Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229- 91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu.  EUROPEAN COMMISSION  
Brussels, 27.9.2018 
C(2018) 6397 final 
PUBLIC VERSION 
 
To the notifying parties  
Subject : Case M. 8858 – Boeing/Safran/JV (Auxiliary power units) 
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004
1 and Article 57 of the Agreement on the 
European Economic Area2 
Dear Sir or Madam,  
(1) On 23 August 2018, the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which The Boeing Company (“ Boeing ”, United States ) and Safran S.A. (“ Safran”, 
France) acquire within the meaning of Article 3(1)(b) and 3(4) of the Merger 
Regulation joint control of newly created joint -venture JV LLC ( the ”APU 
JV”)
3 (“the Transaction”) . (Boeing and Safran are designated  hereinafter as ” the 
Parties ”.)  
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation '). With effect from 1 December 2009, the Treaty 
on the Functioning of the European Union ( 'TFEU ') has introduced certain changes, such as the 
replacement of  'Community ' by 'Union' and 'common market ' by 'internal market '. The terminology 
of the TFEU will be used throughout this  decision.  
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  
3  Publication in the Official Journal of the European Union No C 303,  29.8.2018, p. 22. 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 
concerning non -disclosure of business 
secrets and other  confidential 
information. The omissions are shown 
thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
2 (2) The Transaction  was initially notified to the Commission on 5 June 2018 under 
the simplified procedure and subsequently withdrawn on 26 June 2018. The 
Transaction was re -notified  on 23 August 2018 under the normal procedure.  
1. THE PARTIES  
(3) Boeing designs, manufactures and sells commercial jetliners and defence, space 
and security systems. Boeing also provides aftermarket services for the 
aerospace market. Its products and services include commercial and military 
aircraft, satellites, electronic and defence systems, launch s ystems, advanced 
information and communication systems.  
(4) Safran designs, manufactures and sells aerospace systems, aircraft and defence 
equipment. Its products include aircraft and space engines, electrical and wiring 
systems, landing systems and on- board s ystems for commercial, regional and 
business aircraft. Safran also provides aftermarket services for its equipment.  
2. THE OPERATION  
(5) Pursuant to a Form Contribution Agreement and a Limited Liability 
Company  (LLC) Agreement signed on [date] , Boeing and Safran will establish a 
new company, the APU JV, under the laws of the State of Delaware, United 
States. Boeing and Safran will each contribute [initial investment amount]  and 
grant non- exclusive licences of certain intellectual property to the APU JV.  
(6) The APU J V will design, develop, manufacture and sell auxiliary power units 
(“APUs ”) and their components as original equipment. [Intended JV scope] . The 
APU JV will also provide maintenance, repair and overhaul ( “MRO ”) services 
and spare parts in respect to its AP Us.  
(7) Each of Boeing and Safran will indirectly hold 50% of the securities in the 
APU JV and will have equal board representation and governance rights. The 
APU JV’s business plan which will serve as both a budget and a business plan 
requires unanimous appr oval of the Board. The  Parties  will thus jointly control 
the APU JV pursuant to Article 3(1)(b) of the Merger Regulation.  
3. FULL FUNCTIONALITY OF  THE JOINT VENTURE  
(8) [Description of the timeline of the market entry of the JV and of the platforms 
targeted] . 
(9) The parties will create a full- function joint venture within the meaning of 
Article  3(4) of the Merger Regulation.  
a. As regards the APU JV’s resources to operate independently on the market, 
the APU JV will have its own financial resources, management and staf f, 
intellectual property rights, manufacturing plants and office premises.  
b. As regards the scope of the APU JV’s activities, the APU JV will itself 
engage in product  development, manufacturing, and marketing of APUs and 
sell them on the market.  
 
3 c. As regards sales and purchase relations with the Parties, [intentions 
regarding sourcing of subcomponents] . Over the initial ten years of the 
APU JV following the supply of the first APU to Boeing, the APU JV’s 
sales to third parties are expected to constitute […] % of all revenues (with 
sales of APUs to Boeing and spare part sales to Boeing's subsidiar y Aviall 
accounting for […] % and […]% of the revenues respectively). Ove r the 
projected life of the APU  JV, its sales of MRO services and spare parts to 
third parties ar e projected to make up for […] % of all revenues (with sales 
to Boeing and Aviall accounting for […] % each).  
d. Finally, pursuant to the LLC agreement the JV is established for an 
indefinite period of time and the projected life of the JV goes up to 2060. The JV is, therefore, intended to operate on a lasting basis. 
4. EU
 DIMENSION  
(10) The undertakings concerned have a combined aggregate world- wide turnover of 
more than EUR 5 000 million4 (Boeing EUR  82 670 million , Safran EUR 21 
648 million) . Each of them has an EU-wide turnover in excess of EUR 250 
million  (Boeing […] , Safran […] ), but they do not achieve more than two-thirds 
of their aggregate EU -wide turnover within one and the same Member State. 
The notified operation therefore has an EU dimension  pursuant to Article 1(2) of 
the Merger Regulation . 
5. MARKET DEFINITION  
(11) The Transaction concerns the manufacture of aircraft and of APUs used on such 
aircraft as well as the provision of MRO services  and the supply of spare parts 
for APUs .  
5.1. Manufacture of aircraft  
5.1.1. Produc t market  
(12) Boeing is active in the manufacture of different types of aircraft. Commission precedents have generally differentiated the following main categories of aircraft: commercial aircraft (which include large commercial aircraft, regional aircraft, and  business/corporate jets), military aircraft, helicopters and general 
aviation aircraft.
5 
(13) Within commercial aircraft the precedents differentiated three segments:6 
a. Large commercial aircraft (i.e., aircraft with more than 100 seats, a range of greater t han 2000 nautical miles and a cost in excess of USD 35 million). A 
distinction can be drawn between: 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation .  
5  Case M.1601, Allied Signal /Honeywell , paragraph 11.  
6  Case IV/M.877, Boeing/ McDonnell Douglas , paragraphs 15 and 16; Case M.1601, Allied 
Signal/ Honeywell , paragraph 13; Case M.2220, General Electric /Honeywell , paragraph 10.  
 
