bankers Trust Company (BT), a US investment. DB is a full service bank with substantial activities in a number of banking sectors. SPP is a large life and pension insurance company active in the Nordic countries. Öhman is a special investment vehicle formed for the purpose of the notified operation. It is owned by Öhman J:or Fonkommission AB, a Swedish securities institution. The target companies Telaris and its subsidiaries, operate in the real estate business and are currently owned by the Swedish company Telia.

II THE OPERATION

4. Under the transaction HM, DB, Pyramid, SPP and Öhman acquire joint control of the undertakings Telaris and Telaris Subsidiaries, by way of purchase of shares in a newly created company constituting a joint venture. While the parent companies will hold in the joint venture substantially different shares (HM [15-25%], DB [20-30%], Pyramid [20-30%], SPP [20-30%], and Öhman [5-10%]), each of the parties will acquire joint control by way of veto rights going beyond those normally accorded to minority shareholders as means of investment protection. In particular, a number of strategic business decisions concerning the joint venture require an unanimous vote by the parties, such as, inter alia, the approval of the business plan, some substantial investments and any form of business combination (acquisitions or transfers).

III CONCENTRATION

5. The newly created company resulting from the operation will take over the target companies Telaris and Telaris subsidiaries, which are existing companies active on the market as fully autonomous economic entities. Accordingly, the operation will result in the constitution of a full-function joint venture. It then constitutes a concentration within the meaning of article 3(1)b of the Merger Regulation.

IV COMMUNITY DIMENSION

6. The undertakings concerned have a combined aggregate world-wide turnover in excess of ECU 5,000 million [ ]. Each of at least two undertakings concerned has a Community-wide turnover in excess of ECU 250 million [ ], but they do not achieve more than two-thirds of their aggregate Community-wide turnover within one and the same Member State. Therefore, the notified operation has a Community dimension. It does not constitute a co-operation case under the EEA Agreement.

V THE RELEVANT MARKET

The relevant product market

7. The operation involves the Swedish sector for real estate. In this respect, the acquired companies own, manage, acquire, sell and lease real estate properties. With respect to the product market definition, such a market may be divided into two segments, notably properties for commercial use and properties for residential use. However, the exact definition of the product markets may be left open since, even on the narrowest possible option, the operation will not have any appreciable competitive impact.

The relevant geographic market

8. With respect to the geographic scope of the market, this can also be segmented into local geographic areas (such as municipalities), in particular by taking into account the demand side of the market. However, this question can be left open since, even taking the narrowest possible option, the operation will have, in any event, an insignificant impact.

VI ASSESSMENT

9. The total size of the Swedish real estate market is approximately 420.000.000 square metres, of which 155.000.000 are for residential use and approximately 265.000.000 square metres are for commercial use. The total lettable area of the target companies' properties is approximately [1.000.000-2.000.000], of which only [10.000-20.000] square metres are for residential use, the rest being for commercial use. However, even in the latter market, the target companies' market share at national level is absolutely negligible [0.5-1.5%]. With respect to the position on the markets affected by the transaction of the acquiring parties, only SPP and Öhman operate in these markets, but with an insignificant presence as well. In particular, in both markets for residential use and commercial use SPP appear to hold a market share of approximately [0.5-1.5%] at national level. In these two markets Öhman has even more insignificant market shares. Similarly, if the markets are defined as local in scope, even the combined market shares of the joint venture and its parent companies SPP and Öhman will remain extremely small, never exceeding 5% on any market. As a consequence, no competitive concerns arise from the notified operation.

10. In the light of the above described scenario, notwithstanding the fact that two of the acquiring parent companies are active on the same market as the joint venture, any appreciable cooperative aspect resulting from the transaction is also to be excluded.

VIII CONCLUSION

11. For the above reasons, the Commission decides not to oppose the notified operation and to declare it compatible with the common market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of Council Regulation (EEC) No 4064/89.

For the Commission,