CELEX: 32013M7097
Language: en
Date: 2013-12-18 00:00:00
Title: Commission Decision of 18/12/2013 declaring a concentration to be compatible with the common market (Case No COMP/M.7097 - BRIDGEPOINT / ORLANDO / LA GARDENIA BEAUTY) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

                                        Brussels, 18/12/2013
                                        C(2013) 9639 final

                                        [pic]

|To the notifying parties:                                                                                     |                                                                             |

Dear Sirs,

Subject:    Case No COMP/M.7097 - BRIDGEPOINT / ORLANDO / LA GARDENIA BEAUTY
         Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

    1) On 18 November 2013, the European Commission received a notification of a proposed concentration pursuant  to  Article  4  of  the  Merger
       Regulation by which the undertakings Bridgepoint Advisers Group Limited ("Bridgepoint", United Kingdom) and Orlando Italy Management  S.A.
       ("Orlando", Luxembourg) acquire joint control of La  Gardenia  Beauty  S.pA.  ("La  Gardenia",  Italy),  currently  solely  controlled  by
       Orlando.[2] Bridgepoint and Orlando are hereinafter referred to together as "the Parties".

       THE PARTIES AND THE OPERATION

    2) Bridgepoint is an independent private equity fund which controls a number of entities active in a wide range of  industry  sectors  across
       the EEA and beyond.

    3) Orlando is an independent private equity firm, which focuses its investments on small and medium sized companies.

    4) La Gardenia is mainly active in the retail distribution of perfumes and cosmetic  products  in  specialised  stores.  Its  activities  are
       limited to Italy with around 170 retail stores across the country.

    5) La Gardenia is currently solely controlled by Ol-Cosmetics S. A. ("OIC"), through its wholly owned subsidiary European Fragrances S. à  r.
       l. ("EF"). OIC in turn is a wholly owned subsidiary of Orlando. The proposed transaction consists in the  acquisition  by  Bridgepoint  of
       joint control over La Gardenia by means of an agreement concluded on 29 October 2013 ("Agreement") between  OIC  and  European  Fragrances
       (Holding) S.àr.l. ("EFH"), which in turn is controlled by Bridgepoint. On the basis of the Agreement, EFH will be granted veto rights over
       any approval and/or amendment to the business plan and annual budgets of La Gardenia. These veto rights will remain  in  force  until  OIC
       transfers La Gardenia to an independent third party. As a result of this contractual arrangement Bridgepoint  will  obtain  joint  control
       over La Gardenia.

    6) EF was sold to Orlando by Bridgepoint under a share purchase agreement ("SPA") entered into on 8 August 2013. Prior to the acquisition  by
       Orlando, La Gardenia was solely controlled by Bridgepoint.[3] The acquisition of sole control over La Gardenia by Orlando and the  present
       transaction are not interdependent transactions pursuant to paragraphs 38-45 of  the  Commission  Consolidated  Jurisdictional  Notice,[4]
       since the SPA and the Agreement are not linked by a condition, they were  not  concluded  simultaneously,  they  have  different  economic
       functions[5] and, according to the Parties, they were not a part of a pre-existing legally binding plan.

    7) In view of the above, the present transaction constitutes an acquisition of joint control within the meaning of Article 3 (1) (b)  of  the
       Merger Regulation.

       EU DIMENSION

    8) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000  million[6]  (Bridgepoint:  […],  Orlando:
       […]), Bridgepoint and Orlando have EU-wide turnover in excess of EUR 250 million (Bridgepoint: […] and  Orlando:  […]).  Orlando  achieves
       more than two thirds of its EU-wide turnover in Italy. However, Bridgepoint does not achieve more than two-thirds of its EU-wide  turnover
       in any single Member State.

    9) The notified operation therefore has an EU dimension pursuant to Article 1(2) of the Merger Regulation.

       COMPETITIVE ASSESSMENT

   10) La Gardenia is active in the Italian market for retail distribution of perfumes and cosmetics  through  selective  distribution  channels.
       Orlando and Bridgepoint are active in the same market through their jointly controlled company Limoni S.p.A.  ("Limoni"),  which  in  turn
       controls Bergamotto S.p.A. ("Bergamotto") and Vima Due S.r.l. ("Vima Due").

   11) The transaction does not materially change the competitive landscape since Orlando already solely controls La Gardenia and  jointly,  with
       Bridgepoint, controls Limoni, Bergamotto and Vima Due. The transaction will shift ownership so that  Bridgepoint  will,  post-transaction,
       jointly with Orlando, control also La Gardenia. Moreover, until 8 August 2013, Bridgepoint solely controlled La Gardenia.

1 Relevant market

1 Relevant product market

   12) The Commission has previously distinguished between (1) the distribution of luxury perfumes and cosmetics sold via selective  distribution
       networks and (2) the distribution of luxury perfumes and cosmetics sold via travel retail outlets.[7] The Commission has also investigated
       whether a further segmentation of luxury perfumes and cosmetics could be made, on the basis of the type of product into: (i) perfume, (ii)
       make-up and (iii) skin care products.[8]

   13) La Gardenia sales are made through the selective distribution channel, through perfumeries.

   14) For the purposes of the present case, the precise product market definition can however be left open as the transaction does not give rise
       to any competition concerns under any plausible alternative product market definition.

2 Relevant geographic market

   15) The Parties submit that the geographic scope of the relevant market is at least national.

   16) In previous cases, the Commission has left open whether the geographic scope of the markets for luxury  products  and  for  the  selective
       distribution of perfumes and cosmetics is national or wider.

   17) The Commission has also previously[9] indicated that, in the retailing segment, the catchment area for an outlet is often delimited  by  a
       boundary within which the distribution outlet can be reached by car in no more than about twenty  minutes,  with  an  indication  that  in
       particular in Italy this catchment area would not exceed the size of administrative province.[10]

   18) For the purposes of the present case, the precise geographic market definition can however be left open as the transaction does  not  give
       rise to any competition concerns even when markets are considered to be local.

2 Assessment

   19) In the overall market for luxury retail of perfumes and cosmetics through the selective distribution channel in  Italy[11],  the  combined
       market share of the Parties and La Gardenia is [20-30]% (with La Gardenia having [5-10]% and Limoni [10-20]%).[12]

   20) In the sub segment of luxury retail of perfumes through the selective distribution channel in Italy, the  combined  market  share  of  the
       Parties and La Gardenia is [20-30]% (with La Gardenia having [5-10]% and Limoni [10-20]%).[13] In the sub segment of luxury retail of make-
       up through the selective distribution channel in Italy, the combined market share of the Parties and La  Gardenia  is  [20-30]%  (with  La
       Gardenia having [5-10]% and Limoni [10-20]%).[14] In the sub  segment  of  luxury  retail  of  skincare  products  through  the  selective
       distribution channel in Italy, the combined market share of the Parties and La Gardenia is [10-20]% (with La Gardenia  having  [0-5]%  and
       Limoni [10-20]%.

   21) The Parties submit that there are at least three large players left post-transaction in the Italian market for the retail of perfumes  and
       cosmetics through the selective distribution channel, namely Douglas, Marionnaud and Sephora.

   22) Post-transaction the competitive situation will remain substantially unaffected. Orlando already controls either  solely  or  jointly  the
       horizontally overlapping businesses. Bridgepoint does not control any other companies active in the affected market(s). In  addition,  the
       Commission has already carried out the analysis of the activities of the Parties in the field of perfumes and cosmetics at the  time  when
       Bridgepoint controlled La Gardenia.[15]

   23) In light of the above, the Commission concludes that the proposed transaction does not raise serious doubts as to its  compatibility  with
       the internal market.

       CONCLUSION

   24) For the above reasons, the European Commission has decided not to oppose the notified operation and to  declare  it  compatible  with  the
       internal market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation.

                                        For the Commission

                                        (Signed)
                                        Joaquín ALMUNIA
                                        Vice-President

-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
      ('TFEU') has introduced certain changes, such as the replacement of 'Community' by 'Union' and 'common market' by  'internal  market'.  The
      terminology of the TFEU will be used throughout this decision.

[2]   Publication in the Official Journal of the European Union No C 345, 26.11.2013, p. 19.

[3]   See Italian antitrust authority, Case C11921 OI-Cosmetic / European Fragrances, decision of 3 September 2013.

[4]   Commission Consolidated Jurisdictional Notice under  Council  Regulation  (EC)  No  139/2004  on  the  control  of  concentrations  between
      undertakings, O.J. C 95, 16.04.2008, p.1.

[5]   The SPA was concluded to enable Orlando to promptly commence the debt restructuring process of La Gardenia. Currently,  due  to  a  planned
      outsourcing of certain business functions to a company jointly controlled by La Gardenia and Limoni S.p.A., Bridgepoint is again  obtaining
      joint control over La Gardenia in order to be actively involved, inter alia, in the  structuring  and  implementation  of  the  outsourcing
      agreement.

[6]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
      C95, 16.04.2008, p. 1).

[7]   Case COMP/M.6212 LVMH/Bulgari, paras. 18-20; Case COMP/M. 5068 L'oreal/YSL Beaute, paras. 14-16.

[8]   Case COMP/M. 5068 L'oreal/YSL Beaute, ibidem, paras. 11-13.

[9]   Cases IV/M.1086 Promodès/S21/Gruppo GS, IV/M.998 OBSI Denmark; IV/M.784 Kesko/Tuco; IV/M.558 La Rinascente/Cedis Migliarini.

[10]  See Case IV/M.1086 Promodès/S21/Gruppo GS, ibidem, par. 23.

[11]  According to the Parties, the combined market share would not exceed [20-30]% even at local level (single Italian administrative  province)
      and would not be materially different if perfumes, make-up and skincare product segments were assessed separately.

[12]  Form CO, Table 4.

[13]  Form CO, Table 5.

[14]  Form CO, Table 6.

[15]  See Case COMP/M.6892 Bridgepoint/Orlando/Bergamotto/Vima Due and Case COMP/M.6670 Bridgepoint/Orlando/Limoni.

-----------------------

                                                                  PUBLIC VERSION

 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

                                                                 MERGER PROCEDURE