4 i. narrow -body (or single -aisle) aircraft, which have approx. 100-200 
seats and travel medium distances (2000 -4000 nautical miles); and  
ii. wide -body (or twin -aisle) aircraft, which typically carry 200 -850 
passengers and can travel longer routes (4000 - 8000+ nautical miles).  
b. Regional aircraft (i.e., aircraft with approx. 30- 90 seats, a range of less 
than 2,000 nautical miles and a cost of up to USD 30 million); 
c. Business/Corporate jets (i.e., aircraft designed for corporate activities and 
with a cost generally in the region of USD 3 - 70 million).  
(14) Following those precedents, additional aircraft were introduced to the market 
that fall into the 90 -120 seats range that  may potentially blur the previous 
distinction between narrow -body large commercial aircraft and regional 
aircraft7, such as the Embraer E190 or the Airbus A220-100 and A220-300 
(formerly Bombardier CS100  and CS300). The Commission has therefore 
consider ed in this case a further split of the potential product market for narrow -
body aircraft into (i) a segment for narrow -body aircraft with 90- 120 seats and 
(ii) a segment for narrow -body aircraft with 120- 200 seats. In any event, t he 
sub-segmentation of the  product market for commercial aircraft can be left open 
in this case as no serious doubts arise under either of the alternative market 
definitions.  
5.1.2. Geographic market 
(15) All markets, with the exception of military aircraft, have been considered to be worldwi de in geographic scope.
8 The market investigation in this case has not 
provided any reasons to deviate from those precedent s. The markets for the 
manufacture of aircraft relevant for this case, that is to say the market s for the 
manufacture of regional a nd large commercial aircraft and their potential sub -
segments, are therefore considered to be worldwide in scope. 
5.2. Manufacture of APUs  
5.2.1. Product market 
(16) An APU is a generator that provides electrical power to the aircraft’s systems and devices while the engines are shut down, mainly when the aircraft is on the ground. During flight, APU generators are not normally operated continuously but can be available in emergency situations in case of engine failure, to provide 
back -up electrical power and help restarting the main engine.
9 
                                                 
7  See also page 65 and Chart 14 of the Industry report 'Commercial Aerospace Primer' by Bank of 
America/Merrill Lynch, 04 May 2016.  
8  Case M.2220, General Electric/Honeywell , paragraphs 10- 34; Case M.1601, Allied 
Signal/Honeywell , paragraph 13; Case IV/M.877, Boeing/McDonnell Douglas , paragraphs 14 -20. 
9  Case M.8425 , Safran/Zodiac , paragraph 33.   
 
5 (17) According to previous Commission cases, APUs constitute their own separate  
market.10 The precedents have however left open whether segmentations 
between  the APU’s shaft power and size or by type of aircraft are required.11 
(18) The market investigation in this case provided indicat ions that there may be a 
degree of supply side substitutability between APUs for various types of 
commercial aircraft  because their functionality is essentially similar while their 
shaft power and size may differ significantly .12 However, according to a market 
participant, the design and size of APU s for large com mercial aircraft are 
different from the design and size of other types of aircraft : "It is not so easy to 
start designing and manufacturing a very different kind of APU, because of the impact on design of power requirements for different size of APUs."
13 Further , 
there appears to be limited  demand -side substitutability between APUs designed 
for different types of aircraft  because of the diverging technical requirements 
and consequently diverging price levels.  
(19) In any event, the question whether the product market for APUs should be sub-segmented by type of aircraft can be left open in this case as no serious doubts arise under any  alternative product market definition.   
5.2.2. Geographic market 
(20) In terms of geographic m arket , the Commission has defined the markets  for 
APUs  as global  as is the case for the other markets for civil aerospace systems 
and components .
14 The market investigation in this case has not provided any 
reasons to deviate from those precedents. The m arket for the manufacture of 
APUs and its potential sub- segments are therefore considered to be worldwide 
in scope. 
5.3. APU MRO and spare parts  
5.3.1. Product market 
(21) The Commis sion’s decisional practice has differentiated  four main categories of 
aviation MRO services  based on the part of the aircraft to be serviced and the 
level of service required: line maintenance, heavy maintenance, engine maintenance and component maintenance: 
a. Line maintenance: l ine maintenance refers to the aircraft maintenance 
checks that are carried out to ensure that the aircraft is fit for flight but that 
do not remove the aircraft from service. Line maintenance is generally 
                                                 
10  Case M.6410 , UTC/Goodrich, paragraph 5 7, Case  M.8425, Safran/Zodiac , paragraph s 40. 
11  Case M.8425, Safran /Zodiac , paragraphs 54 and 129- 134. The further distinction between AC and 
DC technology is not relevant for this case as no competition concerns arise even considering this 
narrower product market definition. The reasoning as regards the overall market for APUs of 
different technologies applies equally for APUs of AC technology and APUs of DC technology 
considered separately. 
12  See replies to question 5 of "Questions to market participants of 5 June 2018 ". 
13  See reply of an airframer to question 4 of the Commission's enquiry of 24 September, 2018.  
14  Case M.6410 , UTC/Goodrich, paragraph 5 7, Case M.8425, Safran/Zodiac , paragraph 298. 
 
6 performed at the different airports on the airline's route and consists of 
transit checks, pre- departure  checks, night stops and the rectification of 
certain technical problems.  
b. Heavy maintenance: heavy maintenance refers to regularly scheduled detailed inspection, maintenance, preventive maintenance and alteration of the entire aircraft and its installed components that will place the aircraft out of service for a pre -determined period of time.   
c. Engine maintenance: e ngine maintenance is carried out either while 
mounted on the aircraft wing (on -wing services) or at an approved 
maintenance facility (off -wing).  
d. Component maintenance: component maintenance comprises inspection, 
test and alteration of specific equipment and components installed on an aircraft, which can be repaired and are of a significant value (component maintenance is hereinafter referred to as “component MRO”) . 
(22) The APU JV will only be active in component MRO , more specifically in 
providing MRO  and spare parts for its APUs .  
(23) Further , the Commission has left open the question whether a separate  market 
exists for spare parts from that of MRO.
15  
(24) Spare parts can be sold by OEMs either as stand -alone products or as part of an 
MRO service. According to the Parties , it is not straightforward to single out the 
provision of APU spare parts from the provision of APU MRO services, as the latter necessarily involve the replacement of faulty pieces as part of the MRO  
services provided to the client, which are invoiced together with the provision of MRO services .
16 
5.3.2. Geographic market 
(25) As regards the geographic market, i n its previous practice, the Commission 
considered that the potential market  for component MRO is worldwide because, 
the location of the facility is of secondary importance and component MRO  
does not need to be performed at airports. The Commission found that most  
component MRO  providers are active globally and both the service providers 
and customers considered that the markets for component MRO  are worldwide 
in scope.17  
(26) As regards spare parts , the C ommission has previously found18 that distribution 
of aerospace components took place on a worldwide level and customers were located worldwide while prices did not differ globally.
19 
                                                 
15  Case M.4241, Boeing/Aviall, paragraph 10, Case M.6410, UTC/Goodrich, paragraphs 182- 191. 
16  Form CO, paragraph 125.  
17  See e.g. case M.6410, UTC/Goodrich, paragraph 198.  
18  See e.g. case M.4241, Boeing/Aviall , paragraph 11.  
19  See e.g. case M.6410, UTC/Goodrich, paragraph 199.  
 
