CELEX: 32014M7369
Language: en
Date: 2014-12-03 00:00:00
Title: Commission Decision of 03/12/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7369 - SANTANDER / PSA / JVS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

                                        Brussels, 3.12.2014
                                        C(2014) 9346 final

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|To the notifying parties:                                           |                                                                         |
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Dear Sir / Madam,

Subject:    Case M.7369 - SANTANDER/ PSA/ JVs
         Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139 / 2004[1]

1. On 5 November 2014, the European Commission received a notification of a proposed concentration pursuant to Article 4  of  Council  Regulation
   (EC) No 139/2004 by which the undertaking Santander Consumer Finance, S.A., ("SCF", Spain), a fully owned subsidiary of  Banco  Santander  S.A
   ("Santander", Spain), and Banque PSA Finance S.A. ("Banque PSA", France), a wholly owned  subsidiary  of  Peugeot  S.A.  ("Peugeot",  France),
   acquire within the meaning of Article 3(1)(b) of the Merger Regulation joint control of several newly  created  companies  constituting  joint
   ventures ("JVs") by way of purchase of shares. Santander and Peugeot are collectively referred to as "Notifying Parties".

I.    THE PARTIES AND THE OPERATION

2. SCF is the consumer finance arm of the Santander Group, a Spanish-based group mainly active in retail  banking,  asset  management,  corporate
   and investment banking, treasury and insurance. The group has presence throughout Europe, the United States  of  America,  Latin  America  and
   Asia. Santander is active in automotive financing through its full-service retail banking business. It also partners in a number of automotive
   financing joint ventures, such as in the UK with Hyundai and Kia.

3. Banque PSA offers loans and leases related to motor vehicles associated with Peugeot, Citroën and DS –branded vehicles as  well  as  loans  to
   dealers of these brands. Banque PSA is a subsidiary of Peugeot, which is a French-based  group,  mainly  a  manufacturer  of  motor  vehicles,
   passenger cars as well as light commercial vehicles, and related spare parts.

4. The JVs will offer automotive financing solutions, e.g. loans and leases, as  well  as  related  services,  such  as  insurance,  in  Austria,
   Belgium, France, Germany, Italy, Luxembourg, Poland, Portugal, Malta, the Netherlands, Spain, Switzerland and the United Kingdom.[2]

5. The proposed transaction consists in the acquisition of joint control by SCF and Banque PSA of several newly  created  companies  constituting
   joint ventures by way of purchase of shares. In accordance with the Consolidated  Jurisdictional  Notice[3],  the  transaction  constitutes  a
   unitary transaction due to the fact that, following the closing, SCF and Banque PSA shall acquire joint control over all JVs created and  that
   it follows from the provisions of the Framework and Investment Agreement in particular that all of the different acquisitions forming part  of
   this transaction are provided for in a single contract, and that a single purchase price is agreed for the entire transaction, so that all  of
   these acquisitions are linked together.

6. The JVs will be fully functional entities. They will have all resources necessary to operate independently. Banque PSA will transfer  all  its
   existing assets (including the right to use brands and trade marks), liabilities and employees in its automotive and insurance business to the
   JVs and SCF will provide funding to the JVs. Each JV will also possess its own management team as well as a board of  directors  dedicated  to
   day-to-day management of the JVs business.

7. The JVs will finance the sale of PSA-branded vehicles and will offer automotive financing services (loans,  lease  financing  and  insurance),
   which offer an added value and for which there are separate markets, characterised by the existence  of  companies  specialising  in  lending,
   leasing and insurance.

8. Moreover, the JVs  will  play  an  autonomous  role  in  the  automotive  financing  market  exclusively  with  third  party  customers,  i.e.
   purchasers/lessees of PSA-branded motor vehicles and independent PSA dealers (i.e. authorised dealers that do not belong to  the  PSA  Group).
   Accordingly, the JVs will not depend on sales to their parent companies but have direct access to the market and their own customers.

9. Finally, the JVs are set up on a lasting basis, as the initial term of cooperation is […] years with the possibility of continued renewal  for
   additional […] year periods.

10. SCF and Banque PSA will hold 50% of the shares and voting rights in each JV. […].

11. The […] management control over the JVs is assured by a list of reserved matters regarding the business of the  individual  JVs,  which  will
   require a favourable decision in the […], including: (i) approval of the […]-year business plan; (ii) approval of new  products,  services  or
   projects; (iii) approval of the annual budget; (iv) material expenditure not included in the budget; (v)  material  agreements  above  certain
   thresholds; and (vi) appointment/removal of the CEOs and Deputy CEOs of each JV. […], so both SCF and Banque PSA have a veto  right  over  the
   decisions.

12. Therefore, the proposed transaction qualifies as a concentration within the meaning of Article 3.1(b) of the Merger Regulation.

II.   EU DIMENSION

13. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[4] (Santander:  EUR  73 512  million,
   Peugeot EUR 54 090 million). Each of them has an EU-wide turnover in excess of EUR 250 million (Santander: EUR […] million,  Peugeot  EUR  […]
   million) and they do not achieve more than two-thirds of their aggregate EU-wide turnover within one and the same Member State.

14.  The notified operation therefore has an EU dimension within the meaning of Article 1(2) of the Merger Regulation.

III.  COMPETITIVE ASSESSMENT

15. According to the Notifying Parties, the proposed concentration gives rise to only one horizontally affected market in the EEA, which  is  the
   market of motor vehicle lending in Spain. Notifying Parties confirmed that  there  would  be  no  affected  vertical  relationship  under  any
   plausible alternative market definition. Therefore, only the market for motor vehicle lending in Spain will be further analysed.

     III.1. Product market definition

16. The Commission has previously found consumer loans to be a distinct market and has also, within this segment, considered the  possibility  of
   distinguishing the motor vehicle lending  from credits offered for the purchase of other consumer goods and that there is  an  overall  market
   for automotive financing.[5] Ultimately the Commission left the product market definition open.

17. The Notifying Parties submit that the offering consumer credit does not require the possession of a banking licence and that in  many  Member
   States, including Spain, not even a particular authorisation is required. Therefore the Notifying Parties submit that from  the  supply  side,
   the market for automotive financing encompasses not only retail banks, but also captive finance companies  (such  as  Banque  PSA)  and  other
   financial institutions offering consumer credit. From the demand side, the Notifying Parties submit that the purchasers  of  a  motor  vehicle
   also have the possibility to use financial leasing as an alternative to credit financing.

18. In the present case, the product market definition for motor vehicle lending can be left open, as the proposed concentration does  not  raise
   serious doubts as to its compatibility with the internal market with respect to any plausible market definition.

III.2. Geographic market definition

19. In previous cases, the Commission considered the geographic market for automotive financing (lending and leasing services) to be national  in
   scope.[6] The Notifying Parties submit that the geographic market for automotive financing is national.

20. In the present case, the geographic market definition for motor vehicle lending can be left open, as  the  proposed  concentration  does  not
   raise serious doubts as to its compatibility with the internal market with respect to any plausible market definition.

III.3. Competitive assessment

21. Of all plausible geographic and product market definitions, only the market of motor vehicle  lending  in  Spain  is  affected  and  will  be
   analysed in this section.

22. According to data provided by the Notifying Parties, in 2013 the Spanish market for motor vehicle lending reached  a  volume  of  […]  units,
   which represented a total value of EUR […] billion. The combined market shares of the Notifying Parties in Spain would reach [20-30]%, both in
   value and volume, with an increment of [5-10]% (in value) and [5-10]% (in volume). Other important players on the  market  for  motor  vehicle
   lending in Spain are VW FS ([20-30]% in volume), BBVA ([10-20]% in volume), RCI Banque ([10-20]% in volume), BMW  Bank  ([5-10]%  in  volume),
   Cetelem ([5-10]% in volume) and Toyota Kb ([0-5]%in volume). Their market shares in value are similar with the ones in volume.

23. The Notifying Parties submit that the Spanish market for motor vehicle lending is characterised by a high degree of competition caused  by  a
   large number of credible lenders, such as retail banks, captive finance companies and specialised finance  companies  (often  subsidiaries  of
   major Spanish retail banks) which all offer loans to customers to purchase motor vehicles.

24. The Notifying Parties also argue that the market entry barriers are very low and there are no barriers to expansion  that  would  prevent  an
   existing market player to rapidly expand its loan offer. In view of the fact that the  purchase  of  a  motor  vehicle  is  a  major,  one-off
   investment for most costumers, customers usually spend considerable time and effort to identify the most attractive  offer  to  finance  their
   motor vehicle purchase. Moreover, customers are usually not locked in with previous lenders for such a purchase.

25. The market investigation neither revealed concerns nor particular comments from the market participants in Spain.

26. Taking into account the moderate presence of the Notifying Parties on the market for motor vehicle lending in Spain, the existence  of  other
   strong players that appear to continue exercising competitive constraints on the merged entity and the fact that none of  the  respondents  to
   the market investigation raised any concerns as regards the transaction, the Commission takes the view that he proposed transaction would  not
   give rise to serious doubts as to the compatibility of the notified concentration with the internal market.

IV.   CONCLUSION

27. 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)
                                        Margrethe VESTAGER
                                        Member of the Commission

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[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]   […].

[3]   Commission Consolidated Jurisdictional Notice under Council Regulation No 139/2004 on the control of concentrations between undertakings,
   OJ No C 95, 16.4.2008, p. 1, at para. 38 – 40.

[4]   Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission Consolidated Jurisdictional Notice (OJ C95,
   16.04.2008, p1).

[5]   See M.3067 – INTESA / CAPITALIA / IMI, paragraph 35; and M.1370 – PEUGEOT / CREDIPAR, paragraph 5.

[6]   See M.3067 – INTESA / CAPITALIA / IMI, paragraph 49; and M.1370 – PEUGEOT / CREDIPAR, paragraph 6.

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 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.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE