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, 20.12.2019  
C(2019)  9497 final  
PUBLIC VERSION  
 
To the notifying p arty 
Subject : Case M.9582 – SIEMENS GAMESA RENEWABLE ENERGY / 
SENVION (EUROPEAN ONSHORE WIND TURBINE SERVICE) / 
RIA BLADES  
Commissi on 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 31 October 2019 , the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation. This notification 
concerns the following undertakings:  
 Siemens Gamesa Renewable Energy, S.A. (“SGRE” or the “Notifying Party”, 
Spain) , controlled by Siemens AG (“Siemens”, Germany), and  
 Senvion GmbH’s (“Senvion”, Germany) European onshore servicing business 
for wind farms including all related assets; all of Senvion’s IP as well as 
Senvion’s wind turbine blades manufacturing facilities in Vagos (Portugal) and 
                                                 
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 “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”).  
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information omitted has been replaced by 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 Oliveira de Frades (Portugal), owned and operated by Ria Blades S.A., a 
subsidiary of Senvion, (together “the Senvion Target Business”).  
(2) SGRE acquires within the meaning of Article 3(1)(b) of the Merger Regulation  sole 
control of th e Senvion Target Business (the “proposed Transaction” or 
“Transaction”).3 SGRE and Senvion  together are hereinafter referred to as the 
“Parties” or the “Parties to the proposed Transaction.” In order to facilitate the 
transfer of the Target Business, Senv ion implemented a carve -out separating the 
Target Business from the remaining business of Senvion Group. As a result, and 
with the exception of Ria Blades, the Target Business was separated to and operated 
by Senvion Deutschland GmbH (“Senvion Deutschland” ). Thus, in legal terms, the 
Transaction involves the acquisition of Ria Blades and Senvion Deutschland by 
SGRE.  
1. THE PARTIES  
(3) SGRE is headquartered in Zamudio (Spain), listed on the Madrid, Barcelona, 
Valencia and Bilbao Stock Exchanges and member of the I bex 35 index. SGRE is an 
engineering company in the renewable energy industry that manufactures wind 
turbines and offers onshore and offshore wind turbine services, such as installation 
and maintenance of wind turbines (both for its own fleet and wind turb ines 
manufactured by other turbine manufacturers). It was created in April 2017 by the 
merger of Gamesa with the Wind Power Business of Siemens.4 SGRE’s controlling 
shareholder is Siemens.  
(4) Senvion is a wind turbine manufacturer headquartered in Germany. It  develops, 
manufactures and sells onshore and offshore wind turbines and offers related 
services, such as the construction of a wind turbine’s foundation and maintenance for 
its wind turbine fleet.  
(5) Senvion is facing financial difficulties and Senvion and Senvion Deutschland filed 
for insolvency with the local court – insolvency court – of Hamburg, Germany on 9 
April 2019. On the same day, the insolvency court of Hamburg ordered preliminary 
self-administration and the appointment of a preliminary custodian with regard to the 
assets of each of Senvion and Senvion Deutschland. On 1 July 2019, insolvency 
proceedings were opened by the competent insolvency court and self -administration 
was ordered for Senvion and Senvion Deutschland. On 11 September 2019, 
insolv ency plans were adopted for Senvion and Senvion Deutschland, providing, 
inter alia, for the carve out of the European onshore wind turbine service business 
from Senvion and a transfer of the carved -out business to Senvion Deutschland.  
(6) At the State of Play meeting within the meaning of paragraph 33a) of DG 
Competition’s Best Practices,5 the Commission informed the Parties that it could not 
be excluded that the proposed transaction, as originally notified, might raise serious 
doubts as to its compatibility wi th the internal market in the market for operation and 
maintenance services for offshore wind turbines in the EEA. The Notifying Party 
                                                 
3  Publication in th e Official Journal of the European Union No C 382, 11.11.2019, p. 28.  
4  This transaction was authorised by the Commission on 13 March 2017, Case COMP/M.8134 – 
Siemens/Gamesa.  
5  DG COMPETITION Best Practices on the conduct of EC merger control proceedings  
https://ec.europa.eu/competition/mergers/legislation/proceedings.pdf   
 
 
3 subsequently submitted, and the Commission market tested, commitments on 29 
November 2019 designed to eliminate the poten tial serious doubts identified by the 
Commission in accordance with Article 6(2) of the Merger Regulation. After further 
investigation, and for the reasons stated in Section 5.3.1.2, the Commission 
considers that no serious doubts arise on the market for t he operation and 
maintenance services for offshore wind turbines in the EEA. The commitments 
submitted by the Notifying Party are therefore not necessary and the Transaction can 
be cleared unconditionally.  
2. THE OPERATION  
(7) The proposed Transaction is accompli shed by way of a hive -down and asset deals, 
followed by the purchase of shares. Specifically, as indicated in paragraph (2) above, 
the assets relevant  to the onshore servicing business were transferred from Senvion 
to Senvion Deutschland, the  new entity created for the proposed Transaction. 
Following this carve -out, the Parties entered into binding transaction agreements on 
21 October 2019 by which SGR E would acquire the shares of Senvion Deutschland 
and Ria Blades S.A. The consummation of the Transaction is subject to merger 
clearance by the Commission.  
(8) The Senvion Target Business comprises the following assets:  
i.) A large part of Senvion's European ons hore wind farm servicing business in 
the EEA. Servicing refers to the maintenance works related to wind farms 
with the aim of keeping the wind farms operational. The Senvion Target 
Business includes approximately 81% of Senvion’s onshore wind turbine 
servi ce contracts in the EEA, i.e. SGRE is not acquiring all of Senvion’s 
EEA onshore servicing business. The remaining 19% of EEA onshore 
service contracts, the EEA offshore servicing contracts and all servicing 
contracts outside the EEA are outside of the sco pe of the proposed 
Transaction.  
ii.) All of Senvion's IP. The IP acquired relates to the onshore OMS business, 
to the offshore OMS business, but also to other businesses of Senvion, most 
notably to the technology related to the wind turbines that Senvion 
manufa ctured prior to insolvency.  
iii.) Linited volumes of inventory including spare parts and some tools and 
equipment related to Senvion’s offshore services business.  
iv.) Ria Blades S.A, which comprises Senvion’s wind turbine blades 
manufacturing facilities in Vagos (Po rtugal) and Oliveira de Frades 
(Portugal), currently operated by Ria Blades S.A. The Transaction involves 
the acquisition of these two manufacturing facilities only. The rest of 
Senvion’s blade manufacturing business and all the rest of Senvion’s 
manufactu ring business (most notably the manufacturing of wind turbines) 
are outside the scope of the Transaction.  
 
 
4 3. THE CONCENTRATION  
(9) As a result of the proposed Transaction SGRE will acquire sole control within the 
meaning of Article 3(1)(b) the Merger Regulation over the Senvion Target Business.  
4. EU DIMENSION  
(10) The undertakings  concerned have a combined aggregate worldwide turnover of more 
than EUR 2 500 million6 (SGRE: EUR […] million; Target Business: EUR […] 
million)7 and the aggregate EU -wide turnover of each of them is more than EUR 100 
million (SGRE: EUR […] million; Target Business: EUR […] million). In each of 
Germany, France and the UK their combined aggregate turnover is more than EUR 
100 million, and each of their aggregate turnover is more than EUR 25 mill ion 
(Germany – SGRE: EUR […] million, Target Business: EUR […]million; France – 
SGRE: EUR […] million, Target Business: EUR […] million; the UK – SGRE: 
EUR […] million, Target Business: EUR […] million), but they do not achieve more 
than two -thirds of their aggregate Community -wide turnover within one and the 
same Member State. The notified operation therefore has an EU dimension.   
5. RELEVANT MARKETS AND COMPETITIVE ASSESSMEN T 
(11) The proposed Transa ction  can plausibly affect four activities.  
(12) First, both Parties are active in onshore wind turbine servicing (horizontal 
relationship). The proposed Transaction will primarily affect this activity.  
(13) Second, as SGRE acquires all of Senvion’s IP, including IP related to offshore wind 
turbine servicing, as well as inventory including spare parts, some tools and 
equipment, the proposed Transaction can potentially have an effect on offshore wind 
turbine servicing, where both Parties are active (horizontal relat ionship).  
(14) Third, as SGRE acquires all of Senvion’s IP, including IP related to wind turbine 
manufacturing, the proposed Transaction can potentially have an effect on (onshore 
and offshore) wind turbine manufacturing , where both Parties are active (horizon tal 
relationship).  
(15) Fourth, Siemens manufacturers and sells wind turbine gearboxes for wind turbines 
under its Winergy brand. Gearboxes are an input used in (onshore and offshore) 
wind turbine servicing, notably if gearbox spare parts or the entire gearbox needs to 
be replaced. In addition gearboxes are also used in (onshore and offshore) wind 
turbine manufacturing (vertical relationships).  
(16) Of these activities, the Transaction gives rise to affected markets in onshore wind 
turbine services (horizontally aff ected market) and in the production and sale of 
gearboxes (vertically affected market). Although not an affected market, the 
Commission also examined the effect of the Transaction on the offshore servicing 
market as some market participants expressed conce rns with regard to the effect of 
                                                 
6  Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission 
Cons olidated Jurisdictional Notice (OJ C 95, 16.4.2008, p. 1).  
7  All turnover figures are taken from Form CO, Section 4.  
 
 
5 the Transaction in this domain. The Commission also assessed whether the 
acquisition of Senvion’s IP is likely to have any competition impact on  the markets 
for the manufacturing and supply of onshore and offshore  wind tu rbines.  
(17) Prior to analysing the relevant markets and the competitive effect of the Transaction, 
the Commission will, in the next section of this decision, provide a brief overview of 
the way in which the wind servicing industry works.  
5.1. Introduction  
(18) For a p roper introduction of the wind turbine service industry, it is necessary to first 
describe the wider context, i.e. the wind turbine industry.   
5.1.1.  The wind turbine industry  
(19) Wind is used to produce electricity using the kinetic energy created by air in motion.  
Wind first hits a turbine’s blades, causing them to rotate and turn the turbine 
connected to them. This changes the kinetic energy to rotational energy, by moving a 
shaft which is connected to a generator, and thereby producing electrical energy 
through e lectromagnetism.  
(20) Wind power is one of the fastest -growing renewable energy technologies. Global 
installed wind -generation capacity onshore and offshore has increased by a factor of 
almost 75 in the past two decades, jumping from 7.5 gigawatts (GW) in 1997 to 
some 564 GW by 2018, according to the latest data by the International Renewable 
Energy Agency.8 Worldwide production of wind electricity doubled between 2009 
and 2013, and in 2016 wind energy accounted for 16% of the electricity generated by 
renewables .9 One reason for the strong growth is that the cost of electricity generated 
by wind energy has been falling.10 
(21) Total installed capacity of onshore and offshore wind turbines also increased in the 
EU, from around 80 GW in 2010 to more than 160 GW in 2018.11 In the same period 
total installed capacity of onshore wind turbines increased from around 80 GW to 
157 GW.12 
(22) Annual installation of new capacities in the EU also increased between 2008 and 
2017 from 8.53 GW to 17.1 GW.13 However, from 2017 to 2018, for the  first time 
since 2008, annual installed new capacity decreased by 32%, from 17.2 GW to 11.7. 
GW.14 Broadly the same trend applies to annual onshore installations of new 
capacities, which increased from 8.5 GW to 13.9 GW in 2007, although some years 
registe red a slight decrease. Between 2017 and 2018, annual onshore installations of 
new capacity decreased by more than 35% from 13.9 GW to 9 GW. 2018 marked the 
lowest level of annual onshore installations of new capacity since 2008. Offshore 
                                                 
8  https://www.irena.org/wind  
9  https://www.irena.org/wind  
10  https://www.irena.org/wind  
11  https://www.irena.org/wind  
12  https://www.ir ena.org/wind  
13  https://windeurope.org/wp -content/uploads/files/about -wind/statistics/WindEurope -Annual -Statistics -
2018.pdf  
14  https://windeurope.org/wp -content/uploads/files/about -wind/statistics/WindEurope -Annual -Statistics -
2018.pdf  
 
 
6 annual installatio ns had a slightly different path, increasing from a very low level of 
0.3 GW in 2008 to 3.2 GW in 2017. From the 2017 peak they also decreased but 
only slightly to 2.7 GW. Given that the decrease in annual offshore installations of 
new capacity was much le ss sharp than in onshore installations and that offshore 
annual installations are still lower than onshore installations, offshore wind turbines 
seem to have better growth potential in the near term.  
(23) The amount of power that can be harvested from wind dep ends on the size of the 
turbine and the length of its blades. Wind turbine capacity has increased over time. 
In 1985, typical turbines had a rated capacity of 0.05 megawatts (MW) and a rotor 
diameter of 15 meters. Today’s new wind power projects have turbi ne capacities of 2 
to 6 MW onshore and up to 10 MW offshore. Commercially available wind turbines 
have reached rotor diameters of up to 170 meters onshore and more than 190 meters 
offshore respectively.15 
(24) Wind turbine Original Equipment Manufacturers (“OEMs ”) generally provide 
customers with a final product consisting of the assembled tower, nacelle (including 
the generator) and the blades. As part of so called “turn -key” offerings, OEMs 
occasionally also organise and oversee the contracting for the structur al foundations 
of the turbine (i.e. below the tower) and the cables to connect the wind turbine to the 
electricity network.16 A single wind turbine OEM will usually supply all the wind 
turbines for use on a particular wind farm, or at least for a major tran che of a wind 
farm, reflecting the economies of scale achieved in the construction of wind 
turbines.17  
(25) Customers include utility companies, independent power producers, financial 
investors and (in the case of onshore turbines) communities (municipalities) or small 
landowners like farmers. In some cases wind turbines are not sold to these end 
customers but to a project developer that selects the wind turbine model, builds the 
wind farm and then sells the wind farm on to the end customers.18 Wind turbine sales  
usually happen through tenders.19 
5.1.2.  Servicing of onshore wind turbines  
(26) In the industry the servicing of wind turbines is referred to as operation, maintenance 
and services ("OMS") of wind farms. This decision uses the terms “OMS”, “OMS 
servicing” or simply “servicing” interchangeably.  
5.1.2.1.  Function of OMS services  
(27) OMS supports the ongoing operation of the turbines. Turbine OMS activities start 
when the wind farm construction works are completed and aim to ensure the 
ongoing operational integrity of the wind turb ines and associated balance of plant, 
including planned maintenance and unplanned service in response to faults, during 
the lifetime of the wind turbine (typically around 20 -25 years).20 
                                                 
15  https://www.irena.org/wind   
16  Form CO, paragraph 72.  
17  Form CO, paragraph 74.  
18  Form CO, paragraph 73.  
19  Form CO, paragraph 75.  
20  Form CO, paragraph 77 . 
 
 
7 (28) OMS plays an important role in maximising the financial returns from t he 
investment in the wind farm. These financial returns depend not only on the cost of 
wind turbines but also on the cost of servicing and, most importantly from this 
perspective, on the availability of wind turbines. Availability is defined as the 
percent age of time the wind turbine is ready to produce power if the wind speed is 
within the operational range of the turbine.21 In other words, if the turbine is not 
serviced properly or fails otherwise and is not repaired as fast as possible, the 
turbine’s avai lability decreases, which in turn decreases the revenues generated from 
electricity sales.22 Wind turbine owners typically aim to achieve availability of 
around 98%.23 Consequently OMS contracts often feature an availability guarantee, 
which obliges the OMS provider to maintain a stipulated level of availability (in % 
of time). If the OMS provider fails to comply with the availability target, it has to 
indemnify the turbine owner.  
5.1.2.2.  OMS modules  
(29) While there is no industry -wide accepted definition of OMS, indus try reports 
typically distinguish between the following categories, or modules, of wind turbine 
OMS activities:24 
i.) Scheduled maintenance: Scheduled maintenance includes general 
preventative check -up and maintenance of the wind turbines carried out on 
a regular schedule basis.  
ii.) Minor correctives: Minor correctives encompass repairs or replacements in 
relation to minor issues or parts of the turbine.  
iii.) Technical support: Technical support relates to the general availability of 
technical expertise in order to  provide support in case of issues arising in 
relation to the wind turbine.  
iv.) Spares and distribution: Spares and distribution encompasses the supply of 
spare parts for the wind turbines.  
v.) Major correctives: Major correctives encompass repairs or replacemen ts in 
relation to more significant parts or issues.   
vi.) Component upgrades: Component upgrades include upgrades both in 
relation to hardware and software installed in the wind turbine.  
(30) The Commission’s market investigation revealed that there are additional  activities 
within the broad category of OMS:  
i.) Digital services: In the context of OMS, digital services refer to value added 
service such as turbine data analysis, tools to track turbine availability and 
identify underperforming turbines, diagnostic suppor t, predictive 
maintenance analytics, configuration, condition monitoring, weather and 
                                                 
21  Form CO, paragraph 79.  
22  See, for example Vestas’s response to Q1 Questionnaire to competitors, question 47.1  
23  Form CO, paragraph 79.  
24  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trend 2019, p. 7.  
 
 
8 power forecasting, cyber security, digital management of spare part 
inventories, online platforms for spare parts etc.25 
ii.) High voltage operations: High voltage operations r efer to maintenance 
works related to switches, transformers i.e. the high voltage electricity 
transmission systems on wind farms.26  
iii.) Compliance: Compliance involves the facilitation of compliance with 
applicable regulation, such as performing test procedure s to ensure grid 
safety or health & safety measures, facilitation of statutory inspections.27  
(31) Other services mentioned in the market investigation included repowering and life 
extension. Repowering refers to the installation of a new wind turbine on a wind  
farm to replace an older wind turbine at the end of its lifecycle. Life extension refers 
to extending the useful lifetime of the wind turbine at the end of its lifecycle.28  
However, these operations seem to fall outside the scope of the maintenance works 
during the useful lifetime of a wind turbine and are more akin to the installation of 
new capacity. Consequently, the Commission does not consider them as activities 
falling within the scope of OMS.  
5.1.2.3.  Customers and suppliers  
(32) Customers of OMS are the owners  of wind turbines and are referred to as Asset 
Owners. As described in paragraph (25), they include utility companies, independent 
power producers, fi nancial investors and (in the case of onshore turbines) 
communities (municipalities) or small landowners like farmers.  
(33) OMS suppliers include OEMs, Independent Service Providers (“ISPs”) and 
Affiliated Service providers (“ASPs”).  
(34) OEMs are the manufacturers  of the turbines serviced. OEMs active in the EEA are 
SGRE, Vestas, Enercon, Nordex, GE and, up to now, Senvion.  
(35) ISPs are service providers specialised in OMS without a wind turbine manufacturing 
business (i.e. they are “independent” from the OEM of the t urbine).29 There are more 
than 30 ISPs active in the EEA.30 
(36) ASPs can be of two kinds: (i) an OEM performing OMS servicing on the turbine of 
another OEM31 and (ii) and Asset Owner that developed OMS capabilities in -house 
and, after having done so, offers OMS t o third parties, i.e. other Asset Owners.32 
                                                 
25  Form Co, paragraph 25 and Notifying Party’s response to RFI 1, paragraph 21.3.  
26  Q2 Questi onnaire to customers, question 20, Q1 Questionnaire to competitors, question 21.1.1.  
27  Q2 Questionnaire to customers, question 20, Q1 Questionnaire to competitors, question 21.1.1.  
28  GE’s response to Q1 Questionnaire to competitors, question 21.1.1. Minu tes of phone calls with GE on 15 
November 2019.  
29  Form CO, paragraph 78.  
30  Form CO, paragraph 263.  
31  In this decision the term OEM designates exclusively a turbine manufacturer that provides OMS on its 
own turbines and excludes the activity of the same  OEM that involves providing OMS on the turbine of 
another OEM. OEMs are rather referred to as ASPs when they provide OMS on turbines manufactured by 
other OEMs. . When the context calls for a distinction between ASPs that are OEMs and ASPs that are 
Asset Owners, the terms “OEM ASP” and “Asset Owner ASP” are employed.  
32  Form CO, paragraph 96.  
 
 
9 Asset Owner ASPs are typically big utilities, such as EDF, that manage a large fleet 
of turbines. Their scale and large fleet allowed them to develop OMS capabilities 
and offer them on the market. ASPs are “affili ated” because these OMS providers 
are typically affiliated with a large organisation such as an OEM or a utility. The 
major OEM ASPs active in the EEA are SGRE, Vestas GE, and recently Nordex. 
The limited number of Asset Owner ASPs include E.ON., EDF and E nBW.33 
(37) Some Asset Owners, typically again utilities, self -service their turbines without, 
however, offering OMS to third parties (i.e. without becoming an ASP). As Asset 
Owners who perform OMS in -house are typically utilities, the share of self -service 
in total OMS depends on the composition of Asset Owners in a particular geography. 
For example, in Germany the share of self -service was a mere 2% of all onshore 
OMS in 2017 due to the high prevalence of private and community Asset Owners.34 
By contrast, in Spain and the United Kingdom the share of self -service was 28% and 
21% respectively.35 By 2027 this share is forecast to grow modestly in Germany 
(from 2% to 4%), grow more significantly in the United Kingdom (from 21% to 
30%) and to declin e in Spain (from 28% to 5%).36   
5.1.2.4.  Scope and frequency of OMS contracts and procurement methods  
(38) The scope of awarded OMS contracts can vary and can range from preventive 
maintenance (regular checks) to a complete full service package that includes all 
possibl e OMS functions.37 Various combinations of different OMS services are 
possible, depending on customer preferences.38 A significant part of the variance in 
preferences can be explained by the type of customer.39 Financial investors, which 
do not have the exper tise to take OMS in -house and prefer predictability of costs, 
tend to opt for full -scope contracts. Utilities that developed some service capabilities 
are more likely to opt for a modular approach and request only certain services. As 
they often manage a l arge fleet, they can also “mix and match” to optimise costs, for 
example by requesting certain OMS modules from ISPs and others from OEMs. 
Cost sensitive small Asset Owners (small land owners and communities), although 
lacking in -house capabilities, may op t for a less than full scope contract in exchange 
for lower cost service. Other than preferences across and within customer groups, the 
scope also depends on whether or not the OMS contract is signed at the same time 
and together with the turbine sale. Thi s is discussed in Section 5.1.2.5 below.  
(39) The number of OMS contracts awarded in a year in the EEA is approximately 500 -
700 per year.40  
(40) Customers procure OMS services via tender processes or through a less formalised 
process by requesting a request for pr oposal from one or a handful of potential OMS 
providers.41  
                                                 
33  Form CO, paragraph 267.  
34  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trend 2019, p.59 -60. 
35  Wood Mackenzie, Global Onshore Wind Opera tions and Maintenance (O&M) Trend 2019, pp.66,73.  
36  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trend 2019, pp.59 -60, 66 
and 73.  
37  Minutes of phone calls with Enercon and Nordex on 8 November 2019 and 15 November respectively.  
38  Form CO, paragraph 94.  
39  Form CO, paragraph 84.  
40  Form CO, paragraph 173.  
 
 
10 5.1.2.5.  Standalone and bundled OMS  
(41) OMS services can be sold and provided on a standalone basis or together with the 
sale of the turbine, i.e. as part of a bundle. In the case of standalone OMS contracts, 
ISPs and ASPs can compete for the OMS and the different suppliers compete only in 
OMS. (As such standalone OMS is addressable by ISPs and ASPs, it is also referred 
to as addressable OMS or addressable segment). In the case of bundles, the 
competition for O MS is an integral part of the competition for supplying wind 
turbines and it is not addressable  by ISPs and ASPs as they cannot supply turbines.42  
This OMS is provided by the OEM on a captive basis and as a corollary to the sale 
of the turbine.  
(42) The two market conventions or practices that can result in the OMS being bundled 
and hence non -addressable  are long -term service packages (LTPs) and warranty. 
These will be discussed in Sections (A) and (B) respectively. In addition, the relative 
share of standalone and bundled OMS is influenced by additio nal factors such as 
price developments and contract durations over time. These will be discussed in 
Section (C). Section (D) provides a summary.  
(A) LTPs  
(43) OMS services are first offered at the point of the sale of the wind turbine and 
together with the sale. At this point an LTP is usually signed between the customer 
and the OEM.43 LTPs are full scope service contracts under which the OEM 
performs all necess ary OMS modules for a fixed annual fee.44 It also includes an 
availability guarantee.  
(44) The reason for these arrangements is that customers typically estimate all the costs 
and revenues from a wind farm project, including the cost of the turbine, the cost of  
OMS, the guaranteed availability, wind conditions, electricity tariff plan, etc. and 
will choose the OEM that provides the lowest lifetime costs, which is influenced 
both by the cost of the turbine and the cost of the OMS.45 In this context a full -scope 
service contract with a fixed annual fee and an availability guarantee offers long -
term predictability of costs and transfers the operational risk from the Asset Owner 
to the OMS provider, in this case the OEM.46 If the wind farm project is realised 
through e xternal financing, the bank or other financial institution providing the 
necessary capital typically requires the investor to enter into an LTP.47  
(45) In principle, the signing of the LTP need not mean that the OMS is part of a bundle. 
In theory, the customer is free to choose one OEM for the wind turbine and another 
OMS provider for the LTP. While the Notifying Party mentions such an example48 it 
                                                                                                                                                      
41  Notifying Party’s response to RFI 1, paragraph 8.1.  
42  An OEM ASP can supply turbines in general but when it acts as an ASP it appears on the market as a 
standalone OMS prov ider trying to provide OMS on another OEM’s turbine after that OEM won the 
turbine tender (and the bundled OMS).   
43  Q1 Questionnaire to competitors, questions 12 and 12.1.  
44  Q1 Questionnaire to competitors, questions 12 and 12.1.  
45  Minutes of a phone c all with Vestas on 12 November 2019.  
46  See GE’s response to Q1 Questionnaire to competitors, questions 12 and 12.1.  
47  GE’s response to Q1 Questionnaire to competitors, questions 12 and 12.1, Enercon’s response to Q1 
Questionnaire to competitors, question 7, Vestas’s response to Q1 Questionnaire to competitors, question 
7.  
48  Form CO, paragraph 111.  
 
