COMMISSION DECISION of 02/10/1997 declaring a concentration to be compatible with the common market (Case No IV/M.981 - FORTIS / ASLK-CGER) according to Council Regulation (EEC) No 4064/89

(Only the English text is authentic).

The paper version of the decision is available through the sales offices of the Office of Official Publications of the European Communities.

PUBLIC VERSION

MERGER PROCEDURE

ARTICLE 6 (1)(b) DECISION

Dear Sirs,

Subject: Case No IV/M.981 - FORTIS/C.G.E.R.

Notification of 01-09-1997 pursuant to Article 4 of Council Regulation No 4064/89

1. On 1 september 1997 the Commission received the notification of an operation by which FORTIS AG S.A. and FORTIS Amev N.V. ("FORTIS") will acquire sole control of A.S.L.K.-C.G.E.R.-Bank.

2. After examination of the notification the Commission has concluded that the notified operation falls within the scope of application of Council Regulation 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 AND THE OPERATION

3. FORTIS is a Belgian-Dutch insurance and banking group. FORTIS was formed by the merger between Compagnie Financière et de Réasssurance du Groupe AG (now called Fortis AG) and N.V. AMEV (now called Fortis AMEV) in 1990 (see Case IV/M.018 AG/AMEV - 21.11.1990). The main activity of FORTIS is insurance and banking. Its operations are principally based in Belgium and the Netherlands, with some presence in other Member States.

4. A.S.L.K.-C.G.E.R.is a Belgian bank previously controlled by the Belgian State through Société Fédérale de Participations S.A. - Federale Participatiemaatschappij N.V. ("SFP-FPM").

5. This operation has to be situated in the context of the privatisation program launched by the Belgian State in 1993. In that year, FORTIS acquired from ASLK Holding N.V./CGER Holding S.A. (which is currently named SFP-FPM) a total of 49.9% of the shares in the capital of A.S.L.K.-C.G.E.R. Bank and A.S.L.K.-C.G.E.R. Insurance. This operation was notified to the Commission pursuant to the Merger Regulation and was declared compatible with the common market in a Commission decision of 15.11.1993 (case No. IV/M.342 Fortis/C.G.E.R.). Under that decision, FORTIS was found to obtain sole control over A.S.L.K.-C.G.E.R. Insurance, while it obtained joint control together with SFP-FPM on A.S.L.K.-C.G.E.R. Bank.With this operation, FORTIS will obtain sole control over A.S.L.K.-C.G.E.R. Bank. In a preliminary step to this acquisition, A.S.L.K.-C.G.E.R. Insurance, which is already solely controlled by FORTIS, will become a susidiary of A.S.L.K.-C.G.E.R. Bank.

II. CONCENTRATION

6. As stated above FORTIS will have sole control over A.S.L.K.-C.G.E.R.-Bank. The operation therefore constitutes a concentration within the meaning of article 3(1)b of the Council Regulation 4064/89, of 21 December 1989 (the "merger regulation").

III. COMMUNITY DIMENSION

7. The combined world turnover of the parties exceeds 5 000 million ECU (FORTIS 18 011 mECU, A.S.L.K.-C.G.E.R. 6.610 mECU). The aggregate Community wide turnover of each of the undertakings is more than 250 mECU (FORTIS 15 118 mECU, A.S.L.K.-C.G.E.R Bank 6.610 mECU). The undertakings do not achieve more than two thirds of their turnover in one and the same Member State. The proposed concentration has therefore a Community dimension but does not constitute a cooperation case under the EEA Agreement pursuant to Article 57 and Article 2 in Protocol 24 of that Agreement.

IV. COMPETITIVE ASSESSMENT

Relevant product markets

a) Insurance

8. Both FORTIS and A.S.L.K.-C.G.E.R. Insurance are active in insurance. As indicated above, A.S.L.K.-C.G.E.R. Insurance will, previously to the operation, become a subsidiary of A.S.L.K.-C.G.E.R.-Bank. However, since A.S.L.K.-C.G.E.R.-Insurance is already solely controlled by FORTIS, it is not considered necessary, for the purpose of this decision, to consider the insurance market.

b) Banking

9. The Commission has traditionally divided banking services into three main sub-sectors: retail banking, corporate banking and financial markets (see Case No IV/342 FORTIS/CGER, Case No.IV/M.573 - ING/BARINGS, etc). The parties further suggest that the retail banking market is traditionally further subdivided in the universal banking market (current accounts), the deposit market, the off-balance sheet savings (collective investment instruments showing a capital risk), credit to private individuals. For the borrowing customer the products would be, among others, current and means of payment, ordinary saving accounts, collective investment funds, SICAV, short term loans and mortgage loans. Corporate banking would include domestic corporate, public sector, financial institutions and international credits.Products within these sectors would be investment loans, roll-overs, short-term products (i.e. straight loans and discount credits), guarantee credits, swaps, collective investment funds and commercial paper. Financial Markets comprise money markets operations, foreign exchange trading and derivatives.

10. For the purpose of this decision it is however not necessary to conclude on the existence of separate product markets, as even on the narrowest definition the operation does not create or strengthen a dominant position.

Relevant geographic market

11. From a geographical point of view, the activities of the retail sector have been traditionally considered national in scope. The markets for corporate banking and for financial markets activities are essentially international in scope

Assessment

12. The only market affected by the operation is retail banking in Belgium. In this country, FORTIS' banking activities are currently carried out through its controlling interest in A.S.L.K.-C.G.E.R. Bank. As indicated above, FORTIS acquired this 49% participation from the Belgian State in 1993, which conferred to it joint control with the Belgian State.

With this operation the Belgian State withdraws from A.S.L.K.-C.G.E.R. Bank. Consequently Fortis position in A.S.L.K.-C.G.E.R. bank changes from joint control with the Belgian State to sole control. The market position of FORTIS in the banking sector will substantially remain unchanged [Deleted business secrets].14. In addition, there are a number of strong and well-established players in the Belgian market who have the ability to compete effectively with this entity; These players include: Générale de Banque, Crédit Communal de Belgique, Banque Bruxelles Lambert, and Kredietbank.

V CONCLUSION

15. It follows from the above that the proposed concentration would not create or strengthen a dominant position as a result of which competition would be significantly impeded in the common market or in a substantial part of it.

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

For the Commission,