2001/271/EC: Commission Decision of 14 December 1999 imposing fines under Article 14 of Council Regulation (EEC) No 4064/89 for supplying incorrect and misleading information in a notification and inaccurate information in response to requests for information (Case No IV/M.1610 — Deutsche Post/trans-o-flex) (Text with EEA relevance.) (notified under document number C(1999) 4502)
Date: 1999-12-14
Institutions: European Commission
Subjects: Germany, economic concentration, exchange of information, fine, merger control, postal service

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 14 December 1999

imposing fines under Article 14 of Council Regulation (EEC) No 4064/89 for supplying incorrect
and misleading information in a notification and inaccurate information in response to requests
for information (Case No IV/M.1610 — Deutsche Post/trans-o-flex)

(notified under document number C(1999) 4502)

(Only the German text is authentic)

(Text with EEA relevance)

(2001/271/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

A.

INTRODUCTION

Having regard to the Treaty establishing the European Com-
munity,

Having regard to the Agreement on the European Economic
Area,

I.

SUBJECT OF THE PROCEEDINGS

Having regard to Council Regulation (EEC) No 4064/89 of
21 December 1989 on the control of concentrations between
undertakings (1),
amended by Regulation (EC)
No 1310/97 (2), and in particular Article 14(1)(b) and the first
limb of Article 14(1)(c) thereof,

last

as

Having given Deutsche Post the opportunity to make known
its views on the objections raised by the Commission,

Having regard to the opinion of the Advisory Committee on
Concentrations (3),

Whereas:

(1)

(2)

Investigations carried out by the Commission have
revealed that Deutsche Post AG (Deutsche Post) supplied
incorrect and misleading information when it notified a
takeover of
trans-o-flex Schnell-Lieferdienst GmbH
(trans-o-flex), on 4 February 1999 (Case IV/M.1447 —
Deutsche Post/trans-o-flex). Deutsche Post also supplied
incorrect information in response to the Commission’s
requests for information of 23 February 1999 (reference
1999), 26 March 1999 (reference 3359) and 22 April
1999 (reference 4350).

In so doing, Deutsche Post committed infringements
under Article 14(1)(b)
limb of
Article 14(1)(c) of Regulation (EEC) No 4064/89 (the
Merger Regulation).

first

and

the

(1) OJ L 395, 30.12.1989, p. 1; corrected version: OJ L 257,

21.9.1990, p. 13.

(2) OJ L 180, 9.7.1997, p. 1.
(3) OJ C 106, 6.4.2001.

(3)

The Commission concludes that it ought to impose fines
on Deutsche Post in respect of both infringements.

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II. NOTIFICATION: CASE IV/M.1447 —
DEUTSCHE POST/TRANS-O-FLEX

(9)

(4) On 4 February 1999 Deutsche Post notified the Com-
mission under Article 4 of Regulation (EEC) No 4064/89
of a planned concentration whereby it proposed to
acquire a holding of 50,4 % in trans-o-flex from
Industrial Information GmbH (Industrial Information).

(5)

Deutsche Post took the view that the intended acquisi-
tion of the majority of shares represented a structural
change, as Deutsche Post would thereby acquire sole
control of trans-o-flex. It stated in its notification that
the trans-o-flex decision-making bodies took major
decisions by simple majority, a majority which Deutsche
Post would enjoy only when it had acquired the majority
of the shares.

(6) On 4 March 1999 the Commission decided to initiate
proceedings in this case under Article 6(1)(c) of the
Merger Regulation and Article 57 of the Agreement on
the European Economic Area. On 5 May 1999 Deutsche
Post ‘withdrew’ the notification.
It explained that it
intended to annul the contracts on which the transaction
was based. It did so on 7 May 1999. At this point the
notification procedure was closed, as it no longer served
any purpose.

III.
FINES: CASE IV/M.1610 —
DEUTSCHE POST/TRANS-O-FLEX

(7)

(8)

The information that Deutsche Post supplied in its
notification left open a number of questions which
needed to be clarified before an assessment of the
notified transaction could be made, and the Commission
accordingly sent a number of requests for information
to Deutsche Post and to other parties involved in an
earlier transaction in 1997 in order to establish the facts.
These enquiries revealed the following.

Deutsche Post had infringed its obligation to supply
information under the Merger Regulation both in its
notification and in its replies to the Commission’s
requests for information. In its notification it made
incorrect and misleading statements regarding the cir-
cumstances relevant to an assessment of the question
whether the transaction notified in 1999 would lead to
a change in control. Deutsche Post also gave incorrect
answers on this point in its replies to the Commission’s
requests for information, some of which it supplied only
after the requests had been repeated. The questions put
in the requests for information frequently arose only as
a result of the Commission’s own investigations.

The incorrect and misleading information supplied by
Deutsche Post relates to facts connected with the 1997
transaction. Contrary to the view taken by Deutsche
Post in its reply to the Commission’s statement of
objections, knowledge of all the circumstances relating
to this transaction is crucial to the assessment of the
transaction notified in 1999. There is a ‘concentration’
within the meaning of Article 3 of the Merger Regulation,
and the Commission consequently has jurisdiction to
assess the transaction, only if control changes hands. If
Deutsche Post acquired control of trans-o-flex in 1997,
its acquisition of a majority share in 1999 could not
produce a change in control. The Commission can
determine the question only if it has full knowledge of
the circumstances of the 1997 transaction.

(10) Only in the course of its investigations did the Com-
mission become aware of circumstances which sug-
gested that Deutsche Post might have acquired control
of trans-o-flex in 1997. In that year Deutsche Post
had acquired an interest in Hanna 95 Beteiligungs-
Verwaltungs GmbH (Hanna 95), and thereby in trans-o-
flex AG; it now appeared that this was more than just a
minority holding with no controlling rights. That there
was in fact an acquisition of control was suggested by
the circumstances in which the Hanna 95 shares were
purchased in 1997, by the sequence in which the
successive transactions were concluded, and by the
circumstances and character of the various transactions
associated with the purchase of the shares.

(11) The results of the investigations rest in part on answers
given by other parties to the transaction to requests for
information made by the Commission. They are also
based on an examination of the minutes of meetings of
the Deutsche Post and trans-o-flex supervisory and
management bodies, which were supplied at the Com-
mission’s request. They likewise take account of the
replies given by Deutsche Post, in particular in response
to a reminder sent by the Commission on 22 April
1999, which sought answers to a series of questions
asked of Deutsche Post in the requests for information
of 23 February 1999 and 26 March 1999.

(12) The German Federal Cartels Office (the ‘Bundeskartell-
amt’) has since initiated its own proceeding in respect of
the 1997 transaction, under reference B9-88/89.

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B. THE FACTS

I. THE NOTIFICATION

(13)

In the notification of 4 February 1999 Deutsche Post
stated the following.

(14)

‘Deutsche Post intends to purchase the 50,4 % holding
in trans-o-flex belonging to Industrial Information, of
Zurich, in order to acquire sole control of trans-o-flex,
having previously acquired 24,8 % of the shares in June
1997.

The background to the planned concentration is as
follows.

On 21 November 1995 Hanna 95, of Munich, concluded
a purchase contract to acquire all 1 million ordinary
shares in trans-o-flex AG from Franz Haniel & Cie.
GmbH, of Duisburg, with effect from 30 December
1995; the shares had an individual nominal value of
DEM 50.

three quarters of

Like Industrial Information GmbH, Hanna 95 Beteili-
gungs-Verwaltungs GmbH was a shelf company, a bare
shell; it had been owned by the law firm Oppenhoff &
Rädler. The shares in Hanna 95 GmbH were acquired by
a number of private investors. In 1997 these investors
decided to sell a majority holding in Hanna 95. The
sellers believed that the most likely purchasers were the
Dutch and German Post Offices. They wanted to sell at
the shares at once, against
least
immediate payment of the negotiated price. Had Deut-
sche Post bought the shares in Hanna 95, given the
situation at the time with regard to turnover limits, the
responsible competition authority would have been the
German Federal Cartels Office. The transaction would
also have had to be notified to the competition auth-
orities in the other EU countries where trans-o-flex
traded. This meant it would have taken months for
Deutsche Post to conclude the purchase of the majority
holding in Hanna 95. The sellers were not prepared to
wait that long. But they were prepared to sell Deutsche
Post, a minority holding, with no controlling interest, if
another investor could be enlisted who would conclude
the operation immediately. Thus an investor had to be
found whose turnover, including that of trans-o-flex, did
not exceed the DEM 2 billion limit beyond which prior

notification would have been necessary under German
competition law. [Mr R.] * from Barcelona was prepared
to acquire a majority share in the company, because he
believed he had a good chance of making a reasonable
profit by reselling at a later date. A holding of 50,4 % of
the shares in Hanna 95 was accordingly sold to Industrial
Information, which became the property of [Mr R.]*.’

(15) The notification refers here to a document appended to
it as Annex 5. This is the contract concluded by
Industrial Information on 10 July 1997 for the purchase
of 50,4 % of
Industrial
Information, the buyer, was represented by [Mr H.]*,
who is Deutsche Post’s legal representative in this case.

the shares in Hanna 95.

(16) The notification also states that ‘trans-o-flex Schnell-
Lieferdienst AG was absorbed into Hanna 95 Beteili-
gungs-Verwaltungs GmbH under a full merger agree-
ment concluded on 26 September 1997 (Annex 6).
Hanna 95 Beteiligungs-Verwaltungs GmbH then
changed its name to trans-o-flex Schnell-Lieferdienst
GmbH’.

(17) Annex 6 to the notification contains a contract, authenti-
cated by notary, merging Hanna 95 GmbH into trans-o-
flex AG, concluded between Hanna 95 GmbH and trans-
o-flex AG on 25 September 1997. The contract is
subject to the suspensive condition that it must be
approved by named bodies in both companies. No
evidence of such approval is appended.

(18) The notification goes on to say that ‘Industrial Infor-
mation has complete control of trans-o-flex GmbH, as all
decisions are reached by simple majority and Industrial
Information holds 50,4 % of the shares. (The details are
set out in my letter of 22 January 1999 to [a named
Commission official] (Annex 6a). The articles of associ-
ation of trans-o-flex Schnell-Lieferdienst GmbH are also
attached to that
letter; Article 16(6) states that all
company decisions are to be taken by majority vote. All
major decisions are taken at general meetings, as the
supervisory board consists of equal numbers of represen-
tatives and therefore can perform only those tasks
expressly required by law.) [Mr R.]* has always exercised
his rights as a shareholder.’

* Parts of this text have been edited to ensure that confidential
information is not disclosed; those parts are enclosed in square
brackets and marked with an asterisk.

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(19)

In the letter of 22 January 1999 attached to the
notification as Annex 6a, Deutsche Post’s solicitor, [Mr
H.]*, provides a similar but more detailed version of the
historical background to the operation now notified as
a concentration. He mentions the fact that informal
discussions with the Federal Cartels Office had revealed
that the Office was unlikely to take a swift decision.
However, as the sellers insisted on a quick sale, Deutsche
Post’s only chance of competing successfully with the
Dutch Post Office was through a fast and definitive
agreement. [Mr H.]* had therefore suggested that Deut-
sche Post should simply acquire a minority holding in
trans-o-flex, which would not give it control, and should
find another investor to buy a majority holding in
Hanna 95 and, through Hanna 95, in trans-o-flex AG.
The investor found was [Mr R.]*. [Mr R.]* was an
industrialist living in Spain who owned part of a Spanish
aluminium company. He insisted that the operation be
kept entirely separate from the Spanish company’s
activities. Given the need for haste, [Mr H.]* suggested
that [Mr R.]* should acquire the Swiss company Indus-
trial Information, which was a shelf company belonging
to [Mr H.’s]* law firm, as there was no time to set up a
new company. The use of shelf companies was common
practice among lawyers. [Mr R.]* agreed to the plan, as
did the sellers once the financial details regarding the
purchase price had been settled.