 
11 recognises that this does not occur frequently.49 Further, LTPs are almost exclusively 
signed at the point of the sal e of the wind turbine and very rarely outside this 
context.50 Thus de facto OMS provided under an LTP is bundled with the sale of the 
wind turbines and not addressable  on a standalone basis.  
(46) The Notifying Party submitted that the duration of an LTP is typi cally between 10 to 
20 years.51 Enercon and Vestas explained that the typical duration is 20 years52 and 
15-20 years53 respectively. Exceptionally, the contract term can be as long as 25 or 
even 30 years.54 Several OEMs noted a trend that the duration of LTPs is 
increasing,55 which may imply that these exceptional durations will become more 
common in the future.  
(47) However, while it is common to sign an LTP at the point of a sale, for two reasons 
this does not mean that standalone OMS is a marginal phenomenon or that it is 
excluded for 15 -30 years for a given turbine.  
(48) First, a small share of customers does not opt for an LTP or opts for an LTP with a 
relatively short term.56 For example, approximately 10 % of SG RE and Senvion 
contracts signed at the time of the turbine sale is not an LTP but rather a contract 
with a more limited scope and/or a shorter duration.57  
(49) Second, LTPs contain exit clauses, referred to as “termination for convenience” 
clauses. These clause s allow customers to renegotiate the price of OMS, re -tender 
OMS servicing and switch supplier. The periodicity of the exit clauses varies but by 
far the most frequently mentioned interval in the market investigation was 5 years.58 
The Notifying Party was a lso of the view that LTPs can be terminated for 
convenience with a periodicity of 5 years.59 By way of exception, 2 or 3 years were 
also mentioned and Enercon explained that in its own contracts customers can 
terminate for convenience at any point in time a fter the first five years.60 If the 
customer triggers the exit clause, then competition for standalone OMS opens up, 
where ISPs and ASPs can compete with the OEM of the turbine.    
(50) While the opportunity to exit the LTP at certain periods and tender out OMS exists, 
this does not necessarily mean that all customers do so. Indeed, the commercial logic 
that an LTP provides long -term predictability of costs and relieves the Asset Owner 
of the operational risks can easily prompt customers to stay with the OEM for a long 
period of time and not tender out OMS separately. The entity that provides the 
project finance can also require that customers not opt out of the LTP.  
                                                 
49  Form CO, paragraph  111. 
50  Q1 Questionnaire to competitors, question 12.1.  
51  Form CO, paragraph 108.  
52  Enercon’s response to Q1 Questionnaire to competitors, question 7.  
53  Vestas’s response to Q1 Questionnaire to competitors, question 7.  
54  Q1 Questionnaire to competit ors, question 9.  
55  Minutes of phone calls with Enercon, Vestas and GE on 8 November 2019, 12 November 2019 and 15 
November 2019 respectively.   
56  GE’s response to Q1 Questionnaire to competitors, question 7, Form CO paragraph 108.  
57  Form CO, paragraph 109. 
58  Q1 Questionnaire to competitors, questions 7, 8.1, 10, and 12.1.  
59  Form CO, paragraph 238.  
60  Enercon’s response to Q1 Questionnaire to competitors, question 7.  
 
 
12 (51) There is no precise quantitative information on what proportion of customers trigger 
the exit cla uses and when. The Notifying Party estimates that 30 % of LTPs are 
renegotiated or terminated when this becomes possible.61  
(52) In terms of qualitative information, as discussed before, the Notifying Party 
submitted that the tendency to re -tender OMS and possi bly switch supplier differs by 
customer type. Namely,  
i.) Financial investors typically do not have the required know -how and 
resources to undertake the OMS activities in -house but, at the same time, 
attach great importance to ensuring high turbine availabili ty. They thus tend 
not to opt out of the LTP.  
ii.) Utilities are more likely to bring OMS in -house or to retender OMS.  
iii.) Communities and small land owners also tend to opt out of the LTP and rely 
on third -party service providers to service their fleet. 62 
(53) This vie w is corroborated by the market investigation as several respondents made 
similar distinctions.63   
(54) The Commission obtained additional qualitative information on what share of 
customers exercise the exit clauses and when, during its market investigation.  
i.) EDF observed that a 5 year period is becoming the standard period for 
renegotiating OMS contracts.64 RWE, an ASP, submitted that customers tend 
to retender after 5 years.65  Ponticelli, an ISP, was of the same view.66 This 
suggests that a share of customers in deed exits after the first five years at the 
first exit clause.  
ii.) Even customers who do not opt out of the LTP after the first five years may 
nevertheless opt out at a later stage, before the end of the LTP. In that regard, 
Enercon submitted that during the  financing period customers that used 
financing are unlikely to opt out of the LTP because of project finance 
requirements. However, once the financing period ends, customers tend to 
look for OMS alternatives. For a majority of Enercon customers, this 
happ ens after 10 to 15 years of operation. EDF also mentioned that in certain 
Member States customers typically stay with the OEM for 15 years.67 This 
indicates that a certain share of customers opt out of the LTP at 10 -15 years.  
(55) Vestas argued that customers t end not to use the exit clauses.68 In light of the rest of 
the evidence, however, this does not appear to be correct.   
                                                 
61  Form CO, paragraph 109.  
62  Form CO, paragraph 84.  
63  EnBW’s and Ingeteam’s responses to Q1 Questionnaire to competitors, question 7, GE’s response to Q1 
Questionnaire to competitors, question 8.  
64  EDF’s response to Q1 Questionnaire to competitors, question 10.  
65  RWE’s response to Q1 Questionnaire to competitors, question 7.  
66  Response to Ponticelli Frères to Q1 Questionnaire to competitors, question 10.  
67  EDF’s response to Q1 Questionnaire to competitors, question 7.  
68  Vestas’ response to Q1 Questionnaire to competitors, question 11.  
 
 
13 (56) Overall, although there are no precise numbers and there is a lot of variance, based 
on the qualitative responses SGRE’s estimate that ro ughly [30-40]% of customers 
with LTPs opt to retender at the first exit clause appears reasonable. Additional 
customers appear to do so after the financing period is over, which is roughly after 
10-15 years of operation. Naturally, once the LTP reached its  term and the turbine 
still has useful lifetime, all customers will become addressable.  
(57) Once the customer opts out of the LTP, the subsequent OMS contracts tend to be of 
shorter duration, namely 3 -5 years.69 If contracts are longer, they also have exit 
clauses every 5 years.70 Contracts tend to be longer at the end of the lifetime of the 
turbine.71  
(B) Warranty  
(58) Another way that the sale of the wind turbine affects the addressability of OMS 
opportunities is the warranty. This is because the customer can lose the  warranty if 
any firm other than the OEM provides the servicing.72 This makes it rare that during 
the initial warranty period an ISP or ASP is the actual OMS provider instead of the 
OEM that installed the turbine. The effect of the warranty is smaller than the effect 
of the LTP as typical warranty periods are 2 -5 years.73 As 90 % of customers opt for 
an LTP that can be exited for the first time after 5 years only, these customers remain 
non-addressable by standalone OMS providers (including other OEMs as ASPs ) 
regardless of the warranty. However, the warranty does affect the addressability of 
those 10 % of customers that do not opt for an LTP in that it makes them non -
addressable for the warranty period.  
(C) Factors affecting the share of standalone and bundled OMS  
(59) The first factor that affects the addressability  of OMS is prices. The prices of initial 
full-service OMS contracts have dropped by 65% since their peak in 2011.74 While it 
is unclear whether this is the result of simply a demand shock (due to the decre ase in 
demand in annual wind installations, OEMs have to provide better conditions all -
round, including in OMS) or increased competition, it does make it more likely that 
even financial investors who prefer long -term cost predictability will, at some point , 
opt out of the LTP and renegotiate or re -tender OMS on a standalone basis. Even 
Vestas, which argued most strongly that customers do not opt out of LTPs, admitted 
that a competitive offer can potentially cause a customer to opt out of an LTP.75  
(60) The secon d factor having an influence on the size of the standalone OMS segment is 
the change in the duration of LTPs over time. Concretely, while currently the 
duration of LTPs is typically 15 -20 years and increasing,76 this has not always been 
the case. Indeed, pr eviously LTPs had shorter duration of 10 -15 years.77 This implies 
                                                 
69  Form CO, paragraph 115.  
70  Q1 Questio nnaire to competitors, question 10.  
71  Form CO, paragraph 115.  
72  Q1 Questionnaire to competitors, question 14.1.  
73  Q1 Questionnaire to competitors, question 6.  
74  1Q 2019 Global Wind Market Outlook, Bloomberg NEF, p. 35  
75  Minutes of a phone call with V estas on 12 November 2019.  
76  See paragraph (49) above.  
77  Minutes of a phone call with Enercon on 8 November 2019, Enercon’s response to Q1 Questionnaire to 
competitors, question 7.  
 
 
14 that turbines installed 6 -12 years ago where the owner has not opted out of the LTP 
will be addressable by standalone OMS suppliers in the next 4 years as the LTPs will 
reach their term. Even  though the current trend of growing LTP durations will 
generally imply somewhat less scope for standalone OMS, the impact of this change 
will be relevant only very long -term (i.e. beyond 20 years), which is outside the time 
horizon of the merger assessmen t.  
(61) The fact that in the next four years the previously shorter LTPs reach their term 
implies that the standalone onshore OMS segment is likely to grow. Indeed, in the 
period 2017 -2027 overall OMS is set to grow by 2.9% in Germany, 3.3% in Spain, 
2.2% in t he United Kingdom and 7% in France. As annual installations have slowed 
down considerably since 201778 and shorter LTPs were common previously, the 
standalone OMS segment is likely to grow faster in the same period than bundled 
OMS segment.  
(D) Summary  
(62) In sum mary, OMS can be either sold together with the turbine as a bundle or on a 
standalone basis. Standalone OMS is addressable by ISPs and ASPs, whereas 
bundled OMS is captive to the OEM. Captive OMS results from two market 
conventions, LTPs signed at the poin t of the turbine sale and the warranty. As a 
result, roughly the following customers constitute the addressable segment.  
i.) Approximately [10-20]% of customers do not sign an LTP contract 
(paragraph (48)). These customers become addressable after the expiry of the 
warranty, which varies between 2 -5 years.  
ii.) Approximately [20-30]% of customers choose to use the first possibility to 
exit the LTP typically 5 years after the turbine installation and renegotiate or 
tender out OMS on a standalone basis (paragraphs (51)-(56)).  
iii.) After the end of the financing period, typically 10 -12 years after the turbine 
installation, additional customers utilise the exit clause and renegotiate or 
tender out OMS on a stan dalone basis (paragraph (54)).  
iv.) Once LTPs have reached their term and the turbine still has a useful life, all 
customers become addressable.  
(63) Several  factors are liable to change the relative shares of standalone and bundled 
OMS. First, falling OMS prices caused additional customers to opt out of LTPs. 
Second, due to slowing down new installations and previously shorter term LTPs, 
the standalone OMS se gment is set to grow up to 2027.  
5.1.2.6.  IP and SCADA system  
(64) Wind turbines are generally controlled by supervisory control and data acquisition 
(SCADA) systems. The turbine controller and SCADA system are typically regarded 
as the “nerve centre” of the wind turb ine or wind farm, connecting the individual 
turbines, the substation and meteorological stations to a central computer. This 
computer and the associated communication system allow the operator of the wind 
farm to supervise the behaviour of all the wind tur bines and also the wind farm as a 
                                                 
78  See paragraph (22).  
 
 
15 whole. It will keep a record of all the activity and allows the operator to determine 
what corrective action, if any, needs to be taken. It also records energy output, 
availability and error signals, which will act as a ba sis for any warranty calculations 
and claims.79  
(65) Each OEM has its own proprietary SCADA system consisting of a central computer 
and software running on that computer. This system is protected by IP rights owned 
by the OEM that installed the turbine.80 
(66) Severa l aspects of OMS servicing requires access to the SCADA system and the 
turbine controller. For example, component exchanges (as in minor correctives but 
especially major correctives) require reloading the software and resetting the 
SCADA, which is not poss ible without proper access.  Remote monitoring also may 
not be possible without access to suitable sublevels of the SCADA software.81 
(67) Apart from SCADA system and the turbine controller, technical drawings of the 
turbine and its various spare parts are also protected by IP. This influences OMS in a 
sense that for supplying certain spare parts, access to OEM IP is necessary.82 
(68) How access to this IP (including access to SCADA and turbine controller) influences 
competition will be discussed in the relevant sectio ns on market definition and 
competitive assessment.   
5.1.3.  Servicing of offshore wind turbines  
(69) The description of onshore OMS also applies to offshore OMS, with a few but 
important differences.  
(70) First, as the turbines have to be approached through the sea, off shore servicing 
involves more complex logistics, such as the use of special vessels that are able to 
support a crane and helicopters.83 Harsher weather conditions often make servicing 
more difficult or impossible.84 For the same reason offshore OMS is more 
expensive.85 These factors will be described in more detail in relation to market 
definition (Section 5.2.1.2).  
(71) Second, offshore Asset Owners are mostly large utilities.86 As a consequence, and in 
line with the discussion in Section 5.1.2.5.A, which showed t hat utilities tend to 
prefer self -servicing, self -servicing is widespread in offshore servicing.87  
(72) The fact that customers are mainly self -servicing utilities also implies that LTPs are 
much less prevalent in offshore OMS than in onshore OMS. Given their s trategy of 
                                                 
79  Form CO, paragraph 384.  
80  Form CO, paragraph 383.  
81   Response of [Customer]  to Q2 Questionnaire to customers, question 21.  
82  Responses of EDF, EnBW and ENGIE to Q1 Questionna ire to competitors, question 22.  
83  Q1 Questionnaire to competitors, question 16, Q2 Questionnaire to customers, question 16.  
84  Responses of [Customers], Q2 Questionnaire to customers, question 16, responses of EnBW, Enercon, 
Engie, Ingeteam, Ponticelli F rères, RWE Q1 Questionnaire to competitors, question 16.  
85  Ingeteam’s response to Q1 Questionnaire to competitors, question 16.  
86  Slide deck presented to the Commission on the technical meeting related to offshore services of 3 
December 2019, page 23.  
87  Slide deck presented to the Commission on the technical meeting related to offshore services of 3 
December 2019, page 18.  
 
 
16 self-servicing as soon as the warranty expires, these customers often choose not to 
sign an LTP. On the other hand, the warranty period is typically longer than in 
onshore OMS.88 Taken together this implies that the addressable  standalone segment  
is more influenced by the warranty than by the LTP and can be roughly equated with 
post-warranty OMS. On the basis of capacity serviced (in GW), self -performing has 
a share of 62% of the post -warranty, addressable  segment.89  
5.2. Market definition  
5.2.1.  Product market definition  
5.2.1.1.  Standalone OMS vs captive OMS  
(A) The Notifying Party’s view  
(73) The Notifying Party considers that the markets for the supply of wind turbines 
include the aftermarket for the servicing by the turbine OEM during the initial 
warranty per iod. This market can be distinguished from what could be referred to as 
the “freely addressable” market for the stand -alone provision of OMS for wind 
turbines, at the time of expiry of the initial turbine warranty when the Asset Owner 
seeks to procure OMS,  usually via a competitive tender process.  
(B) Commission precedents  
(74) In General Electric Company/LM Wind Power Holding,90 the Commission 
confirmed that “ wind turbine OEMs typically provide operation and maintenance 
services for a turbine while it is under warr anty, including blade servicing which 
can be provided directly by the wind turbine OEM or subcontracted. A turbine 
warranty generally ranges from two to five years, depending on the onshore or 
offshore market. Once a turbine is off warranty, the customer m ay then (i) choose to 
retain the OEM as the service provider, (ii) perform servicing in -house, or (iii) 
contract with an ISP such as Availon, Deutsche Windtechnik Service GmBH and 
Global Energy Service.”91 
(75) The onshore and offshore servicing markets are also  comparable to the market for 
the servicing of heavy duty gas turbines (HDGT), which the Commission assessed in 
General Electric/Alstom.92 In that case the Commission found that the market for the 
supply of HDGTs includes the associated aftermarket for the initial servicing and the 
HDGT control system, as, at the time of contracting a new HDGT unit, customers 
usually also purchase the associated services for maintaining the machine 
operational from the same OEM.  
                                                 
88  Slide deck presented to the Commission on the technical meeting related to offshore services of 3 
December 2019, page 23.  
89  Slide deck presented to the Commission on the technical meeting related to offshore services of 3 
December 2019, page 18.  
90  Case COMP/M.8283 – General Electric Company/LM Wind Power Holding.  
91  Case COMP/M.8283 – General Electric Company/LM Wind Power Holdin g, paragraphs 70 -71. 
92  Case M.7278 – General Electric/Alstom, recitals 87 – 97. 
 
 
17 (C) The Commission’s assessment  
(76) The Commission ag rees with the principle that OMS services sold together with the 
wind turbine are not freely addressable  by a standalone OMS provider. However, 
captive OMS includes not only OMS provided under the warranty period but also 
OMS services provided under contra cts, mostly LTPs, sold at the time of the turbine 
sale and together with the turbine, up until the point that the customer opts out of the 
LTP by using an exit clause.  
(77) As regards onshore OMS, as explained in Section 5.1.2.5(A), 90% of customers sign 
an LT P at the time of the turbine sales. As the OEM offers the LTP together with the 
turbine, there is no separate competition for the OMS and the parameters of the 
OMS contract (including its price, the availability guarantee, the references of the 
OMS provide r etc.) are only one parameter of the competition for the overall 
package that includes the wind turbine. This means that a customer will not choose 
even a significantly more competitively priced OMS package if the overall 
electricity generation cost of th e whole package is lower. Furthermore, ISPs and 
ASPs cannot contest this OMS separately, which is provided captively by the OEM. 
Thus services provided under LTPs should be considered part of the wind turbine 
market. This applies, however, only until the c ustomer opts out of the LTP by using 
an exit clause. When customers sign an LTP, the warranty does not influence the 
contestability of the OMS because typically the customer can exit the contract for the 
first time 5 years after installation, whereas the d uration of the warranty is 5 years at 
most but shorter in many cases.  
(78) For the 10 % of onshore customers who do not sign an LTP at the time of the turbine 
sale, it is the warranty that reserves the OMS for the OEM that sold the turbine.  As 
discussed in Se ction 5.1.2.5, in this scenario if the customer allows an OMS supplier 
other than the OEM that made the turbine, they risk losing the warranty.93 As it is 
unlikely that they would undertake this risk, in practice the OMS is reserved to the 
OEM of the turbin e during warranty. In this regard, the OMS under warranty is not 
subject to separate competition and the parameters of competition and the set of 
competitors are completely different relative to standalone OMS. Thus OMS under 
warranty should also be consid ered as part of the captive OMS market and excluded 
from the standalone OMS market.  
(79) As regards offshore OMS, as set out in Section 5.1.3, the proportion of LTP is much 
lower than in onshore and the warranty is longer. Thus it is likely that the warranty i s 
a bigger factor in reserving the OMS to OEM than the LTP. Otherwise the same 
principles apply and OMS provided under the warranty period as well as, to the 
extent relevant, OMS provided under LTPs are also part of the (offshore) wind 
turbine market and s eparate from standalone OMS.  
(80) This approach is in line with the precedents cited above.  
(81) The Commission therefore considers that OMS provided under warranty and under 
LTPs until the first use of an exit clause by the customer, whichever period is longer 
are to be considered as captive OMS. Captive OMS forms part of the wind turbine 
market. Other OMS, referred to as standalone OMS, is a market separate from 
captive OMS.  
                                                 
93  See specifically paragraph (58). 
 
 
18 5.2.1.2.  Onshore and offshore OMS  
(A) The Notifying Party’s view  
(82) The Notifying Party submits that t here are significant similarities between the types 
of operation and maintenance services that are performed on onshore and offshore 
wind turbines. Typically, the modules of the servicing are the same, such as 
preventative maintenance, minor correctives, m ajor correctives and remote 
monitoring.94  
(83) The Notifying Party notes, however, that there are certain differences between the 
way in which onshore and offshore turbines are serviced which may warrant a 
product market segmentation. More specifically, due to the harsher environmental 
conditions (salt, moist air) in which offshore turbines operate and the difficult access 
to offshore installations, the logistics and tools required to perform servicing of 
offshore turbines are significantly more burdensome, resu lting in higher maintenance 
and downtime costs for customers.95 
(84) Overall, the Notifying Party considers that the question can be left open as the 
Transaction does not give rise to competition concerns whether onshore and offshore 
OMS servicing is considered as part of the same or separate markets.96  
(B) Commission precedents  
(85) The Commission has not previously assessed onshore and offshore OMS, only the 
difference between the manufacture and sale of onshore and offshore wind turbines.  
(86) In Siemens/Gamesa,  the Commission concluded that separate markets exist for 
onshore and offshore wind turbines as “ the different conditions of the offshore 
environment affect the regulatory framework, planning and construction of offshore 
projects ” resulting in “ differences in d esign, performance and costs of the turbines to 
be installed. ”97 The Commission had previously considered in GE 
Energy/Converteam98 that there were differences between onshore and offshore 
turbines mainly in relation to power output, installation, operation and maintenance 
costs resulting from the harsher environmental conditions and difficulties to access 
turbines in offshore wind in stallations.  
(C) The Commission’s assessment  
(87) An overwhelming majority of customers and competitors confirmed the differences 
pointed out by the Notifying Party between servicing onshore and offshore wind 
turbines. Respondents highlighted additional difference s as well.  
(88) First, it was confirmed that OMS for onshore and OMS for offshore requires 
significantly different tools and logistics.99 In terms of logistics, unlike onshore 
                                                 
94  Form CO, paragraph 174.  
95  Form CO, paragraph 175.  
96  Form CO, paragraph 176.  
97  Case COMP/M.8134 – Siemens/Gamesa ,  paragraph 10.  
98  Case COMP/M.6222 – GE Energy/ Converteam, paragraph 78.  
99  Q1 Questionnaire to competitors, question 16, Q2 Questionnaire to customers, question 16 . 
 
 
19 OMS, offshore OMS requires special vessels and helicopters.100 Special vessels 
include jack-up vessels, i.e. vessels fitted with movable legs that can be jacked down 
onto the sea floor such that the hull can be elevated above water level and be used as 
a stable platform for lifting. It was also submitted that the logistical planning has to 
take into account harsher weather conditions and different health and safety 
regulations.101 Furthermore, bringing cranes for large component servicing involves 
much more costly and planned logistical operations in offshore OMS than in onshore 
OMS.102 In terms of tools, the responses were more mixed. Some respondents 
considered that the big difference lies in logistics but the tools are the same,103 while 
others considered that offshore OMS also requires different tools, such as special 
handling and lifting tools or special tools to implement predictive maintenance.104 
Overall, due to logistics and to a lesser extent the tools, offshore servicing is much 
more challenging and difficult than onshore servicing.  
(89) Second, respondents confirmed that offshore OMS is signifi cantly more expensive 
and involves significantly higher downtime costs for customers.105 Reasons include: 
larger size of offshore turbines (increasing, relative to onshore OMS, the man -hours 
necessary for maintenance and the revenue loss in the case of downt ime); difficulty 
of access both because of naval route and weather conditions leading to certain time 
windows for maintenance; longer distance to maintenance centre; longer downtime; 
and harsh weather conditions, which increase the amount of servicing need ed (salt 
and moisty air leading to corrosion). Engie observed that due to longer downtime 
and difficulty of access it makes sense to maximise predictive and preventive 
maintenance in the case of offshore wind farms.106  
(90) Third, respondents to the market inves tigation indicated that, contrary to onshore 
servicing, offshore OMS requires special maritime technicians107 and that the hourly 
rate of these technicians is higher than the rates of onshore technicians.108 In other 
words, the two types of servicing require a  workforce with different skills. It also 
matters in this regard that, as mentioned before, health and safety regulations are 
different and thus offshore technicians need more extensive health and safety 
training.109  
(91) Fourth, offshore OMS includes additional  modules relative to onshore servicing such 
as foundation maintenance.110  
(92) Fifth, environmental regulations are also different.111  
                                                 
100  Responses of [Customers] , Q2 Questionnaire to customers, question 16, responses of EnBW, Enercon, 
Engie, Ingeteam, Ponticelli Frères, RWE Q1 Questionnaire to competitors, question 16.  
101  Ingeteam’s response to Q1 Questionnaire to competitors, questio n 16.  
102  Ingeteam’s response to Q1 Questionnaire to competitors, question 16.  
103  Responses of Vestas and Ynfiniti to Q1 Questionnaire to competitors, question 16.  
104  Responses of Engie, RWE and EnBW to Q1 Questionnaire to competitors, question 16.  
105  Q1 Questionnaire to competitors, question 17, Q2 Questionnaire to customers, question 17.  
106  [Customer]  response to Q2 Questionnaire to customers, question 17.  
107  EnBW’s response to Q1 Questionnaire to competitors, question 16.  
108  [Customer] response to Q2 Questionnaire to customers, question 17.  
109  Response of [Customer] to Q2 Questionnaire to customers, question 18 and response of Ynfiniti Global 
Energy Services to Q1 Questionnaire to competitors, question 18.  
110  EDF’s response to Q1 Questionnaire to compe titors, question 18.  
 