7 (27) The market investigation in this case has not provided any reasons to deviate 
from those precedents. The Commission has therefore analysed the impact of the Transaction on the potential worldwide markets for component MRO for 
APUs and for the supply of spare parts for APUs  while this distinction can be 
left open as the competitive assessment remains the same under any  alternative 
market definition .  
6. C
OMPETITIVE ASSESSMEN T  
(28) The Transaction creates limited horizontal overlaps in (i) the production of APUs where both Safran is and the APU JV will be active and (ii) the provision 
of component MRO services and the sale of spare parts as Safran and Boeing 
are already  active in MRO services for various components  (for Safran 
including on APUs) , as well as in the sale of spare parts,  and the APU JV will 
also provide MRO services and spare parts for APUs.  
(29) Vertically affected markets arise since the APU JV will be active in the upstream production of APUs which are used in the downstream production of aircraft where Boeing is active.  
6.1. Horizontal overlaps 
6.1.1. APUs  
(30) If APUs are segmented by type of aircraft, the Transaction will not give rise to a horizontal overlap between the APU JV and the Parties. Boeing does not manufacture nor supply any APUs  and Safran 's APUs are not destined for 
[intended JV scope]  where the APU JV will be active. Safran supplies APUs for 
military aircraft and helicopters, and is currently developing APUs for business 
jets. Safran's APUs have less power (< 550 shaft horse power, shp) than the APU JV's (future) APUs ( […]). 
(31) If APUs for all types of aircraft are considered to constitute a single market, Safran's volume based market share was [0 -5]%
20 in 2017, while the APU JV's 
is currently 0% . According to its Business Plan, the APU JV projects  to achieve  
a […] % marke t share by 20 3021, once it has established its presence,  on an APU 
market encompassing all types of aircraft . Based on its internal projections, 
Safran expect s its market share to rise  to […] % by 2030.22 The Parties’ current 
combined share is accordingly far below 20%. Considering the future development of  the APU JV’s and Safran’s activities , the combined market 
share would only slightly exceeds  the level of 20% by 2030 on an overall 
market of all types of APUs considered .  
(32) Furthermore, Safran and the APU JV will not be close competitors, each focussing on producing APUs for different kinds of aircraft.  
                                                 
20  In the supply of APUs for military aircraft, Safran's market share was around [5 -10]% and for 
helicopters around [5 -10]% in 2016.  
21  See the Parties' reply to the Commission's request for information of 24 September 2018.  
22  See the Parties' reply to the Commission's request for information of 24 September 2018.  
 
8 (33) Moreover , no concerns were raised in the market investigation as regards the 
overlap between the activities of Safran and t he APU JV in the manufacture of 
APUs.  
(34) Therefore, the overlap between Safran and the APU JV is unlikely to result in 
competition concerns. 
6.1.2. MRO services and spare parts 
(35) As regards component MRO and spare parts  generally , the T ransaction leads to 
a horizontal overlap since Boeing (and its subsidiary Aviall) and also Safran are 
active in the provision of component MRO and spare parts23 for various 
different components. However, this overlap does not lead to affected markets . 
Boeing estimates its current mark et share at […] % while Safran estimates its 
share at […]%.24 The APU JV currently has a market share of 0% .  
(36) The APU JV will  start offering  component MRO  for its own APUs  in the future . 
According to the APU JV's Business Plan25, the first revenues are to be 
achieved as of  [estimated dates of  first JV MRO and  OEM revenues] . However , 
any increment caused by the APU JV’s activities is not likely to increase the 
Parties' combined market share above 20%  on the overall market for component 
MRO and spare parts  in the foreseeable future . The Parties estimate that , in 
2030, Boeing would have a […] % market share, Safran between […] % and the 
APU JV's share would be  marginal, ca. […] % on an overall market for 
component MRO . Therefore the Parties’ combined  market share would remain 
below 20% by  2030.  
(37) Furthermore, Boeing, Safran and the APU JV will not be close competitors, mainly focussing on providing MRO services and spare parts for different kinds 
of components or for the same components but installed on  different kinds of 
aircraft.  
(38) As concerns a narrower  market by specific component, i.e. APUs, Safran 
provides component MRO and spare parts for  its APUs, which creates an 
overlap with the future activities of the APU JV, which will also service its APUs once brought on the market. Boeing does not provide component MRO 
and spare parts for APUs.  The Parties project
26 the APU JV to achieve a market 
share of […] % and Safran of […] % in 2030 on a market for component MRO 
and spare parts for all types of APU. Therefore,  the Parties’  combined market 
share would remain well below 20% by 2030.  
(39) Moreover , both Safran and the APU JV are , or will be, active in the provision of 
MRO services and the distribution of spare parts with regard to the APU 
                                                 
23  The P arties submit that none of the Parties is able to separate the provision of maintenance services 
and the sale of spare parts for the purposes of defining their market shares, as these two are provided 
together, therefore, market shares provided include both provision of component MRO and 
distribution of spare parts, see Form CO, paragraphs 162 and 163.  
24  Form CO, paragraph  164.  
25  See Busines s Plan, Annex 5 to the Form CO.  
26  See the Parties' reply to the Commission's request for information of 24 September 2018.  
 
9 systems supplied by  Safran and the APU JV respectively and not with regard to 
APU systems supplied by third parties. Safran adds27 that it is not active in the 
provision of maintenance services for APUs on large commercial aircraft 
[Safran ’s capabilities and plans]28. Therefore, even if Safran's and the APU JV's 
activities overlap , they are not closely competing in the provision of component 
MRO services.  
(40) Considering a further segmentation of component MRO and sale of spare parts 
for APUs by type of aircraft, no overlap would arise, given that Boeing does not provide component MRO for any APUs and Safran only provides these services for APUs on helicopters and military aircraft while the APU JV will provide such services for APUs on […] platforms of [intended JV scope]. 
(41) In summary, t he overlap between Boeing, Safran and the APU JV  in component 
MRO and spare parts , including when considering separate  segments for APU 
maintenance and APU spare parts, is unlikely to result in competition concerns  
for the following reasons . First, their combined market shares are low  and 
therefore do not enable them to obtain market power . Second, the Parties  will 
not compete closely  given that they provide MRO services for different 
components (Boeing vs Safran and the APU JV), or for APUs installed on 
different types of aircraft  (Safran vs the APU JV) . Third, the market 
investigation  did not  raise any  concern regarding  the overlap between the Parties 
in component MRO . 
6.1.3. Conclusion regarding horizontal overlaps 
(42) Based on the assessment in parag raphs (30) to 0, the Commission concludes that 
the Transaction does not  raise serious doubts as to its compatibility with the 
internal market with respect  to the horizontal overlaps brought about by the 
Transaction.  
6.2. Vertical relationships  
(43) The APU JV will create a future vertical relationship between the APU JV's manufacturing  of APUs and Boeing's manufacturing of commercial aircraft.  
(44) As a potential new entrant, the APU JV currently has a market share of 0% and will be a new source of supply. None of the current aircraft manufacturers relies on the APU JV for any of its APU pur chases.  If aircraft manufacturers other 
than Boeing were to purchase APUs from the APU JV in the future, this would 
mean that they would benefit from the existence of an additional source of APU supply , extending rather than limiting their choice of APU supplier. Therefore, 
no input foreclosure concerns will arise in this case .  
(45) The Commission’s investigation therefore focussed on potential customer foreclosure concerns  and other concerns raised during the market investigation 
as set out in sections 6.2.1 to 6.2.3. 
                                                 
27  Form CO, footnote 66.  
28  Form C O, paragraph 148.  
 
10 6.2.1. Concerns raised during the market investigation  
Customer forec losure   
(46) A market participant raised concerns during the market investigation claiming 
that Boeing could significantly reduce its APU purchases from the merchant 
market as it would have an incentive to rely on its own JV for APU supplies  in 
the future . This could mean the reduction by up to 50% of the addressable 
market in APU sales for large commercial aircraft for third party APU suppliers .  
(47) The complaint sets forth that such reduced customer base for third party  APU 
suppliers  is likely to lead to high er prices of APUs as research and development 
costs would have to be spread across a smaller number of APU units  sold. 
Furthermore, the adaptation of an existing APU from one platform to another , 
i.e. creating derivatives,  is less costly than the developme nt of a new APU . 
Therefore , moving from one platform to the next  enables the APU manufacturer 
to keep costs down and potentially offer better prices to the customer. With the 
reduction of the customer base, this advantage could be lost.  
(48) Alternatively, the  potential decrease of sales could also lead to a reduction in 
innovation in order to keep costs down.  
(49) For the reasons  set out in paragraphs (46)  to (48), the market participant is 
concerned  that this potential customer foreclosure could present  a significant 
risk of harm to the competitiveness of third party APU manufacturers and 
ultimately also to manufacturers of large commercial aircraft who could be 
faced with higher prices and less innovation.  
Access to commercially sensitive information  
(50) A market participant raised concerns during the market investigation relating to 
the APU JV’s potential access to competing APU suppliers' commercially 
sensitive information. According to the complainant, large amounts of third 
party APU manufacturers’ comm ercially sensitive information need to be shared  
with the aircraft manufacturers, including with Boeing , during the  bidding, 
design, manufacturing and testing process of APUs  and for certification . The 
complainant fears  that the APU JV could obtain access from Boeing to such 
commercially sensitive information of third party APU suppliers  that has been 
transmitted to Boeing during decades of previous collaboration. The information  
could allow  the APU JV to replicate the APUs of third pa rty APU 
manufacturer s, putting these at a significant competitive disadvantage , 
dissuading further entry and expansion and harming innovation.  
Foreclosure of independent MRO providers  
(51) Concerns were raised as to whether independent MRO providers would be able 
to service the A PU JV’s products. In order for such independent MRO providers 
to perform such maintenance, they require a licence to the intellectual property 
(“IP”) owned by the APU manufacturer (in addition to a qualification by the 
relevant aviation authority). Third p arty MROs thus need to obtain the APU 
manufacturer’s approval to perform the maintenance and the manufacturer is 
thus able to choose whether and which MRO to licence its component 
maintenance to.   
 
11 (52) In this context, a  limited number of market participants  further expressed 
concerns  during the market investigation  regarding foreclosure effects on the 
market for APU component MRO .29 According to those market participants , 
Boeing plays a role in  the relationship between the customers of APU 
component MRO , i.e., the airlines , and the suppliers of APU component MRO , 
i.e., the APU manufacturers , by negotiating MRO conditions with the existing 
APU producers in  the interest of the airlines . These market participants are 
concerned that , after the vertical integration, Boeing would no longer assume 
this role in favour of the airlines as it will have a direct interest in the APU 
MRO market itself . Boeing would thus negotiate worse MRO provisions for 
APU component MRO in the future, mainly by restricting the possibility to 
licence- in the required intellectual property owned by the APU manufacturer30 
and to obtain access to spare parts. 
6.2.2. The Part ies' views  
Customer foreclosure 
(53) On a g eneral  note, Boeing submits that introducing a third suppli er for APUs 
into a market characterised by a duopoly creates a positive effect on competition.
31 In fact, the Parties submit that the rationale for the creation of the 
APU JV has been the current lack of competition, stating: [Conclusion of Boeing internal document supporting the APU JV rationale].
32 
(54) [Boeing internal information on current APU market conditions in terms of prices and MRO services ]
33,34. 
(55) As concerns Boeing's incentive to favour the JV 's APUs over those of other 
manufacturers, i.e. Honeywell or UTC, Boeing explains that its 50% interest in the APU JV is not what drives its procurement decisions, but rather the best 
offer available on the market : [Boeing's general APU procurement decision 
criteria ]
35. 
(56) As concerns effects  of its potential in -sourcing on the APU market s, Boeing 
believes that even if it had an exclusivity agreement with the APU JV for the 
supply of APUs, the reduction of  the addressable market for APU manufacturers 
is overestimated by the complainant. Although Boeing's share in large 
                                                 
29  Written s ubmission of 23 July, 2018, minutes of a cal l of 27 June, 2018.  
30  In order for a third party MRO service provider to be able to perform maintenance on any APU it 
needs to obtain, beyond qualification by the relevant aviation safety authority (EASA – European 
Aviation Safety Authority or FAA – Fede ral Aviation Administration), a licence to the intellectual 
property owned by the APU manufacturer on the technical attributes. Generally, third party MROs need to obtain the manufacturer’s approval to perform the maintenance. Therefore, the OEM selects whether and which MRO to licence its component MRO to.   
31  Form CO, paragraphs 211- 220.  
32  Form CO , footnote 4.  
33  See [internal  document], Form CO – Annex 14.  
34  Ibid, slide 5.  
35  Form CO, paragraph 216.  
 
