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, 11.02.2019  
C(2019)1116  
  
 
To the notifying party:  
 
 
Subject : Case M. 9130 - Société Générale / Commerzbank EMC Business  
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 7 January 2019 , the European Commission received notification of a 
proposed concentration  (the “Transaction”)  pursuant to Article 4 of the Merger 
Regulation , by which  Société Générale SA (“SG”, France  or the “Notifying 
Party” ) acqui res within the meaning of Article 3(1)(b) of the Merger Regulation 
sole control of the Equity Markets & Commodities Business (“EMC”, or the 
“Target”) of Commerzbank AG (“Commerzbank”, Germany)3. SG and the 
Target are collectively referred to as the "Partie s". 
1. THE PARTIES  
(2) SG is globally active in retail banking and financial services, global investment 
management, and corporate and investment banking.  
(3) Commerzbank EMC Business is active in asset management services as well as 
the design, structuring, issuance, and market making of structured investment  
products.  
                                                 
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 
'Community' by 'Unio n' 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 18, 15.01.2019 , p. 42.  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possible the information omitted has been 
replaced by ranges of figures or a general 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.  PUBLIC VERS ION 
 
2 2. THE OPERATION  
(4) On 8 November 2018, SG and Commerzbank signed a business purchase 
agreement pursuant to which SG would acquire sole control over the Target by 
way of a combined asset and share deal. The Transaction involves (i) the 
acquisition by SG of assets, liabilities , contracts, and employees pertaining to 
the Target and (ii) the acquisition by SG of 100% of the shares in Commerzbank 
affiliates pertaining to the Target.4  
(5) The Transaction would therefore give rise to a concentration within the meaning 
of Article 3(1)(b ) of the Merger Regulation.  
3. UNION  DIMENSION  
(6) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million5 (SG: EUR 23 954 million; the Target: EUR […]). 
Each of them has an EU -wide turnover in excess of EUR 250 mi llion (SG: EUR 
[…]; the Target: EUR […]), but th ey do not achieve more than two thirds of 
their aggregate EU -wide turnover within one and the same Member State.  
(7) The Transaction  therefore has an EU dimension  pursuant to Article 1(2) of the 
Merger Regulatio n. 
4. RELEVANT MARKETS  
4.1. Structuring, Issuance, and Market Making of ETSIPs  
4.1.1.  Product market definition  
(8) Structured investment products (“SIPs”) are innovative financial instruments,  
characteris ed by an underlying asset (e.g., a specific share, bond, commodity, 
index, rate, or a basket thereof), pay -off formulae (defining the amounts payable 
to the investors based on reference performances of the underlying assets) and a 
wrapper ( e.g., a certificate, note, fund, bilateral master agreement, etc.).  
(9) Financial insti tutions, such as the Parties, are active in the design and 
manufacturing  of SIPs . This involves choosing an underlying financial 
instrument and wrapping it in the adequate legal wrapper. The new SIP is then 
issued and  becomes available  (for the first time)  to investors in the primary 
market . Once a SIP has  entered the primary market, it can then  be traded further 
on the secondary market.  SIPs are attractive when they can be easily traded, i.e., 
the market is sufficiently liquid for the concerned product. To  ensure such 
liquidity, financial institutions often act as “ market makers ”. Market making 
consists in selling and buying SIPs to and from clients, making profit on price 
differentials.6 
                                                 
4  Nam ely, Commerz Funds Solutions S.A., Blue Amber Fund Management S.A., Commerz Pearl Ltd., and 
Commerz Securities Hong Kong Ltd..  
5  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
6  See Case M.7151 – BNP Paribas / Certain Assets of Royal Bank of Scotland , paragraph 30.  
 
3 (10) SIPs that are sufficiently generic and standardized  can be traded on exchanges 
and are therefore called exchange -traded structured investment products 
(“ETSIPs”). ETSIPs include exchange -traded notes, warrants, certificates , and 
exchange traded funds (“ETFs”).  ETSIPs are different from wholesale SIPs 
(“WSIPs”), which are ta ilor-made to meet requirements of specific customers 
and are traded  over-the-counter  (“OTC”) .  
(11) In BNP Paribas / Certain Assets of Royal Bank of Scotland , the Commission 
considered that t here is one single relevant market including t he structuring, 
issuance , and market making of ETSIPs.7 The market investigation in that case 
showed tha t there is limited demand -side substitutability between  ETSIPs  and 
stocks, bonds, and listed equity derivatives , because they involve different levels 
of return and risk .8 The market investigation also suggested that ETSIPs are not 
substitutable with other types of SIPs, like WSIPs .9  
(12) In that case, the market investigation indicated  that the market for  structuring, 
issuance, and market making of  ETSIPs should not be further  sub-segmented  
based on the different asset classes underlying an ETSIP ( e.g., equities, 
commodities, fixed income) .10 Thus, the Commission concluded that  “the 
narrowest product market definition encompasses all structured ETSIP ”.11  
(13) The Notifying Party agree s with the Commission’s past decisional practice 
regarding product market definition concern ing ETSIPs.  
(14) For the purposes of the present case, the Commission considers that the relevant 
product market includes the structuring, issuance, and market making of 
ETSIPs.   
4.1.2.  Geographic market definition  
(15) In BNP Paribas / Certain Assets of Royal Bank of Scotland , the Commission’s 
market investigation indicated that the market for structuring, issuance, and 
market making o f ETSIPs “ should be considered as national in scope since the 
competition between suppliers takes place at the national level ”.12  
(16) The Notifying Party submit s that the  scope of the  market for  structuring, issuing, 
and market making of  ETSIPs is EEA -wide. Th e Notifying Party explain s that 
the situation in the  market has considerably evolved since 2014 and the 
Commission’s investigation in BNP Paribas / Certain Assets of Royal Bank of 
Scotland . The Notifying Party recall s that a  new pan -European regulatory 
framework has been introduced  (namely , MiFID II13 and MiFIR14) and pan -
European trading platforms  have emerged  (e.g., Euronext ETF Access or 
                                                 
7  See Case M.7151 – BNP Paribas / Certain Assets of Royal Bank of Scotland , paragraph 39.  
8  See Case M.7151 – BNP Paribas / Certain Assets of Royal Bank of Scotland , paragraph 40.  
9  See Case M.7151 – BNP Paribas / Certain Assets of Royal Bank of Scotland , paragraph 32.  
10  See Case M.7151 – BNP Paribas / Certain Assets of Royal Bank of Scotl and, paragraph 41.  
11  See Case M.7151 – BNP Paribas / Certain Assets of Royal Bank of Scotland , paragraph 43.  
12  See Case  M.7151 – BNP Paribas / Certain Assets of Royal Bank of Scotland , paragraph 53.  
13  See Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments and 
amending Directive 2002/92/EC and Directive 2011/61, OJ L 173, 12.06.2014, p. 349.  
14  See Regulation 600/2014 of the European Parliament and of the Council on markets in financial instruments and 
amending Regulation (EU) No  648/2012, OJ L 173, 12.06.2014, p. 84.  
 
4 Euronext’s platform for warrants and certificates) . This  facilitates the supply and 
purchase of ETSIPs across the EEA.  
(17) The vast majority of customers participating in the market investigation 
confirmed that , when making their choice for ETSIPs,  customers located in one 
EEA country also consider ETSIPs listed on exchanges in other EEA 
countries.15 As customers put it,  they p urchase ETSIPs  in the EEA  in “an 
integrated marke [t] place. Most ETSIPs are in direct competition with each 
other ” and “the choice of the exchange is less important ”.16 
(18) In the market investigation , most customers considered that there are no 
particular adva ntage s for a n (institutional or retail)  customer purchasing  ETSIPs 
listed on  a local exchange . Only  a minority  of respondents insisted  that there are 
advantages for retail customers when purchasing ETSIPs on a local exchange, 
e.g., the availability of legal documentation in the customer’s native language.17 
(19) For the purpose s of the present case, it can be left open whether the relevant 
market for structuring, issuance, and market making of ETSIPs is EEA -wide or 
national, as the Tra nsaction does not give rise to  serious doubts as to its 
compatibility with internal market  under any plausible geographic market 
definition . 
4.2. Distribution of investment products  (including ETSIPs)  
4.2.1.  Product market definition   
(20) In its past decisional practice, the Commission  considered that the distribution 
of a specific type of investment products ( in that case, mutual funds) constituted 
a separate relevant market.18 In other  cases, the Commission considered that the 
relevant product market could include distributio n of mutual funds and other 
investment products.19 The Commission ultimately left this question  open.20   
(21) The Notifying Party submits that the relevant product market in this case should 
comprise the distribution of all investment products.   
(22) In Crédit Agric ole / Soci été Générale Asset Management , the Commission also 
considered that distribution of mutual funds could be sub -segmented based on 
the channel of distribution. Specifically, t he Commission envisaged different 
markets  for (i) distribution of  mutual funds through the general retail network 
                                                 
15  Replies to Q1 – Questionnaire to Customers, questi on 5.  
16  Replies to Q1 – Questionnaire to Customers, question 5.1.  
17  Replies to Q1 – Questionnaire to Customers, question 6.  
18  See Case M.8359 – Amundi / Crédit Agricole / Pioneer Investment , paragraph 33 and Case M.6168 – RBI / EFG 
EUROBANK / JV , paragraph 12.  
19  See Case M.6405 – Banco Santander / Rainbow , paragraph 12  and Case M.5293 – Santander / Alliance & 
Leicester , paragraph 9.  
20  See Case M.8359 – Amundi / Crédit Agricole / Pioneer Investment , paragraph 33 and Case M.6168 – RBI / EFG 
EUROBANK / JV , paragraph 18, Case M.5293 – Santander / Alliance & Leicester , para graph 9, and Case M.4844 
– Fortis / ABN AMRO Assets , paragraphs 39 -40 and 155.  
 
