(6)The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million [Magna: EUR 28 248 million; GETRAG: EUR […]. Each of them has an EU-wide turnover in excess of EUR 250 million [Magna: EUR 10 453 million; GETRAG: EUR […], 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 within the meaning of Article 1(2) of the Merger Regulation.

(5)The proposed transaction involves the indirect acquisition of sole control of the whole of GETRAG by Magna and it therefore constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

(4)The proposed transaction involves the indirect acquisition by Magna of all limited partnership interests in GETRAG as well as the entire equity interest and legal position in GETRAG's sole general partner. Post-closing of the proposed transaction, Magna will therefore indirectly hold all shares in GETRAG and exercise sole control over the latter.

(3)GETRAG specialises in the manufacture and supply, at a global level, of transmission systems to OEMs of passenger cars, light commercial vehicles and motorcycles. Part of this transmissions business is carried out through joint venture companies that GETRAG has established with, respectively, Ford, Dongfeng and Jiangling. GETRAG itself also provides related after sales services.

(2)Magna is a publicly listed company that is active globally in the manufacture and supply of a wide range of automotive components to original equipment manufacturers ('OEMs') of vehicles. These components relate to various parts of the vehicle, including body, chassis, exterior, seating, powertrain, electronics, vision, and closure and roof systems.

(1)On 12 November 2015, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which Magna International Inc. ('Magna', Canada) acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole control of GETRAG Getriebe- und Zahnradfabrik Hermann Hagenmeyer GmbH & Cie KG ('GETRAG', Germany) by way of a purchase of shares. Magna is referred to as the 'Notifying Party' and Magna and GETRAG are collectively referred to as the 'Parties'.

(7)At a horizontal level, the proposed transaction gives rise to affected markets in relation to the manufacture and OEM supply of complete drive train assemblies for full-electric and hybrid-electric light vehicles ('eDrive systems') as well as in relation to the manufacture and OEM supply of its various sub-systems.

(8)At a vertical level, the proposed transaction gives rise to affected markets in relation to Magna's activities involving the manufacture and supply of transmission oil pumps for light vehicles (upstream) and GETRAG's activities involving the manufacture and OEM supply of automatic transmissions for light vehicles (downstream).

5.1.1.eDrive systems

(9)The aforementioned eDrive systems are autonomous powertrains that can either replace, or work in tandem with, a conventional combustion engine (in full-electric and hybrid-electric vehicles respectively). In full-electric vehicles, eDrive systems are the sole power source driving one of the vehicle's axles (front or rear). In hybrid-electric vehicles, eDrive systems drive one of the vehicle's axles while the combustion engine drives the other, thus also allowing for all-wheel drive capabilities. The Commission notes that, currently, eDrive systems are only suited for powering full-electric or hybrid-electric light vehicles ('LVs', i.e. passenger cars and light commercial vehicles weighing less than six tonnes).

(10)The existing eDrive systems consist of the following sub-systems (i.e. smaller assemblies of components): electric motors, power reducers (i.e. the gear box of an eDrive system), power management and control systems (including the inverter), and housings. Although Magna has manufacturing capabilities in relation to all sub-systems of eDrive systems, it does not supply these on an individual basis (i.e. it supplies them exclusively as part of a pre-assembled eDrive system). Oppositely, GETRAG lacks in-house manufacturing capabilities in relation to electric motors, which it sources from third-parties, while it occasionally does supply the mechanical parts of an eDrive system (power reducers, shafts, differentials and housings) to third-party suppliers thereof. Accordingly, the Parties' activities do not overlap at a horizontal level in relation to the manufacture and supply of any of the individual sub-systems of eDrive systems.

(11)The Commission has previously identified an overall market for the manufacture and supply of complete eDrive systems, noting that the products concerned were not yet in full commercial production although prototypes were already being used (in 2011). Although the market has developed from that moment onwards, it continues to be nascent and growing, with both component suppliers as well as OEMs developing prototypes. It is accordingly difficult to determine at this stage whether, if at all, mass-production will ramp up for either the complete system and/or any of its sub-systems. The Notifying Party agrees with the Commission's prior definition of one overall market for eDrive systems.

(12)Based on the results of the market investigation carried out as part of the present matter, the Commission considers that potential separate relevant product markets exist both for the OEM supply of complete LV eDrive systems as well as for the OEM supply of its various sub-systems (electric motors, power reducers, power management and control systems, and housings). Indeed, the Commission found that several automotive components suppliers are active in the supply to OEMs of complete LV eDrive systems as well as in the supply to OEMs of the various sub-systems thereof. At the same time, the Commission understands that several OEMs are themselves developing LV eDrive systems capabilities. The precise delineation of the relevant product market(s) can however be left open, given that the proposed transaction is unlikely to give rise to serious doubts as to its compatibility with the internal market under any alternative delineation.

(13)The Commission previously considered the geographic scope of this possible market for eDrive systems to encompass at least the EEA, in line with its most recent practice in the automotive sector. The Notifying Party agrees with this definition.

(14)The market investigation carried out as part of the present matter yielded results that support the finding of a market for the OEM supply of LV eDrive systems that is at least EEA-wide, and possibly worldwide, in scope. Indeed, all of the Parties' customers that were contacted during the Commission's market investigation indicated that for their production of vehicles within the EEA they source LV eDrive systems at a global level. The majority of the Parties' competitors in turn mentioned that they supply LV eDrive systems for OEMs' EEA production of vehicles at EEA-level. In this respect, all of the Parties' competitors explained that the whole EEA territory can be covered by each of their EEA manufacturing plants where LV eDrive systems are being produced. The Commission therefore considers that the markets for the manufacture and OEM supply of LV eDrive systems and its various sub-systems are at least EEA-wide in geographic scope.

5.1.2.Transmission oil pumps

(15)The Commission has previously identified a separate relevant product market for the manufacture and OEM supply of transmissions oil pumps (no independent aftermarket exists given that transmission are supposed to last for the entire lifetime of the vehicle). It also considered a distinction based on the weight of the vehicle in which the transmission in question is intended to be included (LVs versus heavy commercial vehicles above six tonnes).

(16)The market for transmission oil pumps was considered to be EEA-wide in scope.

5.1.3.Transmissions

(17)The Commission has previously identified separate relevant product markets for the manufacture and OEM supply of each of manual and automatic transmissions (no independent aftermarket exists given that transmission are supposed to last for the entire lifetime of the vehicle). It also considered a distinction based on the weight of the vehicle in which the transmission in question is intended to be included (LVs versus heavy commercial vehicles above six tonnes).

(18)The market for transmissions was considered to be EEA-wide in scope.

5.2.Horizontal non-coordinated effects

(19)According to information provided by the Notifying Party, there are currently several competing automotive component suppliers capable of supplying complete eDrive systems as well as their constituent sub-systems. These companies all have market positions that are equal to, or stronger than, that of the Parties. The competitive structure of the market is set out in more detail in Table 1, below.

(20)The results of the market investigation carried out as part of the present matter support the Notifying Party's claim that several strong, global companies have similar eDrive systems capabilities to those of the Parties. Indeed, several OEM car manufacturers considered ZF Friedrichshafen, GKN and Aisin to be both technically and commercially capable of supplying them. At the same time, none of the Parties' OEM customers perceived either Magna or GETRAG as an indispensable supplier of LV eDrive systems for their production of vehicles in the EEA.

(21)The abovementioned results of the market investigation support the conclusion that the Parties are not, currently, particularly strong players in the field of eDrive systems, as reflected by their market share estimates set out in Table 1.

Table 1 – eDrive systems