 
 
20 (93) The Commission considers that these extensive differences rule out demand -side 
substitutability.  
(94) From a supply -side perspective , an OMS provider active exclusively in onshore 
servicing is unlikely to be able to switch to offshore servicing with minimal costs, no 
sunk costs and within a short timeframe. Indeed, hiring and training the required 
staff, acquiring or hiring the assets for logistics and servicing, organising the 
complex logistics is likely not possible within a short timeframe and involve non -
negligible costs. Accordingly, a large majority of OMS providers confirmed that 
switching from onshore servicing to offshore servi cing would imply considerable 
technical difficulties and/or costs.112 For example, EDF submitted that such a switch 
implies acquiring specific and experienced resources, analysing of markets and 
defining the strategy, developing the pricing tools as well as negotiating the lease 
contracts for special vessels or acquiring these assets. 113 In EDF’s view this would 
imply significant investments. EnBW advised that the necessary investments amount 
to several millions of euros.114 Ingeteam submitted that the investmen t cost is EUR 1 
million and the time required is 1 -2 years.115 RWE also emphasised the difficulties 
involved, mainly with regard to staffing and logistics: “ Whilst spare parts and 
control systems are the same (or very similar), training and logistics require ments 
as well as working patterns and environment are very different. This leads to 
different staffing requirements, be it in terms of education/experience level, size of 
teams and willingness of staff to work in challenging environments. Setting up and 
running marine logistics (Crew Transfer Vessel, Service Operation Vessel, Jack up 
Vessel, Helicopter) is costly and complex, especially considering the know -how 
around effective and efficient work flows of staff interplaying with the vessel 
operation itself .”116  RWE’s time and cost estimate was 3 years and costs in excess 
of 1 million euros.  
(95) Supply -side substitution from offshore to onshore is more plausible as onshore OMS 
is less challenging than offshore OMS. OMS suppliers’ views were split in this 
regard e ven though nearly all of them acknowledged that switching is easier in 
direction offshore to onshore than vice -versa.117 A number of respondents considered 
that switching would not imply significant difficulties and costs.118 RWE submitted 
that the process wou ld take a few months119 However, a slight majority was of the 
view that the differences are large enough so that switching would imply significant 
difficulties.120 EDF noted that OMS providers would need to adapt their processes to 
be in a position to be compe titive on onshore OMS. In particular, they need to scale 
down their processes, change their cost structure, and rebalance their skills between 
preventive maintenance versus corrective maintenance.121 Ponticelli Frères also 
noted that an offshore firm would n ot be price competitive onshore, 122  which 
                                                                                                                                                      
111  EDF’s response to Q1 Questionnaire to competitors, question 18.  
112  Q1 Questionnaire to competitors, question 19.  
113  EDF’s response to Q1 Questionnaire to competitors, question 19.  
114  EnBW’s response to Q1 Questionnaire to competit ors, question 19.  
115  Ingeteam’s response to Q1 Questionnaire to competitors, question 19.  
116  RWE’s response to Q1 Questionnaire to competitors, question 19.  
117  Q1 Questionnaire to competitors, question 20.  
118  Q1 Questionnaire to competitors, question 20.  
119  RWE’s response to Q1 Questionnaire to competitors, question 20.  
120  Q1 Questionnaire to competitors, question 20.  
121  EDF’s response to Q1 Questionnaire to competitors, question 20.  
122  Response of Ponticelli Frères to Q1 Questionnaire to competitors, q uestion 20.  
 
 
21 implies some restructuring or hiring new staff before onshore activities can 
commence. These responses suggest that switching would not be possible with the 
speed and ease required for supply -side substitution. The  Commission also notes that 
views on the lack of supply -side substitution are more consistent with the responses 
on the more difficult nature of offshore servicing. Indeed, given that offshore 
servicing requires special workforce, logistics, etc., an offsh ore firm has a different 
structure and higher costs than an onshore firm. It thus has to do some restructuring 
before it launches its activities onshore and it is unlikely to be able to react to small 
price increases in onshore OMS.   
(96) The Commission theref ore considers that onshore OMS and offshore OMS belong to 
separate markets.  
5.2.1.3.  Further segmentation based on OMS modules  
(A) The Notifying Party’s view  
(97) In the Notifying Party’s view, it is not required to segment onshore and offshore 
OMS further according to t he type of service provided. OMS for onshore and 
offshore wind turbines include a broad range of functions which, during the lifetime 
of the wind turbine, support and ensure the ongoing operation of the turbine, the 
plant balance and the associated transmi ssion assets. The exact type and range of 
services provided will depend very much on the needs of the individual customer. 
All major service providers, including OEMs, ISPs and ASPs, typically have the 
capabilities to offer a full range of services.123 
(B) Commi ssion precedents  
(98) The Commission did not previously consider whether the markets for the supply of 
offshore and onshore services should be segmented according to the type of services 
rendered. However, the Commission previously considered the further segme ntation 
of the service market or aftermarket of other equipment. For example, in General 
Electric/Alstom,  the Commission considered whether or not all services relating to 
gas turbines constitute one single market.124 In that case a majority of customers 
considered that all services constitutes one single market because steam turbine 
technologies are typically mature and a number of steam turbine services providers 
can provide the whole range of services for all types of steam turbines. However, the 
Commissio n ultimately left the market definition open.  
(99) In John Wood Group / Siemens , the Commission considered that gas turbine services 
rendered by OEMs and ISPs are comparable in terms of quality even though ISPs 
can offer sometimes more competitive prices and t hat there is interchangeability 
between services provided by OEMs and ISPs. The Commission therefore concluded 
that services rendered by OEMs and ISPs are part of the same market.125 
(C) The Commission’s assessment  
(100)  It is clear that, from a demand perspective, t he exact scope of services required by 
the customer can be very different depending on the customer’s preferences. As 
                                                 
123  Form CO, paragraph 180.  
124  Case M.7278 – General Electric/Alstom, recital 1767.  
125  Case COMP/M.7083 – John Wood Group / Siemens, paragraph 23.  
 
 
22 discussed in paragraphs (52)-(53), financial investors typically require full service 
packages, while utilities are more likely to take servicing in -house and have only 
minimal support from OEMs. Cost -sensitive communities and small land owners are 
more likely to use ISPs and tend to requ ire a less than full -scope solution. The 
Commission notes that these are just broad observations and demand for specific 
modules can vary even within customer groups. The exact scope of services 
demanded can also depend on idiosyncratic factors such as the  problems typical with 
a certain turbine type. Thus there is no demand -side substitutability across OMS 
services demanded and the market definition turns on supply -side considerations.  
(101)  In this regard, a slight majority of both customers and competitors ag reed with the 
statement that there are certain subcategories of services that certain OMS providers 
are not capable of doing as opposed to the statement that all OMS providers are 
capable of performing all subcategories even if in some, or all, of the modu les some 
OMS providers are stronger than others.126 This would suggest that in certain 
modules competition is restricted to certain suppliers and excludes others. It would 
follow that those modules form a separate market with a more concentrated market 
struc ture. However, a detailed review of the explanations does not support this 
conclusion for two reasons: first, the qualitative responses of certain respondents 
sometimes contradict the statement supported, and, second, the main issue appears to 
be access to  IP, which rather gives an advantage to OEMs but does not categorically 
exclude other competitors from certain modules. These points are explained in more 
detail below.    
(C.i) Balance of views factoring in qualitative responses  
(102)  Two competitors who agreed with the statement that there are certain subcategories 
of services that certain OMS providers are not capable of doing were actually of the 
view that, save for certain exceptions, in most cases all providers can do all 
services.127 Such an explanation rather sup ports supply -side substitution across 
different modules. Likewise, the responses of four customers128 who agreed with the 
statement that there are certain subcategories of services that certain OMS providers 
are not capable of doing rather actually supports the lack of distinction per modules. 
In a general fashion, these customers submitted that ISPs and ASPs can perform all 
the OMS modules even if they encounter certain difficulties, especially around 
access to SCADA and to the turbine controller. Taking the se qualitative responses 
into account, there is actually a slight majority in favour of the statement that all 
OMS providers are capable of performing all subcategories even if in some, or all, of 
the modules some OMS providers are stronger than others.  
(C.ii)  IP exclusivity and its mitigating factors  
(103)  Regardless of which statement respondents supported, the majority of the 
explanations were consistent in holding that all OMS service providers have the 
capability to provide all OMS services although they face som e difficulties in tasks 
involving IP access, which includes access to the SCADA computer, the turbine 
controller, drawings and turbine documentation.129 For example, Banks Renewables 
                                                 
126  Q1 Questionnaire to competitors, question 22, Q2 Questionnaire to customers, question 21.  
127  Q1 Questionnaire to competitors, question 22.  
128  Q2 Questionnaire to customers, question 21.  
129  Q1 Questionnaire to competitors, question 22, Q2 Questionnaire to customers, question 21.  
 
 
23 submitted that “ Competition is available in all areas but is most difficult  in the area 
of SCADA and control systems where intellectual property has been protected ”130 
RWE, an ASP OMS supplier, was of the view that “ ISPs and ASPs can do most of 
the services that OEMs can . However, ISPs and ASPs encounter restrictions on wind 
turbin e controller and SCADA system to which the OEMs have IP rights. ”131 
Altogether 50% of competitors and 68 % of customers mentioned the lack of access 
to IP rights in its various forms (access to SCADA, controller, spare part 
documentation etc.) as a hurdle in  their qualitative reply.  
(104)  There are several ways in which the IP facilitates the performance of certain 
modules. For example, with SCADA access the turbine can be stopped from a 
distance, whereas without access it can only be stopped manually on site. 132 By its 
nature, remote monitoring and remote operation of the turbine is software based and 
thus requires some kind of access.133 SCADA access facilitates major correctives 
and component upgrades as after a major component exchange the SCADA software 
needs to be reloaded and the SCADA computer reset.134 Supplying and installing 
spare parts is easier with access to drawings and other documentation. 135    
(105)  The key question in relation to market definition is whether the IP merely gives an 
advantage in supplying certa in modules or it de facto excludes ISPs and ASPs from 
certain modules such that they are not constraints on OEMs. Based on the market 
investigation, it appears that control over the IP gives OEMs advantages but that it 
does not reserve any modules as the e xclusive domain of OEMs. This because 
certain practices mitigate the IP advantage and because the bulk of the work by value 
does not require IP access. This is explained below in more detail.  
(106)  Accordingly, there are three factors that mitigate the IP exclu sivity.  
(107)  First, a new SCADA system can be retrofitted on the turbine.136 This is a clean 
solution but relatively costly.137 It does not appear prevalent so far, although the 
Commission notes that there are a number of companies active in the OMS sphere 
who spe cifically focus on offering retrofitting services such as DEIF and Mita -
Teknik. Thus to a certain extent this possibility mitigates the IP advantage.  
(108)  Second, some ISPs use workaround methods.138 These could be risky as they 
interfere with the existing syste m or costly, or both,139 but, again, to a certain extent 
it is a practice in the market and enables ISPs to provide a broader range of services.  
(109)  Third, ISPs and non -OEM ASPs can get access to the IP against licence fees. While 
the OEM may not have an incent ive to provide such access, it is clear from the 
market investigation that granting such access is part of market practice. For 
                                                 
130  Response of [Customer] to Q2 Questionnaire to customers, question  21. 
131  RWE’s reponse to Q1 Questionnaire to competitors, question 22.  
132  Minutes of a phone call with Enercon on 8 November 2019.  
133  [Customer]  response to Q2 Questionnaire to customers, question 21.  
134  [Customer]  response to Q2 Questionnaire to customers, question 21; Response of [Customer]  to Q2 
Questionnaire to customers, question 21.  
135  Responses of EDF, EnBW and ENGIE to Q1 Questionnaire to competitors, question 22.  
136  Form CO, paragraph 386.  
137  Q1 Questionnai re to competitors, question 57.  
138  Form CO, paragraph 387.  
139  Q1 Questionnaire to competitors, question 57.  
 
 
24 example, several ISPs submitted that they can have SCADA access rights but they 
have to pay for such access to the OEM and renew  subscription to the access codes 
every three months.140 Likewise Cubico Sustainable Developments noted that Asset 
Owners can replace the OEM with an ISP through an agreement or by paying for the 
IP information needed.141 Other Asset Owners submitted similar r esponses.142 
Reasons why OEMs grant such access could include the desire not to alienate the 
customer who can also be an important customer in wind turbines.  
(110)  While having to pay for access may be considered a competitive disadvantage, ISPs 
have lower overhe ad and did not have to bear the development costs of the IP. In any 
event, considerations relating to cost advantages and disadvantages are not relevant 
to market definition, where the principal question is whether suppliers exercise a 
competitive constrai nt despite some disadvantages. In other words, although at the 
cost of payment, ISPs and non -OEM ASPs do not appear to be excluded from 
supplying certain OMS modules and thus distinguishing separate markets for certain 
modules does not appear to be justifi ed.  
(111)  To illustrate that the mitigating factors are effective, Deutsche Windtechnik 
(“DWT”), a prominent ISP, has a remote monitoring service that offers 24/7 
monitoring, proactive fault analysis and service hotline. The service covers Vestas, 
Enercon, Nord ex, Senvion turbines.143 As remote monitoring is by definition 
software based, this service would be one of the prime candidates for a module that 
only OEMs could perform due their IP exclusivity. Yet this example shows that this 
is not the case.   
(112)  In additi on to the mitigating factors, it also appears that the bulk of the OMS work 
by value can be provided independently of the OEM, i.e. the IP holder. In particular, 
the market investigation indicated that ISPs can do 80% of the OMS work by value 
independently  from the OEM. While the rest of the services are also important to run 
a windfarm and involve more complex engineering, ISPs can also execute these 
tasks if they obtain a licence against a licence fee.  
(C.iii)  Conclusion  
(113)  On the basis of the above the Commission  considers that it is not appropriate to 
define separate markets based on OMS modules. This does not mean, of course, that 
different suppliers do not have advantages or disadvantages in certain modules or in 
certain types of OMS services. For example, OEMs  seems to have an advantage in 
major correctives, remote monitoring, and, more generally, in being able to provide a 
more comprehensive service.144 They also have an advantage in newer turbine types 
as in respect of these turbines the knowledge is less wides pread and they are more 
protected by IP than older turbines.145 By contrast, ISPs are smaller, more agile, have 
lower costs and thus they are more competitive in scheduled maintenance and minor 
                                                 
140  Q1 Questionnaire to competitors, question 55.  
141  Response of [Customer]  to Q2 Questionnaire to customers, question 21.  
142  Q2 Questionnaire to cus tomers, question 21.  
143  https://www.deutsche -windtechnik.com/remote -data-monitoring   
144  Q2 Questionnaire to customers, question 21.  
145  Q2 Questionnaire to customers, question 21.  
 
 
25 correctives.146 However, these considerations imply that the marke t is differentiated 
rather than that there are separate markets.  
5.2.1.4.  Gearboxes  
(A) The Notifying Party’s view  
(114)  The Notifying Party submits that gearboxes do not differ depending on whether they 
are used in onshore or offshore wind turbines, and no distinction ne eds to be made in 
this respect. In particular, there are no specific additional requirements for offshore 
gearboxes (e.g. anti -corrosion protections) because the gearbox is protected within 
the turbine nacelle. Furthermore, there is little distinction in t erms of design between 
gearboxes for use in differently geared wind turbines. Gearboxes are compatible 
with most turbine design variations (for example, different rotor speeds and blade 
lengths) and accordingly to accommodate most turbine specifications (f or example, 
in relation to wind speed).147 
(B) Commission precedents  
(115)  In Siemens/Gamesa,  the Commission’s market investigation found that customers do 
not consider gearboxes for onshore and offshore turbines substitutable but that 
suppliers can easily adapt gear boxes in order to fit the specific features of the wind 
turbine depending on where it is going to be deployed. 148 However, it ultimately left 
the market definition open.  
(116)  In ZF/Hansen , the Commission considered that further segmentation of the wind 
turbine g earboxes into onshore and offshore wind turbine gearboxes is not 
appropriate due to supply -side substitutability.149  
(C) The Commission’s assessment  
(117)  A large majority of competitors considered that gearboxes for onshore wind turbines 
are different from gearboxes for offshore wind turbines (e.g., in design, functions, 
specific turbine requirements, etc.).150 For example, offshore gearboxes are normally 
sea water proofed and have specific treatment for marine environment. 151 They are 
also bigger sized and hea vier than onshore gearboxes and designed for a longer 
lifetime.152 Competitors did not consider that customers view offshore and onshore 
turbine gearboxes interchangeable153 and this was directly confirmed by customers 
themselves.154 Thus, in line with the prece dents, there is no demand -side substitution 
between gearboxes for onshore and offshore wind turbines.  
(118)  Those competitors that have knowledge of onshore and offshore gearboxes and their 
manufacturing process agreed with the statement that switching producti on from 
                                                 
146  Q2 Questionnaire to customers, question 21.  
147  Form CO, paragraph 198.  
148  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 63- 64. 
149  Case COMP/M.6361 – ZF/Hansen, paragraph 11. 
150  Q1 Questionnaire to competitors, question 24.  
151  Responses of EDF and Ingeteam to Q1 Questionnaire to competitors, question 24.  
152  EDF’s response to Q1 Questionnaire to competitors, question 24.  
153  Q1 Questionnaire to competitors, question 25.  
154  Q2 Questionnaire to customers, question 24.  
 
 
26 onshore to offshore turbine gearboxes does not involve significant difficulties or 
costs.155 In addition, documents submitted by the Notifying Party indicate that the 
manufacturing process for wind gearboxes is relatively standardised worldwide and 
is the same irrespective whether or not the gearbox will be used in an onshore or an 
offshore turbine.156 The only difference appears to be that offshore gearboxes are 
generally larger than offshore gearboxes. However, suppliers have the capability to 
handle different sizes in their manufacturing process and produce both types of 
turbines.157 Therefore, in line  with the precedents and the view of the Notifying Party 
gearboxes for onshore and offshore wind turbines appear to be substitutable from a 
supply perspective.  
(119)  Results were similar with respect to gearboxes for turbines with different gearings. 
Competitor s did not consider that customers view turbine gearboxes for turbines 
with different gearings interchangeable158 and this was directly confirmed by 
customers themselves.159 For example Ingeteam explained that a specific wind 
turbine could not use a different g earbox or different gearings than the ones specified 
by the OEM.160 Vestas advised that gearboxes with a different gearing or ratio will 
not be able to carry the load that they are designed for or they will lose efficiency 
unless the degree of difference in the gearing is small.161 However, all competitors 
that expressed a view confirmed that that switching production from gearboxes with 
a certain gearing to gearboxes with another gearing or vice -versa would not imply 
significant technical difficulties of costs .162 Thus supply -side substitution applies 
across gearboxes for turbines with different gearings.  
(120)  Accordingly, the Commission considers that there is a single market for gearboxes 
for wind turbines without the need to further segment it based on the type of  turbines 
(onshore or offshore) or on turbine gearings.  
5.2.1.5.  Markets for the manufacturing and supply of onshore and offshore wind turbines  
(A) The Notifying Party’s view  
(121)  As the proposed Transaction will not give rise to overlaps on the market for the 
manufacturi ng and supply of onshore and offshore wind turbines, the Notifying 
Party did not discuss market definitions in this regard.  
(B) Commission precedents  
(122)  In Siemens/Gamesa, the Commission considered that the market for the 
manufacturing and supply of onshore and  offshore wind turbines constitute separate 
markets.163 This finding was based on several factors. First, the market investigation 
showed that onshore and offshore turbine projects are very different because 
offshore projects are much more complex; involve m uch larger development, 
                                                 
155  Q1 Questionnaire to competitors,  question 26.  
156  Notifying Party’s response to Commission’s request for information of 12 December 2019, Annex 1.  
157  Notifying Party’s response to Commission’s request for information of 12 December 2019, Annex 1.  
158  Q1 Questionnaire to competitors, ques tion 27.  
159  Q2 Questionnaire to customers, question 25.  
160  Ingetam’s response to Q1 Questionnaire to competitors, question 28.  
161  Vestas’s response to Q1 Questionnaire to competitors, question 27.  
162  Q1 Questionnaire to competitors, question 28.  
163  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 8-28.  
 
 
27 construction and certification costs; have larger project sizes; involve greater 
complexity; and take much more time to complete than onshore projects.164 Second, 
offshore turbines are larger, costlier and more complex to design and m anufacture 
than onshore turbines as they have to withstand harsher environmental conditions, 
and higher wind speeds. Their certification also takes longer.165 Third, while there 
are some overlaps, both suppliers and customers are different in the onshore and  the 
offshore segments.166  
(123)  The Commission considered but rejected the distinction based on power output, 
having regard to the fact that, in the case of new installations where competition 
takes place, newer turbines with higher output do compete with older turbines with 
lower output. In such contexts turbines with a larger power output are more 
productive but costlier and untested relative to turbines with a lower output.167  
(124)  The Commission also rejected distinctions by technology (direct drive or geared) as 
customers are agnostic to the type of technology and suppliers have both types in 
their portfolio. In other words, turbines of different technologies are substitutable 
from both a demand and supply perspective. 168 
(125)  Finally, the Commission also considered a di stinction according to wind speed. In 
this regard, the Commission observed that while there is no demand -side 
substitution, suppliers have turbines for all different wind speeds in their portfolio 
and turbines can be upgraded to different wind speeds. Thus  the Commission 
rejected this distinction based on supply -side considerations.169  
(C) Commission’s assessment  
(126)  The factors underlying the distinction between onshore and offshore wind turbines 
are unlikely to have changed since the Siemens/Gamesa decision. Inde ed, both 
customers and competitors confirmed that these factors still apply,170 which indicates 
that there is no need to revise this distinction. The market investigation also did not 
produce any indication that a distinction based on power output, technolog y or wind 
speed would be justified contrary to the relevant precedent.  
(127)  Accordingly, the Commission considers that there are separate markets for the 
manufacturing and supply of onshore and offshore wind turbines and that further 
distinctions are not appli cable.  
                                                 
164  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 11-16. 
165  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 17-23. 
166  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 24-27. 
167  Case COMP/M.8134 – Siemens/Games a, paragraphs 30-37. 
168  Case COMP/M.8134 – Siemens/Gamesa, paragraph 39. 
169  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 40-41. 
170  Q1 Questionnaire to competitors, questions 16 -17, Q2 Questionnaire to customers, questions 16 -17. 
 
 
28 5.2.2.  Geographic market definition  
5.2.2.1.  Onshore OMS  
(A) The Notifying Party’s view  
(128)  The Notifying Party considers that the markets for the provision of onshore and 
offshore wind turbine services is EEA -wide. Service providers, in particular for 
onshore wind turbi nes, need to have a service hub in proximity to the wind farms in 
order to be able to respond quickly when there is a servicing need. Service stations 
are therefore often located on the premises of the Asset Owner or within a range of 
approximately 80 km o r 1 hour driving distance from the wind farm.171  
(129)  However, despite the requirement for service providers to operate from a service 
station in proximity to the wind farm, the Notifying Party considers that competition 
for wind turbine servicing takes place at  least at an EEA -wide level. All OEMs and 
other service providers (ISPs and ASPs) active in the EEA bid for servicing 
contracts for wind farms across the EEA, regardless of whether they already have a 
service station in proximity to the wind farm – in part icular when the tender 
concerns a long -term servicing contract. After winning a tender, the service provider 
can build up a new service station in proximity to the wind farm or make use of the 
existing facilities and operations which may be owned by the As set Owner or the 
previous service provider. For example, in 2018 DWT bid for projects in the UK that 
were located over 150 miles away from the DWT base in central Scotland. DWT 
subsequently won the two contracts in relation to two sites that had previously  been 
serviced by SGRE. In addition, in France the ISPs Enertrag and DWT are eager to 
expand their footprint and are bidding for service -contracts for wind farms far away 
from their existing service hubs.172 
(B) Commission precedents  
(130)  In General Electric Company/ LM Wind Power Holdin g, the Commission considered 
that the market for servicing onshore and offshore wind turbines is likely no broader 
than EEA -wide.173  
(131)  There were no other precedents directly involving wind turbine OMS. However, 
there were other cases where the Commission considered the geographic scope of 
the servicing other equipment. For example, in General Electric/Alstom, the 
Commission assessed the geographic scope of the market of heavy duty gas turbines 
and found that technical specifications and technical requirements do not differ 
based on geographic location and ancillary issues such as local security requirements 
are not decisive.174 At the same time, it also found that proximity is a relevant factor 
as service providers and parts need to be in proximity to guarantee short response 
times and high availability.175 However, despite proximity being important, when 
organising tenders for their EEA -based  plants customers invite suppliers irrespective 
                                                 
171  Form CO, paragraph 184.  
172  Form CO, paragraph 184.  
173  Case COMP/M.8283 – General Electric Company/LM Wind Power Holding, paragraph 73. 
174  Case M.7278 – General Electric/Alstom (Thermal Power – Renewable Power & Grid Business), recital 
1660.  
175  Case M.7278 – General Electric/Alst om (Thermal Power – Renewable Power & Grid Business), recital 
1661.  
 
 
29 of the location of their manufacturing facilities.176 Consequently, the Commission 
considered the market for servicing of HDGT to be at least EEA -wide, ultimately 
leaving the market definition open.177 The Commis sion came to the same conclusion 
in relation to the geographic scope of the markets for servicing of generators178 and 
steam turbines.179 In Siemens/John Wood Group/Rolls -Royce Combined ADGT 
Business/RWG,180 and John Wood Group/Siemens/JV,181 the Commission found the 
market for servicing for gas turbines to be at least EEA -wide in scope.  
(C) The Commission’s assessment  
(132)  The Commission will first assess the question whether the market is EEA -wide or 
narrower, that is to say, national or sub -national.  
(133)  Most customers182 and competitors183 confirmed that there are no significant 
differences in onshore OMS services in different countries across the EEA. Enel 
explained that the same requirements apply in any country across the EEA.184 
Iberdrola submitted that “ we see the servicing of turbines as a global activity and 
view the activities as consistent across all countries”185 EDF considered that 
“Technologies are similar from one country to another, due to the limited number of 
manufacturers .”186  The only exception mentioned by responde nts is that health and 
safety regulation can differ across countries,187 e.g. they appear to be more stringent 
in the United Kingdom than in other countries. However, this did not influence the 
overall view of respondents and appears to be non -material. As V estas explained, 
“There may be some differences in national legislation, e.g. relating to safety (to the 
extent that it is not harmonized legislation) . However, this is not a material 
issue.”188 Thus the Commission considers that from a demand perspective th ere are 
no material differences between OMS services provided in different Member States, 
especially because technical specifications or regulatory requirements do not differ 
substantially within the EEA.  
(134)  From a supply perspective, consistent with the vie w of the Notifying Party, the large 
majority of competitors189 and customers190 confirmed that local presence in the 
                                                 
176  Case M.7278 – General Electric/Alstom (Thermal Power – Renewable Power & Grid Business), recital 
1662.  
177  Case M.7278 – General Electric/Alstom (Thermal Power – Renewable Power & Grid B usiness), recital 
1664.  
178  Case M.7278 – General Electric/Alstom (Thermal Power – Renewable Power & Grid Business), recitals 
1743 -1747.  
179  Case M.7278 – General Electric/Alstom (Thermal Power – Renewable Power & Grid Business), recitals 
1771 -1773.  
180  Case COMP/M.7284 – Siemens/John Wood Group/Rolls -Royce Combined ADGT Business/RWG, 
paragraphs 57-59. 
181  Case COMP/M.7083 – John Wood Group/Siemens/JV.  
182  Q2 Questionnaire to customers, question 26.  
183  Q1 Questionnaire to competitors, question 29.  
184  [Customer]  response to Q2 Questionnaire to customers, question 26.  
185  [Customer] response to Q2 Questionnaire to customers, question 26.  
186  EDF’s response to Q1 Questionnaire to competitors, question 29.  
187  See the responses of EnBW, Vestas to Q1 Questionnaire to co mpetitors, question 29 and the responses of 
Banks Renewables, Community Windpower, Fred. Olsen & Co  
188  Vestas’ response to Q1 Questionnaire to competitors, question 29.1.  
189  Q1 Questionnaire to competitors, question 31.  
190  Q2 Questionnaire to customers, qu estion 27.  
 
