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, 20.09.2019  
C(2019 ) 6913 final  
PUBLIC VERSION  
 
To the notifying p arty 
Subject : Case M. 9483  – Engie/Powerlines  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 16 August 2019 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which  Engie S.A. 
(“Engie”, France)  acquires within the meaning of Article 3(1)(b) of the M erger 
Regulation sole control over  Powerlines Group GmbH  (“Powerlines”, Austria) by 
way of purchase of shares (the “Transaction ”).3 Engie  is designated hereinafter as the 
“Notifying Party”. Engie and Powerlines are referred to  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 “Commu nity” 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 285 , 23.8.2019 , p. 3. 
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information omitted has been replaced by 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 1. THE PARTIES  
(2) The acquirer Engie is an industrial company active in the fields of gas, electricity 
and energy services. In particular, through its subsidiaries Ineo and Fabricom , Engie 
is active in the installation and maintenance of railway contact lines (catenary and 
overhead lines) in France, Italy, Luxembourg and Belgium. Engie is also active in 
power supply and power tran smission . 
(3) The target Powerlines is active in the areas of rail electrification  and energy 
transmission. More specifically, Powerlines offers engineering, planning, 
development, assembly, installation, consulting and maintenance services for rail 
infrastructure, such as mainline, mass transit, trams, trolleybus es, and subway 
systems. In addition, the company m anufactures and distributes certain  catenary 
equipment. Geographically, Powerlines is active in rail electrification and overhead 
line solutions mainly in the United Kingdom, Germany and Austria, and to a l esser 
extent in Belgium, Sweden, Poland, the Netherlands, Norway, Finland, Slovakia, 
Slovenia and Switzerland. Powerlines is active in the installation of power 
transmission and distribution lines in Germany and Austria.  
2. THE OPERATION  AND THE CONCENTRATIO N 
(4) Pursuant to a share sale and purchase agreement signed on 24 July 2019, Engie will 
acquire shares representing 100% of the total voting rights of Powerlines and will 
have sole control over Powerlines (for a purchase price of approximately […]). The 
Transa ction therefore constitutes a concentration within the meaning of Article 
3(1)(b) of the Merger Regulation.  
3. EU DIMENSION  
(5) The undertakings concerned have a combined aggregate worldwide  turnover of more 
than EUR 5 000 million4. Each of them has a n EU-wide tu rnover in excess of EUR 
250 million, 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.   
4. COMPETITIVE ASSESSMEN T 
4.1. Introduction  
(6) The Parti es are active in rail electrification and in power transmission but they 
operate in different geographies, with the exception of rail electrification in Belgium.  
Further, Powerlines is active in the manufacture and distribution of catenary 
equipment, an in put for the installation and maintenance of railway contact lines in 
which Engie is active.  
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
 
 
3 (7) Specifically, t he activities of the Parties overlap in the installation and maintenance 
of catenary and overhead contact lines in Belgium. The Parties’ combined pos ition in 
Belgium also gives rise to a vertically affected relation associating the manufacture 
and distribution of catenary equipment (upstream) , on the one hand,  and the 
installation and maintenance of rai lway contact lines (downstream) , on the other 
hand .  
4.2. Market definitions  
4.2.1.  Downstream market(s): Installation and maintenance of catenaries and overhead 
contact lines  
(8) In terms of product marke t definition, the Commission has  identified in previous 
decisions a market for railway contact line engineering, whic h includes the 
installation and maintenance of catenary and overhead lines, as well as of third rail 
system.5 A segmentation of this market by system (catenary and overhead contact 
lines v. third rail) an d by customer (train  v. tramway) was considered, but  the market 
definition was ultimately left open.  The Commission has  also distinguished the 
installation and the maintenance of these contact lines from the manufacture of 
catenary equipment.6  
(9) The Parties consider  that there is a single  market for the inst allation and maintenance 
of catenary and ove rhead contact lines, which does not warrant any segmentation .7 
(10) The Commission’s market investigation confirmed the existence of  an overall 
product market for the installation and maintenance of catenaries and ove rhead 
contact lines , including third rail  systems , which is separate from the market for the 
manufacture and distribution of catenary equipment (see para (11) to (13)). 
(11) First, t he market investigation revealed that the installation and maintenance of 
catenary and overhead contact lines, on the one hand,  and the installation and 
maintenance of third rail systems , on the other hand, are in the same product m arket. 
A majority of both customers and competitors who expressed an opinion stated  that 
installers of catenary and overhead contact lines are also able to install third rail , and 
vice versa.8 While several market participants explained that the installation of 
overhead contact lines is more complex  and difficult than the installation of third rail  
systems  and requi res special equipment,  according to market participants,  most of 
providers are able to do both .9  
                                                 
5  See cases M.5701 - Vinci/CEGELEC, paras. 36 – 39, and M.3653 – Siemens/VA Tech, para. 165. 
6  See case M.5701 - Vinci/CEGELEC, paras. 36 - 39. The French Competition Auth ority has also 
considered this distinction in Eurovia/Vossloh (C2008 -84). 
7  Form CO, para. 44 ff.  
8  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 4.1; 
replies to eQ2 to Competitors, Question 6.1.  
9  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 4.1.1 and 
Replies to eQ2 to Competitors, Question 6.1.1. A competitor stated in this regard : “Both systems need 
civil work expertise. Although overhead contact lines are more complex and difficult to install than 
 
 
 
4 (12) Second,  the market investigation revealed that the electrification  of long -distance 
railways and of metropolitan and tramways fall within the same product market. A 
clear  majority of both customers and competitors who expressed an opinion 
indicated  that installers of long -distance railways are able to install metropolitan and 
tramways , and vice versa.10 While several market participants explained that the 
electrification of long-distance railways is more complex and diff icult than the 
electrification of metropolitan and  tramways and requires special equ ipment, they 
also stated  that the majority of providers are able to do both11.  
(13) Third, the outcome of the market investigation confirmed that the distinction 
between the man ufacture of catenary equipment and its components , on the one 
hand , and the installation and maintenance of catenary and overhead contact lines , 
on the other hand,  remains  appropriate . A clear majority of market participants who 
expressed an opinion indica ted that these markets are still separate nowadays.12 
Several market participants observed that a growing  number of companies are active 
in both the manufacture and the installation of catenary and overhead contact lines , 
which gives them an economical adva ntage because of reduced interface risks and 
synergies in management, leading to r educed unit costs for customers. Likewise, 
some market participants reported that some clients do require for certain  projects 
that the contractor both delivers and install s the equipment.  However, most market 
participants still consider  that the overall skill s, equipment and market players differ 
to such a degree that the manufacture of catenary equ ipment and its installation 
constitute separate markets.13  
(14) In any event, the Commission considers that, for the purposes of this Decision, the 
precise scope of the relevant product market for the installation and maintenance of 
catenaries and overhead contact lines  can ultimately be left open since the 
                                                                                                                                                      
3rd rail systems because of cable routing, poles and its foundations/equipment, installers can usually 
perform the installation of both systems .”  
10  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment,  Question 4.2 and 
replies to eQ2 to Competitors, Question 6.2.  
11  Replies to eQ1 to  Customers of Railway Contact Lines and Catenary Equipment, Question 4.2.1 and 
Replies to eQ2 to Competitors, Question 6.2.1. A competitor noted in this regard: “ The main 
difference regarding long and short distance railways is the amount of equipment to be installed. The 
technology or installation requirements/skills are rather similar. Most major installers can therefore 
install long -distance railways and metropolitan and t ramways ” (reply to Q2 to Competitors, Question 
6.2.1.). A customer stated: “ Whilst the overall system parameters alter slightly, the base equipment 
construct at component level for long -distance railways is largely comparable with that of metro or 
tramway systems ” (reply to Customers of Railway Contact Lines and Catenary Equipment, Question 
4.2.1.).  
12  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 5 and 
replies to eQ2 to Competitors, Question 7.  
13  Replies to eQ1 to C ustomers of Railway Contact Lines and Catenary Equipment, Question 5.1 and 
Replies to eQ2 to Competitors, Question 7.1. A competitor noted in this regard: “ Manufacturing is a 
method that involves transforming raw material or material overall into a consuma ble product after 
being engineered whilst installation or maintenance consists of using skilled or trained people to 
install the products. Therefore, the level or type of skills between manufacturing and 
installation/maintenance are different. The competit ors active on the market for manufacturing 
catenary equipment are also largely different than those active on the market for installation of such 
equipment ” (reply to eQ2 to Competitors, Question 7.1 ). 
 
 
5 Transaction  does not give rise to serious doubts about its compatibility with the 
internal market irrespective of whether the relevant product market includes train, 
tramways and/or third rail systems.  
4.2.2.  Geographic market(s): Installation and maintenance of catenaries  and overhead 
contact lines  
(15) In past cases , the Commission has considered the market for the installation and 
maintenance of railway contact lines to be national in scope  because the regulations  
governing railway contact line s tend to be adopted at national  level and because 
these regulations  differ from one Member State /party to the EEA Agreement  to the 
other . 14  
(16) The Parties are also of  the opinion that the geographic market for the installation and 
maintenance of catenaries and overhead contact lines is na tional in scope.15 
(17) The market investigation revealed  diverging views among  market participants and 
was therefore  not conclusive in this regard.16 Certain market participants  consider  
that that  the geographic scope of the supply of installation services is evolving  and 
tends to become cross -border , potentially EEA -wide in scope.  However, a number of 
elements still point in the direction of a national geographic dimension  as cross -
border activiti es still  appear to remain  very limited  in practice . An overwhelming 
majority of customers who expressed an opinion  replied that they had never 
commissioned or selected a supplier  of installation and maintenance services for 
catenaries and overhead contact lines that did not have an established  physical 
presence in the country .17 Individual  replies provided by customers indicate that 
reasons for this  preference for domestic suppliers  are language barriers,  risk 
premiums , as well as  additional  costs for the accommodation and travel of workers .18 
Moreover, all of the competitors who expressed an opinion  consider that at least a 
consortium or partnership with a company that has a physical presence in the country 
where the relevant project takes place , is require d.19  
(18) Nonetheless , the outcome of the market investigation suggests that harmonisation of 
standards and regulations within the EEA  are blurring and dissolving the borders of 
                                                 
14  See cases M.3653 – Siemens/ VA Tech, para. 17 and M .5701 - Vinci/CEGELEC, paras. 44.  
15  Form CO, para. 63.  
16  Asked whether the national scope found in precedents was still valid, the market investigation showed 
diverging views. While a majority of competitors who took a clear position responded affirmative ly, a 
majority of customers who expressed an opinion  said this definition was no longer valid (see replies 
to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 6 and replies to 
eQ2 to Competitors, Question 8 ). Similarly, while a clear majority of competitors who expressed an 
opinion  indicated that national regulations, technical standards and/or certification processes for the 
installation of catenaries and overhead contact lines are very different across the EEA, a majority of 
customers said this was not the case (see replies to Q1 to Customers of Railway Contact Lines and 
Catenary Equipment, Question 7 and replies to eQ2 to Competitors, Question 9 ). 
17  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Que stion 8  
18  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 9.1.  
19  Replies to eQ2 to Competitors, Question 10.  
 
 
6 previously national geographic markets. A majority of both customers and 
competitor s who expressed an opinion indicated t hat they were willing  to consider 
cross -border installation services.20 Some competitors also indicated that they would 
consider setting  up physical presences in new countries if this is economical  in view 
of the  size o f particular  project s.21 
(19) In any event, the Commission considers that, for the purposes of this Decision, the 
precise scope of the relevant geographic market for the installation and maintenance 
of catenaries and overhead contact lines  can ultimately be left open since the 
Transaction does not give rise to serious doubts about its compatibility with the 
internal market irrespective of whether the relevant geographic market is  defined as  
national, supra -regional  or EEA -wide  in scope . 
4.2.3.  Upstream market: Manufacture of catenaries and its components  
4.2.3.1.  Product market  
(20) The outcome of the market investigation confirmed that the manufacture and 
distribution of catenary equipment is separate from the installation and maintenance 
of catenaries and overhea d contact l ines (see above recital  (13)). The Parties agree 
with that  definition  and consider that any further sub-segmentation  is not warranted,  
for example  between train and tramway equipment.22 
(21) In any event, the precise market definition, including a possible s egmentation  
between train and tramway equipment , can be left open for the purposes of this 
Decision  as the proposed transaction does not give rise to serious doubts as t o its 
compatibility wi th the internal market under any  alternative plausible product  market 
definition  for the manufacture and distribution of  catenary equipment  (e.g. overall 
product market or, alternatively, separate product markets for the train and tra mway 
segment s). 
4.2.3.2.   Geographic market  
(22) There is no Commission precedent  regarding the geographic dimension of the 
market for the manufacture of catenary equipment. In the single case where the 
Commission concluded that this activity belonged  to a separate  service market from  
that of the installation of contact lines, there were no horizontal overlaps or vertical 
relations involving  the manufacturing of catenary equipment and therefore there was 
no need to assess the impact of the transaction in question  on this market. 23 
(23) The Parties consider the market for the manufacture and supply of catenary 
equipment to be  national  in scope.24 
                                                 
20  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 9 and 
replies to eQ2 to Competitors, Question 11.  
21  Replies to eQ2 to Competitors, Question 11.1.  
22  Form CO, para. 52. 
23  See case M.5701 - Vinci/CEGELEC, paras. 34 ff.  
24  Form CO, para. 64.  
 