(20)

[Mr H.’s]* letter of 22 January 1999 states that both
transactions, namely Deutsche Post’s purchase of a
minority stake and Industrial Information’s purchase of
a majority stake, took place on 10 July 1997. The
remaining 24,8 % of the shares were held jointly by [Mr
A.]* and [Mr Sch.]*. It had been clear from the beginning
that Deutsche Post would buy only a minority holding
in Hanna 95 with no controlling rights. The rights
deriving from the minority share would not entitle
Deutsche Post to influence trans-o-flex’s policy decisions
or its day-to-day running.

Information wished to sell. The put-option was not
matched by a call-option for Deutsche Post, so that it
was entirely for Industrial Information to decide when
the shares would be sold.

(22) The articles of association of trans-o-flex GmbH annexed

to this letter are dated 27 August 1998.

II. THE RESULTS OF THE COMMISSION’S INVESTIGATIONS

1. Background to the 1997 transaction

(23) Deutsche Post intended to take over trans-o-flex as early
as July 1997. According to the information supplied by
Deutsche Post in the notification, which is set out at B.I,
it would have taken Deutsche Post several months to
acquire a majority holding at that time, owing to the
need to notify the Federal Cartels Office and a number
of competition authorities in other Member States. The
sellers did not wish to wait that long, and were prepared
to sell to other interested parties. The Dutch Post Office
had shown interest in acquiring trans-o-flex.

(24) The sellers wanted to sell at least three quarters of the
shares in trans-o-flex, but were prepared to sell Deutsche
Post a minority holding of 24,8 %, as long as Deutsche
Post could enlist a buyer for the remaining shares.
Deutsche Post instructed its lawyer, [Mr H.]*, to find a
buyer. A 50,4 % majority holding was sold to Industrial
Information, a shelf company controlled by [Mr H.]*;
altogether 75,2 % of the shares in trans-o-flex were sold
on 10 July 1997. Eleven days later Industrial Information
transferred its shares to [Mr R.]*. Deutsche Post con-
tented itself with a minority holding only because this
operation ensured that
it could acquire a majority
holding later.

(21)

[Mr H.]* refers here to the attached articles of association
of trans-o-flex GmbH and concluded that Industrial
Information had sole control of trans-o-flex. As it was
clear that Industrial Information would keep the trans-
o-flex shares only for a limited time, and that [Mr R.]*
would attempt to sell them at a reasonable profit, a put-
option was agreed between Industrial Information and
Deutsche Post, whereby Deutsche Post was obliged to
purchase the trans-o-flex shares as soon as Industrial

2. Transactions on 10 July 1997

(25) A minority holding in Hanna 95 was sold to Deutsche
Post on 10 July 1997. On the same day Industrial
Information purchased a majority holding in Hanna 95,
and a number of agreements were concluded in connec-
tion with these transactions.

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(a) Deutsche Post’s purchase of a minority holding

(26) The purchase contract supplied on 1 March 1999 by
Deutsche Post in response to a request for information
shows that Deutsche Post purchased a minority holding
in trans-o-flex on 10 July 1997. The contract, dated
10 July 1997, is for the sale of a 24,8 % holding in
Hanna 95. Deutsche Post paid [DEM ... million — a sum
corresponding to a price per share equal to the price per
share paid by Industrial Information as described in
recital 30]* for its shares.

(27) The sellers were private investors who had purchased all
the shares in trans-o-flex from Franz Haniel & Cie.
GmbH (Haniel), through Hanna 95, in 1995. In 1997
their stake in
they wished to sell
Hanna 95, and thus in its sole subsidiary, trans-o-flex.

the majority of

(28) The shares were bought by Deutsche Post Express und
Transport GmbH. As is clear from the corporate report
annexed to the notification, this company is a subsidiary
of Deutsche Post, and was set up as a holding company
on 1 July 1997.

(29) By purchasing a minority holding in Hanna 95, Deutsche
Post indirectly acquired a corresponding stake in trans-
o-flex AG, which was wholly owned by Hanna 95.

(32) According to Deutsche Post, the remaining 24,8 % of
the shares in Hanna 95 were retained by two members
investors selling the shares (three,
of the group of
according to the consortium agreement (4)), namely [Mr
Sch.]* and [Mr A.]* (the [A.]* group). To exercise their
voting rights they were required to act together (5).

(33) Hanna 95 was the sole shareholder in trans-o-flex, and
so by acquiring this holding in Hanna 95 Industrial
Information indirectly acquired 50,4 % of trans-o-flex.

(c) The consortium agreement

(34) On 10 July 1997, Industrial Information, Deutsche Post
and the sellers of Hanna 95 concluded what they called a
‘consortium agreement’ (‘Konsortialvereinbarung’) laying
down rules, among other things, for representation on
the management and supervisory bodies of Hanna 95
and trans-o-flex. The agreement makes detailed pro-
vision for the number of seats on the supervisory boards
to be allocated to the individual shareholders. Deutsche
Post did not send this agreement to the Commission
until 27 April 1999, when it replied to the Commission’s
reminder of 22 April 1999 drawing attention to the
Commission’s request for information of 26 March
1999. In its earlier letter, of 6 April 1999, in answer to
a question from the Commission concerning the exist-
ence of an agreement regarding the allocation of seats
on the trans-o-flex management and supervisory boards,
Deutsche Post stated that details regarding represen-
tation on trans-o-flex’s supervisory board had not been
set out in writing. Deutsche Post provided no answer at
that time to the same question in connection with the
management board.

(b)

Industrial Information’s purchase of a majority holding

(30) The contract annexed to the notification shows that on
10 July 1997 the sellers of Hanna 95 concluded a
contract with the Swiss company Industrial Information
for the sale of 50,4 % of the Hanna 95 shares at a price
of [DEM ... million — a sum corresponding to the credit
line referred to in recital 45]*.

(35) Under

the

terms of

consortium agreement,
the
Hanna 95’s management was to be expanded. The trans-
o-flex management board was to be reshuffled by
agreement between the parties. The [A.]* group was to
be entitled to designate at least one of the four board
members, as long as the size of the board was not
reduced.

(36) Under the provisions of the Co-determination Act, the
trans-o-flex supervisory board must consist of at least
12 members, but membership was now to be expanded
to 16 (6), with the [A.]* group and Deutsche Post
entitled to designate two members each and Industrial
Information entitled to designate four.

(31)

[Mr H.]*, Deutsche Post’s lawyer, represented Industrial
Information. The Commission has sought and obtained
a copy of an entry in the Zurich companies register from
which it appears that Industrial Information was a Swiss
limited company which was controlled at the time by
[Mr H.]*, who held a two-thirds stake. [Mr G.]*, who was
Industrial Information’s manager and sole authorised
signatory, held the other third of the shares.

(4) For details see the following section.
(5) See the consortium agreement.
(6) The trans-o-flex AG articles of association, which were sent to the
Commission on 6 April 1998, provide for six members. The lists
of members the Commission has received for the period 1995 to
1997 show numbers fluctuating between 14 and 20 members.

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(37) The rules governing the capitalisation of trans-o-flex AG
which are also contained in the agreement require an
equity capital ratio of [...]* %. Capital increases must be
approved by 80 % of the shareholders. But the opening-
up, acquisition or relinquishing of activities, apart from
acquiring activities which do not cover their costs,
requires only a 75 % majority approval.

ing the agreed purchase price by [DEM ... million — a
sum corresponding to the increase in capital referred to
in recital 82]*, the additional amount to be used by
Industrial Information to increase trans-o-flex’s capital
reserves on 30 December 1998 (7).

(38) The Hanna 95 articles of association of 22 December
1995 and 28 February 1996, which according to the
consortium agreement continue to apply, have not been
supplied to the Commission.

(d) The option agreement

(39) On 10 July 1997 Deutsche Post and Industrial Infor-
mation concluded a contract called an ‘option agree-
ment’, a copy of which the Commission received from
Deutsche Post on 1 March 1999 in response to a request
for information. Under the terms of this agreement,
Deutsche Post undertook to acquire Industrial Infor-
mation’s shares in trans-o-flex if Industrial Information
so requested on 31 July 1998. The purchase price was
to be calculated on the basis of the price paid by
Industrial Information for the trans-o-flex shares plus
any expenditure incurred by Industrial Information less
Information. This
any profits accrued to Industrial
agreement applied irrespective of the share value.

(40)

If Industrial Information wished to sell the shares to a
third party, Deutsche Post enjoyed a right of first refusal,
entitling it to purchase the shares at the price agreed in
the event that Industrial Information were to exercise its
option.

(41) Under the terms of the contract, Industrial Information
was also released from any responsibility or liability for
the management of Hanna 95.

(44) According to Deutsche Post’s notification (Annex 6a),
the put-option was agreed in [Mr R.’s]* interests, in order
to enable him to sell his shares to Deutsche Post at a
reasonable profit at any time (8). In Deutsche Post’s letter
of 1 March 1999, however, and in its reply to the
statement of objections,
it is stated that the option
agreement served as security for the bank which was
financing the acquisition of the holding in Hanna 95.
This latter view is confirmed by an analysis of all the
relevant agreements (9).

(e)

Financing Industrial Information’s acquisition of the
shares

(45) On 10 July 1997, Bank Julius Bär & Co. AG, of
Switzerland (Julius Bär Bank), allowed Industrial Infor-
mation a credit line of [DEM ... million — a sum
corresponding to the purchase price referred to in recital
30]* to finance the purchase of 50,4 % of Hanna 95’s
shares. On 22 April 1999, in response to a request for
information, the Commission received from Industrial
Information Julius Bär Bank’s written confirmation of
this agreement.

(46) As security, Julius Bär Bank concluded a contract with
Industrial Information on 15 July 1997 giving it a lien
on Industrial Information’s shares in Hanna 95; Deutsche
Post supplied the contract
to the Commission on
1 March 1999, in response to a request for information.
The contract, which was authenticated by notary, was

(42) On 10 July 1998 Deutsche Post and Industrial Infor-
mation concluded a new option agreement. The differ-
ence between the two was that the second agreement
extended the period during which the option could be
exercised until 30 June 1999.

(43) On 23 December 1998 Deutsche Post and Industrial
Information concluded an additional agreement increas-

(7) This is clearly connected to the increase in trans-o-flex’s capital

agreed on the same day. For details see below.

(8) ‘Because it was clear from the beginning that Industrial Infor-
mation would hold the shares in trans-o-flex only for a limited
period of time and that [Mr R.]* would try to sell these shares
expecting a reasonable profit, it had been agreed between Deutsche
Post and Industrial Information that Industrial Information has
put-option obliging Deutsche Post to honour in case Industrial
Information wanted to sell its interests in trans-o-flex.’

(9) For details see the following section.

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signed by [Mr H.]* in his capacity as representative of
Industrial Information, and as representative without
power of attorney for Julius Bär Bank. In a declaration
of assignment of 10 July 1997, which was supplied to
the Commission by Deutsche Post on 1 March 1999,
Industrial Information also assigned its rights under the
option agreement to Julius Bär Bank. Contrary to the
indications given by Deutsche Post in its reply to the
statement of objections, there was no agreement to
release Industrial Information from its obligations to
Deutsche Post. Industrial Information further undertook
to increase the capital of the company by at least [CHF
... million — a figure in line with those referred to in
recitals 43 and 82]*.

figure corresponding to the payment guarantee referred
to in recital 47 and to the amount to be used to pay the
purchase price as described in recital 50]*, which was
supposed to be settled by 31 December 2007. On
10 July 1997, in view of Deutsche Post’s acquisition of
a minority holding in trans-o-flex, Haniel and Hanna 95
concluded a supplementary agreement to the purchase
and pledge contract of 21 November 1995 (10). Under
the terms of the new agreement, the purchase price was
to be paid by 30 September 1997 and the pledged
trans-o-flex shares released. Deutsche Post’s payment
guarantee served as security for the payment of the
purchase price. The circumstances surrounding Deut-
sche Post’s supplying the supplementary agreement to
the Commission are the same as those concerning the
payment guarantee described in the preceding recitals.