 
30 vicinity of the wind farm to be serviced is important due to response time and 
availability requirements in OMS contracts. Consistent with this, servicing staff is 
mainly local.191  
(135)  However, the requirement to have a local presence does not appear to prevent 
suppliers not present in a certain Member State from applying competitive pressure 
on those that are present without incurring significant  difficulties and costs.   
(136)  First, the time and cost estimates of  building out local presence range from a few 
months to a year, and from EUR 300 000 to a million respectively,192 the lower end 
of which appears to be supply -side substitution rather than entr y in the context of a 
bidding market with large size contracts.  
(137)  Second, more importantly, a large majority of competitors confirmed that they can 
make a credible bid in a tender for standalone OMS services even in a Member State 
they are not yet present b y committing to build out the necessary local presence after 
the contract award.193  
(138)  Third, there are several factors that facilitate building out local presence either before 
or after a contract win:  
i.) Although the servicing staff is mainly local, OMS suppli ers do move 
servicing crews across borders if there is a labour shortage in a certain 
Member States.194 This is possible, despite some cross -border frictions 
arising from national licensing requirements for technicians.195 Likewise, 
although it is preferable t hat the workforce speaks the local language, this 
does not appear to be an absolute necessity as it is often sufficient that the 
team supervisor speaks the local language and in many cases English 
suffices. 196   
ii.) It appears to be market practice that the win ner of the OMS contract takes 
over the employees of the previous OMS supplier. According to a majority of 
competitors, this practice is common.197 
(139)  It follows that despite the general need for local presence, suppliers constrain each 
other even absent a prior  local presence. In other words, the market can be 
considered EEA -wide from a supply -side perspective.  
(140)  The Commission also notes, that, by way of exception, a local presence is not 
necessary in all cases. For example, Vestas explained that if it services a small wind 
farm in an area where it does not have other service activities, it does not maintain a 
local team but tries to solve issues from a distance. If local intervention is necessary, 
it will send a crew that will take longer to arrive than what wou ld be the case if a 
proximity team was present. As a consequence Vestas might have to indemnify the 
customer under the availability guarantee of the OMS contract. However, in such a 
                                                 
191  Q1 Questionnaire to competitors, question 33.1.2  
192  Q1 Questionnaire to competitors, question 34.  
193  Q1 Questionnaire to competitors, question 35.  
194  Q1 Questionnaire to competitors, question 33.1.2  
195  Q1 Questionnaire to competitors, question 33.1  
196  Q1 Questionnaire to competitors, question 32, Q2 Questionnaire to customers, question 28.  
197  Q1 Questionnaire to competitors, question 35.  
 
 
31 case Vestas already factored in the indemnity payments and considered that  not 
having a proximity team is more cost -efficient despite such payments.198 Thus in 
certain cases an OMS supplier can be competitive and supply the service without 
local presence. Indeed, Blackrock noted that it also has OMS providers who perform 
effective ly without maintaining a local team.199 Likewise, Vattenfall considered that 
“For smaller wind farms in price areas with low electricity price it could be more 
beneficial to have a remote team travelling to the wind farm when needed. But for 
bigger wind farm s there will probably be things to do more regularly and therefore a 
more local team would be more beneficial .“200 The fact that in certain cases local 
presence is not necessary reinforces the finding that the market is rather EEA -wide.  
(141)  Although theoretical ly the market could also be larger than EEA -wide this is 
unlikely as demand -side differences (e.g. regulation) are likely to be much more 
pronounced than within the EEA and non -EEA suppliers are unlikely to constrain 
EEA suppliers with little effort and co st. The market investigation has not produced 
any evidence pointing to a market that is larger than EEA -wide.  
(142)  On the basis of the above, the Commission considers that the market for onshore 
OMS is EEA -wide.   
5.2.2.2.  Offshore OMS  
(A) Notifying Party’s view  
(143)  The Noti fying Party did not discuss offshore OMS in the Form CO.  
(B) Commission precedents  
(144)  The precedents discussed in Section 5.2.2.1 in relation to onshore OMS apply in the 
case of offshore OMS as well. As discussed in relation to onshore OMS, the 
Commission previ ously found that the markets for onshore and offshore OMS is not 
wider than the EEA (See Section 5.2.2.1.B). In addition, with respect to the servicing 
of other equipment, it found that the market for servicing heavy duty gas turbines is 
likely to be EEA -wide but left the market definition open. The same conclusions 
were reached with respect to the servicing of generators and steam turbines. The 
market for servicing (non -heavy duty) gas turbines was considered to be EEA -wide.  
(C) The Commission’s assessment  
(145)  The results of the market investigation mirror those obtained in relation to onshore 
OMS. As the underlying turbine market is EEA -wide and all turbines are based on 
the same principles, the services required are very similar across the EEA. The 
market invest igation did not indicate that regulatory requirements would cause 
substantial differences.201 Thus, just like in the case of onshore OMS, the important 
question is whether local presence is necessary, and, if so, whether this prevents 
EEA -wide competition.  
                                                 
198  Minutes of a phone call with Vestas on 12 November 2019.  
199  [Customer]  response to Q2 Questionnai re to customers, question 27.  
200  [Customer] response to Q2 Questionnaire to customers, question 27.  
201  Q3 Questionnaire to competitors and customers, question 13.  
 
 
32 (146)  In this regard, respondents to the market investigation were unanimous in their 
opinion that local presence is important and necessary due to availability and 
response time commitments in offshore OMS contracts.202 As DWT explained 
“Local presence is crucial  for offshore services. It allows for fast reaction times and 
thus high turbine availability, key figure for asset owners and utilities. High 
availability means high production and high revenues. Team presence in the vicinity 
of the wind farm improves the probability of meeting availability goals 
drastically .”203 
(147)  However, most respondents also considered that offshore OMS providers can submit 
a credible bid in a Member State where they do not have presence by committing to 
build out local presence after the contract win.204 As Vattenfall noted “ An 
experienced OMS provider would be able to tender successfully based on analysis of 
local requirements and legislation of the future market to enter into, in combination 
with experiences gathered in their core markets .”205 Thus it appears that an OMS 
provider without a local presence in a Member State can still constrain suppliers 
with a presence in that Member State. In other words the business requirement to 
have local presence does not prevent EEA -wide competition.  
(148)  Just like in the case of onshore OMS, there are factors that facilitate building out 
local presence either before or after a contract award. These include the fact that 
knowledge of local language is not imperative, that crews are moved across borders 
and th at the employees of the previous provider can be taken over.206 
(149)  Consequently, the Commission considers that the market is EEA -wide, rather than 
national. Although theoretically the market could also be larger than EEA -wide this 
is unlikely as demand -side dif ferences (e.g. regulation) are likely to be much more 
pronounced than within the EEA and non -EEA suppliers are unlikely to constrain 
EEA suppliers with little effort and cost. Indeed, there were no respondents who 
considered that the market would be worldw ide and no evidence was submitted in 
this regard.207  
(150)  Consequently, the Commission considers that the market for offshore OMS is EEA -
wide.  
5.2.2.3.  Gearboxes  
(A) Notifying Party’s view  
(151)  The Notifying Party considers that the geographic market for gearboxes should be 
viewed as global in scope. While the frequency of the electricity grid is different in 
the EEA and North America and Asia (50 Hertz in the EEA, 60 Hertz in North 
America and Asia), the changes required in order to adapt the gearbox 
manufacturing process to on e electrical grid frequency or the other are minor. The 
Notifying Party submits that the same production equipment can be, and is, used to 
manufacture gearboxes for all geographic areas. As regards transport costs, the 
                                                 
202  Q3 Questionnaire to competitors and customers, question 10.  
203  Q3 Questionnaire to compet itors and customers, question 11.  
204  Q3 Questionnaire to competitors and customers, question 12.  
205  Q3 Questionnaire to competitors and customers, question 12.  
206  Q3 Questionnaire to competitors and customers, question 12.  
207  Q3 Questionnaire to competit ors and customers, question 13  
 
 
33 Notifying Party observes that transpo rt costs are sizeable (can be as high as 10 % of 
the manufacturing cost) and result in a lack of trade between the EEA, North 
America and Asia. Nonetheless it considers that it can be more cost efficient to 
transport manufactured gearboxes between geograph ic regions. For example, 
Siemens has recently decided to serve demand in North America from its 
manufacturing and assembly facilities in China and Germany and has closed its parts 
manufacturing facility in the United States.208  
(152)  In any event, the Notifying P arty submits that the exact market definition can be left 
open as the Proposed Transaction does not give rise to any horizontal overlaps or 
any vertical competition issues in relation to gearboxes.209  
(B) Commission precedents  
(153)  In ZF/Hansen , the Commission  found that although the grid frequency is different in 
the EEA (50 Hertz) and in North America and Asia (60 Hertz), argued that the 
production process of wind turbine gearboxes can be easily adjusted to take into 
account the design differences and thus wind tu rbine gearboxes for all geographic 
areas can be manufactured using the same production equipment. However, the 
market investigation revealed that transportation cost and a timely delivery of wind 
turbine gearboxes are important factors for customers and as  a consequence 
gearboxes are generally sourced from within a particular geographic region.210  As 
the transaction did not raise competition concerns under any of the market 
definitions, the Commission left the market definition open.211   
(154)  In Siemens/Gamesa , the market  investigation  revealed that customers of gearboxes 
for wind turbines regularly procure them from outside the EEA, which would imply 
that neither the different grid frequency, nor transportation costs would limit 
competition to the EEA. However, th e Commission  ultimately left the definition 
open.212 
(C) The Commission’s assessment  
(155)  The market investigation  confirmed that the different grid frequency prevents the use 
of the same gearbox in different world regions.213 However, a majority of customers 
and competitors considered that, other than this factor, gearboxes do not differ 
significantly in terms of technical specifications, customer preferences and 
regulatory requirements across Europe, North America and Asia, s uch that a gearbox 
used in one region can also be used in another region.214 With regard to the 
manufacturing process, a large majority of customers215 and competitors216 who 
expressed a view submitted that the production process of gearboxes can easily be 
adjus ted to take into account the different grid frequencies. Thus, in line with the 
                                                 
208  Form CO, paragraph 201.  
209  Form CO, paragraph 201.  
210  Case COMP/M.6361 – ZF/Hansen, paragraph 16.  
211  Case COMP/M.6361 – ZF/Hansen, paragraph 17.  
212  Case COMP/M.8134 – Siemens/Gamesa, paragraph 66.  
213  Q1 Questionnaire to competitors, question 38, Q2 Questionnaire to customers, question 33.  
214  Q1 Questionnaire to competitors, question 38, Q2 Questionnaire to customers, question 33.  
215  Q2 Questionnaire to customers, question 34.  
216  Q1 Questionnaire to c ompetitors, question 39.  
 
 
34 precedents, the differences in grid frequencies does not justify restricting the relevant 
market to the EEA.  
(156)  As regards transport costs, a majority of competitors that express ed an opinion 
considered that transport costs can be significant.217 It was submitted in this regard 
that gearboxes can weigh between 15 and 40 tons and as such logistics are an 
important factor in the price.218 It was also highlighted that regulations on mini mum 
local manufacturing content and long transport time also impacts negatively the 
sourcing of gearboxes from other regions.219 Competitor responses to the question 
whether despite these factors suppliers from one region can constrain suppliers in 
other reg ions were unclear.220  
(157)  Customers that gave a clear response were close to equally split on the question 
whether transport costs are significant such that a gearbox sourced from another 
region cannot be competitively priced. The opinion that transport costs d o not 
preclude competitive pricing had only one more supporter than the opinion that they 
do.221 Those who considered that transport costs do not preclude competitive pricing 
submitted that transport costs are not prohibitive;222 that crane costs incurred when  
fitting the gearbox are more important;223 that transport costs can be compensated 
with lower manufacturing costs;224 that cost of maritime shipping is low;225 and that 
it does happen in the market that gearboxes to EEA turbines are sourced from 
Asia.226 Those wh o considered that transport costs preclude competitive pricing 
submitted that transport costs are significant227 and that sourcing from other regions 
is exceptional.228   
(158)  Certain customers also mentioned that lead time is important, which would be 
another fact or, in addition to transport costs, that limits intra -regional sourcing.229  
(159)  As to the question whether gearboxes used in the EEA can actually be competitively 
sourced from other regions, a majority of customers considered that this is not the 
case.230 
(160)  In summ ary, competitors viewed transport costs as significant, while customers’ 
opinion were split in this regard. Lead time and requirements on local manufacturing 
content may also render suppliers from different regions uncompetitive. As regards 
the question wh ether these factors limit competition between suppliers based in 
different regions or competitive sourcing from other regions, competitors’ responses 
were unclear, while customers considered that, indeed, these factors limit 
                                                 
217  Q1 Questionnaire to competitors, question 40.  
218  See responses of EnBW and Ingeteam to Q1 Questionnaire to competitors, question 40.  
219  RWE’s response to Q1 Questionnaire to competitors, question 40.  
220  Q1 Questionnaire to competitors, question 40.  
221  Q2 Questionnaire to customers, question 35.  
222  [Customer]  response to Q2 Questionnaire to customers, question 35.  
223  Response of [Customer] to Q2 Questionnaire to customers, question 35.  
224  Response of [Customer]  to Q2 Question naire to customers, question 35.  
225  Response of [Customer]  to Q2 Questionnaire to customers, question 35.  
226  [Customer] response to Q2 Questionnaire to customers, question 35.  
227  Responses of [Customers]  to Q2 Questionnaire to customers, question 35.  
228  [Customer]  response to Q2 Questionnaire to customers, question 35.  
229  See the responses of [Customers]  to Q2 Questionnaire to customers, question 35.  
230  Q2 Questionnaire to customers, question 36.  
 
 
35 competitive sourcing. Taken as a whole, the evidence points rather to an EEA -wide 
than a worldwide market but it is not fully conclusive in this regard. To confirm an 
EEA -wide market conclusively, a more detailed analysis of transport costs and trade 
flows would be necessary. In particu lar, it would be necessary to ascertain whether 
or not gearbox imports to the EU from other regions are marginal. However, for the 
present case such analysis does not appear necessary as the Transaction will not give 
rise to serious doubts as to its compat ibility with the internal market irrespective of 
whether an EEA -wide or a worldwide geographic market definition is retained.231 
(161)  For completeness, the Commission notes that both competitors and customers 
confirmed, however, that within the EEA suppliers from  different Member States do 
constrain each other.232 This is all the more the case as there are only a handful of 
gearbox manufacturers and thus there is not one in each Member State. Thus the 
market is not narrower than EEA -wide.  
5.2.2.4.  The manufacturing and suppl y of offshore wind turbines  
(A)  The Notifying Party’s view  
(162)  As the proposed Transaction will not give rise to overlaps on the market for the 
manufacturing and supply of onshore and offshore wind turbines, the Notifying 
Party did not discuss market definition s relating to the manufacture and supply of 
wind turbines.  
(B) Commission precedents  
(163)  In Siemens/Gamesa, the Commission considered that the market for the 
manufacturing and supply of offshore wind turbines is EEA -wide.233 
(164)  On the one hand, suppliers are able to and do, in fact, participate in tenders across 
the EEA regardless of the location of their manufacturing facilities within the EEA. 
Thus the market is not smaller than EEA -wide.234  
(165)  On the other hand, logistics to transport a turbine are highly complex and c ostly. 
Thus, while components can be sourced on a worldwide basis, assembly is always 
carried out in the EEA in order to avoid logistical challenges and minimize transport 
costs. Consequently, transportation costs for turbine OEMs that do not have a base i n 
the EEA translate into increased prices for EEA customers and prevent these 
suppliers from effectively competing with suppliers located in the EEA. Thus the 
Commission concluded that the market cannot be wider than the EEA. 235  
(C) The Commission’s assessment   
(166)  The factors underlying the geographic market definition in Siemens/Gamesa are 
unlikely to have changed. Further, the market investigation indicates that the supply 
and purchase of offshore wind turbines takes place on an EEA -wide, rather than a 
                                                 
231  This is discussed in Section 5.3.2.  
232  Q1 Questionnaire to  competitors, question 41, Q2 Questionnaire to customers, question 37.  
233  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 8 -28.  
234  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 46 -47. 
235  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 45 and 48 -53.  
 
 
36 national basis.236 Thus the market is at least EEA -wide, which is consistent with the 
assessment that, as discussed in Section 5.2.2.2, the offshore OMS market is EEA -
wide. Indeed, if the service market, where proximity is more important, is EEA -
wide, the manufacturi ng of offshore turbines is unlikely to be national, all the more 
so as offshore projects are large and thus the cost of participating in a tender relative 
to the contract value is small.  
(167)  The market investigation has not produced any indication that, contr ary to the 
Siemens/Gamesa precedent, the market for offshore wind turbine manufacturing has 
become wider than EEA (i.e. global). Indeed, given that, as discussed in Section 
5.1.3, logistics and transport is already complex and costly for offshore OMS, the 
same applies to the transport of the offshore wind turbines as well, which could be 
260 meters high from base to blade tip and the blade itself can be as long as 107 
meters. Thus the Commission considers that, in line with the Siemens/Gamesa 
precedent, the  market is not wider than EEA.  
5.2.2.5.  The manufacturing and supply of onshore wind turbines  
(A) The Notifying Party’s view  
(168)  As the proposed Transaction will not give rise to overlaps on the market for the 
manufacturing and supply of onshore and offshore wind turbine s, the Notifying 
Party did not discuss market definitions relating to the manufacture and supply of 
wind turbines.  
(B) Commission precedents  
(169)  In Siemens/Gamesa the Commission noted that the same arguments apply to the 
onshore wind turbine market as to the off shore wind turbine market and thus it 
concluded that the market is EEA -wide. It only noted that due to the complexities of 
road transport relative to sea transport, the market is even less likely to be wider than 
EEA than in the case of offshore turbines. 237    
(C) The Commission’s assessment  
(170)  The Commission considers that the market is EEA -wide rather than national for the 
same reasons as in the case of offshore wind turbines. First, the factors underlying 
are unlikely to have changed since the Siemens/Gamesa de cision. Second, the 
market investigation indicates that the supply and purchase of offshore wind turbines 
takes place on an EEA -wide, rather than a national basis.238 Third, this is consistent 
with the geographic definition of the onshore OMS market, which i s also EEA -wide. 
Indeed, as services in general are less tradable across borders than goods it would be 
highly implausible that the manufacturing market is national while the service 
market of the same wind turbines is EEA -wide.   
(171)  While the market is at le ast EEA -wide, the market investigation has not produced 
any indication that the market for offshore wind turbine manufacturing has become 
wider than EEA (i.e. global).  
                                                 
236  Q3 Questionnaire to competitors and customers, questions 10 -13. 
237  Case COMP/M.8134 – Siemens/Gamesa, paragraphs 54 -58.  
238  Q1 Questionnaire to competitors, questions 80 -82, Q2 Questionnaire to customers, questions 73 -75. 
 
 
37 (172)  Thus the Commission considers that, in line with the Siemens Gamesa precedent, the 
mark et is EEA -wide.  
5.3. Competitive assessment  
5.3.1.  Assessment of horizontal relationships  
5.3.1.1.  Standalone onshore OMS services in the EEA  
(A) Notifying Party’s view  
(173)  The Notifying Party considers that the proposed Transaction will not give rise to any 
competition concerns due to horizontal unilateral effects, for the following principle 
reasons:  
i.) The wind turbine services market is a dynamic market which is expected to 
show growing demand for stand -alone wind turbine services.239 
ii.) The Parties’ combined market share is low and w ell below the threshold that 
would typically give rise to competition concerns.240 
iii.) Senvion only exerted a limited competitive constraint on SGRE as it only 
provided onshore wind turbine services for its own onshore wind turbine 
fleet.241 
iv.) Post-transaction, the merged entity will continue to face strong competition 
from competing OEMs, ISPs and ASPs.242 
v.) SGRE will be subject to significant competitive constraints exercised by 
Asset Owners increasingly moving wind turbine services in -house.243 
vi.) The Target is subject to insolvency proceedings and would most likely exit 
the market in the short -term in the absence of the Proposed Transaction.244 
(B) Commission’s assessment  
(B.i) Senvion’s insolvency and the counterfactual  
(174)  Senvion is experiencing severe financial difficulties. Senvion  has reported annual net 
losses since its initial public offering in 2016. The financial performance deteriorated 
steadily, resulting in significant losses in the years 2017 and 2018. Senvion’s balance 
sheet moved from a net cash position at the end of 201 6, to EUR 64 million net debt 
at the end of 2017 and EUR 250 million net debt at the end of Q3 2018. On 19 
February 2019, Senvion adjusted its 2018 financial guidance downwards and on 23 
February 2019 Senvion announced the postponement of its results for f inancial year 
2018 in the context of securing financing for the company. A transformation 
                                                 
239  Form CO paragraphs 252 -253. 
240  Form CO paragraphs 234 -251 and 254.  
241  Form CO paragraphs 255 -256.  
242  Form CO paragraphs 257 -263. 
243  Form CO paragraphs 264 -266. 
244  Form CO paragraphs 227 -230. 
 
 
38 programme was implemented as a matter of urgency, designed to stabilise the 
company, eliminate inefficiencies and improve execution.245 
(175)  The transformation programme fai led and refinancing discussions with lenders did 
not come to a positive conclusion. Consequently, on 9 April 2019 Senvion and 
Senvion Deutschland filed for insolvency with the local insolvency court of 
Hamburg, Germany.246 On the same day, the insolvency cou rt of Hamburg ordered 
preliminary self -administration ( vorläufige Eigenverwaltung ) and the appointment of 
a preliminary custodian ( vorläufiger Sachwalter ).247 On 1 July 2019 the insolvency 
court opened insolvency proceedings and ordered self -administration for Senvion.248 
(176)  According to the Horizontal Merger Guidelines,249 in assessing the competitive 
effects of a merger, the Commission compares the competitive condi tions that would 
result from the notified merger with the conditions that would have prevailed 
without the merger.250 As Senvion is insolvent, it cannot be assumed that absent the 
proposed Transaction (“counterfactual”) it would stay on the market and compet e, as 
is the case in most mergers involving solvent acquisition targets. Thus, in this case 
the counterfactual needs special consideration. In this Section, the Commission will 
establish the broad outlines of the counterfactual against which the effects of  the 
proposed Transaction need to be assessed, and will discuss the consequences of this 
counterfactual for the assessment of the Transaction.  
(B.i.a)  Senvion and Senvion’s onshore servicing business is likely to exit the market  
(177)  The first question is whether abse nt the Transaction Senvion or Senvion’s onshore 
servicing business would remain on the market as a going concern. To assess this, it 
is appropriate to review the insolvency proceedings that took place to date.  
(178)  Following the entering into temporary self -administration, starting from May 2019, 
discussions between Senvion and potential buyers started on selling the business to 
satisfy creditors. The primary goal of the sales process was to find a strategic 
investor for the whole of Senvion.251 Although Senvion’ s financial advisors 
Rothchild & Co (“Rothchild”) [Information regarding alternative bidders for the 
                                                 
245  Form CO, paragraph 227.  
246  Form CO, paragraph 228.  
247  Form CO, paragraph 228.  
248  Insolvency P roceedings Senvion GmbH, Case -Nr.: 67g IN 114/19, Insolvency Proceedings Senvion 
Deutschland GmbH, Case -Nr.: 67g IN 114/19.  
249  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings, Official Journal of the European Union 2004/C/31, 5 February 
2004.   
250  Guidelines on the assessment of horizontal merger s under the Council Regulation on the control of 
concentrations between undertakings, Official Journal of the European Union 2004/C/31, 5 February 
2004.  
251  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, page 6, submitted as Annex 2 to the Notifying Party’s response 
to the Commission’s RFI 1, question 2.   
 
 
39 target business] .252 [Information regarding alternative bidders for the target 
business.]253 [Information regarding alternative bidders for the target business .].254  
(179)  Following the failure of the sales process to sell the whole of Senvion, at the end of 
July 2019, the process to sell various parts of the Senvion business started. In this 
process, apart from SGRE,  [Information regarding alternative bidders for the target 
business] .255 Of these firms SGRE and [Information regarding alternative bidders for 
the target business ] submitted indicative offers.256 
(180)  It is also relevant in this context that potential buyers (who partially overlap with the 
potential buyers interest ed in the onshore servicing business) also expressed interest 
in acquiring other parts of Senvion as follows:257  
i.) In addition to SGRE, [Information regarding alternative bidders for the target 
business] . All [Information regarding alternative bidders for the  target 
business]  submitted indicative offers.258 
ii.) In addition to SGRE’s potential interest, [Information regarding alternative 
bidders for the target business]  SGRE did not submit an offer for and did not 
acquire the offshore business.259   
iii.) Other than SGRE, [Information regarding alternative bidders for the target 
business] .260 SGRE also made a proposal for all of the IP.261 In addition, 
[Information regarding alternative bidders for the target business] . 
                                                 
252  Internal document titled “Project Scirocco Status Update 19 June 2019”, page 1, submitted as Annex 1 to 
the N otifying Party’s response to the Commission’s RFI 1, question 2.   
253  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, page 2, submitted as Annex 2 to the Notifying Party’s response 
to the Commission’s RFI 1, question 2.  
254  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, page 2, submitted as Annex 2 to the Notifying Party’s res ponse 
to the Commission’s RFI 1, question 2.  
255  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, pages 5 -7, submitted as Annex 2 to the Notifying Party’s 
response to  the Commission’s RFI 1, question 2.  
256  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, pages 5 -7, submitted as Annex 2 to the Notifying Party’s 
response to the Com mission’s RFI 1, question 2.  
257  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, pages 2 -7, submitted as Annex 2 to the Notifying Party’s 
response to the Commission’ s RFI 1, question 2.  
258  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, page 3, submitted as Annex 2 to the Notifying Party’s response 
to the Commission’s RFI 1, qu estion 2.  
259  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, page 3, submitted as Annex 2 to the Notifying Party’s response 
to the Commission’s RFI 1, question 2.  
260  Notifying Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, page 3, submitted as Annex 2 to the Notifying Party’s response 
to the Commission’s RFI 1, question 2.  
261  Notifying  Party’s response to the Commission’s RFI 1, question 2; internal document titled “Project 
Scirocco Status Update 27 August 2019”, page 4, submitted as Annex 2 to the Notifying Party’s response 
to the Commission’s RFI 1, question 2.  
 
 
40 (181)  After management meetings, Q&A sessions, expert sessions, si te visits and 
structuring discussions, [Information regarding alternative bidders for the target 
business]  strategic investors finally entered into discussions for certain parts of 
Senvion Group, including a full due diligence process.262 However, of these 
[Information regarding alternative bidders for the target business]  SGRE was 
prepared to acquire the onshore servicing business. [Information regarding 
alternative bidders for the target business] .263 Out of these offers SGRE’s was the 
most favourable to cred itors and thus the Parties proceeded with the Proposed 
Transaction. Proceeding with SGRE meant that the other offers were turned down.  
(182)  During the sale process Senvion was still operating under self -administration but it 
was quickly running out of funds th at could ensure its operation. Senvion’s 
Insolvency Plan, which was submitted to the Hamburg insolvency court and 
approved by the respective creditors’ assembly, stated that if the spin -off to SGRE is 
not completed, the financing of the ongoing business op erations of the company will 
be secured only until the end of September 2019 at the latest.264 The plan also stated 
that beyond the end of September, financing was no longer secured, so that as a 
result of the insufficient assets to be reported, the company will cease operations 
immediately and liquidation would follow.265 Eventually, the funds ran out by end of 
November 2019, and SGRE agreed to fund the business until the end of 2019.  
(183)  On the basis of this review, the Commission considers that, absent the Tran saction, 
Senvion as a whole and its onshore servicing business would exit the market and 
would not continue as a going concern for the following reasons.  
(184)  First, SGRE made the most serious proposal for the onshore business, and 
potentially the only viable one. [Information regarding alternative bidders for the 
target business] .266  
(185)  Second, given the funding situation evidenced by the Insolvency Plan, at this p oint 
in time it is likely that there would be no time for an additional sale process, unless 
the buyer is prepared to fund the business. Based on [Information regarding 
alternative bidders for the target business] ,267 [Information regarding alternative 
bidders for the target business] . Thus, absent the Transaction, it is very likely that 
liquidation would follow. Operations would be ceased and a liquidator would be 
appointed who would manage the sale of individual assets and the distribution of the 
proce eds to creditors.  
(B.i.b)   Senvion’s assets would not leave the market in their entirety  
(186)  While absent the Transaction the onshore service business would exit the market as a 
going concern, it is very unlikely that all of its individual assets would also exit.  
                                                 
262  Notifying Party’s re sponse to the Commission’s RFI 1, question 2.  
263  Notifying Party’s response to the Commission’s RFI 1, question 2.  
264  Senvion’s Insolvency Plan quoted in Form CO paragraph 230.  
265  Senvion’s Insolvency Plan quoted in Form CO paragraph 230.  
266  Notifying Pa rty’s response to the Commission’s RFI 1, question 2.  
267  [Information regarding alternative bidders for the target business]  based on Notifying Party’s response to 
the Commission’s RFI 1, question 2; internal document titled “Project Scirocco Status Update  27 August 
2019”, page 10, submitted as Annex 2 to the Notifying Party’s response to the Commission’s RFI 1, 
question 2.  
 
 
41 (187)  First, Asset Owners of Senvion turbines would need a servicing solution and would 
thus turn to competitors for providing OMS. Competitors would also offer their 
services on their own initiative to former Senvion clients. It is reasonable to assume 
that comp etitors will win some opportunities and some Asset Owners will decide to 
provide OMS themselves. In doing so, competitors and Asset Owners are likely to 
take over former Senvion employees, an important asset in OMS, as this is standard 
practice in the indu stry (see Section 5.2.2.1.C) and it is unlikely that they would start 
hiring elsewhere when they can just take over Senvion employees close to the site to 
be serviced. Thus, a large proportion of Senvion service employees would remain on 
the market.  
(188)  Secon d, all or part of the IP is likely to be acquired by a market participant in the 
liquidation process. This finding is based on the following:  
i.) Based on the review of the buying process above it is clear [Information 
regarding alternative bidders for the ta rget business.] . As discussed in Section 
5.2.1.3.C, the IP is an advantage in OMS servicing and thus it is plausible 
that OMS suppliers would request a licence. The licensing could take place 
on an exclusive or a non -exclusive basis.  
ii.) On the basis of its i nvestigation the Commission understands that a market 
participant would buy part of the IP if the Transaction did not go through. 
This is an indication that the IP may also be acquired by a competitor.  
iii.) More generally, as discussed in Section 5.2.1.3.C the  IP is valuable in OMS 
servicing and the sale process showed that a [Information regarding 
alternative bidders for the target business] . As the Notifying Party explained, 
[Information regarding alternative bidders for the target business] .268 
However, compar ed to taking over the full business (especially stepping into 
existing contracts), the acquisition of IP requires less due diligence efforts 
and time investment. Further, once liquidation starts the timing constraints 
resulting from limited funding would n ot apply.  
(189)  In all these cases the acquisition of the IP is all the more likely as the liquidation 
would follow a sale process that would be considered as having failed. Following an 
unsuccessful sale process, the prices of individual assets would likely be  lower than 
in that sale process. This is especially the case as prices in liquidation are usually 
heavily discounted relative to their fair value.  
(190)  Third, certain other assets would also likely be taken over. For example, it is very 
plausible that a compe titor who would win over a former Senvion customer would 
take over not only the employees but also tools used by the former Senvion team. 
Other Senvion service tools and the buildings of Senvion’s service hubs could also 
be plausibly acquired in the liquid ation process.  
(191)  The assets could be acquired not only by competitors but also by customers. 
Namely, self -servicing customers could also acquire employees, tools and related 
assets. Some customers, especially those with large wind farms, such as utilities 
could also acquire the IP as this could help them in servicing their assets. However, 
                                                 
268  Notifying Party’s response to the Commission’s RFI 1, question 2, paragraphs 5 -6.  
 
 
 
42 in the case of IP it is more likely that it would be acquired by a competitor than by a 
customer. This is because a competitor could make a better use of the asset as it 
could use it for servicing multiple customers.   
(B.i.c)  Competition in the absence of the Transaction  
(192)  As already indicated, in the absence of the Transaction, owners of Senvion turbines 
would need servicing, and they would likely to turn to Senvion’s competitors or 
competitors would offer their services to these customers at their own initiative. In 
both cases, competition would ensue and Senvion’s competitors, including SGRE, 
would capture these opportunities. In other words, Senvion’s market share would be 
divid ed up between various competitors. The following principles apply in this 
regard:  
i.) As the IP provides an advantage, all else being equal, the acquirer of the IP 
would likely obtain a higher market share than without acquiring the IP.  
ii.) All else being equal, the closer a competitor to Senvion is, the higher market 
share it will acquire in the counterfactual.   
iii.) Those competitors who expressed an interest in the sale process can be 
assumed to compete for Senvion clients even if they may not have been close 
compe titors of Senvion. This is because interest in the sales process indicates 
interest in expanding the business.  
(193)  It is against such counterfactual that the effect of the Transaction has to be assessed. 
At this stage it is sufficient to establish the main ch aracteristics of the counterfactual. 
Additional analysis of the counterfactual will be carried out in relation to the 
assessment of impact of the Transaction in Sections 5.3.1.1.(B.ii) (market shares) 
and 5.3.1.1.(B.iii).  
(B.i.d)  Consequences for the assessment of  the Transaction’s impact  
(194)  In summary, the main characteristics of the counterfactual are the following:  
i.) Senvion as a going concern would exit the market.  
ii.) Senvion’s onshore servicing assets would not leave the market in their 
entirety. In particular, a sha re of its employees, tools and certain other assets 
such as the buildings housing the service hubs would likely be acquired by 
competitors and by self -servicing Asset Owners. The IP would also likely be 
acquired by a competitor.  
iii.) Competition would ensue for  former Senvion clients and competitors would 
divide up Senvion’s market share. Close competitors, the acquirer of the IP 
and those expressing an interest in the sale process, would, all else being 
equal, acquire a larger share than other competitors.  
(195)  The following consequences ensue with  regard to the assessment of the Transaction:   
(196)  First, the Transaction does not reduce the number of competitors on the onshore 
OMS market. As Senvion would exit the market anyway, the number of competitors 
does not ch ange. As such the Transaction does not eliminate the competitive 
 
 
43 pressure between Senvion and SGRE. Nor does it eliminate competition between 
any other competitors.  
(197)  Second, this does not mean that the Transaction per se cannot have any negative 
impact on competition. Indeed, the effect of the Transaction is that it redistributes the 
market shares between competitors. Instead of all competitors competing and 
potentially increasing their market shares, the Transaction assigns most of the market 
share of Senv ion to SGRE. This could potentially lead to serious doubts if the 
market structure changed in an anticompetitive way (e.g. if SGRE was dominant and 
its market position would be strengthened)  
(198)  Third, if it were otherwise problematic, the merger is unlikely to meet the criteria of 
the failing firm defence as a large part of Senvion’s assets would remain in the 
market.269  
(199)  Fourth, closeness has the opposite effect as in merger cases involving solvent targets. 
As discussed above, if Senvion and SGRE were close co mpetitors, then a large 
number of customers would switch to SGRE in the counterfactual, reducing thereby 
the impact of the Transaction.  
(B.ii) Market shares  
(B.ii.a)  Market shares submitted by the Notifying Party  
(200)  The Notifying Party submitted three different sets of mar ket share data based on 
three different methodologies.  
(201)  The first set of market shares is presented in Table 1 below. The Commission 
completed the shares by adding the column “others”.  
Table 1: Average market shares for the supply of stand -alone onshore w ind turbine services for 
2016 -2018 in the EEA270 
 SGRE  Senvion  Combined  Enercon  GE Nordex  Vestas  Others  
2018  [10-20]% [5-10]% [20-30]% [20-30]% [0-5]% [5-10]% [20-30]% [20-30]% 
2017  [10-20]% [0-5]% [20-30]% [20-30]% [0-5]% [5-10]% [20-30]% [20-30]% 
2016  [10-20]% [5-10]% [20-30]% [20-30]% [0-5]% [5-10]% [20-30]% [20-30]% 
Average  [10-20]% [5-10]% [20-30]% [20-30]% [0-5]% [5-10]% [20-30]% [20-30]% 
 
(202)  In order to estimate the market size and the market shares of OEMs, the Notifying 
Party applied the following  assumptions.271  
                                                 
269  Guidelines on the assessment of horizontal me rgers under the Council Regulation on the control of 
concentrations between undertakings, paragraph 90, Official Journal of the European Union 2004/C/31, 5 
February 2004.  
270  Form CO, Table 11.  
271  Form CO, paragraph 236.  
 
 
44 i.) The Notifying Party assumes that all newly installed wind turbines are 
serviced by their OEM for a duration of five years and form part of the 
market for wind turbines. This assumption is supposed to reflect the practice 
that turbines are sold with warrant y and together with an LTP and that as a 
result in the first five years it is usually the OEM that services the turbines.  
ii.) When the warranty/initial service contract ends after an average duration of 
five years, the initial OEM, other OEMs, ISPs and ASPs c an compete to 
enter into a new OMS contract with the customer/Asset Owner. The 
Notifying Party has assumed that this subsequent OMS contract also has an 
average duration of five years as the Notifying Party considers that this is the 
most common contract d uration.  
iii.) The same logic applies to subsequent OMS contracts.  
iv.) Wind turbines have an average lifetime of approx. 20 years.  
(203)  The data on onshore wind turbines installed base is derived from the Global 
Windpower Project Installation Database, which provides pr oject -specific data on 
newly installed wind turbines globally (including, amongst others, the winning OEM 
and the year when the turbines were connected to the grid) but does not capture 
stand -alone wind turbine services projects.  
(204)  On this basis, the Notifyi ng Party estimated the market size  for the stand -alone 
provision of onshore services on the following basis for each of the last three years 
(2018, 2017 and 2016):  
i.) The total market for stand -alone services in year t is assumed to be the sum 
of the total in stalled base that became operational in the years t -5, t-10 and t -
15. For example, to calculate the 2016 market size, the sum is calculated of 
all onshore wind turbines (in MW) installed in 2011, in 2006 and in 2001. In 
any given year, the market size is t herefore determined by the wind turbines 
that have been installed five, ten and 15 years before. This methodology 
reflects the abovementioned assumption that independent onshore wind 
turbine contracts are on average renewed every 5 years.  
ii.) New onshore wind turbine installations in that year were excluded, on the 
basis that the services for those new turbines are provided under the warranty 
or LTP sold as part of the installation contract, such that they are not 
available on the stand -alone market.  
iii.) A turbine installed in, for instance, year t -7 is assumed to have been tendered 
for stand -alone services for the first time in year t -2 and will be re -tendered 
in the years t+3 and t+8. As such it will not be included in the market 
calculation for year t, but it wil l be part of the calculations for the years t -2, 
t+3 and t+8.  
(205)  The total market size was given in MW of capacity serviced, i.e. in volume.  
(206)  Starting from this estimated market size, the parties assessed each OEM’s market 
share  by  
 
 
45 i.) Obtaining, from public so urces, the size of each OEM’s fleet/installed base in 
MW; and  
ii.) Estimating the share of every OEM’s fleet / installed base for which that 
OEM performs the services. The relevant data to identify each OEM’s 
respective share was collected from publicly availa ble resources. The shares 
of each OEM are as follows:  SGRE: 80%, Senvion: 80%, Vestas: 82%, 
Nordex: 74%, Enercon: 90%, GE: 50%.   
(207)  Just like in the case of market size, the shares of OEMs are calculated in MW of 
capacity serviced, i.e. also in volume.  
(208)  The Notifying Party recognises that this methodology is based on a number of 
assumptions. However, it considers that any inaccuracies would most likely 
overestimate the Parties’ market shares and underestimate competitors’ market 
shares. First, when estima ting the share of each OEM, the described methodology 
does not take into account OMS provided by an OEM on another OEM’s turbine. 
Second, the rate at which SGRE services its own turbines varies significantly by 
country. However, as detailed country by coun try data is not available, to be 
conservative and not to underestimate SGRE’s market share, the Notifying Party 
applied a single rate of 80%, whereas for SGRE this rate is lower in some Member 
States.  
(209)  By way of an alternative data set, the Notifying Party  submitted a second set of 
market shares, which is presented in Table 2 below.  
Table 2: Market shares of the Parties based on fleet serviced out of the total installed base volume 
in 2019 in the EEA272 
MW  % market share  
Installed 
Base – 
EEA 
Total  SGRE 
serviced 
fleet 2019  Senvion 
serviced 
fleet 2019  
 Combined 
serviced 
fleet 
 SGRE 
market 
share %  Senvion 
market 
share %  Combined 
market 
share %  
164,608  […] […] […] [10-20]% [5-10]% [10-20]% 
 
(210)  The market share estimates provided in Table 2 present the total MW of onshore 
wind turbines serviced by each Party in 2019 out of the total onshore wind turbine 
installed base. These market shares were not provided for competitors and do not 
distinguish b etween standalone and captive OMS.  
  
                                                 
272  Form CO, Table 9.  
 
 
46 (211)  Third, in response to comments by the Commission, the Notifying Party also 
submitted value based shares. These are presented in Table 3 below.  
Table 3 : Market shares of the Parties based on fleet serviced out of the total installed base by 
value in 2019 in the EEA  
EEA Total 
Market size in 
Million EUR  
 SGRE 
onshore 
servicing 
sales in 
Million EUR  SGRE market 
share  
 Senvion 
onshore 
servicing 
sales in 
Million EUR  Senvion 
market share 
% Combined 
market share 
% 
4185  […] [5-10]% […] [0-5]% [10-20]% 
 
(212)  These market shares reflect the relation between the Parties’ onshore wind turbine 
services revenue and estimated total onshore wind turbine servicing revenue. The 
Parties’ revenue is calculated on the latest available turnov er data. The total market 
size was calculated based on the revenue per MW estimated by an industry 
consultancy for 2017273 and the total installed base.  
(B.ii.b)  Commission’s assessment of market shares  
(213)  As is the case with many bidding markets, given that in the standalone OMS market 
contracts are long -term and competition takes place at the time of the contract award, 
the most relevant metric to measure market share is order intake, i.e. the total value 
of orders received in a given year by a supplier, even if the order will be fulfilled in 
the following five years. The market share of a supplier in certain year is given by 
dividing the total orders awarded in a given year by the order intake of that supp lier. 
In the OMS market this would imply that a supplier’s share in 2018 is given by the 
total value of all contracts won by that supplier in 2018 divided by the total value of 
all contracts awarded in 2018. If demand is characterised by large and infreque nt 
orders, yearly order intakes can be averaged out.  
(214)  Order intake market shares are preferable to shares based on the share of actual 
supply as such shares could reflect competition that took place several years before 
the supply. For example, if the 2018  market share of a supplier is calculated by the 
service revenue earned in 2018 relative to the total service revenue in the market in 
2018, then such a share may very well reflect revenues earned as a result of a tender 
in 2013. Thus it is less informativ e on competitive conditions in 2018.  
(215)  In addition, as the market is differentiated, value based market shares are preferable 
to volume based market shares, in line with paragraph 55 of the Commission’s 
Notice on Market Definition.274 This is because in diffe rentiated markets each unit of 
good or service sold is different and it may very well be that a competitor providing 
high value added, high margin products in lower quantity is stronger than another 
competitor providing higher volume but lower quality and low margin products. The 
                                                 
273  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trends 2019, provided as 
Annex 11.1, page 4. As the revenue information in the Wood Mackenzie Report is provided in USD, the 
annual average exchange rate for 2017 as provided by the ECB o f 1,13 has been applied.   
274  Commission notice on the definition of relevant market for the purposes of Community competition law, 
Official Journal of the European Communities 97/C 372 /03.  
 
 
47 overall value of the service provided (that is volume times price) captures such 
differences and hence reflects better the strength of each supplier.  
(216)  Specifically, with regard to the standalone onshore OMS market it is also prefer able 
that the market shares exclude any services provided under warranty and LTPs as 
these would overestimate OEMs’ market shares relative to ISPs and ASPs.  
(217)  However, data for such ideal market shares is not always readily available, which is 
especially tr ue for the standalone onshore OMS market.  
(218)  Indeed, there appears to be no available data which would allow for a calculation of 
market shares on an “order intake” basis. In particular, there is no comprehensive 
database available which would allow the calc ulation of the sum of the value of the 
service contracts tendered out in a certain year. The Parties do not maintain “project 
lists” and there is no comprehensive third -party data source. An important factor is 
that not all Asset Owners organise formal, le t alone public, tenders for servicing 
contracts. Many customers decide contract with a third -party service provider (OEM, 
ISP, ASP) without organising a formal tender process, e.g. by requesting a proposal 
from one or a handful of potential service provide rs. Thus OMS suppliers are often 
not aware of all opportunities. In light of this variety of purchasing techniques, there 
is limited transparency on the total amount of servicing projects on the market in a 
given year.275  
(219)  It appears especially difficult to compute value based shares for the following 
reasons:276  
i.) Onshore turbine OMS providers do not provide value -based sales 
information to industry consultancies and research groups or other third 
parties as this would allow competitors to derive information on  the value of 
individual projects. Accordingly, third parties do not provide value -based 
market shares.  
ii.) The value of wind turbine service contracts is not generally reported by Asset 
Owners or OMS suppliers.  
iii.) Competitors often do not release any informatio n on their service activities to 
the press, and where press releases are available they do not disclose the 
value of projects.  
iv.) Even for a contract for which a supplier bids, customers will not generally 
provide reliable details as to the value of competito r bids.  
v.) Especially in onshore OMS, there are many tenders that an OMS supplier is 
not aware of, and a further number of tenders that an OMS supplier is aware 
of but does not participate in. In all of these cases it is difficult to estimate a 
project value.   
(220)  Due to this general lack of availability of good quality data, the Commission tried to 
reconstruct the market by requesting value based order intake data from market 
participants. However, the response rate was below the level that would allow a full 
                                                 
275  Form CO, paragraph 244.  
276  Form CO, paragraph 248.  
 
 
48 reconstruction and the quality of data was often poor and incomplete. Despite 
detailed guidance on how to fill in the template, respondents reported the data using 
different interpretations such that often the data reported by two different 
respondents were n ot comparable.  
(221)  Under these circumstances it is reasonable to use proxies to the extent they are 
methodologically sound. The first set of market shares submitted by the Notifying 
Party appears to be such a metric as it tries to proxy the standalone order i ntake 
shares. In particular:  
i.) The overall market in, for example, 2018 corresponds to the installed base in 
2013, 2008 and 2003 (in volume i.e. in MW of capacity served) as these are 
the turbines in respect of which OMS is tendered out assuming that in the  
first five years is OMS provided under warranty or LTP and that after that 
OMS is tendered out on average in every five years. The Commission notes 
that the overall sizes calculated this way are sensitive to the 5 -year 
assumption. However, as discussed in  paragraphs  (49) and (57), the market 
investigation confirmed that indeed most often the LTP can be exited the first 
time after five years and that once the customer opted out the most common 
OMS contract term is five years (or if the contract is longer there is an exit 
clause every five years). That is to say the 5 -year assumption appears to be a 
good modelling choice.   
ii.) The same applies to the shares of individual OEMs. E.g. the share of, say 
Vestas in 2018, was calcu lated by obtaining the Vestas installed base in 
2013, 2008 and 2003 (in volume i.e. in MW of capacity served) and then 
correcting it by the figure representing the share of Vestas in servicing its 
own turbines. Thus the share of Vestas proxies the total vo lume of contracts 
Vestas captured in 2018 out of all the contracts that came up for tendering 
that year. The approach thus mimics order intakes.  
iii.) It is true that the figure that represents for each OEM the share of its fleet for 
which the same OEM performs  the services is not specific to a given year but 
an overall stock figure. That is to say, the [80-90] % share that was used in 
the case of Vestas to correct the volumes it captured in 2018 is not specific to 
2018 but rather an overall, present -day stock f igure. Thus the methodology 
implicitly assumes that the present day stock -figure applies in each year, 
which may not be warranted. However, this does not appear to cause a major 
distortion as third party sources indicate that the share changes slowly over 
the years.277  
(222)  The market share methodology can be considered   conservative in two aspects:  
i.) First, the methodology assumes that after the first 5 years all customers 
become part of the standalone market, whereas the discussion in Section 
5.1.2.5 (A) made it  clear that a significant portion does not opt out of the 
LTP. Thus the methodology implicitly assumes that not opting out of the 
LTP when it becomes possible is a competitive choice. However, one could 
also consider that these customers remained non -addre ssable and part of the 
                                                 
277  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trends 2019, provided as 
Annex 11.1.  
 
 
49 captive market as they have not organized a tender or invited competitors to 
provide OMS on their turbines.. Under this view, given that there was no 
indication in the market investigation that some OEMs’ customers tend to 
stay longe r with LTP than others, there is no effect on OEMs’ relative shares. 
However, in this case  the methodology would overestimate both the market 
size and OEMs’ share relative to ISPs and ASPs, i.e. it would underestimate 
ISPs’ and ASPs’ share. (ISPs’ and ASP s’ share is the difference between [90-
100]% and the total presented in Table 1.).    
ii.) Second, the market shares exclude self -supply by Asset Owners, whereas 
self-servicing is clearly a constraint on the Parties. From the Parties’ 
perspective, opting for se lf-servicing amounts to losing business to a 
competitor. Indeed, an overwhelming majority of customers that expressed 
an opinion (mostly those that do in fact self -service) considered that the 
possibility of self -servicing has a disciplining effect in term s of price and 
quality on OMS providers, including OEMs.278 
(223)  Thus the methodology rather overestimates the Parties’ shares and underestimates 
competitors’ shares than vice versa.  
(224)  The methodology does have some drawbacks but these are unlikely to greatly dist ort 
the competitive picture.  
(225)  First, while the 5 -year assumption is correct on average, other periods also exist, 
which can cause some variations from year to year. However, given the lack of 
precise data, some simplifying assumptions are unavoidable. Furt her, several 
iterations of market shares using the same methodology (for years 2014 and 2015 as 
well as 5 year average instead of the 3 -year average) produced very similar shares.279  
(226)  Second, the methodology is volume based and not value based, which, as dis cussed, 
is less preferable in differentiated markets. In this regard, however, the comparison 
between the Parties’ volume and value based market shares in Table 2 and Table 3 
shows that the difference between the two is minor ( [10-20]% vs. [5-10]% for SGRE  
and [0-5]% vs. [5-10]% for Senvion), which suggests that the volume shares do not 
distort the competitive picture. The market shares in Table 2 and Table 3 were 
computed on the basis of a different and less sound methodology but they are useful 
to demonst rate that in general there is not a significant difference between volume 
and value based shares.  
(227)  Third, OEMs’ share excludes OEMs’ multi -brand activities. For example, Vestas’ 
share was calculated by how much volume Vestas captured out of its own turbine s 
that came up for tendering. However, Vestas is known in the market for having the 
most extensive multi -brand activities as an ASP, i.e. Vestas services a significant 
amount of non -Vestas turbines too.280 At the same time, given that the total market 
size a lso includes turbines that are serviced by OEMs as ASPs, the residual non -
OEM share includes these multi -brand activities and thus overestimates this share. In 
other words, the shares of all OEMs should be the sum of its activities as OEM and 
OEM ASP but t his is not the case. As a result, the share of all OEMs that engage in 
                                                 
278  Q2 questionnaire to customers, question 52.  
279  Form CO, Annex 13.  
280  Form CO, paragraph 117.  
 
 
50 multi -brand servicing (all except Enercon and Senvion) should be higher and the 
residual non -OEM share should be lower so that it only corresponds to ISPs and 
Asset Owner ASPs. In other  words, taking multi -brand activity into account SGRE’s 
share should be higher and competitors’ shares should be rearranged. In particular, 
Vestas’s share should be higher and the residual share of ISPs and Asset Owner 
ASPs should be lower. However, as mul ti-brand activity of OEM ASPs is relatively 
new and not so widespread,281 the effect of this is not large. Furthermore, the 
Notifying Party deliberately overestimated the share of SGRE’s turbines serviced by 
SGRE,282 which compensates for the potential slight underestimation of SGRE's 
share.  
(228)  Overall, the Commission considers that the methodology behind the market shares in 
Table 1 is sound and if anything it overestimates the Parties’ share and 
underestimates competitors’ share. As such, in the absence of good  quality data, it is 
an acceptable proxy.   
(B.ii.c)  Assessment of the effects of the Transaction based on market shares  
(229)  For illustration purposes, in Table 4 the Commission assumes that in the 
counterfactual each competitor wins over an equal share of Senvion customers. The 
merger scenario involves adding up Senvion’s and SGRE’s market share while 
leaving the other market s hares unchanged. Although SGRE acquires only 80 % of 
onshore OMS contracts the Commission allocated all of Senvion’s market share to 
SGRE in the merger scenario as SGRE may be able to win some further onshore 
OMS contracts as a result of the advantage it m ight gain from Senvion’s IP. It is 
therefore a conservative scenario. To simplify, ISPs and ASPs are treated as one 
competitor. Further, as discussed in paragraph (227) , the ISP/ASP column should be 
viewed as the share of ISPs and Asset Owner ASPs. Moreover, as Enercon does not 
service non -Enercon turbines as a matter of business policy, no additional share is 
allocated to Enercon in the counterfactual  (as it is unlikely that Enercon would 
compete for former Senvion customers in the counterfactual given its business 
policy). All other OEMs have or will have multi -brand capabilities in the short term 
and are likely to compete for Senvion customers in the  counterfactual. The shift of 
market shares as a result of the Transaction is indicated in the table.  
  
                                                 
281  Minutes of phone calls with Enercon, GE and Nordex on 8  November 2019, 15 November 2019 and 15 
November 2019 respectively.  
282  Form CO paragraph 243. SGRE’s share is closer to  [60-70]% but to make sure the calculation is 
consistent with the calculation of the share for competitors, the Notifying Party used a sh are of 80%.  
 
 
51 Table 4 : Effects of the Transaction assuming equal split of Senvion’s market share in the 
counterfactual  
 Senvion  SGRE  Vestas  Enercon  Nordex  GE ISPs/ 
ASPs  
2016 -2018 
market shares  [5-10]% [10-20]% [20-30]% [20-30]% [5-10]% [0-5]% [20-30]% 
Counterfactual 
assuming equal 
split of Senvion 
customers 
among all 
competitors 
except Enercon  n/a [10-20]% [20-30]% [20-30]% [5-10]% [0-5]% [20-30]% 
Merger  n/a [20-30]% [20-30]% [20-30]% [5-10]% [0-5]% [20-30]% 
Change in 
market share as 
a result of the 
Transaction  n/a +[5-10]% -[0-5]% [0-5]% -[0-5]% -[0-5]% -[0-5]% 
 
(230)  The above example is just an illustration. As discussed in Section 5.3.1.1 (B.i.c), the 
assessment of the competition absent the Transaction would require identifying who 
would acquire the IP (as all else being equal this competitor is likely to acquire a 
larger market share), which competitors are close to Senvion (as all else being equal, 
close competitors would acquire a larger share) and which competitors expressed 
interest in the sale process (as all else being equal, they are likely to acquire a large r 
share).  
(231)  However, this does not appear necessary, which can be demonstrated by assuming a 
“most competitive” counterfactual among the remotely realistic counterfactuals, (i.e. 
excluding counterfactuals that are truly not realistic such as a new entrant o r a fringe 
competitor with close to 0% share winning over all Senvion customers and replacing 
Senvion). This is illustrated in Table 5. In this counterfactual the Commission 
assumed that GE, the smallest OEM competitor, would acquire the IP and win over 
all of Senvion’s current customers. As a counterfactual, such scenario would provide 
for the most competitive outcome as the smallest competitor acquires the entire 
Senvion share. Thus it is against this counterfactual that the Transaction would have 
the lar gest negative impact (i.e. “worst case scenario” for the Transaction). If this 
effect does not lead to a significant impediment of effective competition, nor will the 
effect stemming from any different counterfactual.   
Table 5 : Effects of the Transaction  assuming most competitive counterfactual  
 Senvio
n SGRE  Vestas  Enercon  Nordex  GE ISPs/  
ASPs  
2016 -2018 market 
shares  [5-
10]% [10-20]% [20-30]% [20-30]% [5-10]% [0-5]% [20-30]% 
Most competitive 
counterfactual 
assuming GE 
acquires all Senvion 
customers  n/a [10-20]% [20-30]% [20-30]% [5-10]%  [10-20]% [20-30]% 
Merger  n/a [20-30]% [20-30]% [20-30]% [5-10]% [0-5]% [20-30]% 
Change in market 
share as a result of 
the Transaction  n/a +[5-10]% [0-5]% [0-5]% [0-5]%  -[5-10]% [0-5]% 
 
 
52 (232)  In this case, the Transaction would increase SGRE’s market share by [5-10]% and 
reduce GE’s by [5-10]%, i.e. SGRE would gain share at the expense of GE and thus 
prevent GE from becoming a larger competitor. Even in such a case, the merged 
entity’s share wo uld not exceed [20-30]% in the merger scenario and three OEMs 
and a large number of ISPs would remain on the market.283 However, this is an 
extreme example and the effect of the Transaction would be much less negative than 
what is indicated in Table 5.  
i.) In re ality, it is unlikely that GE would win over all Senvion customers. As 
stated above, absent the Transaction, the Senvion onshore servicing 
business would not continue as a going concern. Even if a smaller 
competitor like GE would acquire the IP and thus a competitive advantage 
when competing for the Senvion customers, it seems very unlikely that 
such advantage would translate into winning most of the Senvion 
customers. Also, as SGRE expressed interest in expanding, it would surely 
win over some customers in  the counterfactual, which reduces the 
increment to less than [5-10]% 
ii.) It is likely that Vestas and the ISPs/ASPs would also win over some 
customers in the counterfactual.  
iii.) As discussed previously, the market shares can be viewed as conservative 
and may thu s overstate the Parties’ share. Thus the combined share in 
reality would likely be less than [20-30]%      
(233)  Thus, the post -Transaction market share of SGRE would be less than [20-30]% with 
an increment that is considerably less than [5-10]%. At the same time, the 
Transaction would decrease the shares of other competitors only slightly. Moreover, 
the number of competitors would not change.  
(234)  Thus the analysis of market shares does not point to a significant impediment of 
effective competition . Nevertheless, market share data cannot be taken in isolation 
and needs to be complemented with qualitative assessment.   
(B.iii)   Qualitative assessment of the impact of the Transaction  
(B.iii.a)  Role of IP in the competitive process  
(235)  As already discussed in Section 5.1.2.6, access to the SCADA system, the SCADA 
software, access to the turbine controller as well as technical drawings of the turbine 
and some of its spare parts is protected by IP. The owner of the IP is the OEM and 
thus t he question is to what extent the IP strengthens the competitive position of the 
OEM vis -à-vis ISPs and ASPs.  
(236)  As discussed in relation to market definition in Section 5.2.1.3.(C), the IP facilitates 
the performance of certain OMS tasks. For example, SCADA  access the turbine can 
be stopped from a distance, whereas without access it can only be stopped manually 
on site. 284 By its nature, remote monitoring and remote operation of the turbine is 
software based and thus requires some kind of access.285 SCADA acces s facilitates 
major correctives and component upgrades as after a major component exchange the 
                                                 
283  More detail on the nature of these constraints is provided in Section 5.3.1.1 (B.iii).  
284  Minutes of a phone call with Enercon on 8 November 2019.  
285  [Customer]  response to Q2 Questionnaire to customers, question 21.  
 
 
53 SCADA software needs to be reloaded and the SCADA computer reset.286 Supplying 
and installing spare parts is easier with access to drawings and other documentation . 
287  
(237)  In the market investigation ISPs and Asset Owner ASPs had different views from 
OEMs as regards the advantage afforded to OEMs by the ownership of the IP.  
(238)  An OEM for example explained that the customer has a licence to the SCADA 
system and has access rights.288 Using this licence and these access rights ISPs can 
access the system and perform most OMS tasks. In particular, an ISP can read the 
data displayed in the SCADA system and perform OMS tasks on that basis.289 Thus 
the IP does not provide advantages w ith regard to a large majority of OMS tasks.  
(239)  OEMs acknowledge, however, that access of the customers and thus ISPs and ASPs 
is not full and that only the OEM has deeper level access.290 OEMs emphasise that 
deeper level access to SCADA has a security aspect as changing certain parameters 
of the wind turbines could permanently damage the turbines, compromise the safety 
of technicians, result in non -compliance with grid requirements and potentially 
damage parts of the grid network.291 They consider however that s uch deeper level 
of access does not give them competitive advantage.292 
(240)  ISPs and non -OEM ASPs (i.e. ASPs that do not have an own turbine business and 
thus view this issue from a pure non -OEM perspective) had a different view. These 
respondents considered tha t limited access to the SCADA system reduces ISPs’ 
capabilities for innovation, reactivity, performance, cost efficiency and that as a 
result they are at a disadvantage in performing full -scope high quality OMS.293 As 
regards data access they agreed that the y can access the SCADA output data on site 
but considered that this is not sufficient to fully manage the wind farm in all aspects. 
They also submitted that they do not have access to the 24/7 surveillance data.294 
(241)  Thus, overall opinions on the nature and ex tent of the advantage are inconclusive 
and the issue can only be assessed by reference to specific market practices and 
outcomes. Overall, the Commission considers that while the IP affords OEMs with 
an advantage, ISPs and ASPs remain effective competitors . This is because  
i.) The IP advantage is mitigated by certain practices such as SCADA 
retrofitting, workaround methods and access to the IP against a licence fee. 
In addition, the bulk of OMS activities by value can be performed 
independently of the OEM.  
 
                                                 
286  [Customer]  response to Q2 Questionnaire to customers, question 21; Response of [Customer]  to Q2 
Questionnaire to customers, question 21.  
287  Responses of EDF, EnBW and ENGIE to Q1 Questionnaire to competitors, question 22.  
288  Minutes of a phone call with Enercon on 8 November 2019.  
289  Vestas’s response to Q1 Questionnaire to competitors, question 55.  
290  Minutes of phone calls with Enercon and Nordex on 8 November 2019 and 15 November 2019 
respectively.  
291  Vestas’s response to Q1 Questionnaire to competitors, question 54.  
292  Q1 Questionnaire to competitors, question 54.  
293  Q1 Questionnaire to competitors, question 54.  
294  Q1 Questionnaire to competitors, question 55.  
 
 
54 ii.) Observed market outcomes show that ISPs and ASPs are effective 
competitors.  
(242)  These points are explained below. As OEMs admitted that an advantage exists, the 
Commission takes this as a starting point and focuses on the reasons why, despite the 
advantage, ISPs and ASPs remain effective competitors.  
Mitigating factors  
(243)  As discussed in Section 5.2.1.3.(C), there are three key factors that mitigate the 
advantage.  
(244)  First, a new SCADA system can be retrofitted on the turbine.295 Retrofitting 
overcomes all constraints f rom not having SCADA access. However, a number of 
market participants indicated that it is a more costly solution and not very prevalent 
so far.296 It was also submitted that third -party SCADA solutions do not have all 
functionalities and that retrofitting m ay carry the risk of losing certification.297  
(245)  By contrast, others considered retrofitting a workable option. For example, 
Ingeteam, an ISP, considered that this is a feasible solution298 while Vestas explained 
that “ Vestas does this and it is doable with some  reasonable investments. ”299 The 
Commission also notes that DWT, an ISP, already services 377 Senvion turbines 
using a third -party SCADA system.300 There are also a number of companies active 
in the OMS space who specifically focus on offering retrofitting ser vices such as 
DEIF and Mita -Teknik.301 This suggests that there is a market for such services.  
(246)  Overall, in line with the majority of opinions the Commission considers that while 
retrofitting a third party SCADA involves some risks and costs, and thus it is not 
widespread, it remains an option that mitigates the IP advantage and certainly limits 
the advantages/rents that can be extracted from having access.  
(247)  Second, some ISPs have workaround methods.302 Both customers and competitors 
were roughly equally split on the question whether such work around methods can 
fully  eliminate the advantages stemming from SCADA access,303 which actually 
indicates that they can considerably reduce the advantage. However, such methods 
can carry some technical or legal risk or can b e more costly.304 As ENGIE explained 
“ISP is able to do the necessary maintenance in line with the contractual terms & 
conditions, but does not have full access to the SCADA data. This no good practice, 
since this forces the ISP to “work arounds” which may i mply to intervene on the 
                                                 
295  Form CO, paragraph 386.  
296  Q1 Questionnaire to competitors, question 57. Q2 questionnaire to customers, questi on 51.  
297  Q1 Questionnaire to competitors, question 57. Q2 questionnaire to customers, question 51.  
298  Ingeteam’s response to Q1 Questionnaire to competitors, question 57  
299  Vestas’ response to Q1 Questionnaire to competitors, question 57.  
300  Deutsche Windtechnik Newsletter of December 2019, page 1.   
301  The Parties also submit that companies such as SCADA International, Bachmann, Spicatech, DNV -GL, 
Fos4x, ICONICS, Industrial Technology Systems, orbital, KK Wind Solutions, SCADA Solutions appea r 
to provide various (multi -brand) SCADA -based retrofitting solutions for wind turbines.  
302  Form CO, paragraph 387.  
303  Q1 Questionnaire to competitors, question 57, Q2 Questionnaire to customers, question 51.  
304  Q1 Questionnaire to competitors, question 5 7. 
 
 
55 software .”305 Others emphasised that such work around methods involve time and 
money.306 Thus, while such methods can considerably reduce the advantage, they too 
involve some costs or risks. However, certain customers do choose this op tion as the 
benefits may be worth the costs. For example, some Asset Owners chose to replace 
or convert the controllers, routers and interfaces, which grant user access to the 
SCADA system and data.307 Even before Senvion’s insolvency, German software 
provid er Drehpunkt has been offering off -the-shelf interface solutions for Senvion 
turbines, which enable Asset Owners and operators to access, readout and store all 
data generated by Senvion’s pre -installed SCADA system.308 Thus the Commission 
considers that, whi le such work around methods do not fully eliminate the advantage 
they are a practice in the market and mitigate OEMs’ advantages to a certain extent.  
(248)  Third, ISPs and non -OEM ASPs can get access to the IP against licence fees. While 
the OEM may not have an incentive to provide such access, it is clear from the 
market investigation that granting such access is part of market practice. For 
example, several ISPs submitted that they can have SCADA access rights but they 
have to pay for such access to the OEM and  renew subscription to the access codes 
every three months.309 Likewise Cubico Sustainable Developments noted that Asset 
Owners can replace the OEM with an ISP through an agreement or by paying for the 
IP information needed.310 Other Asset Owners submitted sim ilar responses.311 
Reasons why OEMs grant such access could include the desire not to alienate the 
customer who can also be an important customer in wind turbines.  
(249)  While having to pay for access may be considered a competitive disadvantage, ISPs 
have lower o verhead and did not have to bear the development costs of the IP. It was 
generally considered that ISPs’ advantage is price.312 Thus the disadvantage of 
paying for access is rebalanced to a certain extent by lower costs.  
(250)  Finally, the Commission also notes t hat, as discussed in Section 5.2.1.3.(C), it 
appears that ISPs are in any event able to do the bulk of the service tasks by value 
fully independently of the OEM. Even though the remaining tasks are also essential 
to run a windfarm, ISPs can execute these t asks if they pay a licence fee to obtain the 
necessary access codes (or implement workarounds/retrofitting).  
Observed market outcomes  
(251)  The finding that ISPs and ASPs are effective competitors is in line with observed 
market outcomes.  
(252)  First, as explained i n Section 5.1.2.3, a significant share of customers self -service 
their turbines. For example in Spain and in the United Kingdom 28% and 21% of 
installed capacity is self -serviced respectively.313 In that scenario, typically the Asset 
Owner provides 80% of th e OMS but still has a support agreement with the OEM for 
                                                 
305  [Customer]  response to Q2 Questionnaire to customers, question 51.  
306  Responses of [Customer s] Q2 Questionnaire to customers, question 51.  
307  Notifying Party’s response to the Commission’s RFI 10, paragraph 1.3.  
308  Notifying Party’s response to the Commission’s RFI 10, paragraph 1.3.  
309  Q1 Questionnaire to competitors, question 55.  
310  Response of [Customer]  to Q2 Questionnaire to customers, question 21.  
311  Q2 Questionnaire to customers, question 21.  
312  Q1 Questionnaire to competitors, question 55.  
313  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trend 2019, pp.66, 73.  
 
 
56 OMS tasks requiring more advanced engineering skills. As the remaining 20% of 
tasks are vital to operate a windfarm and it is more challenging to execute them in 
the context of self -servicing, the OE M could force the customer to use the OEM for 
100% service needs but this does not happen. It is also unlikely that the OEM would 
charge for the 20% of the OMS services it provides a price equivalent to the full 
scope service as in that case the customer w ould be indifferent to taking a large part 
of the service work in -house. However, many customers apparently find it more 
cost-effective to take services in -house, which suggests that the OEM does not or 
cannot compensate the lost revenues by raising the pr ice of the technical support 
services.  
(253)  Second, similar considerations apply to ISPs. Currently ISPs service roughly 13% of 
each OEM’s fleet,314 whereas in 2010 their presence was negligible.315 Furthermore, 
the share of ISPs is forecast to increase in all maj or EEA countries where such 
forecast is available, i.e. Germany, Spain, United Kingdom and France.316 Thus, 
despite the IP advantage ISPs’ share of the market is set to increase.  
(254)  Third, there are observable examples of ISPs providing services in areas where  
OEMs would appear to have an advantage. For example, as discussed before DWT, 
a prominent ISP, has a remote monitoring service that offers 24/7 monitoring, 
proactive fault analysis and service hotline. The service covers Vestas, Enercon, 
Nordex, Senvion t urbines.317 As remote monitoring is by definition software based, 
OEMs have a natural advantage in this service. The examples of retrofitting of a new 
SCADA system can also be mentioned in this context.  
(255)  Fourth, all OEMs except Enercon have moved into multi -brand servicing, i.e. 
became OEM ASPs. A large majority of market participants consider that in the next 
5 years multi -brand servicing (i.e. servicing of the turbines of other OEMs) will 
increase.318 Clearly, OEMs would not have entered the business se rving other 
OEMs’ turbines and would not consider this as a growth area if they had considered 
that they would not be effective competitors. This trend also suggests that customers 
have decreasing preference for the OEM of their turbines when selecting the ir OMS 
provider.  
Conclusion  
(256)  To conclude, the Commission considers that while the IP gives OEMs some 
competitive advantage, this does not render ISPs and ASPs ineffective as 
competitive forces.   
                                                 
314  This is a rough calculation based on data submitted by the Notifying Party. Based on Form CO paragraph 
241, currently roughly 80% of each OEM fleet is serviced by the OEM that installed the fleet. An 
exception is GE, the OEM with the smallest installed base in the EEA, where this ratio is 50%. Leaving 
aside GE, the 20% is roughly shared equally between ISPs and ASPs. However, on average 26% of 
OEMs’ fleets are yo unger than 5 years and thus on average only 76% of the OEMs’ fleets are addressable 
for ISPs. (See Form CO, paragraph 83) Viewed in that light both ISPs and ASPs service, on average 13 % 
of an OEM’s addressable fleet.  
315  Minutes of a phone call with a mark et participant.  
316  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trend 2019, pp. 59, 66, 73 
and 81.  
317  https://www.deutsche -windtechnik.com/remote -data-monit oring   
318  Q1 Questionnaire to competitors, question 61, Q2 Questionnaire to customers, question 54.  
 
 
57 (B.iii.b)  Impact of the Transaction  
(257)  The starting point of the assessment is that the Transaction does not reduce the 
number of competitors. Thus SGRE will face the same competitors absent the 
Transaction as in the merger scenario. These constraints include OEMs, ISPs, ASPs. 
In addition, alth ough not included in the market shares, self -servicing by customers 
is also a competitive constraint.  
(258)  OEMs include Vestas, GE, Nordex and Enercon. As discussed in relation to market 
shares, Enercon only services its own turbines and therefore it is not an  effective 
constraint with respect to other turbines, including those of Senvion.  
(259)  Vestas is the world’s largest wind turbine supplier as well as wind operation and 
service maintenance provider and the clear market leader within the onshore market. 
It is a lso the leader in multi -brand servicing,319 servicing 7 -8 GW of non -Vestas 
turbines globally from all major OEMs outside of China, such as SGRE, Senvion, 
GE, Nordex, Enercon.320 Vestas was generally considered by customers and 
competitors as the strongest comp etitor in OMS.321 
(260)  GE is the fourth largest manufacturer of wind turbines globally (behind Vestas, 
Goldwind, a Chinese OEM and SGRE). GE offers all levels of services from remote 
monitoring to full maintenance. In total, GE services a fleet of over 30,000 tur bines. 
GE offers services not only to the GE fleet but through its Universal Fleet 
Solutions322 also to facilities manufactured by other OEMs. GE was ranked lower 
than Vestas or SGRE in terms of competitive strength in OMS,323 which is explained 
by the fact th at its presence in the EEA is more limited. However, its global position 
shows that it is a capable competitor having the capital and technology to expand.   
(261)  Nordex is a German OEM that has installed more than 7,100 turbines delivering 
more than 18 GW of e nergy worldwide and offering full scope OMS. The merger 
with Acciona in 2016 led to the development of its multi -brand OMS activity.324 Just 
like GE, it was ranked lower than Vestas or SGRE in terms of competitive strength 
in OMS, but it was acknowledged tha t the Acciona merger stabilised its position and 
that its multi -brand activity is expanding. 325   
(262)  In general all OEMs are large businesses, with a large asset base, full OMS 
capabilities, a deep understanding of wind turbine technicalities and strong R&D 
capabilities. Due to the advantage afforded by their IP, they are always the strongest 
with regard to their own brands. However, it is almost a universal expectation among 
market participants that in the next 5 years multi -brand servicing (i.e. servicing of 
the turbines of other OEMs) will increase.326 As OEMs’ primary area for expansion 
is other OEMs’ turbines (having already a naturally strong position in their own 
turbines), this suggests that OEMs are looking to expand their OMS activities. This 
                                                 
319  Notifying Party’s response to the Commission’s RFI 1, question 16.  
320  Minutes of a phone call with Vestas on 12 November 2019.  
321  Q1 Questionnaire to competitors, question 43, Q2 questionnaire to customers, question 38.  
322  https://www.ge.com/content/dam/gepower -renewables/global/en_US/downloads/brochures/wind -onshore -
services -gea31819c -r2.pdf.  
323  Q1 Questionnaire to competitors, question 43, Q2 Question naire to customers, question 38.  
324  Q1 Questionnaire to competitors, question 43.  
325  Q1 Questionnaire to competitors, question 43, Q2 Questionnaire to customers, question 38.  
326  Q1 Questionnaire to competitors, question 61, Q2 Questionnaire to customers, q uestion 54.  
 
 
58 in turn sug gests that OEMs are and will be an effective constraint on SGRE with 
respect to turbine brands other than their own. In other words, SGRE will face 
effective constraints exercised by OEMs and OEM ASPs.  
(263)  The various types of onshore wind turbine servicing c an also be provided by ISPs. 
There are a large number of ISPs that are active on the onshore wind turbine services 
market and they also constrain SGRE. They include DWT , Connected Wind 
Services, Yinfiniti, Ingeteam, Ponticelli, Mistras and many others. Re spondents of 
the market investigation considered DWT  to be the strongest ISP by far.327 
Although ISPs in general were considered as less capable in providing a full service 
or executing OMS tasks with high engineering complexity, respondents considered 
that they have certain strengths, which include their price level, flexibility and 
agility.328  
(264)  As mentioned previously, currently ISPs service roughly 13 % of each OEM’s 
fleet,329 whereas in 2010 their presence was negligible.330 Furthermore, the share of 
ISPs is f orecast to increase in all major EEA countries where such forecast is 
available, i.e. Germany, Spain, United Kingdom and France.331 This indicates that 
ISPs are, and will be, effective constraints.  
(265)  Asset Owner ASPs, i.e. Asset Owners that provide service to  other Asset Owners as 
OMS suppliers are also competitors. The principle Asset Owner ASPs include E.ON, 
EDF and ENBW. As large utility companies their OMS business grew out of self -
servicing. Given that in their capacity as Asset Owners they manage windfar ms of 
most brands, they have multi -brand capabilities. Respondents considered that they 
have similar strengths and weaknesses as ISPs,332 i.e. they are less strong than OEMs 
in areas involving access but they have lower prices and more flexible than the 
latter.333 
(266)  Finally, as mentioned before, several Asset Owners, mainly large utilities have taken 
OMS servicing in -house and self -supply. Although this was not included in the 
market shares, they are an effective constraint, which is shown by the fact that a 
significant share of customers self -service their turbines. For example, in Spain and 
in the United Kingdom 28% and 21% of installed capacity is self -serviced 
respectively.   
                                                 
327  Q1 Questionnaire to competitors, question 43, Q2 Questionnaire to customers, question 38.  
328  Q1 Questionnaire to competitors, question 46, Q2 Questionnaire to customers, question 41.  
329  This is a rough calculation based on data submitted by  the Notifying Party. Based on Form CO paragraph 
241, currently roughly 80% of each OEM fleet is serviced by the OEM that installed the fleet. An 
exception is GE, the OEM with the smallest installed bass in the EEA, where this ratio is 50%. Leaving 
aside G E, the 20% is roughly shared equally between ISPs and ASPs. However, on average 26% of 
OEMs’ fleets are younger than 5 years and thus on average only 76% of the OEMs’ fleets are addressable 
for ISPs. (See Form CO, paragraph 83) Viewed in that light both IS Ps and ASPs service, on average 13 % 
of an OEM’s addressable fleet.  
330  Minutes of a phone call with a market participant.  
331  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trend 2019, pp. 59, 66, 73 
and 81.  
332  Q1 Questionnaire to comp etitors, question 46, Q2 Questionnaire to customers, question 41.  
333  Q1 Questionnaire to competitors, question 46, Q2 Questionnaire to customers, question 41.  
 