5 and (ii) distribution of  mutual funds through private banking.21 The Commission 
ultimately left this question  open.22  
(23) The Notifying Party highlight s the differences between the two channels and 
recalls  that ET SIPs are essentially distributed to retail clients through online 
brokers , i.e., through the general retail network.  
(24) For the purposes of the present case, it can be left open whether the relevant 
market includes distribution of all investment products  or only ETSIPs and 
whether it comprises all distribution channels or only one of them. The 
Transaction does not give  rise to competition concerns under any plausible 
market delineation .  
4.2.2.  Geographic market definition  
(25) In past decisions, t he Commission found that the market for the distribution of 
mutual funds and other investment products  is national in scope .23 The 
Notifying Party does not contest this geographic market definition.  
(26) For the purposes of the present case , the plausible relev ant markets for the 
distribution of ETSIPs and for the distribution of investment products are 
considered national in scope, regardless of the distribution channel used.  
5. COMPETITIVE ASSESSMEN T 
Introduction  
(27) Article 2 of the Merger Regulation requires the C ommission to examine whether 
notified concentrations are compatible with the internal market, by assessing 
whether they would significantly impede effective competition in the internal 
market or in a substantial part of it.  
(28) The Commission Guidelines on th e assessment of horizontal mergers under the 
Merger Regulation  (the "Horizontal Merger Guidelines") distinguish two main 
ways in which mergers between actual or potential competitors on the same 
relevant market may significantly impede effective competitio n, namely non -
coordinated effects and coordinated effects.24   
(29) Non-coordinated effects may significantly impede effective competition by 
eliminating the competitive constraint imposed by one merging party on the 
other, as a result of which the merged entity  would have increased market power 
without resorting to coordinated behaviour. According to recital (25) of the 
preamble of the Merger Regulation, a significant impediment to effective 
competition can result from the anticompetitive effects of a concentrat ion even 
if the merged entity would not have a dominant position on the market 
                                                 
21  See Case M.5728 – Crédit Agricole / Société Générale Asset Management , paragraphs 68 ff. 
22  See Case M. 5728 – Crédit Agricole / Société Générale Asset Management , paragraph 77 .  
23  See Case M.8359 – Amundi / Crédit Agricole / Pioneer Investment , paragraph 34, Case M.6405 – Banco 
Santander / Rainbow , paragraph 12, Case M.5293 – Santander / Alliance & Leicester , paragraph 9, Case M.4844 
– Fortis / ABN AMRO Assets , paragraphs  155-158.  
24  OJ C 31, 05.02.2004, p. 5.  The remainder of this decision focuses on non -coordinated effects.  
 
6 concerned. In this regard, the Horizontal Merger Guidelines  consider not only 
the direct loss of competition between the merging firms, but also the reduction 
in competitive pressure on non -merging firms in the same market that could be 
brought about by the merger.25  
(30) Indeed, the Horizontal Merger Guidelines list a number of factors which may 
influence whether or not significant non -coordinated effects are likely to result 
from  a merger, such as the large market shares of the merging firms, the fact that 
the merging firms are close competitors, the limited possibilities for customers 
to switch suppliers , or the fact that the merger would eliminate an important 
competitive force.  Not all of these factors need to be present for significant non -
coordinated effects to be likely. The list of factors, each of which is not 
necessarily decisive in its own right, is also not an exhaustive list.26  
(31) In addition, the Commission Guidelines on the assessment of non -horizontal 
mergers under the Merger Regulation  (the "Non -Horizontal Merger Guidelines") 
distinguish between two main ways in which vertical mergers may significantly 
impede effective competiti on, namely input foreclosure and customer 
foreclosure.27  
(32) For a transaction to raise input foreclosure competition concerns, the merged 
entity must have a significant degree  of market power upstream.28 In assessing 
the likelihood of an anticompetitive input foreclosure strategy, the Commission 
has to examine whether (i) the merged entity would have the ability to 
substantially foreclose access to inputs ; (ii) whether it would have the incentive 
to do so; and (iii) whether a foreclosure strategy would have a s ignificant 
detrimental effect on competition downstream.29  
(33) For a transaction to raise customer foreclosure competition concerns, the merged 
entity must be an  important customer with a significant degree of market power 
in the downstream market.30 In assessi ng the likelihood of an anticompetitive 
customer foreclosure strategy , the Commission has to examine whether  (i) the 
merged entity would have the ability to foreclose access to downstream markets 
by reducing its pur chases from upstream rivals;  (ii) whether  it would have the 
incentive to do so;  and (iii) whether a foreclosure strategy would have a 
significant detrimental effect on consumers in the downstream market.31  
                                                 
25  Horizontal Merger Guidelines, paragraphs 24 -38.  
26  Horizontal Merger Guidelines, paragraphs 24 -38. 
27  OJ L 24, 29.1.2004, p. 1.  
28  Non-horizonta l Merger Guidelines, paragraph 35.  
29  Non-horizontal Merger Guidelines, paragraph 32.  
30  Non-horizo ntal Merger Guidelines, paragraph 61.  
31  Non-horizontal Merger Guidelines, paragraph 59.  
 