 
7 (24) Views expressed by market participants over the course of  the market investigation 
diverge  and the results of  the market investig ation  are overall inconclusive.  
(25) Even more so than for the provision of installation and maintenance services for 
catenary and overhead contact lines, the results of the market investigation suggest 
that the relevant geographic market for the manufacture and supply of catenary 
equipment is widen ing.25 A majority of customers and half of the competitors who 
expressed an opinion indicated  that national regulations, technical standards and/or 
certification processes are not very different across the EEA ,26 sugg esting that 
regulatory differences have declined in recent  years. Overall , market participants 
indicated that the geographic market might be wider than the one for installation 
services since the shipment of equipment is not constrained by travel and 
accom modation costs for the workforce and language barriers , at least  to the degree 
it still constrains installation services. Smaller equipment appears to be particularly  
easy to ship  cross -border .27 Moreover,  a clear majority of market participants who 
express ed an opinion  indicated  that no physical presence is needed in the country of 
the project for which the equipment is order ed.28  
(26) However, individual replies provided by several market participants indicate that 
customers still have a preference for domestic  suppliers  due to, e.g.,  language 
barriers, costs and lasting albeit limited differences in applicable regulatory 
standards .29 
(27) Ultimately, t he definition of the relevant geographic market for the manufacture and 
distribution  of catenar y equipment may  be left open for the purposes of this Decision 
since no serious do ubt arise s  irrespective of whether the relevant geographic market 
is defined as  national, supra -regional, EEA -wide or worldwide  in scope . 
                                                 
25  Asked for the size of the geographic market for the manufacture and supply of catenary equipment, 
customers and competitors disagreed. A majority of customers who took a position consider the 
geographic scope to be EEA -wide, while competitors were split between a national and a worldwide 
market, see replies to eQ1 to Customers of Ra ilway Contact Lines and Catenary Equipment, Question 
10 and replies to eQ2 to Competitors, Question 12.  
26  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 11 and 
replies to eQ2 to Competitors, Question 13.  
27   One cust omer noted in this regard: “[…]  Many components are small enough to be shipped from 
other countries. Some single source components where the company owns the IPR are only 
manufactured abroad ” (reply to eQ1 to Customers of Railway Contact Lines and Catenary  
Equipment, Question 12.1.) A competitor said: “ Most manufacturers supply on a worldwide basis. 
While transport costs of some of the equipment such as the poles and its foundation is is moderate to 
high, other catenary equipment is normally small and easil y transportable. It is therefore not required 
to have a local presence in a specific country to supply catenary equipment ” (reply to eQ2  to 
Competitors, Question 14.1.).  
28  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Quest ion 12 and 
replies to Q 2 to Competitors, Question 14.  
29  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 12.1 and 
replies to eQ2  to Competitors, Question 14.1.  
 
 
8 4.3. Competitive assessment  
4.3.1.  Horizontal overlap s in the inst allation and maintenance of catenary and overhead 
contact lines  
(28) The Parties’  activities in  the installation and maintenance of catenary and overhead 
contact lines overlap  at EEA level but  their combined EEA -wide market share 
remains modest at  around [10-20]%, thus not resulting in an affected market.30 
Likewise,  no affected market arises at EEA level if limited to the installation and 
maintenance of catenary and overhead contact lines for either train or tramways .  
Moreover, the Parties are not active in the  installation and maintenance of third rail 
systems.  
(29) At national level, the proposed transaction would give rise to a single  horizontally 
affected market for the installation and maintenance of catenary and overhead 
contact lines in Belgium , where Powerli nes is only active in the tramway segment . 
In fact, the Parties activities do not overlap in any other Member State  or party to the 
EEA Agreement , except Norway  […].31 However , the combined market share of the 
Parties in Norway remains limited, at approximately [10-20]%.  
(30) For the sake of completeness, a slight majority of market participants who expressed 
an opinion indicated that the Parties might be potential competitors in the United 
Kingdom, France, the Netherlands, Luxembourg, and Sweden .32 However , the 
market share of the Party currently active in the United Kingdom, France and the 
Netherlands remains  below 30% , irrespective of the product segmentation .33 In 
Luxemburg,  the market share of Engie’s Ineo is around [40-50]% for train and 
tramways  combined, and [90-100]% for tramways .34 However,  the relatively limited 
size of the relevant market segments in Luxemburg means that market shares may 
vary significantly depending on the award of each particular tender. Moreover, a 
number of strong competi tors active in the train segment in Luxemburg are also 
active in the tramway segment in neighbouring countries. For example, Colas Rail 
with a [40-50]% market share in the train segment in Luxemburg also has a 30 -40% 
market share in the tramway segment in France and is active in that segment in 
Belgium as well.35 Similarly, TSO with a [20-30]% market share in the train 
segment in Luxemburg is a strong player in the tramway segment in France with a 
[20-30]% market share.36 Moreover, the Eqos Energie group that  is based in 
Luxembourg holds a very strong market position in the tramway segment in 
                                                 