 
59 (267)  In general market participants considered competition to be strong on the onshore 
OMS  market.334 For example Vestas explained that OEMs and ISPs offer 
competitively priced and scoped OMS service contracts “ In competitive tenders 
there is often detailed negotiations conducted with a minimum of 3 potential service 
providers (the final service providers vary depending on technical ability, customer 
requirements etc). The customer will take a final decision on who to award an OMS 
service contract to following an evaluation of a range of criteria the prospective 
service provider must fulfil such a s contract price, availability guarantee offered, 
safety record, technical capabilities, financial stability etc .”335 Customers echoed 
this sentiment and considered that their position has improved in recent years.336 
Allianz Capital Partners submitted that “ Competition between OEMs / OEMs 
understanding the risk of the technology better and or becoming more efficient”337 
Banks Renewables explained that “ Pricing has reduced and availability warranties 
have increased. In my view this is due to competition in turbin e and OMS sales in 
Europe and improvements in performance by OMS providers .”338 Blackrock advised 
that “ Increased competition has improved pricing and standards”339 Customers or 
competitors did not consider that the competitive nature of the market would 
decre ase due to Senvion’s exit, which is independent from the Transaction. This is 
especially true because just like Enercon, Senvion did not service other OEMs’ 
turbines.  
(268)  As discussed previously (Section 5.3.1.1 (B.i)), the Transaction will not eliminate 
any of the competitive constraints exercised on SGRE relative to the counterfactual. 
The effect of the Transaction is rearranging market shares across the same market 
participants by assigning Senvion customers to SGRE instead of the market share 
distribution that would result from competition for these customers. As the market is 
competitive even in Senvion’s absence, the shifting of approximately [5-10]% 
market share is unlikely to reduce the effective competition that characterises the 
market currently.  
(269)  Indeed, as none of the competitive constraints described above are eliminated, the 
shifting of market shares would reduce competition significantly only if it changed 
the market structure in a significantly negative way. However, this is not the case. As 
discussed in relation to market shares, SGRE’s post -Transaction market share is 
likely less than [20-30]% with an increment that is likely less than [5-10]%. Under 
such circumstances, the competitive constraints and the intense level of competition 
is likely t o remain on the market. Accordingly, a large majority of customers and 
competitors consider that competitive conditions will remain the same or that 
competition will increase in the next 3 -5 years.340   
(270)  The same conclusion follows from considering the impact  relative to the 
counterfactual. As described in Section 5.3.1.1 (B.ii.c) the worst case scenario for 
the counterfactual is that a smaller competitor like GE will acquire the IP and win 
                                                 
334  Q1 Questionnaire to competitors, question 71. Q2 Questionnaire to customers, question 64. See also 
Minutes of phone calls with Enercon, Vestas, GE and Nordex on 8 November 2019, 12 November 2019 
15 November 2019 and 15 November 2019 respectively.  
335  Vestas’s response to Q1 Questionnaire to competitors, question 71.  
336  Q2 questionnaire to customers,  question 64.  
337  Response of [Customer]  to Q2 questionnaire to customers, question 64.  
338  Response of [Customer]  to Q2 questionnaire to customers, question 64.  
339  [Customer]  response to Q2 questionnaire to customers, question 64.  
340  Q1 Questionnaire to com petitors, question 72. Q2 questionnaire to customers, question 65.  
 
 
60 over all former Senvion customers. The Commission emphasises that this  is an 
unlikely and extreme scenario assumed only for analytical purposes. In that case the 
Transaction increases SGRE’s market share and eliminates the gain GE would have 
had in the counterfactual. However, this would not reduce GE’s competitive strength 
described above as it would remain a global OEM with strong capabilities. Likewise 
SGRE’s market power would not increase to any significant extent in light of the 
constraints it faces. Thus even in this worst -case scenario the Transaction does not 
lead to  a significant impediment of effective competition.  
(271)  Another potential worst -case (and equally unlikely) counterfactual scenario is that 
the IP and Senvion customers are acquired by an even smaller competitor such as a 
smaller ISP. In that case the Transac tion increases SGRE’s market share and would 
prevent this ISP from becoming a larger competitor. As SGRE’s market power 
would not increase to any significant extent (market share of [20-30]%), even in this 
case, in essence the effect of the Transaction wou ld be to prevent the appearance of 
another larger competitor on an already competitive market, i.e. preventing the 
increase of competition. This also would not lead to a significant impediment of 
effective competition.  
(272)  On the basis of the above the Commis sion considers that, in line with the analysis of 
market shares, the Transaction does not lead to a significant impediment of effective 
competition.  
(B.iv)  Barriers to entry and expansion  
(273)  Both customers and competitors confirmed that there has been entry into t he onshore 
OMS market in the last five years.341 Namely, some Asset Owners (e.g. E.ON Wind 
Service (now RWE Renewables) have launched their service to third parties as an 
ASP and several smaller ISPs have entered. Ingeteam described that the “ O&M 
market is r easonably accessible, and there is constant evolution, companies getting 
into and companies exiting the market .”342 A large majority of customers and 
competitors expect further entry in the next five years.343 Iberdrola observed that 
“The trend is to grow the market for OMS Services. The entry barriers are less than 
in the past.”344 Enel explained that “ For sure new companies will enter in the market 
since wind capacity is always growing year by year. Very likely small companies 
will enter in OMS of older wind tu rbines, as soon as the know -how starts to spread 
in the market .”345 Several respondents expect Chinese OEMs to enter as OMS 
suppliers.346 These comments suggest that the onshore OMS market is dynamic with 
frequent entry and exit.  
  
                                                 
341  Q1 Questionnaire to competitors, question 67, Q2 Questionnaire to customers, question 60.  
342  Ingeteam’s response to Q1 Questionnaire to competitors, question 67.  
343  Q1 Questionnaire to competitors, question 68, Q2 questionnaire to customers, question 61.  
344  [Customer]  response to Q2 Questionnaire to customers, question 60.  
345  [Customer]  response to Q2 Questionnaire to customers, question 60.  
346  [Customer]  response to Q2 Questionnaire to customers, question 60. Vestas’s response to Q1 
Questionnaire to competitors, question 68.  
 
 
61 (274)  By contrast both customers and competitors agreed that there are some barriers to 
entry such as the fixed costs associated with building up service centres, shortage of 
skilled workforce, the need to have project references when bidding, access to IP and 
data and bidding costs.347  
(275)  On balance it appears that whilst some entry barriers exist, these are not prohibitive. 
Furthermore, the Commission recalls that, as discussed in Section 5.2.1.2 firms 
active exclusively in the offshore market switch to onshore OMS easier than this 
would hap pen vice -versa. Although such switching is outside the scope of supply -
side substitution, these firms are well placed to enter the market.  
(276)  Finally, as discussed in Section 5.3.1.1 (B.iii.b), a strong recent trend has been that 
OEMs are increasingly moving  into multi -brand servicing (with the exception of 
Enercon). This suggests that barriers to expansion are not high and that several 
suppliers want to expand their activities.  
(277)  The Commission thus considers that entry and expansion will also contribute to 
constraining the merged entity post -Transaction.  
(B.v) Customers’ buyer power  
(278)  As regards customers’ buyer power, a large majority of both competitors and 
customers consider that customers’ buyer power is medium or strong.348 In addition 
a large majority of compet itors considered that customers’ buyer power has stayed 
the same or increased in recent years.349 Moreover, customers themselves were 
clearly of the view that their buyer power has increased in recent years and they are 
able to obtain better conditions than before.350 Furthermore, most customers and 
competitors expect that in the next 5 years conditions will remain the same or 
improve for customers.351 In short, the market has become more favourable to 
customers and is likely to stay that way.  
(279)  Buyer power is rela ted to the fact, discussed in Section 5.1.1., that the onshore wind 
turbine sales have slowed down since their peak in 2017, which had repercussions on 
the OMS market. All OEMs agreed that due to decreased demand for wind turbines, 
OEMs have to offer incre asingly better conditions to turbine customers, which in 
turn prompted OEMs to offer, and Asset Owners to demand, more competitive 
conditions in OMS.352 Buyer power is also consistent with the fact that OMS prices 
have decreased by 65% since 2011 (see Sectio n 5.1.2.5.(C)). Likewise, the 
perception that the market is very competitive and that customers are benefitting 
from improving conditions such as pricing, quality and availability (See Section 
5.3.1.1.(B.iii.b)) is also in line with the responses on buyer power.  
                                                 
347  Q1 Questionnaire to competitors, question 69, Q2 Questionnaire to customers, question 62.  
348  Q1 Questionnaire to competitors, question 71, Q2 Questionnaire to cus tomers, question 64.  
349  Q1 Questionnaire to competitors, question 70.  
350  Q2 Questionnaire to customers, question 63.  
351  Q1 Questionnaire to competitors, question 72, Q2 Questionnaire to customers, question 65.  
352  Minutes of phone calls with Enercon, Vesta s GE and Nordex on 8 November 2019, 12 November 2019 15 
November 2019 and 15 November 2019 respectively.  
 
 
62 (B.vi)  Conclusion on the onshore servicing market  
(280)  Based on the above the Commission considers that the Transaction will not lead to a 
significant impediment of effective competition in the market for onshore OMS.  
5.3.1.2.  Standalone offshore OMS services in the E EA  
(A) Notifying Party’s view  
(281)  The Notifying Party did not assess the impact of the Transaction on the offshore 
OMS market in the Form CO.  
(282)  When the Commission informed the Notifying Party that some market participants 
have indicated that the IP SGRE is acqui ring may negatively affect the offshore 
servicing market, the Notifying Party submitted the following arguments as to why 
serious doubts as to the compatibility of the transaction with the internal market are 
not justified.353  
i.) Senvion is not a competitive c onstraint as it has not won any offshore OMS 
tenders in recent years and will not participate in any tenders going 
forward.  
 
ii.) SGRE’s position is not enhanced through the Transaction and it will face 
effective competition from the remaining actors, notably MHI Vestas and 
GE and the Asset Owners who self -service.  
(B) Commission’s assessment  
(283)  In the course of the investigation, certain market participants communicated their 
concerns to the Commission that the Transaction may significantly reduce 
competition in th e offshore OMS market. It was submitted that the IP SGRE 
acquires also relates to offshore OMS and that, once SGRE is in possession of the 
IP, it will be able to impede effective competition and raise prices in offshore OMS.  
(284)  Given the timing of these conc erns and the fact that the Notifying Party did not 
discuss the impact of the Transaction on the offshore OMS market, the Commission 
had limited time to investigate these concerns and, as discussed in Section 1, 
informed the Parties at the State of Play mee ting within the meaning of paragraph 
33a) of DG Competition’s Best Practices,354 that it could not be excluded that the 
proposed transaction, as originally notified, might raise serious doubts as to its 
compatibility with the internal market in the market fo r offshore OMS in the EEA. 
The Notifying Party subsequently submitted, and the Commission market tested, 
commitments on 29 November 2019 designed to eliminate the potential serious 
doubts identified by the Commission in accordance with Article 6(2) of the Merger 
Regulation. In parallel, the Commission further investigated the impact of the 
Transaction on the offshore OMS market inter alia by collecting further facts on the 
offshore market both from the Parties and from market participants.  
                                                 
353  Slide deck presented to the Commission on the technical meeting related to offshore services of 3 
December 2019, page 23.  
354  DG COMPETITION Best Pr actices on the conduct of EC merger control proceedings 
https://ec.europa.eu/competition/mergers/legislation/proceedings.pdf   
 
 
63 (285)  On the basis of this additional investigation the Commission has come to the 
conclusion that the Transaction does not raise serious doubts as to its compatibility 
with the internal market in respect of standalone offshore OMS. This conclusion is 
mainly bas ed on the following reasons:  
i.) SGRE lacks significant market power , as attested by its low market share, 
and the increment it can plausibly achieve due to the IP in offshore OMS is 
small.   
 
ii.) SGRE will face sufficiently strong constraints post -Transaction; a nd 
 
iii.) The entry of additional ISPs is likely.  
(B.i) Market shares  
(286)  As the Commission explained in Section 5.1.3, the distinction between bundled and 
standalone OMS discussed in relation to onshore OMS (Section 5.1.2.5) also applies 
to offshore OMS. The only differ ence is that due to the longer warranty period and 
the lower prevalence of LTPs, it is rather the warranty than the LTP that renders 
certain OMS captive and non -addressable by ISPs and ASPs. For this reason 
standalone offshore OMS can largely be equated wi th post -warranty OMS. 
Consistent with this, the distinction between standalone and captive OMS discussed 
in relation to market definition (Section5.2.1.1) also applies to offshore OMS. 
Accordingly the Transaction’s impact has to be assessed on the standalo ne offshore 
OMS market as captive offshore OMS forms part of the offshore turbine market.  
(287)  In addition, as the Commission noted in Section 5.1.3, offshore customers are mostly 
large utilities that prefer self -servicing as soon as the warranty expired and a s a result 
self-service is very prevalent in offshore OMS. Indeed, on the basis of capacity 
serviced (in GW) self -service has a share of 62% of the post -warranty, addressable 
segment.355  
(288)  In analysing the onshore OMS market shares, the Commission did not tak e self -
servicing into account in the market shares because self -servicing is much less 
prevalent in onshore OMS and the Transaction does not raise serious doubts even 
without taking this constraint into account in the market shares. However, due to its 
importance in offshore OMS, this constraint has to be included in the market shares.  
(289)  As discussed before in Sections 5.2.1.3.(C) and 5.3.1.1(B.iii.a), Asset Owners can 
perform the bulk of services (roughly 80 -90%) by value. Although the Asset Owners 
usually conclude a support agreement with the OEM for the rest of the tasks, as 
explained in Section 5.3.1.1 (B.iii.a), there is no indication that the OEMs force the 
customer to use the OEM for 100% service needs. It also does not appear that the 
OEM would charge  for the small part of the OMS services provided a price 
equivalent to the full scope service as in that case the customer would be indifferent 
to taking service in -house. On the contrary, a large part of customers apparently find 
it more cost -effective to  take services in -house, which suggests that the OEM does 
not or cannot compensate the lost revenues by raising the price of the technical 
support services. In short, self -service is an effective constraint on OMS suppliers. 
                                                 
355  Slide deck presented to the Commission on the technical meeting related to offshore services of 3 
December 2019, page 18.  
 
 
64 Indeed, an overwhelming majorit y of customers that expressed an opinion (mostly 
those that do, in fact, self -service) considered that the possibility of self -servicing 
has a disciplining effect in terms of price and quality on OMS providers, including 
OEMs.356 As RWE noted “ It is a fact t hat self -servicing has brought down the cost 
of energy [i.e. the cost of producing electricity] by putting pressure on OMS 
providers to both improve the performance (deliver more MWh) and their decrease 
their margins .”357 The fact that the OMS customer is of ten also a large wind turbine 
customer is likely to play a role in this. Namely, the OEM is likely to take into 
account that a price increase in OMS or an attempt to force the Asset Owner to 
procure 100% of its needs from the OEM will have repercussions on  its turbine sales 
in the next turbine tender run by the same customer.  
(290)  With the inclusion of self -service, the 2019 market shares in standalone offshore 
OMS are presented in Table 6.358 The shares were prepared according to the same 
methodology as the meth odology used in relation to onshore OMS. As discussed in 
Section 5.3.1.1.(B.ii.b), the Commission considers these shares an acceptable proxy 
for the reasons discussed in that Section. Accordingly, the Commission notes that 
SGRE’s and other OEMs’ shares do not include their activity as ASPs but this has a 
minimal impact. ISPs share includes only ISPs and not Asset Owner ASPs as the 
latter do not have offshore presence.   
Table 6: 2019 market shares in standalone offshore OMS  
 Self-service  SGRE  Other OEMs  ISPs 
Share  [60-70]% [10-20]% [10-20]% [5-10]% 
 
(291)  Other OEMs include MHS Vestas and GE. Senvion currently has no OMS contracts 
as in the absence of a buyer for the offshore business its offshore contracts have been 
terminated during the insolvency procedure. A  large number of Senvion turbines are 
now serviced by DWT, a prominent ISP, although these may not be permanent 
arrangements.359  
(292)  The assessment of the impact of the Transaction follows the principles outlined in 
relation to the onshore servicing market in Sections 5.3.1.1 (B.i) and 5.3.1.1.(B.ii.c), 
which also apply in relation to the offshore OMS market.  
(293)  Assuming that the OMS contracts currently servicing Senvion turbines are only of a 
temporary nature , then absent the Transaction, the following scenario w ould apply. 
As discussed in Section 5.3.1.1 (B.i), a firm that so far has not been present in the 
standalone offshore OMS market would have acquired the offshore servicing 
business and/or the IP relevant to it. Therefore, this firm would have stepped into the 
Senvion contracts in the counterfactual. Assuming that Senvion’s customers did not 
self-service, then this new entrant would have gained [5-10]% market share.  
                                                 
356  Q2 questionnaire to customers, question 52;  
357  [Customer]  response to Q2 questionnaire to customers, question 52.  
358  Slide deck presented to the Commission on the technical meeting related to offshore services of 3 
December 2019, page 18. Data and methodology on offshore OMS market shares was submitted by the 
Notifying Party on 21 November 2019 as Response of the Parties  to Commission’s RFI 5.  
359  DWT’s response of 29 November 2019 to the Commission’s inquiry on the offshore market.  
 
 
65 (294)  Compared to this counterfactual, in the merger scenario SGRE, ISPs and OEMs will 
compete for  these customers, with SGRE having some advantage due to the fact it 
controls the IP. However, as SGRE is not acquiring the offshore business it is not 
stepping into the Senvion offshore contracts, which have already been terminated 
(see paragraph (291)  above). In other words, contrary to the onshore market it cannot 
be assumed that SGRE will win all former Senvion customers as it would have to 
compete for this customers and it only has a cer tain advantage in this competition 
due to the IP. However, it also has the disadvantage that these customer are already 
using ISPs (DWT and others) temporarily for their OMS needs, which implies that 
these suppliers are in good starting position in bidding  for the permanent contracts.  
(295)  The discussion on the competitive advantage afforded by the IP in relation to 
onshore OMS (Sections 5.2.1.3.(C) and 5.3.1.1 (B.iii.a)) applies to the offshore 
market as well, as there are no differences between onshore and of fshore turbines in 
this regard. Indeed, wind onshore and offshore wind turbines are not different in 
relation to SCADA systems and other aspects affected by IP protection. Thus, the IP 
gives the IP owner some advantage but it does not mean that the competi tors cannot 
compete effectively. Indeed the Commission notes that for example, the 
Nordergrunde offshore wind farm (using Senvion turbines) has contracted DWT to 
perform OMS following Senvion’s insolvency. According to the Parties, DWT has 
converted the tu rbines’ router and now controls all SCADA communication to and 
from the wind farm. In response to the Commission’s market investigation, 
Nordergrunde replied that “we do not see any subcategories of services which 
cannot be done by ISPs, but OEMs may have price advantages due to deeper 
knowledge and volume advantages.”  and “the insolvency of Senvion opened 
business opportunities for ISPs, we think, that the competitive landscape for the 
servicing of Senvion turbines has improves/will improve”  and “we do not  see any 
impact, that is not caused by the insolvency itself” . This evidence demonstrates, 
therefore, that while the acquisition of the IP provides SGRE with a competitive 
advantage, competitors will still constrain it.  
(296)  Accordingly, as a result of owning the IP in the merger scenario SGRE’s market 
share increment will not be [5-10]% but only a part of that. Indeed in its internal 
documents SGRE calculated with acquiring [20-30]% of customers whose contracts 
it did not take over. This was an average number for all Senvion customers whose 
contracts SGRE did not take over, i.e. other than EEA offshore customers this also 
included some onshore and some non -European customers. Thus the increment 
corresponding to the number of offshore EEA customers SGRE is likel y to win over 
can be somewhat higher or lower than [20-30]% but SGRE certainly did not count to 
win over all EEA offshore customers as a result of the IP. The Commission recalls 
that SGRE would have to compete with ISPs who are currently serving these 
customers in a temporary manner and thus start from a good starting position, as 
well as against other competitors looking to win over these contracts. Accordingly, 
SGRE’s market share increment in the merger scenario is unlikely to be more than 
half of the [5-10]% that Senvion turbines represent offshore.  
(297)  Thus, the likely impact of the Transaction in offshore OMS is that it prevents the 
entry of a competitor that would have acquired [5-10]%, and increases SGRE’s share 
by roughly [0-5]%. The share of some ISPs  and other OEMs would also increase in 
the merger scenario. Thus although the Transaction indirectly eliminates a 
competitor with a market share of [5-10]%, increases SGRE’s market share to 
roughly [20-30]% and increases other competitors’ shares by a few percentage 
 
 
66 points. As the post -Transaction market shares will remain modest and barely above 
the level associated with an affected market, the Transaction does not lead to a 
significant reduction of effective competition.  
(298)  The same conclusion applies if it  is assumed that the current OMS contracts under 
which Senvion turbines are currently served by ISPs are more permanent in nature. 
In that case it would be even more difficult for SGRE to win over customers in the 
merger scenario, resulting in an increment  of less than [0-5]% and a post -Transaction 
share of less than [20-30]%.  
(299)  The Commission also notes that whilst Senvion turbines currently represent [5-10]% 
of the total offshore installed base, since Senvion turbines will disappear (i.e. no new 
Senvion tu rbines will be installed going forward), but the offshore market will keep 
on growing, by 2028, the Senvion fleet is expected to represent only [0-5]% of the 
installed base. Thus the share of the market over which SGRE will have an 
advantage will prospecti vely shrink and make up an ever smaller share of the 
market.  
(B.ii) Post-Transaction constraints  
(300)  Not only SGRE’s market share will be modest post -Transaction, it will be 
constrained by self -servicing Asset Owners, ISPs and other OEMs such as GE and 
MHI Vestas.  
(301)  Self-service by Asset Owners alone is a significant constraint. Not only Asset 
Owners have a [60-70]% market share but Asset Owners service [70-80]% of 
SGRE’s own fleet where the warranty has expired. Thus Asset Owners already 
constrain SGRE and will conti nue to do so post -Transaction. As discussed in 
paragraph 289 above, a large number of market participants consider that self -
servicing has a disciplining factor on OEMs.  
(302)  While self -service is the largest constraint, other OEMs like GE and MHI Vestas 
will also compete with SGRE. These are capable OEMs with similar competitive 
strength as SGRE. Market feedback indicated that both Vestas and GE are 
considered as strong competitors.360  
(303)  Finally, SGRE will also be constrained by ISPs, which is demonstrated by the  fact 
that currently ISPs service Senvion’s offshore turbines. As discussed before, while it 
is unclear whether these arrangements are temporary or permanent, they at least 
show the agility of ISPs. Namely the fact that DWT is already servicing Senvion 
turbines and, as explained in paragraph  295 above, was able to neutralize the 
IP/SCADA advantage demonstrates that ISPs will remain effective constraints.    
(B.iii)   Expected entry by ISPs  
(304)  The offshore OMS market is not as mature as the onshore OMS market. Therefo re, 
despite some barriers to entry relating to IP, the vast majority of respondents to the 
Commission’s market investigation expect more entrants in the market for offshore 
OMS. It is considered an attractive market (large and increasing) with more turbine s 
coming out of warranty in coming years and opening up to competition for OMS. 
                                                 
360  Q2 Questionnaire to customers, question 38; Q3 questionnaire on the offshore market and remedies, 
question 14  
 
 
67 Respondents see the market evolving in a similar way to how the onshore OMS 
market has evolved. For example, Nordsee One stated that “ we believe, we will see a 
similar situatio n like in onshore wind segment, where more and more independent 
service providers are available” . Nordsee Ost expects more demand for offshore 
OMS “as well as for multi -contracting instead of full service agreements” . 
Vattenfall states that “providers/OEMs  are preparing multibrand servicing 
strategies currently” .361  
(305)  The Commission therefore considers that competition in the offshore OMS will 
increase.  
(B.iv)  Conclusion on the offshore servicing market  
(306)  Based on the Sections 5.3.1.2.(B.i) -5.3.1.2.(B.iii) above, the Commission considers 
that the Transaction will not lead to a significant impediment of effective 
competition in the market for offshore OMS.  
5.3.1.3.  Impact of the Transaction on the onshore wind turbine market  
(A) Notifying Party’s view  
(307)  The Notifying Party submits that Proposed Transaction does not give rise to any 
overlaps on the market for the supply of onshore wind turbines, as SGRE will not 
acquire Senvion’s (onshore or offshore) wind turbine business. However, the 
Notifying Party considers that through the acqu isition of the onshore servicing 
business and the blade manufacturing facilities in Portugal, it may be in a position to 
gain some additional business in the onshore wind turbine market in Europe in the 
future.  
(308)  The Notifying Party submitted 2016 -2018 mark et shares for the supply of onshore 
wind turbines, which indicate that SGRE’s and Senvion’s market shares are [10-
20]% and [10-20]% respectively. However, the Notifying Party considers that it is 
not appropriate to aggregate SGRE and Senvion’s onshore wind  turbines market 
shares to assess the impact (if any) of the Proposed Transaction on the market for the 
supply of onshore wind turbines in the EEA. There is in fact no guarantee that going 
forward SGRE will be able to acquire any additional wind turbine or ders in the EEA 
as a result of the acquisition of the Senvion Target Business. Senvion’s wind turbine 
manufacturing business will no longer exist as a result of the insolvency. Going 
forward, SGRE will, however, continue to face significant competition fro m the 
other onshore wind turbine OEMs. Nevertheless, SGRE has estimated that it may be 
able to win approximately [Incremental volume] of incremental onshore wind 
turbine volumes in the EEA, as an (indirect) result of the Transaction as the 
Transaction will   
i.) enable  SGRE to establish a more competitive supply chain in Europe due 
to the acquisition of Senvion’s blades manufacturing facilities in Portugals; 
and 
 
ii.) allow SGRE to access new customers as a result of the acquisition of 
Senvion’s European onshore servicing business, in particular in Germany.  
                                                 
361 Replies to questions 37 an d 39 of Q3 questionnaire to customers and competitors.   
 
 
68 (B) Commission’s assessment  
(309)  As discussed in Section 5.3.1.1 (B.i), absent the Transaction, all the Senvion assets 
are likely to go into liquidation as funding for Senvion’s operation would no longer 
be available. This also implies that, even in the merger scenario, assets that fall 
outside the scope of the Transaction will also be liquidated. Consequently, both in 
the counterfactual and in the merger scenario, Senvion’s turbine manufacturing 
business will exit the market as a going concern and SGRE will have to compete for 
new turbine business. The effect of the Transaction in this regard is that due to some 
acquired assets, namely Senvion’s IP, the blade manufacturing facilities in Portugal 
and new customer relatio nships through the acquisition of Senvion’s onshore OMS 
business, SGRE may be in a better position to compete for additional onshore 
turbine sales than in the counterfactual.  
(310)  The Commission considers that the relevant assets that enhance SGRE’s position i n 
this regard are the blade manufacturing facilities and the customer relationships 
rather than the IP. In relation to the IP, while OEMs considered that the IP could be 
valuable for the servicing business, none of the OEMs was of the view that  
Senvion’s I P portfolio will give SGRE a meaningful advantage in the market for the 
manufacturing and supply of (onshore and offshore) wind turbines.362 This is all the 
more likely as the SGRE will not produce Senvion turbines anymore and thus a large 
part of the IP por tfolio may not be of any use for the manufacturing of onshore wind 
turbines.  
(311)  As regards the magnitude of the effect, the Notifying Party’s estimate is in line with 
SGRE’s internal documents. Namely an update to the SGRE board on the 
Transaction considers that due to the acquired assets “ Transaction business case 
considers [Incremental volume]  of incremental volumes in Europe for SGRE as a 
result of the transaction ”363 It is clear from the context that the volumes refer to 
onshore turbines. [Incremental volume] corresponds to [0-5]% market share as the 
total EEA market size is 10584 MW.364 
(312)  As SGRE’s market share is [10-20]%365 and the likely increment is [0-5]%, the 
Transaction would not give rise to an affected market and thus serious doubts eve n 
in the case of an actual overlap. In addition, the increment in this case is more 
uncertain than in the case of an overlap, i.e. in the case of the acquisition of a 
business as a going concern.   
5.3.1.4.  Impact of the Transaction on the offshore wind turbine mar ket 
(A) Notifying Party’s view  
(313)  The Notifying Party did not discuss the effect of the Transaction on the market for 
the manufacturing and supply of offshore wind turbines.   
                                                 
362  Minutes of phone calls with Enercon, Vestas GE and Nordex on 8 November 2019, 12 November 2019 15 
November 2019 and 15 November 2019 respectively. Enercon was concerned about the reshuffling of th e 
patent portfolios between Siemens AG, SGRE and Senvion but this did not appear to be merger -specific 
and was not substantiated by Enercon. The market investigation also did not provide any support for this 
concern.  
363  See SGRE Board Update “Project Snow ”, 25 September 2019, slide 12, submitted as Annex 10.28. to the 
Form CO  
364  Form CO, Table 16.  
365  Form CO, Table 16.  
 
 
69 (B) Commission’s assessment  
(314)  As discussed in Section 5.3.1.3, the effect of the Transactio n on the onshore turbine 
manufacturing market is that the acquisition of certain assets may enable SGRE to be 
in a better position to compete for additional onshore turbine sales than in the 
counterfactual. The same principle applies in the case of the mar ket for the 
manufacture and supply of offshore turbines. SGRE’s average market share in this 
market is [60-70]% in the EEA for 2016 -2018.366 However, any advantages gained 
as a result of the Transaction that could transpose to increased sales of offshore win d 
turbines are highly speculative and limited.  
(315)  First, SGRE is not acquiring Senvion’s offshore OMS business and consequently is 
not stepping into any Senvion contracts as a result of the Transaction. As discussed 
in Section 5.3.1.2, it will have to compet e for additional offshore OMS customers. 
As such, it will not gain additional customer relationships simply as a result of the 
Transaction.  
(316)  Second, as discussed in Section 5.3.1.3, the IP does not appear to give SGRE any 
direct and meaningful advantage in onshore or offshore turbine manufacturing 
business. In line with the analysis of the Transaction’s impact on offshore OMS 
(Section 5.3.1.2), the IP rather gives SGRE a limited advantage in the offshore OMS 
business (translating to a maximum [0-5]% incremen t), which may indirectly benefit 
the offshore turbine manufacturing business as SGRE could build new customer 
relationships, which could help its offshore turbine sales. However, as explained in 
Section 5.3.1.2, this increment is subject to uncertainty as SGRE will have to 
compete for these OMS customers. SGRE is also unlikely to be able to sell 
additional offshore turbines to all of these customers by virtue of these relationships. 
Offshore customers are large utilities and offshore projects involve large tenders 
where most OEMs are invited.367 As such any advantage is even more uncertain than 
the advantage SGRE can expect on the offshore OMS market.  
(317)  Third, whilst the acquisition of the blade manufacturing facilities in Portugal may 
enable SGRE to establish a more competitive supply chain in Europe, this cannot 
automatically be considered to translate into future offshore turbines sales given the 
competitive landscape for the manufacture and sale of offshore wind turbines.  
(318)  Consequently, the effect of the Tra nsaction on the market for the manufacture and 
supply of offshore wind turbines is minimal, even if SGRE’s pre -Transaction market 
share is high. Considering that SGRE faces strong competitors, such as MHI Vestas 
and GE, that customers use competitive tende r procedures for the purchase of 
offshore wind turbines and that the likely growth of the offshore market will cause 
major players to increasingly focus on this segment, the Commission considers that 
the minimal advantage will not translate into a signific ant impediment of effective 
competition.  
                                                 
366  Parties’ response of 10 December 2019 to the Commission’s RFI 10.  
367  Case COMP/M.8134 – Siemens/Gamesa, paragraph 25.  
 
 
70 5.3.2.   Vertically affected markets: gearboxes  
5.3.2.1.  Notifying Party’s view  
(319)  The Notifying Party recalls that the relevant market should be considered global in 
scope. Based on a global market definition, the Proposed Transacti on would not give 
rise to any affected market in relation to gearboxes, as Siemens’ estimated global 
market share amounts to [20-30]%.368 
(320)  If the market were to be considered EEA -wide, the Transaction would give rise to a 
vertically affected market as Siemens ’s market share would be [30-40]%. Even in 
this case, however, the Notifying Party submits that the Transaction will not give 
rise to any harm due to input foreclosure as Siemens would lack the ability and the 
incentive to foreclose competitors in the mark et for standalone onshore OMS.369  
(321)  As regards ability to foreclose, the Notifying Party considers that the upstream 
market for the supply of gearboxes is highly competitive. Siemens faces significant 
competition from suppliers of gearboxes such as ZF/Bosch (EEA share: [20-30]%), 
Moventas (E EA share: [10-20]%), Eickhoff (EEA share: [10-20]%) and CHST/NGC 
(EEA share: [5-10]%). In view of the highly competitive nature of the market for 
gearboxes, Siemens would not be able to foreclose SGRE’s downstream rivals by 
raising prices or restricting th e supply of gearboxes for wind turbines, as SGRE’s 
downstream competitors (OEMs, ISPs etc.) would be able to quickly and cheaply 
source gearboxes from Siemens’ upstream competitors. This is all the more likely as 
downstream competitors multisource gearboxe s per individual wind turbine 
model.370  
(322)  As regards the incentives, the Notifying Party notes that SGRE’s volumes of 
gearboxes represent only a small part of Siemens’ total supplies of gearboxes. In 
2018, SGRE’s gearbox orders from Siemens only amounted to a pproximately [10-
20]% of Siemens’ total gearbox sales to the wind turbine industry. [Siemens 
customers] procured significantly larger volumes of gearboxes from Siemens in 
2018 than SGRE. [Siemens customers]  purchased approximately similar volumes to 
SGRE. Senvion had a total spend on gearboxes of EUR […], representing [0-5]% of 
Siemens’ total gearbox revenues.371 In the Notifying Party’s view, if Siemens tried to 
raise upstream prices, SGRE’s downstream competitors would switch to Siemens’ 
upstream competitor s and thus would continue to enjoy competitively priced 
gearboxes. As such, the downstream competitors could continue to compete with 
SGRE and the loss of upstream profits would not be compensated by incremental 
revenues downstream. This, in turn, implies that Siemens has no incentive to raise 
prices upstream or to restrict access to inputs.372 
5.3.2.2.  Commission’s assessment  
(323)  Although the Notifying Party discussed gearboxes only as an input to onshore 
servicing, they are also an input to offshore servicing, the manu facturing of onshore 
wind turbines and the manufacturing of offshore wind turbines. The Commission 
                                                 
368  Form CO, paragraph 338.  
369  Form CO, paragraph 338 -339, 343.  
370  Form CO, paragraph 341 -342.  
371  Form CO, paragraph 344.  
372  Form CO, paragraph 346.  
 
 
71 will discuss the potential effects on all of the four downstream markets in the 
following sections.  
(A) Potential effect on onshore OMS  
(324)  As discussed in Section 5.2.2.3, the Commission considered that the market for 
gearboxes is rather EEA -wide in scope than worldwide but ultimately left the market 
definition open.  
(325)  If the market was worldwide, Siemens’s share would be less than [30-40] %, the 
Transaction would no t give rise to an affected market and thus would not raise 
serious doubts.  
(326)  If the market were to be considered EEA -wide, Siemens’s upstream market share 
would be [30-40]%. Based on data submitted by the Notifying Party, Siemens’s 
competitors in the upstre am market are ZF/Bosch (EEA share: [20-30]%), Moventas 
(EEA share: [10-20]%), Eickhoff (EEA share: [10-20]%) and CHST/NGC (EEA 
share: [5-10]%). Under this market definition, the Transaction gives rise to an 
affected market. In this case, an assessment of t he Transaction’s effect on Siemens’s 
ability and incentive to foreclose is warranted.  
(327)  As regards ability, the Commission notes that the Transaction does not change 
Siemens’ ability to raise prices or restrict OMS suppliers’ access to its gearboxes as 
the Transaction does not affect its upstream market power. Thus, regardless of its 
ability to raise prices, there is no Transaction -specific effect on SGRE’s ability to 
engage in input foreclosure.  
(328)  As regards incentives, a vertically integrated player like SG RE generally faces a 
trade -off when considering input foreclosure strategies. An increase of prices in the 
upstream market will reduce profits due to decreasing sales to downstream rivals. On 
the other hand by raising rivals’ input costs it may gain additi onal profits 
downstream by capturing additional sales or by increasing prices downstream. In this 
regard, the Transaction increases SGRE’s downstream market share in onshore OMS 
with an increment of less than [5-10]%. In theory, the increment can increase 
SGRE’s incentives to engage in input foreclosure as it can recoup more profits 
downstream than before the merger due to the fact that it has a larger sales base than 
pre-Transaction.  
(329)  Whether this is likely or not depends on the actual ability of SGRE to r aise 
downstream rivals’ costs by raising input prices and, if that is the case, whether or 
not the gains downstream outweigh the losses upstream. Thus, even if SGRE’s 
ability is not affected by the Transaction, its ability to increase prices regardless of 
the Transaction is of interest due to the changed incentives.  
(330)  The Commission considers that Siemens is unlikely to have the ability to 
significantly raise input prices.  
(331)  First, as indicated above, even though Siemens has the largest market share it faces 
four competitors in the upstream market, none of whom are fringe competitors.  
(332)  Second, the market investigation suggests that Siemens lacks the ability to raise 
input prices to such an extent that it would influence the competitiveness of its 
downstream ri vals. Namely, a large majority of customers considered that Siemens 
 
 
72 is not an indispensable supplier of gearboxes, which suggests that it lacks the ability 
to engage in successful input foreclosure.373 As Enel explained “ There are several 
manufacturers of wi nd gearboxes, so even if we are not sure if all Winergy’s 
[Siemens subsidiary that manufactures gearboxes] gearboxes can be replaced with a 
model from another manufacturer, for sure Siemens-Winergy is not indispensable, 
although it is a good quality manufacturer. ”374 Respondents also pointed out that 
instead of replacing a faulty or old gearbox, it can also be serviced or upgraded and 
several firms provide such services. For example, Community Windpower explained 
that “ It is often possible to overhaul a gearbox at the third party company and put it 
back into service and several companies specialise in this reconditioned market .”375 
This implies that the sources of supply is even wider than the five competitors, 
which makes a successful price increase even less l ikely. When Siemens’s 
indispensability as a gearbox supplier was considered exclusively in relation to an 
input to OMS (as opposed to input to turbine manufacturing), competitors responses 
also did not suggest that Siemens would have the market power to raise input 
prices.376  
(333)  Third, the Commission notes that, even though the supply of a gearbox can be 
important for the operation of a wind turbine, changing a gearbox is just one of out 
of the many OMS tasks. As noted above overhauling a gearbox is an alternative to 
supplying one. Even when the supply becomes inevitable it affects only one OMS 
module, namely “spares and distribution”. This module makes up roughly 30 % of 
EMEA OMS revenues according to an industry study.377 However, there are several 
thousand spare parts of a wind turbine of which the gearbox is only one.378 In 
addition, gearboxes do not have to be changed frequently. Thus although a large and 
expensive item, the supply of gearboxes is unlikely to make up more than a fraction 
of overall OMS revenues. It follows that even a significant price increase is unlikely 
to have a major impact on downstream OMS competitors’ ability to compete. This in 
turn implies that Siemens has limited ability to influence downstream prices.  
(334)  Thus, Siemens’s ability to raise input prices (which is unaffected by the Transaction) 
is such that Siemens is not able to engage in input foreclosure. This in turn implies 
that even if the Transaction increased Siemens’s incentives to engage in foreclosure 
(by increasing its downstream share), Siemens will not be able to execute that 
strategy.  
(335)  The Commission also considers that, even assuming ability to raise rivals’ input 
costs, it is unlikely that the Transaction would make such a strategy profitable. 
SGRE has a pre-Transaction downstream market share of [10-20]%, while [90-
100]% of Siemens’s  upstream sales are directed towards suppliers other than SGRE, 
including large volumes to [Siemens customers]. By raising gearbox prices for OMS 
purposes, Siemens could alienate both [Sie mens customers] such that they might buy 
significantly less gearboxes also for turbines or stop buying gearboxes altogether and 
                                                 
373 Q2 Questionnaire to customers, questions 71.   
374  [Customer] response to Q2 Questionnaire to customers, question 71. 
375  Response of [Customer] to Q2 Questionnaire to customers, question 71. 
376  Q1 Questionnaire to competitors, question 78.  
377  Wood Mackenzie, Global Onshore Wind Operations and Maintenance (O&M) Trend 2019, p. 7. 
378  For example, Vestas’ online spa re part platform lists 30000 items across four brands. 
https://shop.vestas.com/en/welcome?utm source=adwords&utm campaign=global awareness&utm term
=turbine spare parts&gclid=EAIaIQobChMIgJaehqe75gIVgbHtCh0HWAAPEAAYASAAEgLEdPD B
wE  
 
 
73 switch to another supplier. Thus the losses on the upstream market could be 
substantial. At the same time, its sales base on the  downstream market of [10-20]% 
is quite small, making it unlikely that it could recoup these losses. By adding less 
than [5-10]% to its downstream market share the Transaction is unlikely to change 
substantially the relative weights of upstream losses and downstream profits even 
assuming ability. It follows that Siemens is unlikely to have the incentive to engage 
in input foreclosure as a result of the Transaction.  
(336)  On the basis of the above the Commission considers that the Transaction does not 
raise serio us doubts as to its compatibility with the internal market on account of 
input foreclosure in relation to the standalone onshore OMS market.  
(B)  Potential effect on offshore OMS  
(337)  As discussed in Section 5.3.1.2, SGRE’s downstream market share is [10-20]% pre -
Transaction and, in line with SGRE’s internal documents and the fact that offshore 
customers are already served by ISPs, the increment due to the Transaction 
(advantage due to the acquisition of the IP) is maximum [0-5]%, The rest of the facts 
are the same  as those discussed in relation to onshore OMS.  
(338)  The assessment carried out in relation to standalone onshore OMS applies to 
standalone offshore OMS too, with minor differences.  
(339)  If the market is worldwide, Siemens’s share for the supply of gearboxes is les s than 
[30-40] %, the Transaction does not give rise to an affected market and thus does not 
raise doubts.  
(340)  If the market is EEA -wide, the impact of the Transaction on Siemens’s ability and 
incentive to engage in input foreclosure needs to be considered. A s discussed in 
relation to onshore OMS, Siemens’s ability is unaffected by the Transaction but the 
Transaction may, in theory, increase Siemens’s incentives to engage in input 
foreclosure due to the fact that SGRE’s downstream market share increases. The 
Commission notes at the outset that given the maximum [0-5]% increment this is 
highly unlikely. Nonetheless, for the sake of completeness the Commission will 
complete the assessment.  
(341)  Whether or not the Transaction induces Siemens to engage in input foreclo sure 
depends on whether Siemens is able to raise downstream rivals’ costs by raising 
input prices and, if that is the case, the gains downstream outweigh the losses 
upstream.  
(342)  As regards ability, the same assessment applies as in the case of onshore OMS 
(Section 5.3.2.2.A). Thus the Commission considers that Siemens lacks the ability to 
raise rivals’ costs by increasing input prices.  
(343)  As regards incentives, the assessment in rel ation to onshore OMS applies with 
slightly different market shares. SGRE has a pre -Transaction downstream market 
share of [10-20]%, while [90-100]% of its upstream sales are directed towards 
suppliers other than SGRE, including large volumes to [Siemen’s c ustomers] . By 
raising gearbox prices for OMS purposes, Siemens could alienate both [Siemen’s 
customers]  such that they might buy significantly less gearboxes also for turbines or 
stop buying gearboxes altogether and switch to another supplier. Thus the los ses on 
 
 
74 the upstream market could be substantial. At the same time, its sales base on the 
downstream market of [10-20]% is quite small, making it unlikely that it could 
recoup these losses. By adding less than [0-5]% to its downstream market share, the 
Tran saction is unlikely to change substantially the relative weights of upstream 
losses and downstream profits even assuming ability. It follows that Siemens is 
unlikely to have the incentive to engage in input foreclosure as a result of the 
Transaction.  
(344)  If one were to consider that self -servicing offshore customers use OEMs and thus 
SGRE for replacing gearboxes in the context of a support agreement, SGRE’s pre -
Transaction share would be close to [70-80]% based on its share of the offshore 
installed base in th e EEA.379 However, despite such a large potential share of supply, 
the market investigation did not provide any indication that pre -Transaction Siemens 
would restrict offshore OMS competitors’ access to gearboxes or that it selectively 
raised gearbox prices vis-à-vis them. More importantly, regardless of Siemens’ 
market share, the Transaction changes very little in Siemens’s incentives due to the 
minimal downstream increment.  
(345)  On the basis of the above the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal market on account of 
input foreclosure in relation to the standalone offshore OMS market.  
(C) Potential effect on the manufacturing of onshore turbines  
(346)  Gearboxes are also an input to wind turbine man ufacturing. As discussed in Section 
5.3.1.3, due to the fact SGRE is acquiring Senvion’s IP, a manufacturing facility and 
customer relationships, SGRE’s share in the market for manufacturing and supply of 
onshore wind turbines is likely increase from [10-20]% to [10-20]% in the EEA. The 
[0-5]% increment is consistent with SGRE’s internal documents in which SGRE 
[Reference to SGRE internal document] . The upstream market conditions for the 
supply of gearboxes have been described in relation to onshore OMS in Section 
5.3.2.2.(A).  
(347)  In this case too, if the market for gearboxes were worldwide, Siemens’s upstream 
market share would be [20-30]% and the Transaction would not give rise to an 
affected market. Thus serious doubts can be excluded under this market defin ition.  
(348)  On the basis of an EEA -wide market definition, Siemens’s upstream market share is 
[30-40]% and the Transaction gives rise to a vertically affected market, which calls 
for the assessment of the Transaction’s impact on Siemens’s ability and incentive  to 
foreclose downstream rivals, in this case onshore turbine OEMs.  
(349)  The assessment in this regard follows the same principles as in the case of onshore 
OMS (Section 5.3.2.2.(A)). Namely, the Transaction does not change Siemens’s 
ability to increase rivals ’ costs by increasing gearbox prices as its upstream market 
power remains unchanged. However, the Transaction may, in theory, increase 
Siemens’s incentive to engage in input foreclosure as it increases the downstream 
basis on which the upstream losses resu lting from a foreclosure strategy can be 
recouped.  
                                                 
379  Parties’ response of 22 November 2019 to the Commission’s RFI 6.  
 
 
75 (350)  Whether this is likely to happen depends on Siemens’s actual ability to raise rival 
onshore OEMs’ costs by increasing gearbox prices and whether or not the additional 
profits downstream will outweigh the losses upstream.  
(351)  As regards ability, the assessment is based on the same aspects as in the case of input 
foreclosure related to onshore OMS (see paragraphs 331-333) but the facts are 
somewhat different.  
(352)  First, the fact that Siemens faces four competitors on the upstream market limits its 
ability to push through price increases in gearboxes.  
(353)  Second, contrary to the assessment in relation to onshore OMS, the market 
investigation indicated that in the supply of gearboxes for onshore wind turbine 
manufacturing, Siemens is an important supplier that cannot easily be avoided.380   
(354)  Third, contrary to OMS where a large part of OMS can be provided regardless of 
gearbox prices, every geared turbine needs a gearbox (i.e. unless a turbine uses direct 
drive technology). However, while the gearbox is likely to represent a greater share 
of input costs for onshore turbines than for onshore OMS and is an important input, 
it is still represents only a small share of the overall turbine costs. Based on the study 
of the International Renewable Energy Agency, the gearbox represents roughly 10 % 
of the total cost of an onshore wind turbine.381 Thus, while it is a bigger cost item 
than in onshore OMS, its impact on the final turbine price is still limited. For 
example, a significant 10 % upstream price increase, which is likely to lead to 
considerable losses on the upstream market, would increase the costs of downstream 
rivals only by 1%. Thus, even though the proportions are different, Siemens’s ability 
to impact downstream rivals costs is quite limited.     
(355)  Thus the Commission considers that Siemens has limited ability to increase rivals’ 
costs in the onshore wind turbine market.  
(356)  As regards incentives, SGRE has a pre-Transaction downstream market share of [10-
20]%, while [90-100]% of its upstream sales are directed towards suppliers other 
than SGRE, including large volumes to [Siemens customers]. By raising gearbox 
prices for the purposes of manufacturing onshore turbines, Siemens could cause 
[Siemens customers] to switch significant volumes to rival gearbox producers. At the 
same time its sales base on the downstream market of [10-20]% is quite small, 
making it unlikely that it could recoup these losses. This is all the more the case 
because, as discussed, even significant input price increases (which cause great 
losses upstream), translate into minor cost increases and thus minor potential price 
increases downstream. Consequently Siemens has very little incentive to engage in 
input foreclosure strategies pre-Transaction and by adding approximately [0-5] % 
market share as per paragraph 346 above, the Transaction will not affect the relative 
weights of upstream losses and downstream profits in any meaningful way, even 
assuming ability.  
  
                                                 
380  Q2 Questi onnaire to customers, questions 71.  
381  https://www.irena.org/documentdownloads/publications/re technologies cost analysis-wind power.pdf , 
page 18.  
 
 
76 (357)  Given that Siemens has limited ability and no in centive to engage in input 
foreclosure strategies as a result of the Transaction, the Commission considers that 
the Transaction does not raise serious doubts on account of input foreclosure relating 
to the manufacturing and supply of onshore wind turbines.   
(D) Potential effect on the manufacturing of offshore wind turbines  
(358)  As discussed in Section 5.3.1.4, due to the fact SGRE is acquiring Senvion’s IP and 
a blade manufacturing facility (and as a result may gain some new customers), 
SGRE’s share in the market f or manufacturing and supply of offshore wind turbines 
could increase marginally in the EEA. The upstream market conditions for the 
supply of gearboxes have been described in relation to onshore OMS (Section 
5.3.2.2(A)).  
(359)  The same assessment applies as in t he case of the effect on the onshore turbine 
market (Section 5.3.2.2.(C)) with certain differences.  
(360)  Namely, if the market for gearboxes were worldwide, Siemens’s market upstream 
market share would be [20-30]% and the Transaction would not give rise to an 
affected market. Thus serious doubts can be excluded under this market definition.  
(361)  On the basis of an EEA -wide market definition, Siemens’s upstream market share is 
[30-40]% and the Transaction gives rise to  a vertically affected market, which makes 
an assessment of the Transaction’s impact on Siemens’s ability and incentive to 
foreclose downstream rivals, in this case offshore turbine OEMs, necessary.  
(362)  As in the case of manufacturing onshore wind turbines, t he Transaction does not 
change Siemens’s ability to increase rivals’ costs by increasing gearbox prices as its 
upstream market power remains unchanged. However, the Transaction may, in 
theory, increase Siemens’s incentive to engage in input foreclosure as it increases the 
downstream basis on which the upstream losses resulting from a foreclosure strategy 
can be recouped.  
(363)  Whether this is likely to happen depends on Siemens’s actual ability to raise rival 
onshore OEMs’ costs by increasing gearbox prices and whether or not the additional 
profits downstream will outweigh the losses upstream.  
(364)  The Commission considers that Siemens’s ability to raise rival offshore OEMs’ costs 
by increasing gearbox prices is limited for the same reasons as those outlined in 
relation to the manufacturing of onshore turbines in Section 5.3.2.2.(C). The ability 
is even more limited given that, as discussed in relation to market definition (Section 
5.2.1.5), the cost of manufacturing offshore turbines is much higher due to the 
special requirements resulting from offshore use. On the other hand, as discussed in 
relatio n to the market definition of gearboxes (Section 5.2.1.4), separate onshore and 
offshore gearbox markets are not distinguished as the costs involved in adjusting 
production from one type to another are minor. It follows that the input cost of a 
gearbox for  onshore and offshore use are similar but the cost of producing an 
offshore turbine is much greater than that of manufacturing an onshore turbine. 
Consequently, the cost of a gearbox is likely to make up much less than 10 % of the 
total cost of a turbine, which further limits Siemens’s ability to influence 
downstream rivals’ costs in manufacturing offshore turbines relative to 
manufacturing onshore turbines.  
 
 
77 (365)  As regards incentives, the Commission considers that Siemens does not have an 
incentive to engage i n input foreclosure as a result of the Transaction, for the same 
reasons as those outlined in relation to the manufacturing of onshore turbines in 
Section 5.3.2.2.(C). If anything, the Transaction’s effect on Siemens’s incentives is 
even less than in the c ase of onshore manufacturing as the expected increase of its 
downstream market share is negligible.  
(366)  On the basis of the above, the Commission considers that the Transaction does not 
raise serious doubts on account of input foreclosure relating to the manu facturing 
and supply of offshore wind turbines.  
6. CONCLUSION  
(367)  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 a dopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice -President