CELEX: 32021M10314
Language: en
Date: 2021-10-25 00:00:00
Title: Commission Decision of 25/10/2021 declaring a concentration to be compatible with the common market (Case No COMP/M.10314 - VINCI / ENERGIA Y SERVICIOS DINSA II) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 25.10.2021
                                                                C(2021) 7823 final
                                                                                 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                                                                 has been replaced by ranges of figures or a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.
                                                                VINCI S.A.
                                                                1 cours Ferdinand de Lesseps
                                                                92851 Rueil-Malmaison
                                                                France
Subject:             Case M.10314 – VINCI S.A. / ENERGÍA Y SERVICIOS DINSA II
                     Commission decision pursuant to Article 6(1)(b) of Council Regulation
                     No 139/20041 and Article 57 of the Agreement on the European Economic
                     Area2
Dear Sir or Madam,
(1)       On 20 September 2021, the European Commission received notification of a
          proposed concentration pursuant to Article 4 of the Merger Regulation by which
          Vinci S.A. (France), the ultimate parent company of the Vinci group (‘Vinci’ or
          ‘Notifying Party’), will acquire sole control within the meaning of Article 3(1)(b) of
          the Merger Regulation over Energía y Servicios DINSA II, S.L.U. (‘ACS ES’ or the
          ‘Target’, Spain), by way of purchase of shares (the ‘Transaction’) from ACS
1     OJ L 24, 29.1.2004, p. 1 (the ’Merger Regulation’). With effect from 1 December 2009, the Treaty on the
      Functioning of the European Union (‘TFEU’) has introduced certain changes, such as the replacement of
      ‘Community’ by ‘Union’ and ‘common market’ by ‘internal market’. The terminology of the TFEU will
      be used throughout this decision.
2     OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’).
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak---          Servicios Comunicaciones y Energía, S.A3 . (Vinci and ACS ES are designated
         hereinafter as the 'Parties' to the Transaction.)
1.       THE PARTIES
(2)      Vinci is a diversified group active in concessions and infrastructures (e.g. motorways
         and airports); building, public works and civil engineering; energy and information
         technology services; and road works. In relation to energy, Vinci offers services in
         the fields of electrical engineering (electrical and telecommunications networks,
         power supply and others), air-conditioning/thermal engineering services (heating,
         cooling, air treatment and others) and mechanical engineering (automation,
         instrumentation and control systems).
(3)      ACS ES has two business lines: industry support services (mainly aimed at industrial
         maintenance contracts and services) and integrated projects (focusing on the
         development of engineering, procurement and construction projects related to
         energy, including the development of projects related to renewable energies and the
         oil and gas sector).
2.       THE CONCENTRATION
(4)      The Transaction consists of the acquisition by Vinci of 100% of the shares of ACS
         ES. Upon completion of the transaction, Vinci will exercise sole control over ACS
         ES.4
3.       UNION DIMENSION
(5)      The undertakings concerned have a combined aggregate worldwide turnover of more
         than EUR 5 000 million (Vinci: EUR 44 707 million; ACS ES: EUR […], million)5 .
         Each of them has a Union-wide turnover in excess of EUR 250 million (Vinci: EUR
         […] million; ACS ES: EUR […] million), but they do not achieve more than two-
         thirds of their aggregate Union-wide turnover within one and the same Member
         State. The notified operation therefore has a Union dimension.
4.       M ARKET DEFINITION
(6)      The Parties’ activities overlap horizontally in the provision of (i) electrical
         engineering services, (ii) mechanical engineering services, (iii) thermal and air-
3   Publication in the Official Journal of the European Union No C 398, 1.10.2021, p. 23.
4   Grupo ACS and VINCI S.A. have also agreed to the creation – conditional upon the closing of the
    Transaction – of a joint-venture owned […]% by Vinci and […]% by Grupo ACS under the sole control
    of the former. The purpose of the JV is, for a minimum term of eight years and six months, the acquisition
    from ACS ES, operation, asset management and optimisation of renewable energy production assets
    developed and connected to the grid by ACS ES.
5   Turnover calculated in accordance with Article 5 of the Merger Regulation .
                                                          2
 ---pagebreak---           conditioning engineering services, (iv) IT services, (v) construction services and (vi)
          Engineering, Procurement and Construction (EPC) of onshore Oil & Gas projects.6
(7)       Considering all plausible product and geographic market definitions, the Transaction
          could only give rise to horizontally affected markets in the fields of electrical and
          mechanical engineering services.
