38.

Article 5(4) of the Merger Regulation provides the following: ‘Without prejudice to paragraph 2 [acquisitions of parts], the aggregate turnover of an undertaking concerned within the meaning of Article 1(2) and (3) shall be calculated by adding together the respective turnovers of the following: (a) the undertaking concerned; (b) those undertakings in which the undertaking concerned directly or indirectly: — owns more than half the capital or business assets, or — has the power to exercise more than half the voting rights, or — has the power to appoint more than half the members of the supervisory board, the administrative board or bodies legally representing the undertakings, or — has the right to manage the undertaking's affairs; (c) those undertakings which have in an undertaking concerned the rights or powers listed in (b); (d) those undertakings in which an undertaking as referred to in (c) has the rights or powers listed in (b); (e) those undertakings in which two or more undertakings as referred to in (a) to (d) jointly have the rights or powers listed in (b).’ This means that the turnover of the company directly involved in the transaction (point (a)) should include its subsidiaries (point (b)), its parent companies (point (c)), the other subsidiaries of its parent companies (point (d)) and any other undertaking jointly controlled by two or more of the companies belonging to the group (point (e)). A graphic example is as follows: The undertaking concerned and its group: a : The undertaking concerned b : Its subsidiaries and their own subsidiaries (b1 and b2) c : Its parent companies and their own parent companies (c1) d : Other subsidiaries of the parent companies of the undertaking concerned e : Companies jointly controlled by two (or more) companies of the group Note: these letters correspond to the relevant points of Article 5(4). Several remarks can be made from this chart: 1. As long as the test of control of point (b) is fulfilled, the whole turnover of the subsidiary in question will be taken into account regardless of the actual shareholding of the controlling company. In the example, the whole turnover of the three subsidiaries (called b) of the undertaking concerned (a) will be included. 2. When any of the companies identified as belonging to the group also controls others, these should also be incorporated into the calculation. In the example, one of the subsidiaries of a (called b) has in turn its own subsidiaries b1 and b2. 3. When two or more companies jointly control the undertaking concerned (a) in the sense that the agreement of each and all of them is needed in order to manage the undertaking affairs, the turnover of all of them should be included (9). In the example, the two parent companies (c) of the undertaking concerned (a) would be taken into account as well as their own parent companies (c1 in the example). Although the Merger Regulation does not explicitly mention this rule for those cases where the undertaking concerned is in fact a joint venture, it is inferred from the text of Article 5(4)(c), which uses the plural when referring to the parent companies. This interpretation has been consistently applied by the Commission. 4. Any intra-group sale should be subtracted from the turnover of the group (see paragraph 22).