30  Form CO, para. 97.  
31    Form CO, para. 93 ff. and rep ly to RFI 5, question 1 on 13 August 2019.  
32  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 24 and 25 
and replies to eQ2 to Competitors, Question 20 and 21 . 
33  In France Engie through INEO has an approximately [20-30]% market share (see Form CO para. 158 
table 4). In Sweden and the UK Powerlines has a market share below 30%, (see reply to RFI N°9 of 
18 September 2019).  
34  Form CO, para. 159 table 6.   
35   Form CO, para 158 table 4.  
36   Form CO, para. 159 table 6.  
 
 
9 Belgium, of almost [60-70]%.37 Thus, combined with the lack of language barriers 
and the anticipated increase in cross -border supply (see above paragraphs (1 7) to 
(18)), effective competition from strong suppliers active in neighbouring countries 
will remain in Luxemburg irrespective of the proposed concentration. Furthermore, 
market participants did not raise specific concern s in relation to Luxembourg  over 
the course of the market investigation .  
4.3.1.1.  Assessment of the horizontal ly affected market  
(31) The marke t investigati on revealed  that the sourcing of  installation and maintenance 
services for  catenary and overhead contact lines , including third rail system,  takes 
place though tenders (i.e., these are “bidding market s”),38 and that  price is the key 
driver of competition39. 
(32) In Belgium , the proposed transaction would result in a combined market share of 
[20-30]%, with an increment below [0-5]% in an overall market for the installation 
and maintenance  services for  catenary and overhead contact lines . In the tramway 
segment where Powerlines is active, the combined market share would be around 
[30-40]% with an increment below [0-5]%. The Parties claim  that these market 
shares are overestimated inasmuch as  they do not take into account  third rail system  
(for the Parties themselves do not install or maintain this type of system  in 
Belgium ).40 These market shares were  overall  confirmed by market participants over 
the course of  the market investigation.41  
(33) Powerlines entered the Belgium market in 2017 and has since participated in the 
same tenders  as Engie. The Parties claim however that  they are not close competitors  
because  Powerlines does not have the capabilities to bid for large projects, whereas  
Engie  does. As apparent from the results of the Commission’s investigation, m arket 
participants  share the view that the Parties  are not close  competitors , including in 
Belgium .42  
(34) The Parties also claim that they  are facing  effective  competition  in Belgium from 
seven other established market players, including  two with a market share close to 
the Parties (Colas and Engema /Mobix ). In the tram way segment, specifically,  the 
Parties face competition from at least two other competitors , including  Eqos  with a 
much larger market share close to [60-70]%. Generally, the results of the market 
                                                 
37   Form CO, para. 156 table 3.  
38  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 13 and 
replies to eQ2 to Competitors, Question 15.  
39  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Questio n 15.  
40  Form CO, para. 80, 81, 86 and 154.  
41  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 18 and 
replies to eQ2 to Competitors, Question 16.  
42  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equ ipment, Question 18, 21, 22, 
23 and replies to eQ2 to Competitors, Question 16, 18.3, 18.4 and 19. One competitor stated in this 
regard: “ To [our] knowledge, Engie and Powerlines have never tendered against each other. They 
could however, be close competit ors as they both have railway market experience and have tendered 
for the same scope of work ” (see reply to eQ2 to Competitors, Question 18.1 ). 
 