4.1.      Relevant markets
4.1.1. Electrical engineering services
4.1.1.1. Product market definition
(8)       Electrical engineering services include services on electrical and telecommunication
          networks, substations, voice data-image, power supply, public lighting, etc. In its
          previous decisions, the Commission has distinguished between the provision of (i)
          electrical, (ii) mechanical and (iii) thermal/air-conditioning engineering services,
          although it left the precise market definition open.7
(9)       Within electrical engineering services, the Commission has considered the
          possibility of further sub-segmenting the market depending on (i) the type of
          business        (residential/non-residential);          (ii)       the      type        of       work
          (installation/maintenance);       and       (iii)       the      nature       of     the       service
          (infrastructures/industry/tertiary sector). 8
(10)      Moreover, the Commission has considered that engineering services on (i)
          telecommunication networks, (ii) substations, and (iii) power lines might constitute
          distinct markets.9 Finally, the Commission has also considered in past decisions
          potential distinct markets for engineering services on public lighting, including street
          and public place lighting, traffic signals, and the illumination of places, monuments
          and buildings, distinguishing between installation and maintenance services. 10
(11)      The Parties generally agree with the Commission’s practice, without taking a firm
          view on the exact product market definition. 11 Within the provision of engineering
          services for power lines, however, the Parties indicate that a possible further sub-
6    Vinci also provides electrical and mechanical engineering installation or maintenance, as well as
     construction services, that hypothetically could be sourced by the Target for its EPC services for wind
     farms, photovoltaic farms and offshore oil and gas facilities. Vinci provides services which are not EPC
     specific, and the Target is only active in Spain and, to a lesser extent, in Denmark and Germany. Even if
     this hypothetical link could be considered as a vertical relationship, the Transaction would not give rise to
     affected markets. ACS ES’ shares in the downstream markets do not exceed 10% in any geog raphic
     market, Vinci does not offer EPC specific services, and its market shares regarding electrical or
     mechanical services are far below 30%.
7    Case COMP/M.5701 – VINCI/CEGELEC, Case COMP/M.6623 – VINCI/EVT.
8    Case COMP/M.9270 – VINCI AIRPORTS / GATWICK AIRPORT, §21; Case COMP/M.6623 – VINCI /
     EVT, §7 et seq.; Case COMP/M.5701 – VINCI / CEGELEC §9 et seq.; Case COMP/M.6623 – VINCI /
     EVT §8 and Case COMP/M.2447 – FABRICOM / GTI §20.
9    Case COMP/M.6623 – VINCI / EVT §10 and Case COMP/M.5701 VINCI / CEGELEC §22-24.
10 Case COMP/M.7137 – EDF / DALKIA EN FRANCE, §132; Case COMP/M.5464 - Véolia Eau/Société
     des eaux de Marseille/Société des eaux d’Arles/Société Stéphanoise des eaux, §37.
11 Form CO paragraph 144.
                                                            3
 ---pagebreak---          distinction could be made between overhead and underground power lines. 12 The
         Commission’s decisional practice has not considered such a distinction.
(12)     The market investigation showed that competitors were divided as to whether the
         provision of electrical services to infrastructures13 should be further segmented (e.g.
         distinguishing, for instance, between installation/maintenance of public lighting
         infrastructure, installation/maintenance of power lines, etc.),14 although the majority
         of customers that expressed a view considered that no further segmentation would be
         necessary.
(13)     However, when it comes to the provision of engineering services for power lines, the
         majority of competitors and customers were of the view that it was appropriate to
         distinguish by type of voltage (between high – above 50 000 volts, and medium/low
         – below 50 000 volts).15 One competitor, for instance, indicated as follows: “High
         voltage request specific plant, heavy equipment, staff & labor force being highly
         trained, not necessary for low or medium voltage. Profile of workers, equipment,
         software, plant are completely different”.16 Other customers expressed similar
         opinions, and one of them stated that whereas there are some companies specialised
         in the provision of services for high-voltage lines, others cover the whole range of
         services.1718
(14)     As to a possible distinction between services concerning, on one hand, the
         installation and, on the other hand, the maintenance of power lines, all competitors
         that expressed a view indicated that they carry out both installation and maintenance
