CELEX: 31993M0346
Language: en
Date: 1993-06-30 00:00:00
Title: COMMISSION DECISION of 30.06.1993 declaring a concentration to be compatible with the common market (Case No IV/M.346 - JCSAT / SAJAC) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31993M0346

COMMISSION DECISION of 30.06.1993 declaring a concentration to be compatible with the common market (Case No IV/M.346 - JCSAT / SAJAC) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 219 , 13/08/1993 P. 0000

 COMMISSION DECISION of 30.06.1993 declaring a concentration to  be compatible with the common market (Case No IV/M.346 - JCSAT  / SAJAC) 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 To the notifying parties Dear Sirs, Re. : <ind>  Case No IV/M.346 - JCSAT/SAJAC  <ind> Notification of 1.6.1993 pursuant to Article 4 of  Council Regulation No. 4064/89 (Merger Regulation)  1. <ind> On 1.6.1993, Itochu Corporation (Itochu), Mitsui and  Co, Ltd (Mitsui), Sumitomo Corporation (Sumitomo) and Nissho  Iwai Corporation (Nissho Iwai) will merge their domestic  satellite communication business and acquire joint control of  the newly created company Kabushiki Kaisha Nihon Satellite  Systems (Newco).   2. <ind> After examination of the notification, the Commission  has concluded that the notified operation falls within the  scope of the Merger Regulation and does not raise serious  doubts as to its compatibility with the common market.  I. <ind> THE PARTIES  3. <ind> Each notifying party is a large Japanese trading  company dealing with a wide range of commodities, industrial  goods and consumer goods.  Besides trade and manufacture of  goods, each offers a wide range of services and invests in  various activities.  Japan Communications Satellite Company Inc  (JCSAT) concentrates Itochu and Mitsui's satellite operation  business. JCSAT operates two communications satellites which  provide domestic telecommunications services within Japan.   Satellite Japan Corporation (SAJAC) concentrate Sumitomo and  Nissho Iwai's satellite operations business.  SAJAC is licensed  to operate domestic communications satellites in Japan, but  does not own or operate a satellite.   II. <ind> THE OPERATION  4. <ind> Following the acquisition by Itochu and Mitsui of 50 %  of the shares of SAJAC and by Sumitomo, Nissho Iwai and  possibly other minority SAJAC's shareholders of 50 % of the  shares of JCSAT, SAJAC and JCSAT will merge.  The shares of the  new created entity Newco will be held in the following  percentages : Itochu 27 % ; Mitsui 23 % ; Nissho Iwai 22 % ;  Sumitomo 22 % ; other SAJAC shareholders 6% [In case that other  SAJAC shareholders do not invest in JCSAT, and consequently in  Newco, the notifying parties will adjust the above percentages  with the condition i.a. that the order of the ownership is  maintained.].  III. <ind> JOINT VENTURE  5. <ind> According to the terms of a Shareholders Agreement,  entered into by the notifying parties, Newco will have a board  of ten directors, four of whom will be representative  directors.  Itochu, Mitsui, Sumitomo and Nissho Iwai will each  nominate two directors among which one representative director.   The remaining two directors will be appointed by agreement of  Itochu, Mitsui, Sumitomo and Nissho Iwai.  Newco will also have  four statutory auditors with each party appointing one of them.   The full-time auditor will rotate among the four parties.   Finally, a number of matters will require the approval of  Itochu, Mitsui, Sumitomo and Nissho Iwai, including the annual  settlement of accounts, the establishment of subsidiary or  other major investment or withdrawal, any provision of  satellite communication service by Newco, determination of  medium- and long-term management plans and all important  matters relating to the management of the company.  6. <ind> As a result of the above mentioned elements, it can be  concluded that Newco will be jointly controlled by Itochu,  Mitsui, Sumitomo and Nissho Iwai.   IV. <ind> CONCENTRATION  7. <ind> Newco will perform on a lasting basis all the  functions of an autonomous economic entity.  It has been  created for an indefinite period of time.  It will have its own  assets and its own personnel.  It will use the trademark JCSAT  and will have its own logo.  Marketing, accounting, finance and  management support provided by the parties to Newco will be  regulated by specific contracts in order to guarantee the  independence of Newco.  8. <ind> As regards possible coordination between the various  undertakings concerned, the notifying parties will not retain  any activity related to the satellite communication business.   Furthermore, there are no identifiable spill-over effects  arising from linkages or means by which the enlarged group of  undertakings could exploit the increase in the total range of  products.  9. <ind> The present operation therefore constitutes a  concentration in the sense of Article 3 of the Merger  Regulation.   V. <ind> COMMUNITY DIMENSION  10. <ind> The combined aggregate turnover of the undertakings  concerned in their last financial year exceeds 5,000 million  ECU (Itochu 127,135 million ECU ; Mitsui 109,795 million ECU ;  Sumitomo 122,838 million ECU ; Nissho Iwai 69,734 million ECU).   Their Community-wide turnover is more than 250 million ECU.  [deleted business secret]  <ind> The undertakings concerned do not achieve more than two- thirds of their aggregate Community-wide turnover within one  and the same Member State.  Therefore, the proposed  concentration has a Community dimension.  VI. <ind> COMPATIBILITY WITH THE COMMON MARKET  11. <ind> Neither JCSAT nor SAJAC is licensed to provide  telecommunications service outside Japan or between Japan and  another location.  Therefore, the concentration has presently  no effect in the Community.  12. <ind> This situation is not likely to change for the  following reasons :   <ind> - <ind> the current equipment of JCSAT is unsuited to  transmission between Japan and the EC ;  <ind> - <ind> the Japan Minister for Post and  Telecommunications has always insisted on separate licenses for  domestic and international carriers.  Up to now, it has also  never allowed a company to obtain both a domestic and an  international [This applies for Type 1 common carriers.] common  carrier license.   <ind> Finally, it can be added that European and international  satellite operators providing telecommunications service within  Europe or between Europe and Japan already exist and that the  operation of a new satellite communications service between  Japan and the Community would also require European regulatory  approvals.  VII. <ind> CONCLUSION  13. <ind> Based upon the above considerations, the Commission  has come to the conclusion that the proposed concentration does  not create or strenghten a dominant position as a result of  which effective competition would be significantly impeded in  the common market or in a substantial part of it.  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 No 4064/89.  For the Commission,