 
10 investigation confirm that the supply conditions in Belgium are sufficiently 
competitive .43 
(35) Moreover, th e Parties claim that they will continue facing  potent ial competition  in 
Belgium.44 The market investigation  confirmed that n ew entries into the Belgian 
market(s)  are possible even though the number of tenders is expected to be limited  in 
the next three  years .45 The target  itself entere d Belgium  only in 2017 and another 
company shared its i nterest in entering the Belgium market (s) in response to the 
market investigation .46  
4.3.1.2.  Conclusion on horizontal overlaps  
(36) In view  of the considerations summari sed in recitals  (31) to (35), the Commission 
concludes that the proposed transaction does not give rise to serious doubts about its 
compatibility with the internal market as a result of  possible  horizontal effects in the 
installation and maintenance of catenary and overhead contact li nes. 
4.3.2.  Vertical relations between Powerlines’ activities in the manufacture of catenaries 
and related components  
(37) While Engie is only active in the installation and maintenance of catenary and 
overhead contact lines, Powerlines also manufactures and di stribut es catenaries and 
associated  components and is as such active in a product market upstream of the 
electrification  services.  
(38) On a single product market combining installation and maintenance for trains and 
tramways, the proposed transaction would  not lead to vertically affected markets, 
irrespective of the geographic market definition.47 If one were to consider a distinct 
market for  the installation and maintenance of catenary and overhead lines for  
tramways, the proposed transaction would result in a vertic ally affected market in 
Belgium . However, in Belgium, Powerline s’ upstream market share is limited 
(approx. [5-10]%),48 while Engie’s downstream market share  in the tramways 
segment  is moderate (approx. [30-40]%).49 Moreover , there are at least four other 
competitors active in the supply of catenary e quipment in Belgium, including two  
with higher market shares than Powerlin es (Siemens Mobil ity with approx.  [60-
70]% and Drugman d & Meert with approx.  [10-20]%). In addition , since  these are 
                                                 
43  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 18, 21, 22 
and replies to eQ2 to Competitors, Question 16, 18.3, 18.4.  
44  Form CO, para. 91.  
45  Replies to eQ1 to Customers of Railway Contact Lines and Catenary Equipment, Question 26 and 27  
and replies to eQ2 to Competitors, Question 23.1.  
46  Replies to eQ1 to Customers of Rai lway Contact Lines and Catenary Equipment, Question 26 and 27 
and replies to eQ2 to Competitors, Question 22 and 23.  
47  See Form CO, para 118 to 125.  
48  Form CO, para. 121 and 171.  
49  Form CO, para. 156.  
 
 
11 bidding markets  (see recital (31)), the Commission considers that  the incentives to 
stop supplying a competitor downstream are weak  as the opportunity to recover the 
loss on the do wnstream market is not guaranteed, whereas  by supplying a competitor 
the vertically integrated company which lost the bid might still (indirectly) benefit 
from that lost bid. Hence, the likelihood that the Parties might engage in an input 
foreclosure strategy appears remote .  
(39) Similarly, engaging in a customer foreclosure strategy  also appears unlikely. There 
are several other installers in Belgium and given that these  are bidding markets the 
likelihood  appears limited  that the merged entity would benefit fr om higher price 
levels in the upstream market as result of their ups tream rivals being foreclose d. 
Further more , the outcome of the market investigation has revealed  that the  impact of 
any foreclosure strategy  on customers of Powerlines and suppliers to Eng ie would be 
limited  in any event .50 
(40) For the sake of completeness, no vertically affected market arises in Luxembourg, as 
Powerlines has not been active  in the manufacture and supply of catenary equipment 
and its components in Luxembourg  over at least the last five  years .51 
4.3.2.1.  Conclusion on vertical effects  
(41) In view  of the considerations summaris ed in recitals (37) to (38), the Commission 
concludes that the proposed transaction does not give rise to serious doubts as to  its 
compatibility with the internal market or the functioning of the EEA agree ment as a 
result of the vertical relation  arising between Powerlines’ activities in  the 
manufacture and distribution of catenary equipment , on the one hand,  and the 
Parties’ activities in the installation and maintenance of catenary and overhead 
contact lines,  on the other hand,  irrespective of the geographic market definition.  
5. CONCLUSION  
(42) 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 appli cation 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  
 
                                                 
50  Replies to eQ2 to Competitors, Question 24, 24.1,  24.2, 25, 25.1 and 25.2.  
51   Form CO, para. 118 and 119  and the Parties’ reply to RFI 10 of 19 September 2019.