COMMISSION DECISION of 22.10.1991 declaring a concentration to be compatible with the common market (Case No IV/M.137 - BANKAMERICA / SECURITY PACIFIC) 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

Registered with advice of delivery

To the notifying party

Dear Sirs,

Subject:<ind> Case No. IV/M.137 - BankAmerica / Security Pacific

<ind> <ind> Your notification of 23.09.1991 pursuant to Article 4 of Council Regulation N* 4064/89.

I.<ind> THE AGREEMENT AND THE PARTIES

1.<ind> BankAmerica and Security Pacific entered into an agreement on August 12, 1991 by which they will merge. The agreement will be carried out in two stages. Firstly, the two holding companies - BankAmerica Corporation and Security Pacific Corporation - will merge before the end of March 1992. Thereafter, the banking companies themselves - Bank of America National Trust and Savings Association and Security Pacific National Bank - will merge.

II.<tab> CONCENTRATION

2.<ind> The operation consists of a merger between BankAmerica and Security Pacific within the meaning of Article 3(1)a of the Merger Regulation.

III.<tab> COMMUNITY DIMENSION

3.<ind> The operation has a Community dimension. One-tenth of the total assets of both parties amounts to ECU 14,552 million and the amount attributable to the Community under the method of calculation set out in Article 5(3)a of the Regulation is as follows:

<tab> <tab> Security Pacific <tab> ECU 377 million

<tab> <tab> BankAmerica <tab> ECU 399 million

<ind> The two banks do not achieve more than two-thirds of their Community turnover within one and the same Member State.

IV.<ind> COMPATIBILITY WITH THE COMMON MARKET

4.<ind> BankAmerica and Security Pacific both are strong in the United States where they are ranked second and fifth respectively (source American Banker). In a survey of the top 1000 banks worldwide (The banker July 1991) BankAmerica and Security Pacific were placed in 34th and 57th position respectively ranked by assets.

5.<ind> The parties state that the logic and commercial strategy which led to the proposed merger are not dictated or even materially influenced by the Bank's presence in the Community. The primary business of both banks is in the US, carried on through an extensive subsidiary and branch network. Their activities are concentrated in particular in the State of California. The principal international market for both banks is Asia and the Pacific basin, where they hold [For purposes of pulication these shares are deleted.] of their global loan portfolio.

6.<ind> A smaller part of the bank's international business is carried out in Europe. Loans and advances to credit institutions and customers within the Community by BankAmerica amounted to [For purposes of publication this figure is deleted.] in 1990. In the case of Security Pacific, this amounted to [For purposes of publication this figure is deleted.]. In the Community the respective activities of BankAmerica and Security Pacific are broadly complementary. Security Pacific focuses in addition to general wholesale banking mostly on equity trading and broking and other similar activities through its subsidiary, Hare Gavotte. In the EC BankAmerica has virtually no general corporate banking including loans, security, trading, foreign exchange and local currency clearing.

7.<ind> The volume of business carried out by the banks within the Community is small in comparison to the total amount of such business in the Community. The concentration is therefore unlikely to have any effect on competition in the EC.

8.<ind> The parties have supplied the Commission with information on their main fields of activities in the Community. The following categorization of business provides an indication of the bank's position within the Community:

<tab> -<ind> Credit, including loans and advances to institutions and customers, leasing and consumer lending. Their combined shares using central bank and Banking Association sources are as follows:

<tab> <tab> United Kingdom

<tab> <tab> Spain

<tab> <tab> Benelux

<tab> <tab> France

<tab> <tab> Germany

<tab> <tab> [For purposes of publication these shares are deleted. They are below 1%.]

<ind> <ind> Market share in other countries is insignificant.

<tab> -<ind> Swaps, including interest rate and currency swaps. Market shares in the United Kingdom: [For purposes of publication this figure is deleted. It is below 10%.]

<tab> -<ind> Foreign Exchange and local currency clearing. The only significant activity of the parties in the E is carried out in the United Kingdom and Germany, with market shares as follows:

<tab> <tab> United Kingdom <tab> Germany

<tab> <tab> Foreign Exchange

<tab> <tab> Local currency clearing

<tab> <tab> [For purposes of publication the figures are deleted. They are below 10%.]

9.<ind> At its broadest the relevant product/service market could be defined as the lending (or the borrowing) of money and related financial services. On this basis, the banking business carried out in the United Kingdom by the banks, represents less than 1% of the banking business carried out by all institutions authorized in the United Kingdom. Over half of the business of both BankAmerica and Security Pacific in the Community is in the United Kingdom.

<ind> The small level of operations of the merging banks in the Community excludes the possibility of a dominant position even if a narrower definition of product service or geographic markets is adopted. For that reason the question of product/service or geographic market definition can be left open.

10.<ind> Given the extremely low shares of the merging banks in the Community's financial markets, and their limited presence in the EC, the concentration will not create or strengthen a dominant position as a result of which effective competition would be significantly impeded in the Common market or in a substantial part of it.

For the above reasons, the Commission has decided not to oppose the notified operation and to declare it compatible with the common market. This decision is adopted in application of Article 6, paragraph 1(b) of Council Regulation N* 4064/89.

For the Commission