(f)

Payment guarantee

(g) The loan to meet the commitments to Haniel

(47) Likewise on 10 July 1997, Deutsche Post underwrote a
payment guarantee for [DEM ... million — a figure
corresponding to the purchase price owed by Hanna 95
to Haniel as described in recitals 49 and 50]* in
favour of Hanna 95. The document in question, though
unsigned, was sent to the Commission by Deutsche Post
on 1 March 1999,
for
information dated 23 February 1999, as part of the
contract for Deutsche Post’s acquisition of a minority
holding in Hanna 95. Deutsche Post’s covering note of
1 March 1999 makes no references to the payment
guarantee. In answer to questions in the request for
information, the covering note denies that Deutsche
Post has assisted trans-o-flex, Industrial Information or
any of their shareholders, for example by waiving claims
or taking over commitments.

in response to the request

(50) Deutsche Post made Hanna 95 a loan of [DEM ... million
— a sum identical to the sum intended to meet Hanna
95’s commitments to Haniel which is referred to in
recitals 86, 164 and 167]* (in two part-payments of
[DEM ... million — a sum corresponding to the purchase
price referred to in recitals 49 and 50 and the payment
guarantee referred to in recital 47]* and [DEM ... million
— a sum corresponding to 17 % of the amount just
referred to]*), at [less than 5 %]*, with effect from
30 September 1997. It was agreed that [DEM ... million
— a sum corresponding to the purchase price referred
to in recital 49 and the payment guarantee referred to in
recital 47]* should be used to pay the share purchase
price, which Hanna 95 owed Haniel, while the remaining
[17 % of the sum just referred to]* was to repay the
shareholders’ loan to Hanna 95.

(48) The reasons behind the payment guarantee have been
confirmed by trans-o-flex in a statement of 26 April
1999, and are as follows. Deutsche Post gave a similar,
if less detailed account on 27 April 1999, in response to
a letter sent by the Commission on 22 April 1999 in
which it drew attention to its request for information of
26 March 1999. There, and in its reply to the statement
of objections, Deutsche Post referred to the contract for
the purchase of a 24,8 % holding in Hanna 95, which it
had supplied on 1 March 1999. No mention is made in
the contract, however, of the circumstances described
below.

(51) On 27 April 1999, in response to the reminder drawing
attention to the request for information of 26 March
1999, Deutsche Post sent the Commission a letter to
Hanna 95, dated 13 October 1997, in which it con-
firmed the loan agreement.
In its earlier reply of
30 March 1999 Deutsche Post simply referred to an
otherwise unspecified loan of [DEM ... million — a sum
equal to the loan referred to in recital 50 plus the
amount by which the credit line referred to in recital 83
had been taken up]* which it had made to trans-o-flex
at a rate below the market rate so that the company

(49)

In 1995 Hanna 95 gave Haniel a lien on all the ordinary
trans-o-flex shares. Haniel had sold the trans-o-flex
shares to Hanna 95, and the lien was its security for
payment of the purchase price of [DEM ... million — a

(10) The supplementary agreement referred to a transfer of losses and

a loan.

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could settle existing liabilities. Deutsche Post’s letter of
30 March 1999 also replied to a reminder from the
Commission asking for further details regarding its
request of 23 February 1999 for information concerning
possible assistance from Deutsche Post (see B.II.2(f)). In
its letter of 1 March 1999 Deutsche Post denied any
such action, but offered no further explanation (see
B.II.2(f)).

(58)

[Mr H.]* and [Mr T.]* joined [Mr G.]* as managers of
Industrial Information, any two being authorised to bind
the company.

(59) The Commission received the papers documenting these
operations from [Mr H.]* on 6 April 1999, in response
to its request for information dated 26 March 1999.

3. Changes in Industrial Information

(a) Granting general power of attorney to [Mr H.]*

(52) On 11 July 1997 Industrial Information granted Deut-
sche Post’s lawyer, [Mr H.]*, who at that time had a
controlling interest in Industrial Information (11), unlim-
ited power of attorney to represent it in all its trans-
actions. This power of attorney was signed by [Mr G.]*,
in his capacity as manager of Industrial Information.

(53) The Commission learned of this power of attorney on
7 May 1999. Deutsche Post did not supply the document
until it supplied the contracts cancelling the notified
transaction.
it with the original
notification.

It did not submit

(b) The increase in the share capital and amendment of the

articles of association

(54) On 14 July 1997, following the acquisition by Industrial
Information of a majority holding in trans-o-flex,
[Mr G.]* transferred his shares in Industrial Information
to [Mr H.]*. He remained the manager and sole author-
ised signatory.

(55) Then, on the same day, 14 July 1997,

Industrial
Information increased its share capital and amended its
articles of association.

(60)

[Mr T.]* explained in his letter of 6 April 1999 that he
joined Industrial Information at the request of [Mr R.]*.
[Mr R.]* held no shares in the company at the time.

(c)

[Mr R.’s]* entry into Industrial Information

(61)

In [Mr R.]* [Mr H.]* had found an investor who was
prepared to acquire 50,4 % of the shares in Hanna 95.
According to Deutsche Post’s notification, [Mr R.]*
purchased the majority holding with a view to making a
reasonable profit by selling it at a later date. According
to Deutsche Post, [Mr R.]* was an investor with a
turnover of under DEM 2 billion, including his trans-o-
flex holding. Had this turnover limit been exceeded, the
transaction would have had to be notified to the Federal
Cartels Office under German competition law.

(62) Eleven days after Industrial Information acquired the
majority holding in Hanna 95, [Mr R.]* joined Industrial
the agreement of
Information. Under the terms of
21 July 1999 he took over [Mr H.’s]* contribution of
CHF 1 999 000. [Mr H.]* supplied the relevant contract
in response to the Commission’s request for information
of 26 March 1999.

(56) Until then, Industrial Information’s share capital had
been CHF 21 000, CHF 14 000 of which was held by
[Mr H.]* and CHF 7 000 by [Mr G.]*. [Mr G.]* was also
sole manager and authorised signatory.

(63) The entry in the Zurich companies register shows that
[Mr H.]* gave up not only his stake in Industrial
Information but also his position as manager. However,
[Mr R.]* became neither a manager nor an authorised
signatory.

(57) On 14 July 1999, an extraordinary meeting of Industrial
Information’s shareholders chaired by [Mr H.]* decided
to increase the share capital
from CHF 21 000 to
CHF 2 000 000. This was achieved by an increase in
[Mr H.’s]* contribution from CHF 21 000 to CHF
1 999 000 and the entry into the company of [Mr T.]*,
who made a contribution of CHF 1 000. [Mr H.]* and
[Mr T.]* each undertook to pay their contribution.

(11) For details see B.II.3(b).

(64) The purchase price of the contribution to capital was
[CHF ... — a sum corresponding to [Mr H’s]* increased
capital contribution, referred to in recital 57, or about
4 % of the sum paid by Deutsche Post for its 24,8 %
holding in Hanna 95, referred to in recital 26]*. [Mr H.]*
informed the Commission in his letter of 6 April 1999
that [Mr R.]* received a loan to cover the purchase price
from West-Treuhand GmbH, whose sole shareholder is
[Mrs H.]*, [Mr H.’s]* wife. The Commission was sent no
supporting evidence to confirm this.

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4. Trans-o-flex after the entry of Deutsche Post

and Industrial Information

(a) Merger agreement

(65) At the Commission’s request, the Mannheim local court
(Amtsgericht) sent the Commission a copy of a full
merger agreement which had been concluded between
Hanna 95 Beteiligungs-Verwaltungs GmbH and trans-o-
flex Schnell-Lieferdienst AG on 27 August 1998. The
merger was recorded in the companies register. Under
the terms of the agreement, trans-o-flex AG was wound
up. The companies register shows that Hanna 95
changed its name to trans-o-flex Schnell-Lieferdienst
GmbH.

(66) The companies register also shows that [Mr A.]* and
[Mr B.]* were registered as managers of Hanna 95 on
3 July 1997 and that they retained their positions until
the merger. [Mr B.]* is a Deutsche Post employee. He
represented the company and its subsidiary Deutsche
Post Express und Transport GmbH during the acqui-
sition of the minority holding in Hanna 95, and replied
on Deutsche Post’s behalf to the Commission’s requests
for information of 22 April and 26 April 1999. After
the merger [Mr P.]*, [Mr L.]* and [Mr Br.]*joined the
management.

(67)

(68)

In the notification, however, it was stated that trans-o-
flex AG was merged into Hanna 95 on 26 September
1997, that is to say, a year before the actual merger. A
contract authenticated by notary and dated 25 Septem-
ber 1997 was supplied as a supporting document. This
document in fact provided for the merger of Hanna 95
into trans-o-flex AG.

the Commission was informed that

It was only in the letter from trans-o-flex dated 26 April
the
1999 that
merger agreement between Hanna 95 and trans-o-flex
AG had been concluded a year later, on 25 September
1998. Prior to this, trans-o-flex had written to the
Commission on 29 March 1999 attaching the minutes
of trans-o-flex’s management board and shareholders’
meetings. Examination of these documents revealed that
Hanna 95 had indeed concluded a merger agreement
with trans-o-flex AG in the autumn of 1997, under
which Hanna 95 was to be merged into trans-o-flex AG.
The minutes of the trans-o-flex extraordinary general
meeting on 13 May 1998 show that the agreement

was approved by the trans-o-flex general meeting on
25 September 1997. But the extaordinary general meet-
ing on 13 May 1998 reversed that decision, and instead
approved the merger agreement that merged trans-o-
flex into Hanna 95.

(69) Deutsche Post made no reference to these changes in the
facts in any of its letters. It mentioned them for the first
time in its reply to the statement of objections, when it
confirmed the facts established in the Commission’s
investigations.

(b) Changes in management

(70) When the new shareholders joined trans-o-flex AG,
changes were made in the management structure. On
11 July 1997, the day after Industrial Information and
Deutsche Post acquired their shares in trans-o-flex, trans-
o-flex AG’s management board spokesman, [Mr E.]*,
resigned. This is confirmed by the documentation sent
in response to the reminder of
by Deutsche Post
26 March 1999.

(71) There are inconsistencies regarding the background to
[Mr E.’s]* resignation. In its letter of 1 March 1999, and
in its reply to the statement of objections, Deutsche Post
cites disagreements with the supervisory board as the
reason. According to the minutes of the supervisory
board meeting of 11 July 1997, however, Deutsche Post
had been allowed to designate a person to sit on the
management board. [Mr E.]* was to give up his position.
[Mr P.]* was proposed as the new member of the
management board and spokesman. He was appointed
to these positions at the trans-o-flex supervisory board
meeting of 28 July 1997.

(72) The documentation sent by Deutsche Post on 30 March
1999 states that [Mr P.]* joined the trans-o-flex manage-
ment board on 28 July 1997. He was appointed
spokesman for the management board of trans-o-flex
AG by virtue of a contract of employment dated
3 March 1998 with retroactive effect from 28 July 1997.
Following the merging of trans-o-flex AG into Hanna
95 [Mr P.]* has continued to manage the affairs of trans-
o-flex GmbH. He is one of the managers of trans-o-flex
GmbH and, according to the notification of 4 February
1999, spokesman for the management. [Mr Br.]* and
[Mr L.]*, two former trans-o-flex AG management board
members, are also managers of trans-o-flex GmbH,
alongside [Mr P.]*, according to the documents supplied
by Deutsche Post on 30 March 1999.

(73) Even before his appointment [Mr P.]* had had close
contact with Deutsche Post. According to his letter of
6 April 1999, he was contacted about the position by
[Mr B.]*, who was himself to become a member of the

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trans-o-flex supervisory board on 15 September 1997.
[Mr P.]* and [Mr Bl.]* are shareholders in LBMG (Logistik
in which Deutsche
Management-Beteiligungs GmbH),
Post also has a 24,8 % holding. Prior to working for
trans-o-flex, [Mr P.]* worked for TNT Netlog, a company
he had set up himself, whose only customer at the time
was Deutsche Post.

(c) Membership of the supervisory board

were designated has not been made available to the
Commission. In response to questions on the matter,
Deutsche Post sent the list referred to in recital 76,
covering the period from 1 January 1985 until [Mr Bo.]*
joined on 27 August 1998, which was before the merger
agreement. Consequently, it can refer only to the now
defunct trans-o-flex AG. (It should be noted that the list
contains only 12 members, whereas the consortium
agreement provided for membership to be increased to
16).

(74) According to the consortium agreement of 10 July 1997
described in B.II.2(c), Industrial Information is allowed
the trans-o-flex AG
to designate four members of
supervisory board, while Deutsche Post and the
[Sch./A.]* group are entitled to appoint two each. It may
be assumed that
the
supervisory board referred to in the consortium agree-
ment are employees’ representatives. This has not been
confirmed by the parties. In its notification Deutsche
Post simply states that the trans-o-flex supervisory board
consists of equal numbers of representatives.

the other eight members of

(78) Deutsche Post has not clarified to what extent the
membership of the trans-o-flex AG board corresponds
to the membership of the trans-o-flex GmbH board. In
its letters of 6 April and 27 April 1999 it merely stated
that the current membership of the supervisory board
had been decided by verbal agreement between Industrial
Information and the minority shareholders. Only in its
reply to the statement of objections did Deutsche Post
inform the Commission that there had been no change
in the membership of the supervisory board since the
last date indicated on the list it had supplied, namely
27 August 1998.

the minutes of

(75) On 15 September 1997 [Mr Bl.]* and [Mr D.]* were sent
to represent Deutsche Post on the trans-o-flex AG
supervisory board. Industrial Information did not exer-
cise its right to designate board representatives until
27 August 1998. It designated only [Mr Bo.]*, although
it was entitled to designate four members. This is made
clear in [Mr A.’s]* letter of 3 March 1999. It is confirmed
by item 3 of
the trans-o-flex AG
supervisory board meeting of 11 July 1997, which were
together with the minutes
sent by Deutsche Post,
of other trans-o-flex supervisory board meetings,
in
response to the request for information of 1 March
1999. The minutes state that Deutsche Post has been
allowed to designate two board members, and that two
of the shareholders’ board members have therefore had
to leave the board. There was no discussion concerning
the four members to be designated by Industrial Infor-
mation on the basis of the consortium agreement.

(76) As regards details of the persons appointed to the
supervisory board, Deutsche Post merely provided, on
30 March 1999, a list of the trans-o-flex AG supervisory
board members and dates when they took up their
positions and when they left. In the light of the statement
made by [Mr R.]* in his letter of 6 April 1999, where he
identifies [Mr Bo.]* as the supervisory board member
sent by Industrial Information, it is only indirectly that
it can be concluded from this list that the two members
appointed on 15 September 1997,
[Mr Bl.]* and
[Mr D.]*, must have been proposed by Deutsche Post.

(d) Voting at the shareholders’ meeting

(79) Deutsche Post’s notification of 4 February 1999 and
the annexed articles of association, together with the
managers’ rules of procedure supplied by trans-o-flex on
31 March 1999, show that the shareholders’ meeting is
trans-o-flex GmbH’s controlling body. Shareholders’
decisions are as a general rule taken by simple majority
vote. [Mr R.’s]* and [Mr T.’s]* letters of 6 April 1999, as
well as [Mr G.’s]* letter of 26 April 1999, all state that
[Mr H.]* represented the majority shareholder. This is
confirmed by Deutsche Post in its reply to the statement
of objections.
In response to a reminder from the
Commission, [Mr G.]* also explained in his letter of
26 April 1999 that [Mr H.]* had been instructed to
represent Industrial Information by [Mr R.]*. However,
[Mr H.]* already had the general power of attorney
before [Mr R.]* joined Industrial Information (12).

(80) At this point it should be pointed out that the statements
made by Deutsche Post and the other parties questioned
concern the exercise of controlling rights in trans-o-flex.
Only at the end of the Commission’s enquiries did trans-
o-flex GmbH inform the Commission that trans-o-flex
AG had been merged into Hanna 95 a year after the date

(77) A comprehensive list of current trans-o-flex GmbH
supervisory board members showing by whom they

(12) For details see B.II.3(a).

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the documents

given in the notification. However, contrary to the
view put forward by Deutsche Post in its reply to the
statement of objections, for the period prior to that
merger the decisive question is the control of Hanna
95, and not of trans-o-flex AG. Deutsche Post supplied
no information regarding the control of Hanna 95.
No investigation was carried out into this matter, since
it
on the information supplied by Deutsche Post
appeared to be of no importance: according to the
notification, the merger took place on 26 September
1997, closely following the transactions carried out on
10 July 1997. Hanna 95 and trans-o-flex GmbH are
identical. But
referred to in the
preceding recital concerning trans-o-flex GmbH reveal
nothing about Hanna 95, as they are dated only from
27 August 1998 onwards. Only in its reply to the
statement of objections did Deutsche Post inform the
Commission, though without supplying the relevant
documents,
there had been no change in the
control structure between the old Hanna 95 and the
new trans-o-flex GmbH. In the Deutsche Post letter of
31 March 1999, which included the documentation
concerning the powers of
the governing bodies of
trans-o-flex AG, there are no details about the control
structure of Hanna 95, the sole owner of trans-o-flex
AG. Moreover, these documents are dated March and
April 1998, and therefore have no bearing on the
time when the minority holding was acquired.

that

(e) Capital increase

(81) According to Deutsche Post’s letter of 27 April 1999,
the shareholders decided at a meeting on 23 December
1998 to increase trans-o-flex GmbH’s capital. Deutsche
Post refers the Commission to an annexed shareholder
resolution for further details. The resolution is signed
only by the shareholders [A.]* and [Sch.]*, not by
Industrial Information or Deutsche Post.

(82) According to this shareholder resolution Industrial Infor-
mation is to make a cash investment of [DEM ... million
— a sum equal to the sum named in the agreement
additional
to the option agreement referred to in
recital 43]*. This is the same amount as that by which
the purchase price in the option agreement between
Industrial Information and Deutsche Post was increased
in an additional agreement on the same day (see

B.II.2(d)). Only in its reply to the statement of objections
did Deutsche Post inform the Commission that that
increase in capital had been financed by Julius Bär Bank,
and that this had necessitated a corresponding increase
in the security provided by Deutsche Post.

(f)

Loan to trans-o-flex

(83)

In its letter of 27 April 1999,
in response to the
Commission’s reminder of 22 April 1999, Deutsche
Post explained that it had allowed trans-o-flex a credit
line of [DEM ... million — a sum twice as large as the
take-up referred to in the next sentence]*. Of this total,
trans-o-flex had taken up [DEM ... million — a sum
equal to half the credit line granted, see also recital 51]*.
Deutsche Post also referred to the relevant loan contract,
which trans-o-flex had annexed to its letter of 29 March
1999.

(84) Under the terms of the contract, dated 7 January 1998,
trans-o-flex was granted a credit line of [DEM ... million
— a sum identical to the first figure mentioned in
recital 83]* by Deutsche Post with retroactive effect
from 1 September 1997. The credit line was to be open
for a year and the period would be automatically
extended unless it was cancelled. Interest was calculated
on the basis of the Frankfurt interbank offer rate plus [a
figure of less than 1 %]* and was to finance the day-to-
day running of the company, as can be seen from trans-
o-flex’s letter of 26 April 1999.

(85) The contract was forwarded to the Commission by
trans-o-flex on 29 March 1999,
in response to a
Commission reminder. The accompanying letter states
that this is the contract by which Deutsche Post extended
a loan of [DEM ... million — a sum identical to the figure
referred to in recital 51 made up of the loan referred to
in recital 50 and the take-up of the credit line referred to
in recital 83]* to trans-o-flex. The loan had been
agreed because Deutsche Post’s conditions were far more
favourable than those previously offered to trans-o-flex
by the banks. This explanation matches that given by
Deutsche Post in its letter of 30 March 1999, in response
to a reminder.

(86) As the amounts mentioned in the Deutsche Post and
trans-o-flex letters differed from the amount in the
contract supplied, the Commission sent reminders to
Deutsche Post and trans-o-flex on 22 April 1999

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requesting answers to the requests for information
previously despatched. Only in its response of 27 April
1999 to the reminder did Deutsche Post explain the
details of its loan to trans-o-flex. It consisted in the first
place of a loan of [DEM ... million — a sum identical to
the loan referred to in recital 50 and to Hanna 95’s debt
to Haniel referred to in recitals 164 and 167]* to
meet Hanna 95’s commitments, especially to Haniel, as
explained at B.II.2(g). The remaining [DEM ... million —
a sum corresponding to the take-up of the credit line to
finance day-to-day running as explained in recitals 83,
142 and 167]* had been taken up out of the credit line
of [DEM ... million — a sum corresponding to the credit
line granted to cover day-to-day running referred to in
recitals 83, 84, 86 and 142]*.

5. The sale of the Industrial Information shares to

Deutsche Post

(87) On 12 February 1999 a contract for the sale of the
majority holding in trans-o-flex was concluded between
Industrial Information and Deutsche Post Express und
Transport GmbH. The purchase price was [DEM ...
million — a sum equal to the purchase price paid by
Industrial Information and referred to in recital 30, plus
the capital increase or the equivalent figure named in the
agreement additional to the option agreement referred to
in recital 43, plus 5 % of the total purchase price]*. The
contract was supplied to the Commission on Deutsche
Post’s behalf by letter from [Mr H.]* on 16 February
1999.

(88) According to [Mr R.]* and [Mr T.]* in their letters of
6 April 1999, the sale took place following an informal
discussion, and the put-option was not used. It was not
necessary to make use of the option, according to [Mr
R.]*, as [Mr H.]* had told him of Deutsche Post’s interest
and [Mr R.]* had said he was prepared to sell to Deutsche
Post.

C. LEGAL ASSESSMENT

(90) The Commission’s investigations have shown that in its
notification and in its reply to the Commission’s requests
for information Deutsche Post failed to meet the infor-
mation requirements laid down in the Merger Regu-
lation. A number of key facts that were of major
importance in assessing the question of Deutsche Post’s
acquisition of control of trans-o-flex as a result of the
transaction notified in 1999 were clarified only as a
result of the investigations themselves. Those facts were
presented incorrectly or in a misleading way in the
notification. Deutsche Post’s answers to the requests for
information also contain incorrect information.

(91) The Commission was thus prevented from forming a
complete picture of Deutsche Post’s acquisition of
control of trans-o-flex through the transaction notified
in 1999. Contrary to what Deutsche Post asserts in its
reply to the statement of objections, the Commission’s
objection is not that Deutsche Post took an erroneous
view of the change in control. The objection made
against Deutsche Post is that it did not present all the
information that would allow the Commission to judge
this matter itself.

I.

INFORMATION REQUIREMENTS UNDER

THE MERGER REGULATION AND THEIR INFRINGEMENT
BY DEUTSCHE POST

(92) Deutsche Post was obliged to present such information
in the notification in accordance with form CO. Contrary
to what Deutsche Post assumes in its reply to the
statement of objections, this requirement to provide
information is not confined to the circumstances directly
associated with the notified transaction in 1999, but
applies to all the circumstances relevant to a determi-
nation of the question whether there is a concentration
within the meaning of Article 3 of the Merger Regu-
lation. This includes, in this instance, the circumstances
of the 1997 transaction. Only if those circumstances
show that Deutsche Post did not acquire sole control of
trans-o-flex through that transaction can it be assumed
that there is acquisition of control and hence a concen-
tration in 1999.

(89) On 7 May 1999 the sales contract was annulled by a
contract authenticated by notary which was concluded
between Industrial Information, represented by [Mr H.]*
on the basis of his general power of attorney of 11 July
1997, and Deutsche Post Express und Transport GmbH,
represented by its managers.

(93) The purpose of the information requirements is to
ensure that the Commission has all the information it
needs in order to take a decision on the notified merger
within the time limits set by the Merger Regulation. It
must be able to assess the notified transaction under
competition law, but it must also be able to determine
whether it has jurisdiction. The time limits are set in

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such a way as to ensure that the economic process is
impeded as little as possible. Given these deadline
constraints, it is of particular importance that the parties
ensure complete, correct and careful notification of the
information to be provided under the Merger Regulation.
The liability to pay a fine in the event of infringement of
the information requirements thus serves to enforce
the principle, which is essential to the Commission’s
monitoring activity, that the parties notifying a proposed
merger must provide correct and complete information.
The liability to pay a fine applies regardless of whether
the infringement of the information requirements is
such as to cause the Commission to make an incorrect
assessment.