7 Affected markets  
(34) Both SG and the Target  design, construct, and sell ETSIPs and the Transaction 
gives rise to horizontally affected market s regarding structuring, issuance, and 
market making of ETSIPs in the EEA and in several Member States .32 
(35) In addition, SG distributes its own and third -party ETSIPs, among other 
investment products. In this respect , SG only acts as a broker, meaning that it 
does not buy and/or sell ETSIPs on its own behalf , making a profit on  the price 
differential . When acting as a distributor, SG only concludes  a transaction on 
behalf of a client  (collecting a brokerage fee ). 
(36) The Transaction gives rise to affected markets regarding the vertical link 
between structuring, issuing, and market making of ETSIPs (upstream) and 
distribution of investment products such as ETSIPs (downstream).33 
5.1. Horizontal Analysis  
(37) The Parties’ activities overlap in the structuring, issuance, and market making of 
ETSIPs in 16 EEA countries34 and give rise to affected markets at the EEA  level  
and in 12 EEA countries.35 Given the volatility of  market shares in ETSIPs, the 
Commission did not identify affected markets only based on 2017 market share 
data but also took into account the combined market share s of the Parties in 
2015 and 2016. A market was considered as horizontally  affected by the 
Transaction where the combined share of the Parties was 20% or higher in any 
of the years 2015, 2016, or 2017.  
5.1.1.  EEA Level  
(38) A possible EEA -wide market  for structuring, issuance, and market making of 
ETSIPs would be affected by the Transaction based on 2015  market share data , 
when the combined entity would have been the market leader with  a share of  
[20-30]% . In 2016 and 2017, the Transaction would not have affected the EEA -
wide market for structuring, issuance, and market making of ETSIPs. Table 1 
below summarizes the shares of the Parties and their competitors in  this market 
in the EEA  in 2015, 2016 and 2017.   
                                                 
32  The Parties’ activities also overlap horizontally in (i) asset management services and (ii) WSIPs but the 
Transaction does not give rise to affected markets.  
33  SG is further active in the markets for the distribution of mutual funds, in fund administration services and in 
custody services, which are all vertically re lated to the Parties' activities in the provision of asset management 
services. SG is also active in the distribution of investment products, which is vertically related to the Parties’ 
activities in WSIPs. None of these vertical links gives rise to affect ed markets.  
34  Namely, Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxemb ourg, the Netherlands, 
Norway, Poland, Portugal, Spain, Sweden, and the United Kingdom.  
35  Namely, Austria, Belgium, Finland, France, Germany, Ireland, Italy,  Luxembourg, Poland, Portugal, Spain, and 
Sweden.  
 
8 Table 1 – Market for structuring, issuance, and market making of ETSIPs (2017)  
Total Market Size and Market Share in the EEA  
(2015 -2017)  
 2015  2016  2017  
Total market size (M€)  1 101 533  1 118 155  1 340 824  
SOCIETE GENERALE  [5-10]%  [5-10]%  [5-10]%  
TARGET  [10-20]%  [10-20]%  [10-20]%  
Merged entity  [20-30]%  [10-20]%  [10-20]%  
FLOW TRADERS  [10-20]%  [10-20]%  [20-30]%  
JANE STREET  [10-20]%  [10-20]%  [10-20]%  
SUSQUEHANNA  [5-10]%  [5-10]%  [5-10]%  
OPTIVER  [0-5]% [0-5]% [0-5]% 
GOLDMAN SACHS  [0-5]% [0-5]% [0-5]% 
BNP PARIBAS  [0-5]% [0-5]% [0-5]% 
Others  [20-30]%  [20-30]%  [20-30]%  
TOTAL  100%  100%  100%  
Post-merger HHI  [1000 -2000]  [1000 -2000]  [1000 -2000]  
HHI increment  [0-250] [0-250] [0-250] 
Source : Form CO  
(39) The Transaction does not give rise to serious doubts as to its compatibility with 
the internal market regarding a possible EEA -wide market for structuring, 
issuance, and market making of ETSIPs for the following reasons.  
(40) First, following the Transaction, the combined entity will continue facing  strong 
competition from several players, including Flow Traders (the market leader 
with a s hare of [20-30]% in 2017), Jane Street ([10-20]%) , and Susquehanna 
([5-10]%)  (all operating at EEA level for the market making of ETFs), but also 
Optiver ([5-10]%) Goldman Sachs ([0-5]%) , BNP Paribas ([0-5]%) , UniCredit 
([0-5]%) , Deutsche Bank ([0-5]%) , Vontobel ([0-5]%) , and Morgan Stanley ([0-
5]%) . The HHI in this market is between 1 ,000 and  2,000 and the delta HHI is 
below 250 in each of 2015, 2016 , and 2017.36 
(41) The market investigation confirmed that the combined entity will  remain subject 
to strong competitive constraints in the EEA -wide market for structuring, 
issuance, and market making of ETSIP s. Customers described this market as 
“highly competitive ”37 and including  a large number of competitors.38 In this 
respect, the vas t majority of respondents confirmed that, post -Transaction, the 
number of alternative providers of  ETSIPs would remain sufficient for 
customers to obtain both competitive prices and a wide range of product options 
from suppliers  of ETSIPs  in the EEA.39 
(42) Seco nd, according to the results of the market investigation, in the market for 
structuring, issuance, and market making of ETSIPs in the EEA, the Parties are 
not each other ’s closest competitors. The vast majority of customers and 
competitors who responded to  the market investigation identified players other  
than the Target as SG’s closest competitor in the EEA  (e.g., BNP Paribas or 
                                                 
36  See Horizontal Merger Guidelines, paragraph  20.  
37  Replies to Q1 – Questionnaire to Customers, question 8.  
38  Replies to Q1 – Questionnaire to Customers, question 8.  
39  Replies to Q1 – Questionnaire to Customers, question 17 and to Q2 – Questionnaire to Competitors, question 16.  
 
