CELEX: 31992M0224
Language: en
Date: 1992-05-21 00:00:00
Title: COMMISSION DECISION of 21.05.1992 declaring a concentration to be compatible with the common market (Case No IV/M.224 - VOLVO / LEX) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31992M0224

COMMISSION DECISION of 21.05.1992 declaring a concentration to be compatible with the common market (Case No IV/M.224 - VOLVO / LEX) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 142 , 04/06/1992 P. 0000

 COMMISSION DECISION of 21.05.1992 declaring a concentration to  be compatible with the common market (Case No IV/M.224 -  VOLVO  / LEX) according to Council Regulation (EEC) No 4064/89  (Only the English text is authentic)  The paper version of the decision is available through the  sales offices of the Office of Official Publications of the  European Communities. PUBLIC VERSION MERGER PROCEDURE ARTICLE 6(1)(b) DECISION Registered with advice of delivery 1. Notifying party 2. Notifying party Dear Sirs, Subject: <ind> Case N  IV/M224 - VOLVO/LEX <tab> <tab> <ind> Notification of 21.04.1992 pursuant to  Article 4 of Council Regulation N  4064/89.  1.<ind> This case concerns the purchase by the Volvo Car  Corporation (Volvo), through its wholly-owned UK subsidiary  Swecar Engineering Limited, of the operating assets of Volvo  Concessionaires Limited, the independent importer and  distributor of Volvo passenger cars in the UK. Volvo  Concessionaires is a wholly-owned subsidiary of Lex Service Plc  (Lex).  2.<ind> After examination of the notification, the Commission  has concluded that the notified operation falls within the  scope of Council Regulation 4064/89 (the Regulation) and does  not raise serious doubts as to its compatibility with the  common market.  I.<ind> THE PARTIES AND THE AGREEMENT  3.<ind> Volvo Car Corporation is the subsidiary of the Volvo  Group which develops, manufactures and markets, directly and  through more than 40 operating subsidiaries Volvo passenger  cars and related components and spare parts all over the  world.  <ind> Lex Service Plc is a UK holding company whose main  activities include automotive distribution and leasing as well  as the distribution of electronic components and computer  products.  4.<ind> Under an asset purchase agreement Volvo will acquire  all of Volvo Concessionaires' operating assets while a separate  settlement agreement provides for compensation to be paid to  Lex by Volvo for the premature termination of its distribution  agreement with Volvo.   II. CONCENTRATION  5.<ind> The proposed operation is a concentration within the  meaning of Article 3(1) of the Regulation in that Volvo will  acquire direct control of the operating assets of Volvo  Concessionaires Limited, thereby becoming directly responsible  for the importation, marketing and distribution of Volvo  passenger cars in the UK market.  III. COMMUNITY DIMENSION  6.<ind> The operation has a community dimension as the combined  aggregate worldwide turnover of all the undertakings concerned  is more than 5,000 million ECU (11,109 million ECU), the  aggregate Community-wide turnover of each undertaking is more  than 250 million ECU (Volvo Group - 3,765 million ECU; Volvo  Concessionaires Ltd - 784 million ECU) and they do not achieve  more than two-thirds of their community-wide turnover within  one and the same Member State.  IV. COMPATIBILITY WITH THE COMMON MARKET  7.<ind> The product market concerned consists of the  distribution of passenger cars and related accessories and  spare parts. Vehicle distribution is usually undertaken through  a pyramidal structure whereby manufacturers supply  importers/distributors who in turn supply dealers and  subdealers. A recent survey made by EUROMOTOR Reports Research  shows a growing trend in Europe towards manufacturers acquiring  control of importers/distributors. This choice is explained by  a number of reasons, for example:  <tab>  -<ind> to gain complete control over all aspects of  marketing, sales and financial management; <tab>  -<ind> to improve coherence between headquarters and  local or national priorities; <tab>  -<ind> to bring manufacturing and distribution margins  within the control of a single organization; and <tab>  -<ind> to maintain a competitive global and strategic  pricing policy.  8.<ind> Although importers/distributors are typically given  exclusive rights with regard to a Member State it is not  necessary to decide whether, for the distribution of passenger  cars, there is a community-wide market or a national market  since even if one considers national markets, the proposed  operation does not raise serious doubts as to its compatibility  with the common market. Volvo's share of the UK passenger car  market was only 3% by value in 1991. Its share of the EC market  was, for the same year, less than 2% and its highest market  share within an EC Member State was in the Netherlands and  amounted to only 4.3%.  9.<ind> The proposed concentration will result in no additional  market foreclosure: Volvo Concessionaires' distribution network  was only available for Volvo cars prior to this transaction and  will remain so following its acquisition by Volvo.  V.<ind> CONCLUSION  10.<ind> There is no horizontal overlap between the activities  of the parties and the proposed concentration will not give  rise to any increment in market shares. The main economic  effect will be the increase in value added by the Volvo Group  through vertical integration of its activities in the UK  market, which does not give rise to any competition concerns.  11.<ind> For the above reasons the Commission has decided not  to oppose the notified concentration and to declare it  compatible with the common market. This decision is adopted in  application of Article 6(1)b of Council Regulation N  4064/89.  For the Commission,