EUROPEAN COMMISSION C(2017) 4869 final



To the notifying parties Dear Sir or Madam, Subject:Case M.8470 - DAAM / INFRAVIA / FIH / AI

Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004 and Article 57 of the Agreement on the European Economic Area (1)On 13 June 2017, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which Deutsche Alternative Asset Management (Global) Limited ("DAAM", United Kingdom), InfraVia Capital Partners ("InfraVia", France), and Finanziaria Internazionale Holding S.p.A. ("FIH", Italy) acquire within the meaning of Article 3(1)(b) of the Merger Regulation control of the whole of Agorà Investimenti S.p.a. ("AI", Italy), by way of purchase of shares ("the Transaction"). DAAM, InfraVia and FIH are collectively referred to as the "Parties". 1.THE PARTIES (2)DAAM is a management company that provides investment management and fund management services. DAAM is a wholly owned subsidiary of Deutsche Bank, a global provider of financial services headquartered in Germany. DAAM indirectly controls, among others, TCR CapVest SA ("TCR"), a specialist provider of aviation ground support equipment providing rental, maintenance, repair, ramp assistance and fleet management services. (3)InfraVia is an independent investment manager dedicated to the infrastructure sectors, including transportation, environment, energy and social infrastructure. (4)FIH is a financial company active in three macro-areas: (i) investment banking and asset management, (ii) business process outsourcing, and (iii) proprietary investments. (5)AI carries out investments in the transport infrastructure sector in Italy and holds a controlling shareholding in SAVE S.p.A. ("SAVE"), the ultimate target of the Transaction. (6)SAVE is the parent company of a group which has integrated operations in the passenger service sector and operates mainly in the airport management business area. In particular, SAVE holds controlling interests in the managing companies of the airports of Venice (Italy), Treviso (Italy), Verona (Italy), Brescia (Italy) and Charleroi (Belgium). 2.THE TRANSACTION (7)Prior to the Transaction, AI and, in turn, SAVE are solely controlled by FIH. (8)The Transaction consists of the acquisition by BidCo, an entity jointly established by InfraVia, DAAM and FIH, of 100% of the share capital of AI, and consequently, of a controlling stake in SAVE. (9)The governance arrangements for, inter alia, BidCo, AI and SAVE are set out in a draft shareholders' agreement (the "SHA"), which aims at ensuring that DAAM, InfraVia and FIH enjoy the same rights. In particular, under the SHA, for BidCo, AI and SAVE, (i) each of DAAM, InfraVia and FIH has a veto right on the shareholders' reserved matters; (ii) DAAM, InfraVia and FIH have the right to appoint the same number of directors in the board; and (iii) as a result of the qualified majority or, for SAVE, of the consultation procedure, each of DAAM, InfraVia and FIH has a veto right on the board's reserved matters. Those reserved matters pertain to decisions essential for the strategy of BidCo, AI and SAVE, and going beyond the protection of minority shareholders' interests. (10)In view of the above, the Transaction results in the acquisition of joint control by DAAM, InfraVia and FIH over AI and, consequently, over SAVE. It therefore constitutes a concentration under Article 3(1)(b) of the Merger Regulation.

3.EU DIMENSION (11)The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million (DAAM: EUR […] million; InfraVia: EUR […] million; FIH: EUR […] million ). Each of them has an EU-wide turnover in excess of EUR […] million (DAAM: EUR […] million; InfraVia: EUR […] million; FIH: EUR […] million ), but they do not achieve more than two-thirds of their aggregate EU-wide turnover within one and the same Member State. (12)The notified operation therefore has an EU dimension according to Article 1(2) of the Merger Regulation. 4.MARKET DEFINITION (13)SAVE, the ultimate target of the Transaction, has the exclusive purpose to develop, project, realise, adjust and manage airport facilities and installation, in Italy and abroad. Its activities include (i) the provision of airport infrastructure services to airlines, (ii) the provision (contracting) of ground-handling services; (iii) the provision (contracting) of associated commercial services, and (iv) the supply of information technology solutions for airports. (14)Neither DAAM nor InfraVia controls companies active in the same markets as SAVE or in upstream or downstream markets. As an exception, TCR, a specialist supplier of aviation ground support equipment controlled by DAAM, provides rental, maintenance, repair, ramp assistance and fleet management services to providers of ground-handling services. (15)Therefore, the provision (contracting) of ground handling services and the supply of aviation ground support equipment give rise to relevant markets. 4.1.The provision (contracting) of ground handling services 4.1.1.Product market definition (16)In its prior decision practice, the Commission has defined a market for the provision of ground handling services, consisting of ramp, passenger, and baggage handling services as well as airside cargo handling services. (17)The Parties agree with the Commission's product market definition of ground handling services. (18)It is however not necessary to decide on the exact definition of the product market for the provision of ground handling services, more specifically on the distinction between each of ramp, passenger, and baggage handling services, as the Transaction does not raise serious doubts as to its compatibility with the internal market under any plausible product market definition. 4.1.2.Geographic market definition (19)In its prior decision practice, the Commission has concluded that the market for the provision of ground-handling services is limited to a specific airport (or possibly two neighbouring airports), given that the services required at a particular airport cannot normally be substituted by services provided at other airports. (20)The Parties submit that the market extends beyond a single airport and encompasses the airports within the same catchment area (or at least two neighbouring airports), because pricing for ground handling services is constrained both by competitors active at a particular airport and by other competitors active in the same catchment area. (21)In any case, it is not necessary to decide on whether the market for the provision of ground handling services is local or extends beyond a single airport, as the Transaction does not raise serious doubts as to its compatibility with the internal market under any plausible geographic market definition. 4.2.The supply of aviation ground support equipment 4.2.1.Product market definition (22)Having regard to the Commission's prior decision practice in relation to other markets upstream from the provision of ground handling services, the Commission does not exclude that the market for the supply of aviation ground support equipment should be further segmented and that a distinction should be made between ramp, baggage and passengers handling equipment. Further, it might be necessary to distinguish between sale (direct ownership), finance leasing and operating leasing (or rental) of aviation ground equipment. (23)The Parties submit that any segmentation between ramp, passenger and baggage handling equipment would be artificial as all these types of equipment are used together to handle passengers, luggage and aircraft flows. Conversely, the Parties do not object to the definition of the relevant product market as the operating leasing (or rental) of aviation ground support equipment. They however note that SAVE does not resort – and has no intention to resort to – operating leasing (or rental) of ground support equipment.

(24)In any case, it is not necessary to decide on the exact definition of the product market for the supply of aviation ground equipment, as the Transaction does not raise serious doubts as to its compatibility with the internal market under any plausible product market definition. 4.2.2.Geographic market definition (25)The Commission has not yet addressed the geographic scope of the market for the supply of aviation ground equipment. However, considering the Commission's prior decision practice with regard to the supply of automatic handling material systems and accompanying services for baggage handling at airports and with regard to the operating leasing of specific types of assets, the scope of supply of aviation ground equipment may be national, EEA-wide or wider than the EEA. (26)The Parties indicate that the ground support equipment rental, maintenance, repair, ramp assistance and fleet management services are not characterised by geographical limitations, given the mobile nature of the units. The Parties therefore submit that the market is at least EEA-wide. (27)In any case, it is not necessary to decide on whether the market for the supply of aviation ground equipment is national, EEA-wide or wider than the EEA, as the Transaction does not raise serious doubts as to its compatibility with the internal market under any plausible geographic market definition. 5.COMPETITIVE ASSESSMENT 5.1.Overview of the vertically affected markets (28)DAAM, through TCR, is engaged in business activities in the market for the supply of aviation ground support equipment, which is upstream of the market for the provision of ground handling services in which SAVE operates. (29)SAVE's share of the downstream market for the provision of ground handling services exceeds 30% on three markets (Treviso, Brescia and Charleroi airports), if the geographic scope is defined as limited to one airport. TCR does not operate in any of those three airports, but is active in Belgium and Italy. The Commission will therefore assess in section 5.2 below whether the vertical effects of the Transaction on the upstream market for the supply of aviation ground support equipment and on the downstream market for the provision of ground handling services may raise customer foreclosure issues. (30)TCR's share of the upstream market for the supply of aviation ground support equipment exceeds 30% in Italy, Belgium and the EEA, if the product market is limited to the operating leasing (or rental) of aviation ground equipment. Under such a product market definition, the Transaction does not give rise to a vertical relationship, since airports that operate ground handling services like SAVE opt in principle for an ownership model of the assets they use. They have no incentive to resort to operating leasing in terms of flexibility, cost, cash or network effects. Nevertheless, the Commission will assess in section 5.3 below whether the vertical effects of the Transaction on the upstream market for the operating leasing (or rental) of aviation ground support equipment and on the downstream market for the provision of ground handling services may raise input foreclosure concerns. (31)For the purposes of its assessment, the Commission will examine whether the following three conditions set out in the Non-Horizontal Merger Guidelines for foreclosure to be a concern are met: (i) the merged entity has the ability to foreclose its rivals; (ii) the merged entity has the incentive to foreclose its rivals; and (iii) the foreclosure strategy has a significant detrimental effect on competition on the downstream market (input foreclosure) or on customers (customer foreclosure). In practice, these factors are often examined together since they are closely intertwined. 5.2.No risk of customer foreclosure 5.2.1.Parties' views (32)The Parties submit that SAVE has no ability or incentive to engage in a customer foreclosure strategy, in particular because TCR's competitors supply many customers across Italy, Belgium and the EEA. 5.2.2.Commission's assessment (33)The ability of a merged entity to foreclose access to downstream markets depends on the degree of market power in the downstream market. SAVE's market share in the downstream market for the provision of ground handling services is below 30% in the two countries in which it operates (Italy and Belgium). Therefore, SAVE's purchases represent a limited share of the available sales base for suppliers of ground support equipment, even if the market for supply of ground support equipment is defined as national (Italy and Belgium). Conversely, independent and integrated ground handlers other than SAVE constitute a sufficiently large customer base for suppliers of ground support equipment competing with TCR. (34)In addition, SAVE is currently not a customer of TCR or of other suppliers specialised in operating leasing (or rental) of ground support equipment. Engaging in a customer foreclosure strategy would require that SAVE shifts from an ownership to a rental model for ground support equipment, which would be economically and operationally burdensome. Furthermore, the effects of the re-direction of SAVE's demand from manufacturers of ground support equipment (which sell equipment) to TCR (which rents equipment) would have a limited impact on the sales level of manufacturers of ground support equipment. Indeed, TCR sources the ground support equipment that it later rents to independent ground handlers from manufacturers with which it competes on the overall market for the supply of ground support equipment. (35)Therefore, the Parties lack the ability and incentive to adopt a successful customer foreclosure strategy. 5.3.No risk of input foreclosure 5.3.1.Parties' views