CELEX: 31993M0366
Language: en
Date: 1993-09-13 00:00:00
Title: COMMISSION DECISION of 13.09.1993 declaring a concentration to be compatible with the common market (Case No IV/M.366 - ALCATEL / STC) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31993M0366

COMMISSION DECISION of 13.09.1993 declaring a concentration to be compatible with the common market (Case No IV/M.366 - ALCATEL / STC) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 259 , 23/09/1993 P. 0000

 COMMISSION DECISION of 13.09.1993 declaring a concentration to  be compatible with the common market (Case No IV/M.366 -  ALCATEL / STC) 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)(a) DECISION Registered with advice of delivery To the notifying party Dear Sirs, Subject : <tab> Case No IV/M.366 - Alcatel / STC  <ind>  <ind> Your notification of 11.08.1993 pursuant to  Article 4 of Council Regulation No 4064/89 (Merger Regulation)  1. <ind> On 28.07.1993, Alcatel Cable S.A. (Alcatel) notified  to the Commission an agreement to purchase from Northern  Telecom Europe Ltd (Northern Telecom) the whole share capital  of STC Limited (STC), to which Northern Telecom will transfer  prior to the transaction its entire submarine  telecommunications systems business.  2. <ind> On 11.08.1993, Alcatel notified a second proposed  transaction between the said parties in respect of the  acquisition by Alcatel of Northern Telecom's satellite  television antennae business, which would also be included in  STC.  3. <ind> In accordance with paragraph 2 of Article 5(2) of the  Merger Regulation these transactions have to be treated for  jurisdictional purposes as one and the same concentration  arising on the date of the last transaction.  4. <ind> After examination of the notification, the Commission  has concluded that the operation does not fall within the scope  of the Merger Regulation.   I. <ind> THE PARTIES  5. <ind> Alcatel is a subsidiary of Compagnie Financière  Alcatel, which in turn is owned by Alcatel Alsthom. It is  involved in the production and sales of power cables and  submarine telecommunications systems.  6. <ind> STC is a UK telecommunications equipment supplier  which was acquired in 1990 by Northern elecom, a leading  global supplier of fully digital telecommunications switching  systems and related services. Northern Telecom is ultimately  controlled by Bell Canada Enterprises Inc., the major provider  of telecommunications services in Canada.  II. <ind> COMMUNITY DIMENSION  7. <ind> The worldwide turnover of the undertakings concerned  exceeds 5,000 million ECU (Alcatel 16,058 million ECU and STC  326 million ECU).   <ind> With regard to the aggregate Community-wide turnover of  the undertakings, Alcatel clearly exceeds the 250 million ECU  threshold laid down in the Merger Regulation. As for STC, the  notifying party states in its notification that its aggregate  Community-wide turnover in 1992 exceeded 272 million ECU.  8. <ind> To reach this figure, the notifying party has taken  into account as Community-wide turnover all turnover, amounting  to 244 million ECU, derived from contracts for submarine  systems having at least one landfall in the EC, ie. a direct  physical link with the Community. To this figure is added 40%,  amounting to 11 million ECU, of turnover derived from a  contract in Thailand on the basis that an EC investor has made  an identifiable investment in that project and the cable will  partially also be used for international calls originating in  the EC. To this should be added the satellite antennae  business, accounting for 17 million ECU, as a result of the  second transaction.  9. <ind> As a justification for the adoption of the landfall  criterion, the notifying party puts forward the argument that  contracts for submarine systems with at least one landfall in  the EC have a direct physical link to EC public  telecommunications networks in which at least one EC telecom  operator will be a direct party to the procurement contract and  will thus jointly hold undivided ownership of the system. As a  result, the EC telecom operator will connect the system to its  own terminal equipment and will receive revenues based on  traffic through the system in both directions (EC and non-EC  originating traffic).  10. <ind> The Commission recognises that the market for  submarine telecommunications systems is a market in which it is  not, prima facie, evident how turnover can be geographically  allocated. It does not, however, consider that the assumptions  of the parties with regard to STC turnover are in line with the  relevant provisions of the Merger Regulation.  11. <ind> According to Article 5(1) paragraph 2, "turnover in  the Community or in a Member State shall comprise products sold  and services provided to undertakings or consumers, in the  Community or in that Member State as the case may be."  12. <ind> In this respect, a differentiation has firstly to be  made between the market for submarine telecommunications  systems, which is the relevant product market in this case, and  the market for the service they are aimed to provide which is  not in issue here.   13. <ind> The market for submarine telecommunications systems  is characterised by rapid technological evolution and the  existence of vast projects usually requiring the formation of  multi-manufacturers consortia for their execution. Cables are  laid primarily in international waters and are sold to  international purchasing consortia often composed of  telecommunications operators who will usually be parties to  each direct procurement contract. These submarine cables  contain thousands of circuits which are apportioned to  operators according to their share participation in the  consortium.  14. <ind> The Commission considers that it is not the physical  link which is decisive but the place where the investors are  established and their respective shares in the consortium. This  appears to be the right way to consider whether, and to what  extent, a Community operator is the recipient of the products  in question and, as a result, the correct test for attributing  to the Community turnover generated by the sale of submarine  telecommunications systems.  15. <ind> Using the above criteria, the Commission calculates  the EC turnover of STC, including submarine telecommunications  systems and satellite antennae, to be 151 million ECU (see  detailed chart attached) [Deleted - Business secrets.].  16. <ind> Accordingly, the proposed operation does not have a  Community dimension since the Community-wide turnover of STC  does not exceed the 250 million ECU threshold set out in  Article 1.  III. <ind> CONCLUSION  17. <ind> Based on the above, the Commission has concluded that  the notified operation is a concentration which does not have a  Community dimension within the meaning of Article 1 of the  Merger Regulation and therefore does not fall within the scope  of the Merger Regulation. This decision is adopted in  application of Article 6(1)(a) of Council Regulation No  4064/89.