12  Form CO, paragraphs 254.
13  The only area that could potentially give rise to affected markets .
14  Competitors Q4, customers Q4.
15  Competitors Q5, customers Q5.
16  Competitors, Q.5.
17  Customers, Q.5.
18  As to a possible distinction between underground and overhead within each high and medium-low voltage
    lines, the Notifying Party submits that in France calls for tenders for high voltage overhead and
    underground electrical lines are is sued separately by the two customers in the market (RTE and EDF SEI)
    and market shares are provided separately at national level (the Notifying Party is not able to estimate the
    Parties’ market shares separately for each overhead and underground at a regio nal level, but it indicates
    that to its knowledge, all competitors active in France are able to answer calls for tenders regarding both
    overhead and underground works in all regions of France where the Parties’ activities overlap). In France,
    the Parties’ activities do not overlap in medium-low voltage lines and, therefore, a possible distinction
    between underground and overhead lines is not relevant. As regards Spain, the Notifying Party submits
    that the calls for tenders do not distinguish between overhead and underground works and are therefore
    jointly tendered, and thus, such distinction is not relevant. In high voltage lines, the Notifying Party
    submits that such distinction would in any case have no relevant impact as the proportion of the market
    relating to underground high voltage line works is negligible. In medium-low lines, the Notifying Party
    submits that in any case such a distinction is also not relevant for the competitive assessment as the teams
    delivering services related to medium and low voltage electrical lines services perform services on both
    overhead and underground lines during the same day, notably because the line cables are thin (much
    thinner and easier to handle than cables for high voltage lines) and installed on already existing p oles for
    overhead lines and inside already existing ducts for underground lines (reply by the Notifying Party to RFI
    9 of 22 October 2021). The customers and competitors consulted by the Commission in the market
    investigation pointed to relevance of the distinction between high and low-medium lines as there are
    differences in demand (different customers) and the structure of supply between these two types of lines.
    None of the market players pointed to the relevance of a distinction between overhead or unde rground
    lines, which are tendered by the same customers.
                                                            4
 ---pagebreak---         works.19 A slight majority of customers indicated that they contract installation and
        maintenance services in the same contract20 and that most contractors cover both
        types of works.21 One customer explained that installation and maintenance are very
        similar, that they often involve the same type of works, only with a difference in
        their urgency, and that the staff and resources employed by companies can be used in
        both.22
(15)    The Commission considers that, for the purposes of this Decision, it can be left open
        whether the provision of electrical engineering services should be sub-segmented
        according to the type of business, the type of work or the nature of the service;
        whether distinct product markets should be considered for telecommunication
        networks, substations, power lines or public lighting; or whether power lines should
        be further sub-segmented according to the type of voltage or between overhead and
        underground power lines, as the Transaction does not raise serious doubts as to its
        compatibility with the internal market under any of the plausible product market
        definitions.
4.1.1.2. Geographic market definition
(16)    In its previous decisions, the Commission has considered that the geographic scope
        of electrical engineering markets was at least national, although the precise
        definition was ultimately left open.23 While it is true that in one case concerning
        France the Commission considered both national and regional shares due to the
        existence of national players,24 the market investigation in that same case suggested
        that the geographic scope for the provision of services to power lines was most likely
        national because the competitive conditions were similar throughout France. 25
(17)    The Notifying Party considers the markets to be, at least, national in scope.26
(18)    In the market investigation, the majority of competitors were of the view that
        companies active in electrical engineering services are typically present at national
        level and that prices are essentially the same throughout the national territory. 27 The
        majority also indicated that the market for the installation/maintenance of electrical
        infrastructures should be viewed as national, with one competitor even indicating
        that it could be even EEA-wide or wider.28 The majority of customers also agreed
        that most companies active in electrical engineering services are present at national
        level.29 One of the main customers in Spain also stated that “most of our suppliers of
19  Competitors, Q.6. One competitor, however, stated that they need to sub -contract certain works in high
    voltage power lines.
20  Customers Q7.
21  Customers Q6.
22  Customers Q.7
23  COMP/M.2447 – Fabricom / GTI, paras. 17, 25, 27-28; Case COMP/M.3653 – Siemens /VA Tech, paras.
    445-446.
24  COMP/M.5701 - VINCI / CEGELEC, para. 53.
25  COMP/M.5701 – VINCI / CEGELEC, para. 33, COMP/M.6623 - VINCI/ EVT BUSINESS, paras 14-15.
26  Form CO, paragraph 150.
27  Competitors, Q8 and Q10.
28  Competitors, Q11
29  Customers, Q9. Even the ones who considered that most service providers are regional explained that
    “most […] suppliers are local companies. Nevertheless, national companies such as Vinci and Eiffage,
                                                       5
 ---pagebreak---          electrical engineering services cover the national territory. Some big corporations
         may have companies that operate in different countries”. The replies provided by
         customers were also inconclusive as to whether quoted prices differ significantly in
         different areas within Spain and/or France. One of the main customers in Spain
         explained that “prices show very little variation from one region to another. These
         variations might be slightly higher in islands with respect to continental territory,
         due to the location and isolation”.30 In any case, the majority of customers also
         consider that the market is national.31
(19)     In conclusion, according to the market investigation the geographic scope of the
         provision of electrical engineering services, in particular for power lines, is most
         likely national although, for the purposes of this Decision, it can be left open
         whether the market should be defined as national or regional, as the Transaction does
         not raise serious doubts as to its compatibility with the internal market under either
         geographic market definition.
4.1.2. Mechanical engineering services
(20)     In the mechanical engineering services field, the Commission has considered in its
         past decisions further sub-segmenting the market distinguishing by type of work
         (installation/maintenance), type of business (residential/non-residential), and the type
         of customer (infrastructures/industry/tertiary), although the precise market definition
         has ultimately been left open.32 The Parties do not contest the Commission’s past
         practice.
(21)     As regards the geographic market definition, the Commission has in the past left
         open whether the market should be considered national or regional. 33 The Notifying
         Parties submit that the provision of mechanical engineering services is national.
(22)     For the purposes of this Decision, it can be left open whether the provision of
         mechanical engineering services should be sub-segmented according to the type of
         work, the type of business or the type of customer and whether the market should be
         defined as national or regional, as the Transaction does not raise serious doubts as to
         its compatibility with the internal market under any product or geographic market
         definition.
5.       COMPETITIVE ASSESSMENT
(23)     The Transaction would not give rise to any affected markets at national level
         according to the market definitions and the different segmentations considered by the
         Commission in the past.
    although a minority in number, may represent a significant part of the volume of purchases in certain
    territories”.
30  Customers, Q11.
31  Customers, Q12.
32  COMP/M.9270 – VINCI AIRPORTS / GATWICK AIRPORT, §21; Case COMP/M.6623 – VINCI /
    EVT, §7 et. seq.; Case COMP/M.5701 – VINCI / CEGELEC §9 et seq.
33  Case COMP/M.5701 – VINCI / CEGELEC §§28 – 32.
                                                      6
 ---pagebreak--- (24)     However, considering narrower segmentations, a number of affected markets would
         arise in the areas of electrical engineering services and mechanical engineering
         services.
5.1.     Electrical engineering services
(25)     In Spain, on a broader market for maintenance services for electrical infrastructures,
         there would not be an affected market at national level, but two regional markets
         would be affected: Andalucía and Extremadura.
(26)     As regards services for power lines, if a distinction is made according to the voltage
         of the power lines (i.e. between high voltage power lines above 50 000 volts, and
         low and medium voltage power lines below 50 000 volts), there would be an
         affected national market (for maintenance services for medium and low voltage
         electric lines). And if the markets were to be defined regionally, there would be a
         number of affected regional markets:
         (a)     Installation and maintenance services - taken together – for low and medium
                 voltage power lines (Andalucía, Aragón, Balearic Islands, Canary Islands,
                 Catalonia and Extremadura); and
         (b)     If the services’ markets are considered more narrowly (i.e. distinguishing
                 between installation and maintenance):
                 –         for installation services of high voltage power lines (Aragón, Asturias,
                           Castilla La Mancha, Catalonia, Madrid and Valencia),
                 –         for installation services of low and medium voltage power lines
                           (Andalucía); and
                 –         for maintenance services of low and medium voltage power lines
                           (Andalucía, Aragón, Balearic Islands, Canary Islands, Catalonia and
                           Extremadura).
(27)     In France, as regards services for power lines, if a distinction is made between
         overhead and underground lines within high voltage lines (the only type of lines
         where the Parties’ activities overlap), there would be affected national markets for
         the installation of (i) overhead and (ii) underground power lines. And if a distinction
         is made according to the voltage of the power lines and the markets were to be
         defined as regional, two regional markets would be affected for the installation of
         high voltage power lines: Centre-Val de Loire and Corsica.
5.1.1. Spain
(28)     Table 1 below shows the Parties’ market shares in Spain in 2019 and 2020 for all
         plausible affected markets.34
34 In Spain, overhead and underground power lines are tendered jointly (see footnote 18).
                                                         7
 ---pagebreak---  ---pagebreak---          and the high volatility of market share; and fourth, that customers have bargaining
         power.36
         (B)        The Commission’s assessment
(30)     In Spain, there could be affected markets at national and at regional level (see Table
         1 Market shares for the Parties in Spain, 2019-2020above).
         (B.i)      National level
(31)     At a national level, there would be only one potentially affected market, the
         maintenance of low and medium voltage power lines. The Parties had a combined
         market share of [30-40]% in 2020 (varying from [40-50]% in 2018 and [30-40]% in
         2019). Both Parties hold a similar position on this market (e.g. in 2020 Vinci’s share
         was [20-30]% whereas ACS ES’ share was [10-20]%). The Parties’ market shares
         over the previous years illustrate that ACS ES’ position is on a consistent downward
         trend, and there are a number of competitors with equivalent capacity and market
         position as that of the Parties (e.g. Elecnor has a 15-25% market share, Eiffage has a
         10-20% market share, and other competitors such as FCC Industrial, Ametel or
         Siemsa, all with shares between 0-10%). The internal documents provided by the
         Parties confirm the existence of a large number of competitors. 37
(32)     Even if shares at a national level are less volatile than regional shares (precisely
         because when a service provider wins a regional contract and loses another one in a
         different region, the effect of volatility is mitigated at national level), there are
         substantial variations from one year to another. For example, ACS ES lost more than
         [5-10] percentage points in only two years (its market share declined from [20-30]%
         to [10-20]% between 2018 and 2020). Such variations are explained by the fact that
         the Parties’ shares depend on very few large customers (notably Iberdrola, Endesa
         and Naturgy) and concrete projects, on the way that clients tender and on the results
         of each call for tender.
(33)     The Parties provided tendering data for the last four years showing that contracts are
         generally awarded for a period of two or maximum three years, which explains the
         share volatility in relatively short periods. Such tender data also shows that the
         number of competitors participating in each of these tenders is large, with more than
         ten or even twenty bidders each time, including large service providers active in
         Spain such as Elecnor, Eiffage or FCC Industrial.
         (B.ii)     Regional level
(34)     At regional level, there would be potentially affected markets in a number of regions
         in installation and maintenance combined, and in installation and in maintenance of
         low and medium voltage lines separately.
36  The high volatility of market shares is illustrated by the situation in Andalucía (the only region where the
    Parties’ combined market in installation and maintenance exceeds [30-40]%) where the Parties combined
    market share in 2019 was [40-50]%, which then substantially dropped by more than ten points in 2020.
    Moreover, the Target lost the contracts it had in this region in January 2021, which means that its share
    estimation for 2021 would be close to [0-5]%.
37 See presentation provided as Annex 5.4.c […] .
                                                            9
 ---pagebreak--- (35)     As regards installation and maintenance of low and medium voltage lines combined,
         six affected regional markets would arise in 2020 (Andalucía, Aragón, Balearic
         Islands, Canary Islands, Catalonia and Extremadura, see Table 1 above). In none of
         those markets the combined market shares were above 35%. In three regions, the
         increment was low or negligible (in any case below 5%), and in the other three
         regions the increments were between [5-10]-[10-20]%. Market shares appear also to
         be volatile, with fluctuations of up to 21 percentage points between 2019 and 2020.
(36)     As regards installation of low and medium voltage lines, only one regional affected
         market would arise in 2020 (Andalucía, see Table 1 above). The combined market
         share was moderate ([20-30]%), and the increment was below 10%.
(37)     As regards maintenance of low and medium voltage lines, it is true that market
         shares are high in some regions. However, the Commission considers that, in the
         unlikely scenario that the markets for the maintenance of medium and low voltage
         electric lines were to be defined as regional, the Transaction would also not give rise
         to serious doubts as to its compatibility with the internal market, for the following
         reasons (besides those explained in relation to the national market in paragraphs
         (31)-(33) above):
(38)     First, in some regions with high market shares (Aragón, Canary Islands), the market
         share increment would be very limited or negligible. In Aragón, the combined
         market share was very high in 2020 ([60-70]% but the increment was less than 5%
         (ACS ES’ share was [0-5]%). Moreover, in 2019 the market shares were drastically
         different: The combined market share was almost half of that in 2020 ([30-40]%),
         with similar individual market shares by both Parties (between [10-20]%), which in
         only one year more than […] in the case of Vinci and were divided by six in the case
         of ACS ES. In the Canary Islands, the combined market share was [70-80]% in
         2020, with a negligible increment of [0-5]%. Moreover, in all these regions there are
         various competitors with equivalent capacity to that of the Parties which pose an
         effective constraint, as shown by the fact that their estimated market shares for 2021
         indicate that the Parties, in some instances, have negligible positions or were even
         driven out of those markets in just one year and despite their 2020 market shares
         (e.g. in Extremadura).38
(39)     Second, the substantial market shares’ fluctuation (see paragraphs (32)-(33)) is
         indicative of contestable or challengeable market positions, which can vary greatly
38  E.g. in 2021 the Parties identified strong competitors in the regions with higher combined market shares.
    For instance, in Andalucía, there are various competitors holding an estimated market share between 0-
    10% and Elecnor has an estimated market share of 20-30%. In Aragón, UTE PSC-Ullastres holds an
    estimated market share between 40-50%. In the Balearic Islands Elecnor holds an estimated market share
    between 40-50%. In the Canary Islands, also Elecnor holds an estimated market share of 30-40% and UTE
    PSC-Ullastres holds an estimated market share of 10-15%. In Catalonia, Elecnor also has an estimated
    market share of 30-40%, while Comsa and Melfosur have estimated market shares of 0-20% and 0-10%
    respectively. In Extremadura Ametel is expected to hold a market share of 70-80% and UTE Mopael a
    market share of 20-30% (implying that the Parties’ market shares in 2021 are minimal or non -existing in
    that region). According to the Notifying Party, 2021 market share estimates were prepared by ACS ES
    based on Endesa’s tenders (which correspond to the regions of Andalucía, Aragon, Balearic Islands,
    Canary Islands and Catalonia) and Iberdrola (Extremadura). The Notifying Party explains that currently
    there is still a tender in process in 2021 that affects Catalonia and Andalucia, but the attribution of
    this tender will not have any effect until mid-2022, and the outcome is uncertain. Moreover, the Notifying
    Party considers that according to the bidding conditions for these two regions organised by Endesa, no
    winning company will be able to obtain a volume larger than a 25% market share for both regions.
                                                           10
 ---pagebreak---          very rapidly (i.e. from one year to the next). In Andalucía, for instance, the Parties’
         combined share was [60-70]% in 2019 and [40-50]% in 2020, i.e. it decreased by
         [10-20] percentage points. In Extremadura, the shares’ fluctuation was even more
         prominent: the Parties lost [30-40] percentage points in only one year. Conversely, in
         Aragón, the combined market share increased by [30-40] percentage points in one
         year, and the Balearic Islands by almost [60-70] points. In the Canary Islands the
         volatility is even more pronounced: There were no affected markets in 2019 and the
         combined market share was [70-80]% in 2020. This shows, as confirmed by the
         market investigation, that high market shares in a region in a given year are the result
         of the adjudication of certain works but do not imply a stable or incontestable
         position of market power.
(40)     Third, the information provided by the Parties on tenders organised by customers in
         the last four years in these specific regions (see also paragraph (33)) confirms this
         contestability. During the period considered in this tender data, there were [40-50]
         tenders, all concerning contracts of very short duration (mostly two years and at
         most three years in a few instances). Numerous bidders participated in each of those
         awards (often more than 10 and in some occasions even more than 20),39 and there
         were a non-insignificant amount of tenders in which only one of the Parties
         participated ([10-20] out of the [40-50] tenders on which the Parties submitted
         information).
(41)     Fourth, the results of the market investigation suggest – in line with the Parties’
         submissions and the Commission’s precedents – that the dividing line between
         maintenance and installation is not clear-cut, as customers often source maintenance
         and installation services either through the same contracts or to the same market
         players. The market investigation suggested that many companies provide services
         in both fields (see paragraph (14) above), which means that even if installation and
         maintenance were considered separate products markets, there might be at the very
         least a certain degree of out-of-market competition, since the Parties would face
         competitive pressure from the companies active in the other segment which are
         ready to satisfy demand in both areas. The tendering data provided by the Parties
         also demonstrates this, showing that the scope of most requests for quotation
         included both installation and maintenance works.
(42)     In this regard, the Commission notes that, as shown in Table 1 above, the Parties’
         combined market shares in these regions in a segment combining both maintenance
         and installation works for medium and low voltage electric lines are lower or
         significantly lower than the shares considering only maintenance.40 This indicates
         the existence of out-of-market constraints, i.e. that companies with high shares in
         one region would face the competitive constraint of the companies active in other
         regions who are ready to offer their services on a supra-regional level.
(43)     Fifth, the demand for maintenance (and installation) services for medium and low
         power lines is concentrated, customers (distribution system operators, ‘DSOs’) are
39  The existence of numerous competitors that participate in tenders in Spain has been confirmed by
    customers in the market investigation.
40 The combined shares considering both installation and maintenance of medium and low voltage lines are
    significantly lower: Less than 20% in Spain and below 30% in all regions in Spain except in four, where
    the combined shares are in any case below 34% (Andalucía: [30-40]%; Aragón: [30-40]%; Balearic
    Islands: [30-40]%; Catalonia: [30-40]%).
                                                       11
 ---pagebreak---         large and sophisticated companies and are natural monopolists in their respective
        markets, which suggests that they possess bargaining power. In this respect, if the
        markets were to be defined narrower than national (i.e. regional), the demand would
        be even more concentrated, as only a few DSOs are present in each region/local area,
        which would increase further this bargaining power. All competitors responding to
        the market investigation agreed that customers are generally very large companies,
        which can dictate or heavily influence the final prices and conditions when they
        award a new contract.
(44)    Sixth, even considering regional markets, the Parties would face considerable out-of-
        market constraints from competitors in other (sometimes adjacent) regions where the
        Parties have significantly lower market shares, given that the competitive conditions,
        prices and regulation are similar throughout the national territory and, therefore,
        other competitors would likely face low barriers to enter the region in question. Most
        respondents to the market investigation stated that companies active in electrical
        engineering services are typically present at national level and that prices are
        essentially the same throughout the national territory.
(45)    Finally, the Commission notes that, regardless of the precise product or geographic
        scope of the market, customers and competitors have not raised any concerns in the
        market investigation, and have expressed the view that the markets are competitive
        and that the Parties would not have the ability to raise prices post-Transaction, as
        there are numerous other service providers to which customers can switch. In fact,
        all competitors agreed that customers are generally very large companies, which can
        dictate or heavily influence the final prices and conditions when they award a new
        contract.
(46)    Also, the vast majority of customers stated that, if post-merger the Parties were to
        raise prices, they would have other competitors to switch to (none replied that there
        would not be alternative suppliers), and a majority of competitors also confirmed
        that if the Parties were to raise prices they could face an increase in demand and
        serve those customers wanting to switch. Most competitors consider that switching
        service provider does not entail significant costs and can be done frequently, and
        most customers were of the same view (even one of the customers who suggested
        that switching could be difficult, clarified that switching may require 3-4 months and
        that it may be burdensome from the point of view of technical requirements rather
        than costs).
5.1.1.2. High voltage power lines
        (A)       The Notifying Parties’ views
(47)    The Parties submit that a regional distinction is not relevant for high voltage power
        lines according to the Commission’s previous decisions. In any event, they submit
        that, even at regional level, the Parties’ combined market shares never exceed [40-
        50]% whatever the region and appear very volatile, as they depend on a few projects,
                                                    12
 ---pagebreak---  ---pagebreak---  ---pagebreak--- 5.1.2.2. The Commission’s assessment
(57)    In France, distinguishing between underground and overhead power lines, the
        Parties’ combined market share at national level in the installation segments leads to
        affected markets, but is still relatively low and with a limited presence of ACS ES.
        The combined market shares remain below 30% in both 2019 and 2020 (and, in the
        case of underground power lines, below 20% in 2019), and the Target’s market share
        is in both cases around [5-10]% ([5-10]% for overhead lines and [0-5]% for
        underground lines in 2020).
(58)    Moreover, in the last three years, the majority of both Parties’ turnover in power
        lines in France was generated through one long-term framework agreement
        concluded with RTE and resulting from one call for tender. 45
(59)    With regard to overhead power lines, the Target answers calls for tenders jointly (in
        a consortium) with Lebag, Eqos and Helcom. Moreover, the Parties will continue to
        face competitive pressure from large competitors in call for tenders for overhead
        power lines (e.g. Bouygues Energies Services 2018, EIFFAGE Energies Systèmes
        and INABENSA/CI2000 Consortium – all with market shares between 15-20% in
        2020, and also Engie INEO/Cetim Consortium, with a market share between 10-15%
        in 2020.
(60)    With regard to underground power lines, the increment brought by the Target ([0-
        5]%) is even less representative considering that ACS ES is present in the market
        through its subsidiary SEMI, that answers calls for tenders as part of a consortium
        with Inabensa and Eqos.
(61)    The Parties will continue to face substantial competitive pressure from numerous
        competitors present in the market which answer calls for tenders for underground
        power lines such as Engie Ineo, EIFFAGE Energies Systèmes, Consortium SPIE/
        Thepault, Consortium Serpollet/ ETPM (all with market shares between 10-20% in
        2020), as well as a number of smaller competitors (e.g. Sobeca, EHTP, Sade, and
        Satelec), all with market shares between 5-10% in 2020).46
(62)    With respect to the segment for the installation of high voltage power lines, there are
        two regional affected markets in 2020, Centre-Val de Loire and Corsica with
        combined market shares of [50-60]% and [50-60]% respectively. In both cases,
        market shares do not appear to reflect accurately a position of market power given
        their strong fluctuation (in only one year, the market share varied in about [30-40]
        percentage points in Centre-Val de la Loire, and also in more than 30 percentage
        points in Corsica – which was not even one of the regions where the Parties’
        activities led to affected markets in 2019).
(63)    As explained in paragraph (43) above for the maintenance and installation of low
        and medium voltage lines, the demand is very concentrated. Customers are large and
        sophisticated companies and are natural monopolists in their respective markets,
        which suggests that they possess bargaining power. In the case of installation of high
        voltage lines in France, demand is even more concentrated, since in each of those
        regions there is only one customer for these type of services (either RTE or EDF
45  Form CO, paragraph 419.
46  Form CO, paragraph 431.
                                                    15
 ---pagebreak---          SEI). This evidences the ability of such customers to drive negotiations with service
         providers, and to counter any attempted price increase by switching to any of the
         existing alternative providers (such as Bouygues Energies Services, EIFFAGE
         Energies Systèmes, Engie INEO, Inabensa, CI2000, SNEF and SPIE). All
         competitors responding to the market investigation agreed that customers are
         generally very large companies, which can dictate or heavily influence the final
         prices and conditions when they award a new contract.
(64)     The market investigation confirmed that neither customers nor competitors expect
         the Transaction to have a negative impact on competition in those markets.
(65)     For these reasons, the Commission considers that the Transaction does not raise
         serious doubts as to its compatibility with the internal market in relation to the
         installation of high voltage power lines in France.
5.2.     Mechanical engineering services
(66)     As regards the mechanical engineering services, if the market was to be defined as
         regional, the Transaction would only give rise to an affected market in the
         maintenance of infrastructures in the Region of Madrid, Spain. In this potential
         market, ACS ES’ share would be [20-30]% and Vinci’s less than [0-5]%, with a
         combined share post-Transaction of around [20-30]%.47
(67)     Even if the markets were to be defined as regional, the Commission considers
         unlikely that the Transaction may give rise to any serious doubts as to its
         compatibility with the internal market. First, Vinci’s presence in the region is
         symbolic (EUR […] in 2020 and EUR […] in 2019), which results in a very limited
         increment. Second, ACS ES’s presence in the Madrid region mainly concerns
         services for aircraft maintenance and ground handling equipment, areas in which
         Vinci is not active, which means that the competitive pressure they exert on each
         other is, in the best of cases, very limited. Third, there are other competitors active in
         the market with shares higher than those of Vinci. Fourth, the market invstigation
         has not revealed any concerns in this market.
(68)     For these reasons, the Commission considers that the Transaction does not raise
         serious doubts as to its compatibility with the internal market in relation to
         mechanical engineering services in Spain.
47   At national level, their combined market share in this segment would be [10-20]% (ACS ES: [10-20]%;
     Vinci: [0-5]%).
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 ---pagebreak--- 6.   CONCLUSION
(69) 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 and Article 57 of the EEA Agreement.
                                                   For the Commission
                                                   (Signed)
                                                   Margrethe VESTAGER
                                                   Executive Vice-President
                                             17