9 Blackrock) , taking into account the range of ETSIPs offered .40 Similarly, the 
vast majority of respondents identified players other  than SG as the Target’s 
closest competitor in the EEA  (e.g., Deutsche Bank) , taking into account the 
country where the ETSIP provider is based .41 In any event , the market 
investigation provided indications that there are no significant differences 
between the ETSIP products that the various suppliers offer. In this context,  
some market participants explained that  “the product types offered are highly 
standardized ” and “ there is no specific feature which differentiates [SG or the 
Target Business] from o ther large pan -European issuers ”.42   
(43) Third, the majority of  customers and competitors that participated in the market 
investigation stated that customers switch easily between suppliers of the 
structuring, issuance, and market making of ETSIPs.43 The price of an  ETSIP is 
the most important parameter that customers take into account in purchasing 
decisions ,44 considering also the return and performance prospects of the 
product. A s explained by  one customer : “ETSIPs business is  a transparent and 
competitive, t herefore customers can compare different product offers easily 
and decide what fit s best for them ”.45   
(44) Fourth, the market investigation did not revea l any substantiated competition 
concerns in relation to the proposed Transaction in  a possible EEA market f or 
the structuring, issuance, and market making of ETSIPs.46  
(45) In light of the above, the Transaction does not give rise to serious doubts as to 
its compatibility with the internal market regarding a possible market for the 
structuring, issuance, and market making of ETSIPs in the EEA.   
5.1.2.  National level  
(46) If the market for the structuring, issuance, and market making of ETSIPs were 
defined at national level, t he Transaction would lead  to horizontally affected 
markets in 12 E EA countries, namely Austria, Belgium, Finland, France, 
Germany, Ireland, Italy, Luxembourg, Poland, Portugal, Spain , and Sweden.  
(47) Table 2 below summari ses the Parties’ combined market shares in each of the se 
national  market s in 2015, 2016  and 2017. It also includes information on the 
market size and the share increment that either SG or the Target contribute to 
the combined entity (whichever is the lowest in each case).  
                                                 
40  Replies to Q1 – Questionnaire to Customers, question 12 and to Q2 – Questionnaire to Competitors, question 12.  
41  Replies to Q1 – Questionnai re to Customers, question 13 and to Q2 – Questionnaire to Competitors, question 1 3. 
42  Replies to Q2 - Questionnaire to Competitors, q uestions 6, 8, and 9.  
43  Replies to Q1 – Questionnaire to Customers, question 15.  
44  Replies to Q1 – Questionnaire to Cust omers, question 9.  
45  Replies to Q1 – Questionnaire to Customers, question 15.1.  
46  Replies to Q1 – Questionnaire to Customers, ques tion 17 and to Q2 – Questionnaire to Competitors, question 17.  
 
10 Table 2 – National Market s for structuring, issuance, and market making of ETSIPs  
Combined market shares in affected EEA countries over the 2015 -2017 period  
EEA 
Member 
State  2015  2016  2017  
Market  
size 
(M€)  Combine
d 
Share  Share Δ Market  
size 
(M€)  Combine d 
Share  Share Δ Market  
size 
(M€)  Combin
ed 
Share  Share Δ 
Austria  20 588  [30-40]%  [10-20]%  20 867  [30-40]%  [10-20]%  27 237  [10-20]%  [5-10]%  
Belgium  6 778  [20-30]%  [10-20]%  6 745  [20-30]%  [10-20]%  8 796  [20-30]%  [5-10]%  
Finland  11 408  [20-30]%  [10-20]%  11 177  [10-20]%  [5-10]%  14 434  [20-30]%  [5-10]%  
France  124 269  [30-40]%  [10-20]%  125 098  [20-30]%  [10-20]%  162 280  [10-20]%  [5-10]%  
Germany  317 977  [20-30]%  [0-5]% 279 322  [20-30]%  [0-5]% 322 771  [20-30]%  [0-5]% 
Ireland  13 272  [20-30]%  [5-10]%  13 451  [30-40]%  [5-10]%  17 557  [20-30]%  [5-10]%  
Italy 162 303  [20-30]%  [10-20]%  161 597  [20-30]%  [5-10]%  185 911  [10-20]%  [5-10]%  
Luxembourg  11 154  [40-50]%  [20-30]%  11 305  [40-50]%  [20-30]%  14 756  [30-40]%  [10-20]%  
Poland  2 600  [20-30]%  [0-5]% 2 537  [20-30]%  [0-5]% 2 600  [10-20]%  [0-5]% 
Portugal  3 427  [20-30]%  [5-10]%  3 473  [10-20]%  [5-10]%  4 533  [10-20]%  [5-10]%  
Spain  17 256  [30-40]%  [5-10]%  17 093  [30-40]%  [5-10]%  21 838  [30-40]%  [5-10]%  
Sweden  19 544  [30-40]%  [10-20]%  20 427  [10-20]%  [5-10]%  22 008  [10-20]%  [0-5]% 
Source: Form CO  
(48) To account  for the volatility of market shares47 Table 3 below  shows the Parties’ 
average combined market shares for the same markets over the last five years  
(2013 -2017) . 
Table 3 – National Market s for the structuring, issuance, and market making of ETSIPs  
Average combined market shares in affected EEA countries (2013 -2017)  
EEA Member State  SG Share  Target Share  Combine d Share  
Austria  [10-20]%  [10-20]%  [20-30]%  
Belgium  [5-10]%  [10-20]%  [20-30]%  
Finland  [10-20]%  [10-20]%  [20-30]%  
France  [10-20]%  [5-10]%  [20-30]%  
Germany  [0-5]% [10-20]%  [20-30]%  
Ireland  [5-10]%  [10-20]%  [20-30]%  
Italy [10-20]%  [5-10]%  [10-20]%  
Luxembourg  [10-20]%  [20-30]%  [30-40]%  
Poland  [10-20]%  [0-5]% [10-20]%  
Portugal  [5-10]%  [10-20]%  [10-20]%  
Spain  [20-30]%  [20-30]%  [20-30]%  
Sweden  [10-20]%  [10-20]%  [30-40]%  
Source: Form CO  
 
(49) In Finland , Poland , and Portugal , the Parties’ combined market shares remain 
below [20-30]%  in each of 2015, 2016 and 2017  and on average for the period 
2013 -2017 . The market investigation did not reveal any competition concerns in 
relation to ETSIPs in Finland, Poland, and Portugal.48 In all three countries, the 
combined entity will continue to face competition by at least fo ur players with 
                                                 
47  Cf. Case M.7151 – BNP Paribas / Certain Assets of Royal Bank of Scotland , paragraph 67 and Table 1. In that 
decision, the Commission acknowledged (in paragraph 69) that “... high volatility is a structural characteristic of 
the [ETSIPs] market” . 
48  Replies to Q1 – Questionnaire to Customers, question 18 and to Q2 – Questionnaire to Competitors, question 18 . 
 
11 average shares of 5% or more in 2013 -2017.49 In light of this,50 the Transaction 
does not give rise to serious doubts as to its compatibility with the internal 
market regarding market s for structuring, issuance, and market making of 
ETSIPs in  Finland, Poland, and Portugal.  
(50) In Belgium , Ireland , and Italy, the Parties’ combined market share exceeded [20-
30]%  in 2015, 2016, and/or 2017 but the average combined market shares 
remain ed below [20-30]%  over the 2013 -2017 period. In all three countries , the 
combined entity will continue to face  competition by at least four players with 
average shares of approximately 5% or more in 2013 -2017.51 The market 
investigation did not reveal any competition concerns in relation to the market 
for structur ing, issuance, and market making of ETSIPs in Belgium, Ireland, and 
Italy.52 In light of this, the Transaction does not give rise to serious doubts as to 
its compatibility with the internal market regarding  markets for structuring, 
issuance, and market maki ng of ETSIPs in Belgium, Ireland, and Italy.  
(51) In each of Austria , France , and Sweden , the Parties’ combined market shares 
exceeded [20-30]%  in 2015 and/or 2016, but fell below [20-30]%  in 2017. 
Moreover, in Austria  and France , the  average combined market sh are of the 
Parties in  2013 -2017 period does not exceed [20-30]%.  In France and Sweden , 
the Parties’ combined market shares  have been steadily decreasing between 
2015 and 2017 . In all three countries, the combined entity would face 
competition by at least four players with average market shares above 5%  in 
2013 -2017 .53 The market investigation did not reveal any competition concerns 
in relation to  the market for structuring, issuance, and market making of  ETSIPs 
in Austria, France, and Sweden.54 In light of t his, the Transaction does not give 
rise to serious doubts as to its compatibility with the internal market regarding  
markets for  structuring, issuance, and market making of  ETSIPs in Austria, 
France, and Sweden.  
(52) In Germany , the Parties’ combined market sha re in 2017 and their average 
combined market share in 2013 -2017 was below [20-30]% . The Parties’ 
combined market share was [20-30]%  in 2015. In any event , the post-merger 
HHI remains below 2, 000 post -Transaction based on market share data of 2015, 
2016, an d 2017. The HHI increment  in each of these years would be less than 
250.55 The market investigation did not reveal any competition concerns in 
relation to  the market for structuring, issuance, and market making of  ETSIPs in 
                                                 
49  In Finland: Flow Traders ([20-30]%) , Jane Street ([10-20]%) , Susquehanna ([10-20]%) , and Optiver ([5-10]%) ; 
in Poland: Flow Traders ([20-30]%) , Jane Street ([20-30]%) , Susquehanna (11%), and Optiver ([5-10]%); in 
Portugal: Flow Traders ([20-30]%) , Jane Street ([20-30]%) , Susquehanna ([10-20]%) , and Optiver ([5-10]%) . 
50  See Horizontal Merger Guidelines, paragraph  18.  
51  In Belgium: Flow Traders ([20-30]%) , Jane Street ([20-30]%) , Susquehanna ([10-20]%)  and Optiver ([5-10]%) ; 
in Ireland: Flow Traders ([20-30]%) , Jane Street ([20-30]%) , Susquehanna ([10-20]%) ) and Optiver ([5-10]%) ; 
in Italy, these are Flow Traders ([20-30]%) , Jane Street ([10-20]%) , Susquehanna ([5-10]%) , and Optiver ([5-
10]%) .  
52  Repli es to Q1 – Questionnaire to Customers, question 18 and to Q2 – Questionnaire to Competitors, question 18.  
53  In Austria:  Flow Traders ([20-30]%) , Jane Street ([20-30]%) , Susquehanna ([10-20]%) , and Optiver ([5-10]%) ; 
in France: Flow Traders ([20-30]%) , Jan e Street ([10-20]%) , Susquehanna ([10-20]%) , and Optiver ([5-10]%) ; 
in Sweden: Morgan Stanley ([10-20]%), BNP Paribas ([10-20]%) , Flow Traders ([5-10]%) , and Jane Street ([5-
10]%) .  
54  Replies to Q1 – Questionnaire to Customers, question 18 and to Q2 – Questionnaire to Competitors, question 18.  
55  Form CO, Annex 12.   
 
12 Germany.56 In light of this, the Transaction does not give rise to serious doubts 
as to its compatibility with the internal market regarding  the market  for 
structuring, issuance, and market making of ETSIPs in Germany.  
(53) In Luxembourg , the Parties’ combined share was [30-40]%  in 2017. T he merged 
entity would be come  the number one player in the market. The average 
combined share of the Parties over 2013 -2017 would be [30-40]% . However, the 
Transaction does not give rise to serious doubts as to its compatibility with the 
internal market in  the market for structuring, issuance, and market making of  
ETSIPs in Luxembourg:  
 Post-Transaction, the combined entity will face competition in Luxembourg 
by at least three major competitors with average s hares of above  5% in 
2013 -2017.57 One customer act ive in Luxembourg stated:  “[w]e absolutely 
believe that the market of ETSIPs will remain competitive, after the 
Transaction, the reason being that the market counts +/ - 15 issuers which 
provide the market with plenty of structure, maturities etc.” ;58 
 The vast majority of respondents confirmed that the Parties are not each 
other’s closest competitors in Luxembourg;59 
 As in the EEA, in Luxembourg, customers can (and do) easily switch from 
one ETSIP provider to another because products are similar and there is  high 
price transparency.  The price  of the ETSIP  is the key criterion that 
customers take into account when making their purchasing decisions ,60 
considering also the return  on investment  and performance prospects of the 
product;  and  
 The market investigatio n did not reveal any competition concerns in relation 
to the market for structuring, issuance, and market making of ETSIPs in 
Luxembourg .61 
(54) In Spain , the Parties’ combined share was [30-40]%  in 2017. The merged entity 
would be the number one player in the m arket. The average combined share of 
the Parties over 2013 -2017 would be [20-30]% . However, the Transaction does 
not give rise to serious doubts as to its compatibility with the internal market in 
the market for structuring, issuance, and market making of ETSIPs in Spain:  
 Post-Transaction, the combined entity will face competition in Spain  by at 
least three major competitors with shares  above 5% in 2013 -2017 ;62   
                                                 
56  Replies to Q1 – Questionnaire to Customers, question 18 and to Q2 – Questionnaire to Competitors, question 18.  
57  Namely, Flow Traders ([10-20]%) , Jane Street ([10-20]%) , and Susquehana ([5-10]%).  
58  Replies to Q1 – Questionnaire to Customers, question 17.  
59  Replies to Q1 – Questionnaire to Customers, questions 12 -13 and to Q2 – Questionnaire to Competitors, questions 
10-11.  
60  Doc ID 256, Minutes of Call with customer active in Luxembo urg, 4 December 2018, paragraphs 4 and 8.  
61  Replies to Q1 – Questionnaire to Customers, question 18 and to Q2 – Questionnaire to Competitors, question 
16.1.  
62  Namely, Flow Traders ([20-30]%) , Jane Street ([10-20]%) , and Susquehana ([5-10]%).  
 
13  As in the EEA, in Spain, customers can  (and do)  easily switch from one 
provider to another becau se products are similar and there is high price 
transparency. The price  of the ETSIP  is the key criterion that customers of 
take into account when making their purchasing decisions ,63 considering 
also the return  on investment  and performance prospects of th e product;  and  
 The market investigation did not reveal any  competition concerns in relation 
to the market for the structuring, issuance, and market making of ETSIPs in 
Spain.64 
5.2. Vertical  analysis  
(55) SG is active in the EEA in the distribution of investment pro ducts  (including 
ETSIPs) , which is downstream from the market for structuring, issuance, and 
market making of ETSIPs.  
(56) The Notifying Party submit s that SG’s share is far below 30% in the 
downstream market for the distribution of investment products (including 
ETSIPs), regardless of the precise relevant market delineation.  
(57) The Transaction only gives rise to affected markets in countries where the 
combined share of the Parties is 30% or more in the upstream  market ( i.e., the 
market for structuring, iss uance, and market making of ETSIPs) and SG is 
active in the downstream  market ( regardless of its precise delineation ). These  
countries  are Austria, France, Ireland, Luxembourg, and Spain.65 Table 4 
includes SG’s estimated market share in distribution of inv estment products in 
each of these five countries, under all plausible market delineations.  
                                                 
63  Doc ID 63 , Minutes of Call with customer active in Spain, 4 December 2018, paragraph 4.  
64  Replies to Q1 – Questionnaire to Customers, question 17 and to Q2 – Questionnaire to Competitors, question s 
16.1 and 17.1; Doc ID 63, Minutes of Call with customer active in Spain, 4 December 2018, paragraph 6.  
65  Taking into account the combined share of the Parties in any of the years 2015, 2016, or 2017.  
 
14 Table 4 – Distribution of ETSIPs and other investment products   
SG Market Share (2017)  
Country  Product Distributed  Channel of Distribution  2017 Share of SG66 
Austria  Distribution of all investment 
products (including ETSIPs)  All channels  [0-5]% 
General retail banking network  [0-5]% 
Private banking network  [0-5]% 
Distribution of ETSIPs  All channels  [0-5]% 
General retail banking network  [0-5]% 
Private banking network  [0-5]% 
France  Distribution of all investment 
products (including ETSIPs)  All channels  [10-20]%  
General retail banking network  [10-20]%  
Private banking network  [5-10]%  
Distribution of ETSIPs  All channels  [10-20]%  
General retail banking network  [0-5]% 
Private banking network  [10-20]%  
Ireland  Distribution of all investment 
products (including ETSIPs)  All channels  [0-5]% 
General retail banking network  [0-5]% 
Private banking network  [0-5]% 
Distribution of ETSIPs  All channels  [0-5]% 
General retail banking network  [0-5]% 
Private banking network  [0-5]% 
Luxembourg  Distribution of all investment 
products (including ETSIPs)  All channels  [0-5]% 
General retail banking network  [0-5]% 
Private banking network  [0-5]% 
Distribution of ETSIPs  All channels  [0-5]% 
General retail banking network  [0-5]% 
Private banking network  [0-5]% 
Spain  Distribution of all investment 
products (including ETSIPs)  All channels  [0-5]% 
General retail banking network  [0-5]% 
Private banking network  [0-5]% 
Distribution of ETSIPs  All channels  [0-5]% 
General retail banking network  [0-5]% 
Private banking network  [0-5]% 
Source: Notifying Party’s Reply to RFI of 28 January 2019  
 
5.2.1.  Input Foreclosure  
(58) The combined entity is unlikely to foreclose competing distributors of ETSIPs 
post-Transaction by r estricting access to its ETSIPs:   
 The combined entity would not have the ability to foreclose downstream 
rivals because it would not have a significant degree  of marke t power in the 
upstream market for ETSIPs.   
In Austria , France , and Ireland , the combined share of the Parties exceeded 
30% in 2015 or 2016  in the upstream market for ETSIPs  but in 2017 and on 
average over the period 2013 -2017, it is far below this threshold.67   
In Luxembourg  and in Spain , the Parties held combined shares  exceeding 
30% in 2017  in the upstream  market for ETSIPs. However, the combined 
entity would still not have a significant degree of market power  within the 
meaning of the Non -horizontal Merger Guidelines . In both countries, the 
combined entity cannot restrict the overall availability of ETSIPs in the 
market in terms of either price or quality. The combined entity is unlikely to 
increase ETSIP prices, because  there is high transpa rency for customers 
                                                 
66  Shares based on volumes traded.  
67  See Tables 2 and 3 above.  
 
15 purchasing ETSIPs in both Luxembourg and Spain and switching  is easy.68 
If the combined entity downgraded the quality of the ETSIPs it offers 
downstream, distributors would switch to alternatives from rivals, as there 
are no f undamental differences among the ETSIPs offered in the market .69 In 
any event, if the combined entity were to limit  access to its ETSIPs  for 
distributors , its compet itors would be able to respond immediately 
expanding their output (e.g., proposing more, differentiated ETSIPs) in 
response to the supply restriction.  
 The combined entity would not have the incentive to restrict access to its 
ETSIPs. ETSIPs need to be distributed (and traded) as widely as possible 
and in high volumes to be most profitable for the issuer.    
5.2.2.  Customer Foreclosure  
(59) The combined entity is unlikely to foreclose competing ETSIP providers post -
Transaction by restricting acce ss to its distribution services:   
 The combined entity would not have the ability to foreclose upstream rivals  
because it  would not have a significant degree of market power in the 
downstream market, irrespective  of its precise delineation.   
In Austria , Ireland , Luxembourg , and Spain , the c ombined entity holds less 
than [0-5]%  in the downstream market (under all plausible sub -
segmentations).   
In France , the share of the combined entity would reach [10-20]%  in a 
potential market for distribution of investment products via the general retail 
network. However, even in this case, the combined entity would not be in 
any way a “ must -go” distributor  for ETSIP providers . Several alternative 
options remain for the distribution of ETSIPs in France, including online 
brokers and traditional bank networks ( e.g., Citi, BNP, Crédit Agricole).   
 The combined entity would not have the incentive to restrict the portfolio of 
ETSIPs it distributes  and exclude third -party products . ETSIP end-
purchasers always opt for distributors who can offer the widest possible 
choice of products.  The market invest igation confirmed that today, SG 
distributes , alongside the SG ETSIPs, a wide range of third -party products, 
e.g., from BNP Paribas, Credit Suisse, and Natixis, etc.70  
 
 
 
                                                 
68  See paragraphs (52) and (53) above.  
69  See paragraph (41) above.  
70  Replies to Q2 – Questionnaire to Competitors, question 2.1.  
 
16 6. CONCLUSION  
(60) 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 application 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