CELEX: 31996M0771
Language: en
Date: 1996-07-11 00:00:00
Title: Commission Decision of 11/07/1996 declaring a concentration to be compatible with the common market (Case No IV/M.771 - AMB / Rodutch) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31996M0771

Commission Decision of 11/07/1996 declaring a concentration to be compatible with the common market (Case No IV/M.771 - AMB / Rodutch) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 266 , 13/09/1996 P. 0008

 COMMISSION DECISION of 11/07/1996 declaring a concentration to be  compatible with the common market (Case No IV/M.771 - AMB / Rodutch)  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 To the notifying party Dear Sirs, Subject :<ind> Case No IV/M.771  AMB/Rodutch <ind> <ind> Your notification of  21/06/96 pursuant to Article 4 ofCouncil  Regulation No 4064/89 1.<ind> On 21.06.1996 the Commission received a notification of a proposed  concentration pursuant to Article 4 of Council Regulation no 4064/89 by  which the German insurance undertaking, Aachener und Muenchener  BeteiligungsAktiengesellschaft (AMB), will acquire sole control of the  Dutch insurance undertaking, Rodutch Holdings BV (Rodutch). 2.<ind> After examination of the notification, the Commission has  concluded that the notified operation falls within the scope of Council  Regulation No 4064/89 and does not raise any serious doubts as to its  compatibility with the Common Market and with the functioning of the EEA  Agreement. I.<tab> THE PARTIES 3.<ind> AMB is a German undertaking whose principal activities are related  to life and nonlife insurance in Germany and in other EU countries.  AMB  is also engaged in the financial services sector and in real estate  operations. 4.<ind> Rodutch is a holding company which is active in the Dutch life and  nonlife insurance business.  Rodutch conducts its life and nonlife  insurance businesses in the Netherlands through its subsidiaries, Royal  Levensverzekering NV and Royal Nederland Schadeverzekering NV,  respectively. II.<tab> CONCENTRATION 5.<ind> Prior to the notified operation, Rodutch was jointly controlled by  AMB and the British insurance undertaking, Royal Insurance plc (Royal),  with shareholdings of 66.66% and 33.33% respectively, through a vehicle  holding company, namely European Partners for Insurance Cooperation S.A.  (Epic).  In spite of AMB's majority shareholding in Epic this latter  company was effectively jointly controlled by AMB and Royal since  decisions on strategical matters such as the business plan and budget of  Epic required the consent of both shareholders. 6.<ind> By the present operation AMB and Royal enter into a share sale and  purchase agreement according to which AMB will acquire the 33.33%  shareholding Royal held in Epic.  AMB will therefore become the sole owner  of Epic and will therefore acquire sole control of Rodutch, a 100%  subsidiary of Epic. 7.<ind> The present operation therefore deals with a change from joint  control to sole control by AMB on Rodutch through Epic.  A change from  joint control to sole control is deemed to be a concentration under the  Merger Regulation since the quality of decisive influence exercised solely  is substantially different from decisive influence exercised jointly,  since the latter has to take into account the potentially different  interest of the other party or parties concerned. <ind> Therefore the notified operation is a concentration in the sense of  the Merger Regulation. III.<tab> COMMUNITY DIMENSION 8.<ind> The aggregate worldwide turnover of AMB and Rodutch, calculated in  accordance with Article 5(3)b of the Merger Regulation, exceeded in 1995 5  billion ECU (AMB = 8,016 Million ECU; Rodutch = 514 Million ECU).  The  aggregate community wide turnover of each of the two undertakings amounted  the same year to more than 250 Million ECU and the two companies did not  achieve more than two thirds of their aggregate communitywide turnover  within one and the same Member State.  Therefore the concentration has a  community dimension. IV.<tab> COMPATIBILITY WITH THE COMMON MARKET 9.<ind> The relevant product markets concerned by the notified operation  are life and nonlife insurance since the target company, Rodutch, only  carries out activities in these product markets. 10.<ind> As far as life and nonlife insurance are concerned, the  Commission has so far consistently considered in previous decisions that  geographical reference markets are still, at present, predominantly  national in scope in view, inter alia, of the established market  structures, the need for adequate distribution channels, fiscal  constraints and differing national systems of regulatory supervision. 11.<ind> The activities of Rodutch in life and nonlife insurance are  exclusively limited to the territory of the Netherlands where Rodutch has  a total market share of less than 3% (life and nonlife insurance  combined).  Furthermore, Rodutch's market share does not exceed 10% in any  segment of the life and nonlife insurance sectors within the Netherlands. 12.<ind> AMB has significant life and nonlife insurance operations in  Germany, as well as in other E.U. countries, but does not have any  activities in these markets in the Netherlands, except for its  shareholding in Rodutch. 13.<ind> Therefore, the proposed operation will not give rise to any  overlap of activities between AMB and Rodutch and consequently there will  be no addition of market shares in the Dutch insurance markets. V.<tab> ANCILLARY RESTRAINTS 14.<ind> The parties have requested that Article 7 of the share sale and  purchase agreement, which provides that Royal must not compete with  Rodutch or any member of the Rodutch Group in the Netherlands for a period  not exceeding 2 years after the entering into force of the agreement, be  considered as ancillary. 15.<ind> The covenant not to compete is directly related and necessary to  the concentration as it is intended to vest in AMB as sole shareholder of  Rodutch the exclusive right to do business in the Netherlands insurance  market through Rodutch with the benefit of the entire goodwill and knowhow  of Rodutch on this market.  Therefore, this provision of Article 7 shall  be considered as ancillary to the concentration. VI.<ind> CONCLUSION  16.<ind> For the above reasons, the Commission has decided not to oppose  the notified operation and to declare it compatible with the Common Market  and with the functioning of the EEA Agreement. This decision is adopted in  application of Article 6(1)(b) of Council Regulation No 4064/89. For the Commission,