(94)

In the notification, Deutsche Post described the 1997
transaction. However,
it provided only information
which supported its view that Deutsche Post would
trans-o-flex through the notified
acquire control of
information and facts that militated
transaction. All
against this view were omitted. This presentation was
underpinned by a number of incorrect items of infor-
mation.

(95) A similar picture emerges from analysis of the answers
given by Deutsche Post to the requests for information
on questions relating to the acquisition of control. Those
answers also contain incorrect information in support
of Deutsche Post’s view on the acquisition of control.
This is true of the answers to questions on the compo-
sition of the management and supervisory bodies of
trans-o-flex and on Deutsche Post’s financial contri-
butions to Hanna 95/trans-o-flex.
It was only after
repeated reminders had been sent by the Commission
and through study of
the internal
documents which the Commission had requested that a
number of these incorrect items of information were
rectified.

the content of

II. DEUTSCHE POST’S REPLY
OF 13 SEPTEMBER 1999

(96) Deutsche Post was sent a statement of objections, giving
it the opportunity to state its views on the issues raised
by the Commission.

(97)

In its reply of 13 September 1999, Deutsche Post did
not dispute the facts established by the Commission’s
investigations.
it conceded that all the facts
established by the Commission were correct.

Indeed,

(98) However, Deutsche Post took the view that,

in the
notification, it had presented the facts as applicable at
the beginning of 1999 in a true and complete manner.
It argued that form CO did not require it to present the

the 1997 transaction. The Com-
circumstances of
mission,
it claimed, had also taken this view. If the
Commission did believe that such information was
required, Deutsche Post did not agree with it. However,
it argued, this could not be interpreted as an incorrect
or misleading presentation of the facts.

(99) The question of possible acquisition of control

in
1997 is of crucial importance to an assessment of the
transaction notified in 1999. The relevant circumstances
should therefore have been included in the notification.
Deutsche Post was aware of this, since it did present
these circumstances in the notification, albeit in an
incorrect and misleading manner.

(100) The obligation to include such circumstances applies
regardless of whether the Commission pointed this out
to the notifying parties. In the case in point, however,
the evidence suggesting a possible acquisition of control
in 1997 was so clear that — contrary to Deutsche Post’s
assertion in its reply — the Commission had already
pointed out to Deutsche Post in January 1999, prior to
the notification, that the notification should include a
comprehensive description of those details. This was
done in particular at a preliminary discussion on the
notification of Deutsche Post’s intended acquisition of a
majority holding in trans-o-flex which took place on
2 February 1999.

(101) Deutsche Post’s obligation to present these facts applies
regardless of the conclusions that may be drawn from
them as to whether Deutsche Post had in fact acquired
control of trans-o-flex in 1997. Consequently, Deutsche
Post’s assertion that
the notification was complete
because it only had to notify the details of the 1999
transaction is incorrect.

(102) Nor can the finable infringement of the obligation to
provide information be nullified ex post through a change
in circumstances. Deutsche Post argued at the hearing
that there was no legal basis for the current proceedings,
because the Commission could not have taken a decision
on the basis of the information which Deutsche Post
had provided. This in turn meant that there was no
basis for the application of Article 14 of the Merger
Regulation. Deutsche Post made reference here, on the
one hand, to the cancellation of the notified transaction,
which terminated the notification procedure. On the
other, it argued that the Commission had no competence
as regards an acquisition of control in 1997.

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(103) Deutsche Post notified its acquisition of the trans-o-flex
majority holding to the Commission under the Merger
Regulation. The information contained in the notifi-
cation was transmitted to the Commission for the
purpose of preparing the ground for a decision under
the Regulation. In so far as incorrect and misleading
information is contained in that notification, this in
itself constitutes an infringement of the information
requirement laid down in the Merger Regulation. Any
such infringement cannot be reversed simply because a
decision is not taken in the particular case. Once it is
established that the information requirements have been
infringed, proceedings can be initiated for the imposition
of a fine. It does not matter whether a notification is still
pending and may lead to a decision.

(104) Deutsche Post’s argument that the Commission did not
have competence as regards the 1997 transaction is
answered by the comments above explaining that the
circumstances of the 1997 transaction are important in
assessing the control structure in connection with the
transaction notified in 1999.

(105) In its comments in its reply, Deutsche Post relies on a
number of other arguments, which do not, however,
stand up.

it does not affect

forward that view, but

(106) In response to the charge that it infringed the infor-
mation requirements, Deutsche Post advances its own
assessment of the facts, which it bases on its own view
of the acquisition of control. Deutsche Post is entitled to
put
the
information requirements laid down in the Merger
Regulation. Those requirements apply objectively, irres-
pective of any conclusions that might be drawn from
the facts that have to be provided. There is a duty to
supply all the factual
information called for by the
Merger Regulation. It is not permissible for the notifying
parties to select the facts to be provided on the basis of
their own subjective interpretation of those facts, and
any such selection constitutes an infringement of the
information requirements.

(107) As regards the answers to the requests for information,
Deutsche Post also takes the view in its reply that it
answered correctly and completely all the questions
which the Commission put to it. In this context too,
Deutsche Post confirms that the facts established in the
Commission’s investigations are correct.

(108) However, Deutsche Post complains that it did not have
sufficient time to answer the questions. It should be
noted on this point that Deutsche Post was granted the
usual amount of
time to answer the requests for
information. A shorter deadline was set only for parts of

the questions that had not been answered, or not
answered completely,
in previous requests for infor-
mation. Furthermore, Deutsche Post did not avail itself
of the possibility of asking the Commission for an
extension of the deadlines set.

(109) Deutsche Post also takes the view that some of the
Commission’s questions were unclear and that Deutsche
Post could not therefore be blamed if it answered the
questions in a different way than the Commission
intended. This interpretation by Deutsche Post of the
questions put by the Commission is justified neither by
their wording nor by the context in which they were
put, namely determination of the details of control. The
only explanation is rather that Deutsche Post sought to
withhold from the Commission any information that
might cast doubt on Deutsche Post’s view on the
control issue. Deutsche Post has put forward a specific
interpretation of its own of only one question, and that
interpretation is not tenable: the question regarding
agreements by the parties on the distribution of seats in
trans-o-flex’s governing bodies was confined, in Deut-
sche Post’s view, to the identity of the persons delegated
to them, and did not cover the shareholders’ rights to
delegate (see C.III.2(a)(1)).

(110) Deutsche Post bases its argument on a lack of a causal
link between the incorrect or misleading presentation of
the facts and the substance of a Commission decision.
The facts that were not presented to the Commission
would not have produced a different assessment,
it
argues.

link is not necessary for a finable
(111) Such a causal
infringement of
to be
the information requirement
committed. The information provided under the Merger
Regulation must not contain any incorrect and mislead-
ing particulars. The requirement that all the information
called for under the Merger Regulation be provided in a
correct and complete manner serves an objective pur-
pose. It is intended to enable the Commission to take a
decision on the basis of all the relevant information
within the time limits set. It is, however, not necessary
that the incorrect and misleading information should
result in an incorrect assessment.

(112) For this reason, Deutsche Post’s argument

that

the
presentation of the information in question was not
necessary because the Commission could not have
reached any other conclusion on the basis of such
information does not stand up. Deutsche Post takes its
own interpretation of the acquisition of control as the
basis for this assessment. In so doing, it fails to recognise
that, although it is entitled to make such assessments,

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the factual
information on the basis of which the
assessment was made must nevertheless be made avail-
able to the Commission in full so that it can form its
own view. Selecting information which supports the
notifying party’s own interpretation at the expense of
information that might call
interpretation into
question does not meet the information requirements
laid down in the Merger Regulation.

that

having provided incomplete or misleading information
are there any arguments that refute the objections which
are the subject of this Decision. The following detailed
analysis will, as far as necessary, look at the particulars
of relevance in this respect.

III.

INFRINGEMENT OF THE MERGER REGULATION

(113) Nor is the accusation that the information requirements
under the Merger Regulation have been infringed invali-
dated by the fact that in its reply to the statement
of objections Deutsche Post confirmed that the facts
ascertained were correct. The purpose of these infor-
mation requirements is precisely to ensure that the
information is made available to the Commission from
the outset and not after extensive and time-consuming
investigations have been carried out. The same applies
to the argument that Deutsche Post made no secret of the
facts that were subject to the information requirement. If
information is not presented in the notification, the
information requirement is infringed.

(114) Deutsche Post points out that the Commission was able
to obtain documents which were not submitted from
generally accessible sources such as the companies
register. Deutsche Post fails to recognise here that the
information requirements laid down in the Merger
Regulation are not confined to facts of which only the
notifying parties have knowledge, but extend to all
relevant information,
including information which is
generally accessible.

(115) Deutsche Post argues that a number of items of infor-
mation which the Commission says are missing could
be gathered from the annexes to the notification. As the
first paragraph of point B in form CO makes clear, the
information requirements regarding the notification
apply primarily to the notification form. All the infor-
mation required must be supplied in the form itself. The
notification form must be comprehensible in its own
right, and the annexes must be used only to illustrate or
confirm the information supplied in the form. Notifying
parties may not claim that they have fulfilled their
information requirement by pointing out
that facts
which have been wholly omitted from the form have
been included in the annexes. Furthermore,
in this
particular instance, the relevant information cannot be
deduced in full from the annexes.

(116) Nor in Deutsche Post’s specific comments on the
individual points regarding which it is charged with

1. Article 14(1)(b)

(a) The fact of the infringement

(117) The facts set out above show that, in its notification of
4 February 1999 concerning the acquisition of 50,4 %
of the shares in trans-o-flex GmbH from Industrial
Information, Deutsche Post supplied incorrect and mis-
leading information. This conduct
is contrary to
Article 14(1)(b) of the Merger Regulation.

(118) In its notification, Deutsche Post claimed that it would
obtain control of the company only when it had acquired
the majority holding in trans-o-flex as notified. It also
claimed that, when it purchased a minority holding in
trans-o-flex on 10 July 1997, it had not acquired a
controlling interest in the company.

(119) However, the evidence uncovered in the course of the
investigations, and the analysis of the results, which have
already been explained in detail, suggest that Deutsche
Post actually took over control of trans-o-flex AG on
10 July 1997.

(1)

Incorrect information

(120) Deutsche Post’s notification contained a series of in-
accurate statements which served to support its presen-
tation of the case.

(a) Merger

(121) Contrary to what was stated in the notification, the
merger of trans-o-flex AG and Hanna 95 GmbH took
place on 27 August 1998, a year later than the stated
date of 25 September 1997. It is not possible that the
discrepancy was due to a typing error in the notification,
as the notification contained in the annex a merger
agreement between the two companies, authenticated
by notary, which had indeed been concluded on 25 Sep-
tember 1997. Only in the course of the investigation did
it become clear that this agreement had been replaced
by the agreement concluded on 27 August 1998, which

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was then in fact implemented. Although, in its reply to
the statement of objections, Deutsche Post concedes that
the agreement submitted was not the final agreement
between the parties, it claims that this was due to an
oversight. But even if one accepts that there was such an
oversight, the notification remains incorrect as regards
the date of the merger, as Deutsche Post itself concedes
in its reply. It has been explained already (B.II.4(d)) that
the fact that the merger did not take place, in connection
with the 1997 transaction, as was stated in the notifi-
cation, but only one year later, is of major importance
in determining when control was acquired.

(b)

Profit motive

(122) According to the information given in the notification,
[Mr R.]*, acting through Industrial Information, acquired
a temporary majority holding in trans-o-flex with a view
to making a profit, as it appeared to be a promising
investment. The investigation revealed that this portrayal
of the facts was also incorrect. Contrary to Deutsche
Post’s statements, the relevant contracts do not give [Mr
R.]* any prospect of making a profit in line with the
fortunes of the company. It is evident from the purchase
price clause in the option agreement (B.II.2(d)) that, in
the event of a sale to Deutsche Post, no provision is
made for a profit margin for Industrial Information. Any
remuneration through the reimbursement of expendi-
ture incurred cannot be termed ‘profit’, but might at
most be regarded as remuneration for a service provided.
It follows from Deutsche Post’s right of first refusal
in conjunction with the purchase price arrangement
(B.II.2(d)) that Industrial Information cannot expect to
achieve a profit even in the event of a sale to third
parties.

with third parties and at the shareholders’ meeting.
Deutsche Post asserts in its reply to the statement
of objections that there was an active exchange of
information between [Mr R.]* and [Mr H.]* on the
matter, and that instructions were issued. However,
Deutsche Post has not substantiated these assertions in
its submissions or provided documentary evidence for
them.

(125) The assertion that [Mr R.]* exercised his rights as a
shareholder is in any event incorrect, if only because
there are other shareholders’ rights which were not
exercised. This is not disputed by Deutsche Post. The
right to designate four members of the supervisory
board was exercised only in part, since only one of four
possible members was designated. Similarly, although it
is the majority shareholder in Hanna 95 GmbH, trans-
o-flex AG and trans-o-flex GmbH, Industrial Information
is not represented in the managements of any of them.

(d) Right to exercise the put-option

(126) It is claimed in the notification that it was to be a matter
entirely for Industrial Information to decide when the
majority holding in trans-o-flex would be sold, and
that this was why Deutsche Post granted Industrial
Information a put-option. In fact, as Deutsche Post
expressly confirms in its reply to the statement of
objections, the put-option served as security for the
lending bank, to which the put-option rights were
transferred. Industrial Information thus waived the put-
option right which entitled it alone to determine the
timing of the sale of its trans-o-flex shares to Deutsche
Post. The assertion made in the notification in this
respect is therefore incorrect.

(123) On the basis of the arrangements contained in the
option agreement,
there is no economic
therefore,
interest on the part of Industrial Information and [Mr
R.]*. Any economic interest as regards the participation
of Industrial Information lies solely with Deutsche Post.

(2) Misleading information

(c)

Exercise of shareholder rights

(124) The notification also states that [Mr R.]* always exercised
his rights as a shareholder. However, the investigation
revealed that [Mr R.]* appeared only in order to purchase
the shares in Industrial
Information from [Mr H.]*,
11 days after the conclusion of the contracts concerning
the acquisition of the majority holding. At that stage,
[Mr H.]* already had a general power of attorney from
Industrial Information, which he used to exercise its
rights as a shareholder and to represent it in dealings

(127) In addition to the abovementioned incorrect

infor-
mation, in its notification Deutsche Post also supplied a
large amount of misleading information to substantiate
its claim that Industrial Information, and not Deutsche
Post, took control of trans-o-flex in 1997. Deutsche Post
misled the Commission by failing to mention a number
facts that allow an appraisal to be made as to
of
whether Deutsche Post would acquire control in 1999.
Acquisition of control by Deutsche Post in 1999 was
possible only if it had not already acquired sole control
in 1997. The notification should therefore have provided
all the facts that would have allowed the Commission to
assess the control structure arising from the 1997
transaction.

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(128) Under Article 4 of the Merger Regulation, read in
conjunction with Article 3(1) of
the Implementing
Regulation (13), and, in particular, section 2.1 of form
CO, Deutsche Post was obliged to supply this infor-
mation in its notification. The Commission must be able
to establish on the basis of the account given of a
notified transaction whether the transaction is in fact a
concentration within the meaning of Article 3 of the
Merger Regulation. The Commission’s assessment may
not be replaced by the notifier’s assessment, backed up
by information selected to support that view. By failing
to supply information needed for the assessment of the
takeover, the account given by Deutsche Post distorted
the facts. Contrary to what Deutsche Post claims in its
reply to the statement of objections, such omission can
result in a misleading presentation of the facts. If it was
not to be incomplete and misleading, an account of the
takeover should have contained the following infor-
mation.

(a) Control of Industrial Information by [Mr H.]* at the time of

the 1997 transaction

(129) [Mr H.]* controlled Industrial Information when the
Hanna 95 shares were purchased. Deutsche Post had
indeed informed the Commission that Industrial Infor-
mation was a shelf company belonging to [Mr H.]*. But,
according to Deutsche Post’s account in its notification,
[Mr R.]* first took over Industrial Information in order
then to acquire a majority of the shares in trans-o-
flex (14). In fact, all the transactions associated with the
acquisition of the trans-o-flex shares occurred at a time
at which [Mr H.]* still controlled Industrial Information.
These facts are important in assessing the position
regarding control, and it was therefore necessary to
present them.

(b) General power of attorney

(130) On 11 July 1997, one day after Industrial Information’s
acquisition of the majority holding in Hanna 95 and at
a time when, as the majority shareholder, he did not

(13) Commission Regulation (EC) No 447/98 of 1 March 1998 on
the notifications, time limits and hearings provided for in Council
Regulation (EEC) No 4064/89 on the control of concentrations
between undertakings (OJ L 61, 2.3.1998, p. 1).

(14) ‘In this way, 50,4 % of the shares in Hanna 95 were acquired by
Industrial Information, which in the mean time had become the
property of [Mr R.]*.’

require power of attorney at all, [Mr H.]* obtained
general power of attorney for Industrial Information,
and on this basis he continues to represent the company
today. This information is important in assessing the
control structure and should therefore have been pre-
sented, since the delegation of such power may be seen
as a preparatory step for the entrance of a majority
shareholder who will not himself exercise any influence.

(c) Timing of [Mr R.’s]* entry

(131) [Mr R.]* took over Industrial Information only 11 days
after all the transactions regarding the acquisition of
trans-o-flex had been concluded. This again is a key
factor in assessing the control structure and one which
is not mentioned in the notification. If the only reason
for this late entry of [Mr R.]* is in fact, as was first
asserted in Deutsche Post’s reply to the statement of
objections, that [Mr R.]* was prevented from doing so
because of other commitments, this could have been
pointed out in the notification. This circumstance would
then have been taken into account by the Commission
in its assessment. The fact remains, however, that the
information should have been provided.

(d)

Level of the purchase price for Industrial Information

(132) [Mr R.]* paid only the nominal value of the Industrial
Information shares. This corresponded to approximately
2 % of the value of the Hanna 95/trans-o-flex shares
acquired by Industrial Information (see B.II.3(c)). These
facts too should have been provided in the notification:
it is of considerable importance in assessing the control
structure, particularly in conjunction with the other
facts established by the Commission, that the person
described as the investor, [Mr R.]* should have paid only
a small part of the actual value of the object of the
investment.

(e) The consortium agreement

(133) The consortium agreement should have been supplied
and explained. It contains agreements on the composi-
tion of the governing bodies of Hanna 95 and trans-o-
flex AG and was therefore of importance for an assess-
ment of the control structure. This is necessary in
order to enable the Commission to carry out such an
assessment even if, as Deutsche Post asserts in its
reply to the statement of objections, the consortium
agreement merely repeats for the record the rules of the
relevant articles of association. Moreover, Deutsche
Post’s argument is invalidated by the fact that neither
the articles of association of Hanna 95 nor those of
trans-o-flex AG were submitted to the Commission.

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(f) The option agreement

(134) The option agreement should have been fully explained
and annexed to the notification. The notification makes
no mention of the price clause, Deutsche Post’s right of
first refusal, and Industrial
Information’s exemption
from any responsibility of liability in relation to the
management of Hanna 95, all of which were crucial to
the assessment of the acquisition of control. These
provisions of the agreement show that Deutsche Post
bears the economic risk for the trans-o-flex shares
acquired by Industrial Information (C.III.1(a)(1)(b)). The
option agreement
importance in
assessing the time when acquisition of control occurred.

is thus of crucial

(135) In its reply to the statement of objections, Deutsche Post
argues that the option agreement was unimportant in
the given context. The agreement did not confer rights
nor impose obligations on Industrial Information, since
those were transferred to the bank through the assign-
ment by way of universal succession. Industrial Infor-
mation had therefore been free to renegotiate the sale
and the terms and conditions associated with it. This
had in fact happened when the purchase agreement was
concluded with Deutsche Post in 1999, with the result
that the achievement of a profit had not only been
possible, but had also actually taken place.

(136) However, it is clear from the wording of the option
agreement in conjunction with the declaration of assign-
ment and from the letter from the lending bank on
10 July 1997 that the object of the assignment to the
bank was the exercise of the rights arising from Industrial
Information’s put-option. It is not possible, through
a declaration of assignment, to release oneself from
obligations to a third party. Thus the fact remains that
the purchase price agreement and Deutsche Post’s right
of first refusal excluded a profit for Industrial Infor-
mation and the conclusions drawn above regarding the
acquisition of control stand. The fact that, as Deutsche
Post argues in its reply to the statement of objections, a
contract was concluded two years later which, according
to Deutsche Post, was negotiated independently of these
agreements, is without significance in this context. The
crucial factor is that, in connection with the takeover of
the majority shareholding in trans-o-flex in 1997,
Industrial
Information reached an option agreement
with Deutsche Post which specified a purchase price
arrangement which could not be altered unilaterally.
Industrial
It did not allow a profit on the part of
Information.

(137) The content of the option agreement is therefore, in this
context, of crucial importance and, contrary to what

Deutsche Post asserts in its reply to the statement of
objections, should have been presented in the notifi-
cation. In this connection, in view of the account given
by Deutsche Post
in its reply to the statement of
objections, it should be noted that the option agreement
was not covered by the notification, but was transmitted
to the Commission only when requested in a formal
request for information.

(g)

Financing of Industrial Information’s holding in trans-o-flex

(138) The notification should have contained details of the
financing of the acquisition of Industrial Information’s
majority holding in Hanna 95 by Julius Bär Bank,
including the securities offered to the bank. These facts
are of importance in assessing the control structure,
since the securities necessary for the credit line were
provided by Deutsche Post, the minority shareholder,
alone.
Julius Bär Bank, which provided that credit
line, was assigned the put-option rights belonging to
Industrial Information, and was pledged the trans-o-flex
shares belonging to Industrial Information (see B.II.2(e)).
Together with the purchase price arrangement for the
exercise of the put-option (see B.II.2(d)), this ensured
that the bank could at any time recover the capital it had
provided in full from the financially strong Deutsche
Post.

(h)

Payment guarantee

(139) The payment guarantee underwritten by Deutsche Post
on behalf of Hanna 95 and the particular circumstances
that led to this action and the reasons for it should have
been described in the notification. This means not only
the sale of trans-o-flex by Haniel in 1995, which was
mentioned in the notification, but also the other facts
set out in B.II.2(f), especially the fact that when the
contracts were concluded on 10 July 1997 trans-o-flex’s
shares were under a lien held by Haniel. The provision
of a guarantee served to prevent the exercise of this lien.

(140) Contrary to Deutsche Post’s assertions in its reply to the
statement of objections, these facts were not communi-
cated to the Commission. Presentation of the purchase
contract, to which Deutsche Post refers here and in
which various liens are mentioned, is not sufficient in
itself without mention in the notification. Furthermore,
even on close reading of the purchase contract, the
circumstances associated with the lien remain unclear.
Form CO required that this information be disclosed. As
already explained in detail (B.II.2(f)), the purpose of the
a
provision of

guarantee was

to prevent

the

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complete loss of
the assets of Hanna 95 through
realisation of the trans-o-flex shares subject to a lien.
That a minority shareholder not formally entitled to
control should underwrite such a guarantee, which
primarily benefits the majority shareholder formally
entitled to control, and this without any counter-
consideration, is a key factor in assessing the control
question at issue here.

which was authenticated by notary but which — as
emerged from the Commission’s investigations — had
not entered into force, and was dated one day before the
merger date specified in the notification. These dates are
one year before the actual merger.

(l) Articles of association

(i) The loan to redeem the lien

(141) For the same reasons, the notification should also have
mentioned that Deutsche Post made Hanna 95 a loan
shortly before the due date of the claim secured by the
lien, so that the lien could be redeemed. As Deutsche
Post itself confirms in its reply to the statement of
objections, the loan served the same purpose as the
payment guarantee. Contrary to what Deutsche Post
argues in its reply to the statement of objections, the
majority shareholder here received favourable treatment
from Deutsche Post regardless of whether Deutsche Post
was able to re-finance this loan on more favourable
conditions than it granted to trans-o-flex: the benefit is
conferred by the very granting of the loan for the
purpose described.

(j) The loan to cover running costs

(142) Deutsche Post granted trans-o-flex a credit line of [DEM
... million — see recitals 83, 84 and 86]* to cover its
normal running costs, and trans-o-flex took up [DEM ...
million — see recitals 83, 86, and 167]* of the loan (see
B.II.4(f)). Contrary to Deutsche Post’s opinion, such a
transaction must be disclosed, since, regardless of the re-
financing conditions, it represents a unilateral payment
by the minority shareholder which, however, benefits all
the shareholders in proportion to the size of their
respective shareholdings. This fact is also relevant to
assessment of the control structure.

(k) Merger agreement

(143) The merger agreement which was actually implemented,
the declarations of consent provided for in the agree-
ment, and any other relevant documentation should
have been annexed to the notification. These documents
and the time at which they were concluded are, as
explained above (B.II.4(d)), of crucial
importance in
assessing the legal control structure of trans-o-flex.

(144) If the abovementioned documents had been transmitted,
it would moreover have been immediately evident that
the wrong merger agreement had been sent by mistake.
The merger agreement submitted was an agreement

(145) The Hanna 95 shareholders’ agreement and the trans-o-
flex AG articles of association which were valid when
the shares were acquired in 1997 should have been
annexed to the notification, together with any other
documentation regarding the control of the two com-
panies, contrary to the view taken by Deutsche Post in
its reply to the statement of objections, since, as is clear
from the explanations given above (B.II.4(d)), they are of
crucial importance to determining the control structure
created by the 1997 transaction. Only in this way would
the Commission have been able to form an assessment
of whether the legal control structures at the time of the
1997 transaction were the same as at the time of the
entry into force of the later articles of association
available to the Commission. Deutsche Post’s assertion,
in its reply to the statement of objections, that this was
the case does not remove the infringement of the
information requirement in this respect. Furthermore,
Deutsche Post does not in its reply present any of the
documents that were missing in the notification.

(m) Change in management

(146) Any changes in the management of trans-o-flex and
Hanna 95 which occurred when Deutsche Post acquired
its holding or were directly related to Deutsche Post’s
acquisition of Hanna 95 should have been disclosed and
explained (see B.II.4(b)). Contrary to Deutsche Post’s
contention, such changes are important
factors in
assessing the control structure.

(n)

Supervisory board changes

(147) This also applies to changes in the membership of the
supervisory board (see B.II.4(c)). These should also have
been disclosed in the notification.

(o) Capital increase

(148) On 23 December 1998, it was decided to increase trans-
Infor-
o-flex’s company capital. Although Industrial
mation provided the injection of capital,
the plan
was that Deutsche Post should compensate Industrial
Information by including the amount in the purchase
price. These facts too are not evident from the notifi-
cation, but are essential in assessing the control structure.
They must be seen in conjunction with the purchase
price provision in the option agreement (see B.II.4(e)).

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(b)

Intention

(149) Deutsche

the

Post

committed

by
Article 14(1)(b) intentionally, as it recognised or could
not have been unaware that the information contained
in its notification was in breach of the information
requirements in the manner described in that provision.

caught

acts

the

(150) The investigation has revealed that Deutsche Post was
aware of
information in respect of which
Article 14(1)(b) applies. The Commission received much
of the information in question from Deutsche Post in
response to requests for information or reminders
drawing attention to requests for information. Thus
Deutsche Post knew that the information it had supplied
in its notification was incorrect and misleading. The
investigation has further revealed that Deutsche Post
was also aware that these facts were crucial to the
assessment of Deutsche Post’s acquisition of control of
trans-o-flex in 1999 through the notified transaction,
and should therefore have been included in the notifi-
cation.

(151) The way in which the facts were presented by Deutsche
Post in its notification also makes this clear. The false
information consists of more than isolated incorrect
or misleading details. The incorrect and misleading
information supplied in its notification served directly
to support Deutsche Post’s view of the takeover and
deliberately and systematically prevented the Com-
mission from forming a full and correct picture of
the situation. By a deliberate combination of
false
information and the omission of information which was
crucial to the decision, an account of the facts was
fabricated which made it appear that the transaction
matched all of the criteria for an acquisition of control.
The process involved concealment of the actual sequence
of events, such as the point at which [Mr R.]* joined
Industrial Information in relation to the point at which
the trans-o-flex shareholding was acquired. Out-of-date
documents were also supplied,
including the merger
agreement of 25 September 1997, which was never
implemented, while other documents did not relate to
the relevant period, such as the articles of association of
trans-o-flex AG, and the articles of association of
September 1998.

(152) It follows that, in the account it gave in its notification,
Deutsche Post acted with the intention to deceive. That
intention in any event includes the intention referred to
in Article 14(1).

agreement, whereas the actual merger only occurred a
year later (see C.III.A(a)(1)(a) and C.III.1(a)(2)(k)), it is not
possible that the merger agreement was provided only
inadvertently.

(c)

Finding

(154) In its notification of 4 February 1999 in Case IV/M.1447
— Deutsche Post/trans-o-flex, therefore, Deutsche Post
intentionally supplied incorrect and misleading infor-
mation, in that it supported its depiction of the case by
making a number of incorrect statements and providing
a great deal of misleading information.

2. Article 14(1)(c)

(a) The fact of the infringement

(155) The facts set out show that Deutsche Post supplied
incorrect information in response to requests made
pursuant to Article 11 of the Merger Regulation. This
conduct is contrary to the first limb of Article 14(1)(c)
of the Regulation.

(156) The Commission sent Deutsche Post three requests for
information concerning Deutsche Post’s takeover of
trans-o-flex, on 23 February 1999 (reference 1999),
26 March 1999 (reference 3359) and 22 April 1999
(reference 4350). The request
information of
26 March 1999 contained a number of new questions,
and asked Deutsche Post
to answer the questions
contained in the request for information of 23 February
1999. The request for information of 22 April 1999
requested answers only to unanswered questions from
the previous two requests.

for

(157) Deutsche Post replied to these requests for information
in its letters of 1 March 1999, 30 March 1999, 6 April
1999 and 27 April 1999. The letters contained incorrect
information. They also left a number of questions
unanswered, forcing the Commission to repeat them,
sometimes formulated more precisely on the basis of the
results of the investigation being conducted, and to ask
a number of further questions. Deutsche Post’s letter of
27 April 1999, replying to the reminder of 22 April
1999 drawing attention to the previous requests for
information, contained a number of corrections of
information previously supplied and supplementary
information completing information requested earlier.

(153) The same applies to the incorrect information regarding
the merger. Since the date given for the merger in the
notification corresponds to the date of the attached

(158) The investigation has shown that Deutsche Post supplied
the following incorrect information when replying to
the requests for information pursuant to Article 11.

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(1) Agreements regarding the allocation of seats on the

supervisory board

(159) In its letter of 6 April 1999, Deutsche Post stated,
in reply to a question relating to arrangements for
membership of the trans-o-flex management board and
supervisory board, that no documents existed regarding
the composition of the trans-o-flex supevisory board.
This is incorrect, as the consortium agreement between
the parties contains detailed rules concerning member-
ship of the trans-o-flex AG Hanna 95 governing bodies.

(160) This question could not, as Deutsche Post states in
its reply, be misinterpreted merely as a question on
arrangements regarding the identity of
the persons
appointed to the supervisory board. The question is
concerned above all with the shareholders’ rights to
appoint members to these bodies. The narrow interpret-
ation placed on the Commission’s question by Deutsche
Post is justified neither by its wording nor by the context
in which it was asked. The term ‘seats’ used in the
question, and the context, which was the exercise of
supervision by various shareholders, precludes a limiting
of
the individuals
represented. It was therefore clear to Deutsche Post that
merely providing individual names would be of no help
to the Commission. The only explanation for the
interpretation of the relevant question proposed by
Deutsche Post in its reply is that any information which
could cast doubt on Deutsche Post’s view of the control
issue was to be withheld from the Commission. More-
over, Deutsche Post’s reply was confined to the supervis-
ory board, whereas the question covered the supervisory
board and the management board.

the question to the identity of

(2) Security provided by Deutsche Post

(161) In its letter of 1 March 1999, replying to the request for
information of 23 February 1999, Deutsche Post denied
that it had directly or indirectly financed Industrial
Information’s acquisition of the shares.

(162) However, the investigation revealed that Deutsche Post
financed this acquisition indirectly by providing security
for the loan granted to Industrial
Information (see
B.II.2(e)). Deutsche Post therefore answered the question
incorrectly.

denied that
trans-o-flex,
it had intervened to assist
Industrial Information or any of their shareholders, for
example by waiving claims or taking over commitments.
However, the investigation revealed that Deutsche Post
should have answered this question in the affirmative.

(164) Deutsche Post first gave a payment guarantee benefiting
Hanna 95, which at that time was sole proprietor of
trans-o-flex, and then made the company a loan. In this
way it enabled Hanna 95 to meet
its obligations,
amounting to [DEM ... million — a sum corresponding
to the sum lent to meet Hanna 95’s commitments to
Haniel referred to in recitals 50, 86 and 167]*, in respect
of the purchase price owed by Hanna 95 to Haniel for
the acquisition of trans-o-flex shares in 1995 (see B.II.2(f)
and (g)). Deutsche Post therefore relieved Hanna 95 of
the obligation to make this payment by the end of
September 1997. It is not necessary for this debt to be
waived completely, as maintained by Deutsche Post in
its reply, for a discharge of debts to have occurred. An
extension of credit is sufficient, especially if it is intended,
as in this case, to protect the entire assets of the
benefiting company, i.e. trans-o-flex AG shares, from
conversion into cash and hence from loss. Deutsche Post
therefore gave an incorrect reply to the question.

(165) Nor can it be argued, as in Deutsche Post’s reply, that
the question had been correctly answered because
the circumstances surrounding the provision of the
guarantee and the loan were clear from the documents
enclosed. If these circumstances were clear from the
annexes alone, they would merely confirm that the
Commission’s answer was wrongly answered in the
negative. Not only is Deutsche Post’s reply incorrect, it
is also contradictory. In any event, the facts which reveal
that Deutsche Post’s answer is incorrect are not clear
from the annexes, as explained in the next recital.

(4) Circumstances of the payment guarantee and loan

from Deutsche Post

(3)

Intervention by Deutsche Post

(163) In its letter of 1 March 1999, replying to the request for
information of 23 February 1999, Deutsche Post also

(166) In its letter of 27 April 1999 Deutsche Post stated that
all the relevant information concerning the payment
guarantee and the granting of the loan were supplied in
the annexes to its letter of 1 March 1999. This is not the
case. The Commission was not able to determine the
facts relating to the payment guarantee and the granting
of the loan from the annexes to the letter of 1 March.

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The loan contract was not enclosed, and the payment
guarantee was supplied only in draft form. Moreover, no
explanation was given of the context surrounding these
agreements. The Commission first gained knowledge of
all these elements through its own investigations (see
B.II.2(f) and (g)). Deutsche Post’s answer was therefore
incorrect.

1999, a list of all management and supervisory boards,
beginning at 1 January 1985 and ending at 27 August
1998. The list, however, is incorrect, as it refers only to
trans-o-flex AG, which ceased to exist folowing the
merger, and contains no information about the member-
ship of the corresponding bodies in trans-o-flex GmbH.

(5) Reason for the loan

(167) In its letter of 30 March 1999 Deutsche Post claimed it
had made trans-o-flex a loan of [DEM ... million — see
recital 85, with further references]* in order to enable
trans-o-flex to settle existing liabilities at a rate of interest
lower than the market rate. The investigation revealed,
however, that [DEM ... million — see recital 164, with
further references]* of
the loan was used to meet
Hanna 95’s commitments to Haniel. The purpose of this
loan was to enable Haniel to release the pledged trans-
o-flex shares, while [DEM ... million — see recital 142,
with further references]* financed trans-o-flex’s current
activities. The main purpose of
the loan was not,
therefore, as Deutsche Post claims, the refinancing of
existing liabilities at a low rate of interest. Deutsche
Post’s answer was therefore incorrect.

(6) Changes in management

(168) In its letter of 1 March 1999, Deutsche Post stated that
no changes to trans-o-flex’s management had been made
at the behest of Deutsche Post. This was not true. The
record of the trans-o-flex supervisory board meeting of
11 July 1997, one day after the 1997 transaction,
indicated that [Mr P.]* joined the management board (as
chairman) on behalf of Deutsche Post, and that the
resignation of [Mr E.]* was directly connected with this
event. Whether or not tensions already existed between
[Mr E.]* and the supervisory board before Deutsche Post
joined the board, as claimed by Deutsche Post, is not
important in this context, since these had not led [Mr E.]*
to resign.

(170) Deutsche Post’s failure to provide a correct answer to
the Commission is not remedied by the fact that it
indicates in its reply to the statement of objections that
no changes to these bodies had occurred after the stated
final date. This statement is unclear and ambiguous. If it
refers to trans-o-flex AG, no change could have been
made after the stated date, since it ceased to exist
immediately after that date as a result of the merger. If it
refers to trans-o-flex GmbH, it cannot be correct since,
although the company has a supervisory board, it does
not have a management board (‘Vorstand’) but three
managers (‘Geschäftsführer’) instead.

(b)

Intention

(171) The investigation has revealed that Deutsche Post was
aware of the information in respect of which the first
limb of Article 14(1)(c) of the Merger Regulation applies.
The Commission received much of the information in
question from Deutsche Post in response to reminders
drawing attention to its requests for information. Thus
the information which it
Deutsche Post knew that
had supplied and which has been examined here was
incorrect. Deutsche Post deliberately attempted to make
use of this incorrect information to give a false presenta-
tion of the facts in order to support its view of the
takeover. If follows that in the account it gave in its
notification Deutsche Post acted with the intention to
deceive. That intention in any event includes the inten-
tion referred to in Article 14(1). Deutsche Post therefore
acted intentionally within the meaning of Article 14(1).

(7) Membership of trans-o-flex governing bodies

(c)

Finding

(169) When the Commission asked for the names of the
members of trans-o-flex’s governing bodies, with details
of when they joined and left, Deutsche Post answered by
supplying the list of supervisory board members for
1995, 1996 and 1997. Only when reminded by the
Commission did Deutsche Post supply, on 30 March

(172) In its letters of 1 March 1999, 30 March 1999, 6 April
1999 and 27 April 1999, replying to requests for
information pursuant
the Merger
Regulation in Case IV/M.1447 — Deutsche Post/trans-
o-flex, Deutsche Post intentionally supplied the incorrect
information described (at C.III.2).

to Article 11 of

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D.

FINES

(173) In setting fines the Commission has taken the following

factors into account.

Commission to prove that an infringement had occurred.
The information was supplied only in response to
requests from the Commission, and often only in
response to reminders. It was also supplied very late in
the proceedings.

I. ARTICLE 14(1)(b)

II.

FIRST LIMB OF ARTICLE 14(1)(c)

(174) Article 14(1)(b) of the Merger Regulation states that the
Commission may by decision impose on the persons
referred to in Article 3(1)(b), undertakings or associ-
ations of undertakings fines of from EUR 1 000 to
EUR 50 000 where intentionally or negligently they
supply incorrect or misleading information in a notifi-
cation pursuant to Article 4.

(180) Article 14(1)(c) of the Merger Regulation empowers the
Commission by decision to impose on the persons
referred to in Article 3(1)(b), undertakings or associ-
ations of undertakings fines of from EUR 1 000 to
EUR 50 000 where intentionally or negligently they
supply incorrect information in response to a request
made pursuant to Article 11.

(175) Article 14(3) states that, in setting the amount of a fine,
the Commission is to have regard to the nature and
gravity of the infringement. The Commission will here
take account of any aggravating or mitigating circum-
stances.

(181) Article 14(3) states that in setting the amount of a fine
the Commission is to have regard to the nature and
gravity of the infringement. The Commission will here
take account of any aggravating or mitigating circum-
stances.

(176) The infringement at issue is the intentional supply of
incorrect and misleading information by Deutsche Post
in its notification of 4 February 1999.

(177) The fact that the incorrect and misleading information
relates to the acquisition of control, and hence to the
Commission’s competence in respect of the notified
transaction, is to be regarded as an aggravating circum-
stance. Information on the acquisition of control
is
information that must be supplied by the parties in
accordance with section 2.1 of form CO in order to
enable the Commission to assess whether the notified
merger constitutes a concentration within the meaning
of Article 3(1) of the Merger Regulation. This assessment
is essential for determining the powers of the Com-
mission in respect of the notified transaction. If the tests
for the presence of a concentration laid down in the
Merger Regulation are not satisfied, the transaction is
not within the Commission’s competence. One of the
main tests of this kind is that the notified operation
should produce a change in control.

(178) A further aggravating circumstance is the fact that the
incorrect and misleading information listed above in
connection with the question of intention was intended
to deceive the Commission with regard to an acquisition
of control, and therefore with regard to the Com-
mission’s powers in relation to the transaction.

(179) There are no circumstances in this case which would
justify a reduction in the fine. Deutsche Post cannot
plead in mitigation that it supplied the Commission
with the bulk of the information which enabled the

(182) A series of infringements caught by the first limb of
Article 14(1)(c) have been committed, in that incorrect
information on various points detailed above was sup-
plied on a number of occasions in response to requests
for
information made by the Commission under
Article 11 of the Merger Regulation.

(183) The incorrect information was designed to deceive the
Commission with regard to the acquisition of control,
and thus to ensure that the Commission continued in its
opinion that it was competent in the case, as had been
suggested by the incorrect and misleading information
in the notification. Only after exhaustive investigation
was the Commission able to clarify the facts sufficiently
to be able to make a correct assessment of the acquisition
of control in the event that it took a decision in the case.

(184) Here, too, the fact that the incorrect replies relate to the
acquisition of control and hence to the Commission’s
competence should be regarded as an aggravating cir-
cumstance.

(185) The gravity of the infringement is also aggravated by the
intention to deceive, which has already been established.

(186) For

the reasons already outlined in the light of
Article 14(1)(b) of the Merger Regulation, there are no
circumstances here which would justify a reduction in
the fine. Deutsche Post cannot plead in mitigation that
in response to the Commission’s requests it supplied the
information which led to the clarification of the case.

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(187) As was explained above, Deutsche Post provided an
account of the real facts of the case only in its letter of
27 April 1999, and many material facts were omitted
from that letter, such as the sequence of events and [Mr
H.’s]* power of attorney. Nor should it be forgotten that
the information was supplied only in response to
reminders drawing attention to the failure to answer
questions in previous requests for information.

E. CONCLUSIONS

(188) The considerations set out above demonstrate that
Deutsche Post supplied incorrect and misleading infor-
mation in its notification of 4 February 1999 in Case
IV/M.1447 — Deutsche Post/trans-o-flex. They likewise
demonstrate that Deutsche Post replied incorrectly to
requests for information under Article 11 in its letters of
1 March 1999, 30 March 1999, 6 April 1999 and
27 April 1999.

(189) The Commission reaches the conclusion that Deutsche
Post’s actions are caught by Article 14(1)(b) and the first
limb of Article 14(1)(c) of the Merger Regulation, which
makes it liable to fines under two separate provisions.

(190) The Commission ought to impose a fine on Deutsche
Post under Article 14(1)(b) of the Merger Regulation,
and a further fine under the first limb of Article 14(1)(c).

(191) Accordingly, taking into account the circumstances of
the case, the Commission considers it appropriate to
impose a fine of EUR 50 000 under Article 14(1)(b) of
the Merger Regulation and a further fine of EUR
50 000 under the first limb of Article 14(1)(c), making
a total of EUR 100 000,

HAS ADOPTED THIS DECISION:

Article 1

1.
A fine of EUR 50 000 is hereby imposed on Deutsche
Post AG under Article 14(1)(b) of Regulation (EEC)
No 4064/89 for intentionally supplying incorrect and mislead-
ing information to the Commission in the notification it
submitted on 4 February 1999.

2.
A fine of EUR 50 000 is hereby imposed on Deutsche
Post AG under the first limb of Article 14(1)(c) of Regulation
(EEC) No 4064/89 for intentionally supplying incorrect infor-
mation to the Commission in reply to requests for information
made on 23 February 1999 (reference 1999), 26 March 1999
(reference 3359) and 22 April 1999 (reference 4350).

Article 2

The fines referred to in Article 1 shall be paid to the
1.
the European Communities within three
Commission of
months of the date of notification of this Decision, to account
number 310-0933000-43 at the Banque Bruxelles Lambert,
Filiale Rond-Point Schuman 5, B-1040 Brussels.

Upon expiry of the period allowed for payment, default
2.
interest shall be payable on the fines at the interest rate applied
by the European Central Bank to its repo operations on the
first day of the month in which this Decision is adopted,
namely 3 %, plus 3,5 percentage points, giving a total of 6,5 %.

Article 3

This Decision is addressed to:

Deutsche Post AG
Generaldirektion
D-53105 Bonn.

Done at Brussels, 14 December 1999.

For the Commission
Mario MONTI

Member of the Commission

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ANNEX

Contents

A.

Introduction

I.

Subject of the proceedings

II.

Notification: Case IV/M.1447 — Deutsche Post/trans-o-flex

III.

Fines: Case IV/M.1610 — Deutsche Post/trans-o-flex

B.

The facts

I.

The notification

II.

The results of the Commission’s investigations

1.

2.

Background to the 1997 transaction

Transactions on 10 July 1997

(a) Deutsche Post’s purchase of a minority holding

(b)

(c)

(d)

(e)

(f)

(g)

Industrial Information’s purchase of a majority holding

The consortium agreement

The option agreement

Financing Industrial Information’s acquisition of the shares

Payment guarantee

The loan to meet the commitments to Haniel

3.

Changes in Industrial Information

(a) Granting general power of attorney to [Mr H.]*

(b)

(c)

The increase in the share capital and amendment of the articles of association

[Mr R.’s]* entry into Industrial Information

4.

Trans-o-flex after the entry of Deutsche Post and Industrial Information

(a) Merger agreement

(b)

Changes in management

(c) Membership of the supervisory board

(d) Voting at the shareholders’ meeting

(e)

(f)

Capital increase

Loan to trans-o-flex

5.

The sale of the Industrial Information shares to Deutsche Post

C.

Legal assessment

I.

Information requirements under the Merger Regulation and their infringement by Deutsche Post

II.

Deutsche Post’s reply of 13 September 1999

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III.

Infringement of the Merger Regulation

1.

Article 14(1)(b)

(a)

The fact of the infringement

(1)

Incorrect information
(a) Merger
(b)
(c)
(d)

Profit motive
Exercise of shareholder rights
Right to exercise the put-option

(2) Misleading information

Control of Industrial Information by [Mr H.]* at the time of the 1997 transaction

(a)
(b) General power of attorney
Timing of [Mr R.’s]* entry
(c)
Level of the purchase price for Industrial Information
(d)
The consortium agreement
(e)
The option agreement
(f)
Financing of Industrial Information’s holding in trans-o-flex
(g)
Payment guarantee
(h)
The loan to redeem the lien
(i)
(j)
The loan to cover running costs
(k) Merger agreement
(l)
(m) Change in management
(n)
(o)

Supervisory board changes
Capital increase

Articles of association

(b)

(c)

Intention

Finding

2.

Article 14(1)(c)

(a)

The fact of the infringement

(1) Agreements regarding the allocation of seats on the supervisory board

(2)

(3)

Security provided by Deutsche Post

Intervention by Deutsche Post

(4) Circumstances of the payment guarantee and loan from Deutsche Post

(5) Reason for the loan

(6) Changes in management

(7) Membership of trans-o-flex governing bodies

(b)

(c)

Intention

Finding

D.

Fines

I.

II.

Article 14(1)(b)

First limb of Article 14(1)(c)

E.

Conclusions