12 commercial aircraft is large, it is only around [50-60] % of the market. [Boeing’s 
expectations with respect to future large commercial aircraft market shares and 
compet ition] , as new entrants, such as COMAC and Irkut , expand production. 
Furthermore, Boeing submits that creating more competition will increase 
manufacturers' incentives to innovate and invest in R&D. C onversely, Boeing 
holds that it is the current concentrated market structure that does not incentivise 
innovation.  
Access to commercially sensitive information  
(57) Boeing acknowledges that intellectual property (“ IP”) protection is one of the 
central issues in its supplier relations and confirms that it has a series of 
contractual and procedural provisions in place to protect the confidential information of third parties. [Details of Boeing’s  internal policies] .
36  
(58) Boeing submits that it  has stringent safeguards in place to protect the 
confidential information of  APU suppliers during the different stages of the ir 
collaboration.37 [Description of Boeing’s internal safeguards during the APU 
bidding  and development process]. 
(59) [Description of Boeing’s internal trainings on use of supplier data]. 
(60) Boeing sets forth that third -party proprietary information is also protected 
through contractual terms in each agreement and [contractual clauses of Boeing 
for the protection of confidential information].38 […],39 Boeing  confirms that it  
does not share  this third -party proprietary information w ith prospective APU 
providers for future aircraft  and will maintain this policy with respect to the 
APU JV.   
(61) [Description of Boeing's information sharing and storing policy, including with respect to the APU JV] .  
(62) Boeing adds that it is against Boeing's business interest to misuse or appropriate suppliers' intellectual property or any other confidential information as it could lead to a loss of trust. A  deterioration of cooperation between Boeing and its 
suppliers would interfere with Boeing’s efforts to develop the new aircraft that 
are key to its continuing commercial success. Any gains that Boeing might theoretically realise via its 50% ownership interest in the APU JV from obtaining access to the IP of third- party APU manufacturers are very unlikely to 
exceed the long -run costs that Boeing would incur if it developed a reputation 
for being an unreliable partner of component suppliers in the development of 
new aircraft.  
(63) Finally, Boeing argues that the information shared by the APU manufacturers with Boeing does not include  the IP  rights  required to develop a competing 
                                                 
36  [Details of Boeing’s  internal practices and  policies] . 
37  Form CO , paragraph s 200- 203. 
38  Boeing also submits examples of its contracts in Annexes 38 to 44 of the Form CO.  
39  The text reads: [quoted excerpt from a standard agreement with an APU provider].  
 
13 APU. The information provided by the APU manufacturer to Boeing is a 
component maintenance manual ( “CMM” ) which, in essence, is a large diagram 
of the APU so that, in the event of an APU malfunction or customer query, Boeing is able to identify the potential problem component or area. The CMM, however, does not provide the details necessary to actual ly repair (or explain 
how to repair) or develop the malfunctioning part , let alone an entire APU . Such 
information is closely held by the APU supplier. [Details of Boeing  APU design  
requirements] . 
Foreclosure of independent MRO providers  
(64) The Parties submit that the Transaction will not ha ve any negative effects on the 
market for APU MRO services. [Boeing's rationale for the proposed JV].  
(65) [Information on the APU JV's strategy in the provision of MRO services].40  
(66) [Information on the APU JV's strategy in the provision of MRO services].41 
6.2.3. The Commission's assessment  
Concentration levels 
(67) The market for APUs for lar ge commercial aircraft  where the APU JV will be 
active42 is characterised  by high concentration levels: Market leader Honeywell 
holds a very high market share, indicating that it hold s significant market power, 
with an estimated [70-80] % of all installed APUs as of 2017, while UTC 
follows with [20-30] %. In this respect , Boeing notes43 [Boeing understanding of 
APU supplier activities] . The market for APUs for large commercial aircraft is 
therefore characterised by a duopoly of suppliers, one of which – Honeywell – 
may be holding a dominant position. 
                                                 
40  Form CO, footnote 23.  
41  Response to the Commission’s Pre -Notification RFI RFI 5,  question 13.   
42  T he activities of the APU JV will be limited to selling APUs for [intended JV scope]  while Boeing’ 
activities are limited to selling large commercial aircraft. Since there is, therefore, only a vertical 
with respect to the sale of APUs for large commercial aircraft (upstream) and the sale of large commercial aircraft (downstream), the Commission’s assessment will focus on this link. Any effects 
of the Transaction on other and/or broader markets will be more limited than the effects assessed in 
this decision while the more pronounced links already do not lead to serious doubts for the reasons set out in this decision.  
43  Form CO, paragraph 172.  
 
14 Market shares in terms of number of APU units, 201744 
 
Large 
Commercial 
Aircraft  
Regional  
Business 
Jets 
Helicopters  
All segments  
HONEYWELL  [70-80]% [40-50]% [90-100]% [5-10]% [60-70]% 
UTC/P&W  [20-30]% [50-60]% [0-5]% [40-50]% [20-30]% 
MOTOR SICH  [0-5]% [0-5]% [0-5]% [40-50]% [5-10]% 
SAFRAN POWER UNITS  [0-5]% [0-5]% [0-5]% [5-10]% [0-5]% 
PRNVI BRNENSKA STROJIRNA  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
AEROSILA  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
KLIMOV  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
OTHER  [0-5]% [0-5]% [0-5]% [0-5]% [0-5]% 
 
(68) As regards the manufacture of large commercial aircraft above 90 seats,  Airbus 
and Boeing held market shares of [40-50] % and [50-60]%, respectively in terms 
of number of aircraft deliveries  in 2017.45 Embraer's market share amounted  
to [0-5]% while  no other participants had a material market presence in this 
segment .  
(69) If regional aircraft  with less than 90 seats are included in the market definition, 
Boeing’s market share amount s to [40-50] %, in terms of number of aircraft 
deliveries in 2017 with Airbus, Embraer and Bombardier accounting for 
[40-50] %, [5 -10]% and [0 -5]% respectively .46  
(70) In the segment of large commercial aircraft of more than 120 seats, Boeing's market share amounts to [50-60] %, with Airbus accounting for the remaining 
[40-50] % in terms of number of aircraft deliveries in 2017. Finally, in the sub-
segment of wide -body commercial aircraft of 200 seats or more , Boeing held a 
market share of [50-60] % in terms of  number of  aircraft deliveries in 2017, with 
Airbus accounting for [40-50]%
47. 
Customer foreclosure 
(71) As concerns customer foreclosure, the Commission observes the following on 
Boeing's ability  to foreclose competing APU manufacturers:  
                                                 
44  Form CO, paragraph 142.  
45  Response by Parties of 29  August 2018 to RFI 1.  
46  Response by Parties to RFI 2 of 5 September 2018, question 1. The market share presented by 
Boeing does not account for 26 regional aircraft deliveries by COMAC and United Aircraft 
Corporation (Sukhoi) in 2017.  
47  Response by Part ies of 29 August 2018 to RFI 1.  
 
15 (72) First, Boeing has a market share of [50-60] % in the sale of large commercial 
aircraft above 90 seats and of [50-60] % in the sale of large commercial aircraft 
above 120 seats in terms of number of aircraft deliver ies in 2017 and a market 
share of  [0-5]% in the sale of regional aircraft, leaving around [50-60] % of 
demand for APUs for large commercial aircraft and all of the demand for APUs 
for re gional aircraft unaffected by the Transaction.48 Third party APU suppliers 
will thus continue to be able to sell their APUs to a significant part of the 
market . 
(73) Second, it is unlikely or at least highly uncertain that the APU JV will be able to 
serve all  or most of Boeing’s demand for APUs going forward, leaving also at 
least part of Boeing’s demand for APUs unaffected by the Transaction .  
(74) In the first place, t he APU JV has no sales of APUs yet and is expected to 
develop its presence  only gradually  over a  period of [timing estimates]  years . 
The first APU sales  are expected to generate turnover in [timing estimates] only. 
Therefore, any potential foreclosure effects could be expected to materialise 
only in the medium term and only gradually, adding significant uncertainty to any assessment of foreclosure effects . This also provides third party APU 
manufacturers with time to adjust to the new competitive environment and improve their offering. 
(75) In the second place, according to Boeing's Business Plan
49 the APU JV targets 
the development of APUs for [specific JV -targeted platforms] , platforms50. 
Boeing estimates51 that by maturity, in 2030, the APU JV will achieve a market 
share of […] % of all anticipated APUs for large commercial aircraft in 
operation. F urthermore, according to Boeing's calculations, the targeted 
platforms represent only […] of at least twelve large commercial platforms , 
including five Boeing platforms, with existing orders52. Therefore, a large 
portion of the addressable market , including on Boeing aircraft,  would remain 
available for third party APU suppliers.   
(76) In the third place, Boeing has not entered any exclusivity arrangements with the APU JV and, in principle, remains open to purchase APUs from third party APU suppliers, in particular if their offers are superior to the offers from the APU JV.  
(77) In the fourth place, market participants indicated that the development of an APU is a difficult technological development, which will take years to complete. The development is associated with uncertainties and execution risks. It is 
                                                 
48  Boeing has announced its intention to acquire aircraft manufacturer Embraer which manufactures 
mainly regional aircraft: http://boeing mediaroom.com/2018- 07-05-Boeing -and-Embraer -to-
Establish -Strategic -Aerospace -Partnersh ip-to-Accelerate -Global -Aerospace -Growth . Since no 
binding acquisition agreement has been signed and the regulatory approvals have not been received, the Commission will treat Boeing and Embraer as separate entities for the purposes of this decision.  
49  S ee Business Plan, Annex 5 to the Form CO.   
50  Form CO, paragraph 17.  
51  Form CO, paragraph 173. 
52  Form CO, footnote 72.  
 
16 therefore unclear whether the APU JV will ultimately be successful in the future 
and thus whether Boeing will be able to rely to a large extent on the APU JV.53 
(78) Third, the production of large commercial aircraft has increased significantly 
over the past 10 years  and is expected to continue growing rapidly during the 
decade to come.54 Therefore, any reduction of the addressable merchant market 
could be counterbalanced by general market growth.  
(79) Fourth, present APU suppliers have long term contracts55 on existing aircraft 
platforms . Large commer cial aircraft p latforms have a lifetime of potentially 
several decades, 25 -30 years , so that OEM sales  of third party suppliers  are 
likely to continue for a number of years . In addition, existing  third party APU 
suppliers will be able to continue making MR O sales on the aftermarkets – with 
MRO sales on the aftermarkets representing the bulk of the APU revenues – for 
some decades after the sale of the platforms is discontinued.  
(80) As concerns Boeing's incentive to foreclose alternative APU suppliers, the 
Commission finds the following:  
(81) First, although t he prime objective of the APU JV is to supply […] Boeing 
platforms with APUs  – resulting in incentives for Boeing to purchase APUs 
from the APU JV at least for those […] platforms – Honeywell and UTC are 
long standing APU suppliers. Honeywell and UTC – and Honeywell in 
particular in the large commercial aircraft segment  – are very strong APU 
suppliers and may offer superior technology  or quality and have a price 
advantage over the  products of the  APU JV. It is therefore  uncertain whether 
Boeing would have incentives to forego buying from the two established players 
in the market  altogether .  
(82) Second, according to Boeing56, the decision concerning the choice of the APU 
for future platforms will [Boeing's general APU procurement decision criteria]. 
Boeing has incentives to make cost efficient choices . Following the logic  
whereby creating derivatives of an  existing APU for a next platform is 
significantly more cost effective than developing a new AP U from scratch ,57 
incumbent APU suppliers are expected to enjoy a significant cost and thus competitive advantage over the APU JV.
  
                                                 
53  See minutes with a n airline on 27 June, 2018 and also the press 
https://www.flightglobal.com/news/articles/analysis -how-will-boeing- safran -venture -shake -up-ap-
449234/ . 
54  See e.g. page 89 and Chart 28 of the Industry report 'Commercial Aerospace Primer' by Bank of 
America/Merrill Lynch, 04 May 2016, see also Form CO and see also forecasts of Airbus and Boeing, at Global Market Forecast 2018- https://www.airbus.com/aircraft/market/global- market -
forecast.html  and also transcript of a speak of Boeing CEO at Morgan Stanley Laguna Conference 
on 12 September, 2018, page 2.  
55  E.g. Honeywell's supply contract for the [platform] runs until [timing details]. See Form CO, Footnote 7.  
56  Form CO, paragraph 216. 
57  See an APU manufacturers' reply to question 6 of " Questions to market participants of 
5 June 2018" . 
 
17 (83) Third , the price of APU per aircraft represent s less than [0 -5]% on the list price 
of the respective aircraft in the case of the most sold Boeing aircraft .58 The 
potential profits for Boeing generated via the JV are also proportionally small.  
Therefore , Boeing will primarily have incentives to optimise the 
competitiveness of its  aircraft by selecting the best available APU,  rather than 
opt for the APUs of the APU JV, at all cost . This more so the case, because the 
profits of the APU JV are shared with Safran and would only partially flow to 
Boeing, whereas any foregone profits from revenues lost in the sale of aircraft 
would be fully absorbed by Boeing.  
(84) As concerns the impact  of Boeing's potential foreclosure of alternative APU 
suppliers, the Commission finds the following:  
(85) First, the APU JV represents a new entrant on  a very concentrated, two player  
APU market:  Boeing ’s stated objective is not only the self -supply of APUs but 
also the introduction an alternative commercial offer on the merchant market for third party air craft manufacture rs.
59 
(86) Second, t he APU JV is developing a new APU from scratch, meaning that an 
alternative technology could become available in a market with  currently few 
alternatives , with a potential to  boosting innovation.60 In fact , contrary to a 
situation of backwards integration, the T ransaction brings about the creation of a 
new entrant in the upstream market. 
(87) Third, shifting purchases from a third party supplier to in- house sourcing does 
not in itself and automatically amount to customer foreclosure. Such shifts would only be anticompet itive if the move to in -house production harm s the 
competitive viability of an upstream rival. [ Conclusion of Boeing internal 
document supporting the APU JV rationale]
61,62. 
(88) Fourth, several market participants responding to the market investigation 
highlighted the lack of competition on the APU market  and market participants 
welcome the perspective that an additional APU supplier may appear , 
potentially offering more choice.63 They noted, however , that due to risks and 
the long time horizon, their ability to make predictions at this stage was limited.
64 Furthermore, responding market participants do not predict price 
increases or reduction of innovation as a result of the Transaction.65 
                                                 
58  The Parties' reply to the Commission's RFI Nr.2, question 5, on 12 September 2018.  
59  Form CO, paragraph 17.  
60  See replies to questions 2 and 3 of the Commission enquiry of 24 August 2018, minutes of a call 
with an aircraft manufacturer on 29 June, 2018.  
61  See also [ internal document ], Form CO – Annex 14 .  
62  See [internal document], Form CO, Annex 12. [Internal document].  
63  See replies to question 3 of the Commission enquiry of 24 August 2018. 
64  See e.g. minutes of a call with an airline on 27 June, 2018.  
65  See replies to question 3 of the Commission enquiry of 24 August 2018.  
 
18 (89) Fifth , APUs represent a relatively small input to the production of large 
commercial aircraft. In terms of cost, APUs represent less than [0 -5]% of the 
cost of the final aircraft.  
(90) Sixth , Airbus is a strong competitor in the downstream market for the sale of 
large commercial aircraft and in the purchasing of APUs. Should a potential 
customer foreclosure strategy negatively affect Airbus, it cannot be excluded 
that Airbus could decide to support third party APU suppliers in their business 
development or may ultimately  decide to insource the manufacture of APUs 
itself .  
(91) Seventh , as concerns the potential reduction in innovation, APUs seem to be one 
of the less R&D intensive products where development is currently rather slow 
and gradual. A market participant  explained during the market investigation that 
APUs were "not a particularly innovative are a", with "IP developed 
continuously and an adaptation of the technology" ,66 indicating that 
improvements occur  gradually, in an incremental manner. This appears t o be 
confirmed by an innovation activity log submitted to the Commission ,67 
displaying four major technical advances between 1998 and 2017. Industry 
reports share this view:68 "It [APU] is not as much of a differentiating factor as 
an avionics suite and so, it has not benefited from much product improvement effort by manufacturers. APUs are not at the center of the race for ever -greater 
aircraft efficiency."  
(92) For the reasons set out in paragraphs (71) to (91), the Commission considers that the Transaction does not raise customer foreclosure concerns.  
Access to commerciall y sensitive information  
(93) Paragraph 78 of the Commission’s Non- Horizontal Merger Guidelines notes the 
possibility that, by vertically integrating, the merged entity  may gain access to 
commercially  sensitive information on the upstream or downstream activitie s of 
non-integrated  rivals. As a result, competitors may be put at a competitive 
disadvantage thereby dissuading them to enter or expand in the market.  
(94) As regards the application of those principles to the present case, the 
Commission notes, f irst, that several of the arguments  discussed in 
paragraphs (71) to (91) also argue against significant adverse effects  on the 
relevant markets  of the sharing of confidential information. For instance, 
(i) significant demand for APUs in a growing market is likely to remain available for third party APU manufacturers even  if they reduce their sales to 
Boeing due to the risk of disclosing confidential information to the APU JV ; 
(ii) Boeing is expecting to continue to rely on third party manufacturers in the 
purchasing of APU for years to come  giving it incentives to find mutually 
satisfactory agreements with the APU manufacturers  regarding their confidential 
information; ( iii) the APU JV represents a new entrant on a concentrated market, 
offering more choice and  potentially boosting innovation also from incumbent 
                                                 
66  See minutes of a call with an aircraft manufacturer on 29 June 2018.  
67  See submission on 31 August 2018.  
68  https://www.mro -network.com/engineering -design/apus -getting -more -attention -mro-providers . 
 
19 APU manufacturers ; and (iv) Airbus is likely to have means to react if adverse 
effects materialise or risk materialising on the APU markets.  
(95) Second, business confidential information that is critical for the design, 
development and manufacture of an APU can be protected under IP rights 
legislation. IP rights protection is enforceable in court and it confers a protection 
against any potential misappropriation of sensitive information. T hird party 
APU suppliers can therefore have recourse  to IP law to safeguard their IP rights 
and protect sensitive information .  
(96) Third, the exchange of confidential information related to the purchasing of APUs by Boeing is covered by NDAs as set out in paragraph (60), which will 
prohibit the sharing of confidential information of competing APU manufacturers with the APU JV and which can be enforced through litigation. Boeing has safeguards in place to limit the circulation of the confidential information and to implement  the NDA provisions as outlined in 
paragraph s (58) to  (61).  
(97) Fourth, other market participants did not  express a similar concern regarding the 
disclosure of commercially sensitive information  to the APU JV.  
(98) Fifth , the market investigation confirmed Boeing's statement that the 
information obtained from the APU suppliers during bidding, design and 
certification would be in sufficient to empower an aircraft manufacturer to start 
manufacturing APUs. This view is shared by another  aircraft manufacturer  who 
also adds " the APU OEM itself restricts access to the most necessary 
information that is required for the assessment of the compliance with […] specifications, quality requirements and how the equipment interfaces with the other equipment on the aircraft ."
69 
(99) Sixth , Boeing's internal documents also reflect that Boeing was looking for a JV 
partner with some experience in APUs, indicating that it would not have been able to manufacture an APU on its own even though third party APU 
manufacturers had provided it with certain information in the past.  
(100)  Seventh , insofar as the complainant refers to recent Commission precedent s,
70 
addressing concerns about the misappropriation of confidential information, the 
Commission notes that the market in APUs is highly concentrated  and that the 
APU JV is a new market entrant . Furthermore, the relative negotiation power of 
the APU suppliers vis -à-vis Boeing concerning  provisions protecting sensitive 
information is unlik ely to be  unbalanced in favour of Boeing. In fact one market 
participant considers that one of the APU producers has a s "of today, […] a 
dominant position and the JV LLC would be positive unless Boeing makes of the JV LLC their only supplier ". Boeing will have to rely on third party APU 
suppliers going forward, and at least until the APU JV would be able to produce 
APUs , provided that the APU JV is successful , Boeing is unlikely to be in a 
                                                 
69  Minutes of a call with a n aircraft manufacturer on 29 June  2018. 
70  Case M.8314, Broadcom/Brocade , paragraphs 104- 112., case M.7724, ASL/Arianespace , 
paragraphs  197-230.  
 
20 position to negotiate confidentiality clauses in agreements with APU  suppliers 
to their advantage in a disproportionate manner.   
(101)  For the reasons set out in paragraphs (93) to (100) , the Commission considers 
that the Transaction does not raise concerns due to Boeing’s  access to 
confidential information of third party APU manufacturers.  
Foreclosure of t hird party  MRO providers  
(102)  As regards the  potential foreclosure of third party MRO providers  from APU 
component MRO and spare parts markets , the concern fundamentally relates to 
APU suppliers’ alleged practice of limiting third party  MRO  providers from 
servicing their APUs. Around [ Boeing’s internal estimate of MRO services 
revenues ]%71 of revenues of APU suppli ers are achieved through component 
MRO on the aftermarket.72 APUs are usually sold to aircraft manufacturers  at 
lower margins in order to recoup investments on the aftermarket. Such 
recouping is achieved  partly through licencing requirements .  
(103)  The Commission finds the following in this regard : 
(104)  First,  as set out above, the APU JV will start from a n APU market share of 0%, 
gradually increasing its presence over the years, making it unlikely or at least 
highly uncertain that the Transaction will have significant foreclosure effects in 
the provision of component MRO  in APUs in the foreseeable future.   
(105)  Seco nd, w hereas some market participants took note of the alleged ly foreclosing  
practices of existing APU suppliers , a number of third party MRO providers 
replying to the market investigation did not express foreclosure concerns related 
to the creation of the  APU JV. To the contrary, some MRO providers expect the 
Transaction to have a positive impact.  As one respondent73 put it " Conditions 
will not worsen, however they could improve if JV LLC grant licenses to third party MROs to repair their APUs". 
(106)  Third, w hereas the practice of foreclosing MRO services are generally a concern 
for market participants, the Commission notes that to date, only one third of the 
APU MRO market is served by the APU manufacturers .
74  
(107)  Fourth, as reflected in its internal documents75, Boeing's primary objective in 
setting up the APU JV is to support the competitiveness of its aircraft  via a 
better APU offer, including MRO provisions that are attractive to airlines. For example, Boeing identifies as one of the value drivers of the APU JV [Boeing 
                                                 
71  As for t he APU JV, over its lifetime until 2060, around [ Parties’ estimates ]% of revenues are 
expected to derive from MRO services and spare parts.  
72  MRO revenues represents [ Parties’ estimates ]% of the total revenues for APUs for large commercial 
aircraft, according to Safran internal estimates.  
73  Respondent representing several airlines, reply t o question 1 of the Commission's follow up enquiry 
on 5 September.  
74  Form CO paragraphs 158 and 159 based on third party independent industry analysis.  
75  Respon se by Parties dated 17 August 2018 to Commission's questions of 6 August 2018, 
question  18.  
 
21 value drivers]  and [Boeing value drivers] .76 Accordingly, Boeing’s  internal 
documents indicate that the Parties are planning to [ Parties’ plans  with respect to 
the JV]. Generally,  the Commission considers that Boeing’s 50% share of the 
potential profits from the APU JV’s MRO services will not affect its basic 
incentive , which is  to increase sales of its aircraft. Boeing thus has every 
incentive to provide competitive terms for its own APU MRO services.  
(108)  Finally , in relation to the concern expressed by certain market participants that 
Boeing would, post -Transaction, no longer have an incentive to negotiate 
competitive terms with other APU manufacturers on behalf of airlines, the 
Commission notes the following. Suc h negotiations do not appear to have been 
very effective in the past . [Information from Boeing internal documents about  
current APU market conditions]77 This is also reflected in Boeing’s goal, as 
stated in an internal document, […]78. In any event , in view of maintaining its 
competitive position versus Airbus  which also negotiates MRO terms with APU 
suppliers, Boeing appears unlikely to stop trying to  negotiat e competitive terms 
with other APU manufacturers as a result of the Transaction . 
(109)  Therefore, co mpetition concerns are ultimately unlikely to  arise given the lack 
of concrete evidence of a deterioration of current MRO market  dynamics.  
(110)  For the reasons set out in paragraphs (104) to (109) , the Commission considers 
that the Transaction does not raise concerns related  to any foreclosure from 
APU MRO markets.   
6.2.4. Conclusion regarding vertical relationships 
(111)  Based on the assessment in paragraphs (67) to (110) , the Commission concludes 
that the Transaction does not raise serious doubts as to its compatibility with the internal market with respect to the vertical relationships  brought about by the 
Transacti on. 
7. C
ONCLUSION  
(112)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with 
the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation and Article 57 of the EEA Agreement. 
For the Commission   (Signed) Margrethe VESTAGER  
Member of the Commission
 
                                                 
76  Ibid, question 3.  
77  Ibid, question 18.  
78  Ibid.