CELEX: 32013M7081
Language: en
Date: 2013-12-09 00:00:00
Title: Commission Decision of 09/12/2013 declaring a concentration to be compatible with the common market (Case No COMP/M.7081 - CENTERBRIDGE PARTNERS / CORSAIR CAPITAL / ROYAL BANK OF SCOTLAND GROUP) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

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                                        Brussels, 10.12.2013

                                        C(2010) 9152 final

                                       To the notifying parties:
Dear Sir/Madam,

Subject:    Case No COMP/M.7081 - Centerbridge Partners/ Corsair Capital/ Royal Bank of Scotland Group

         Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

1. On 12 November 2013, the European Commission (the "Commission") received a notification of a proposed concentration pursuant to Article  4  of
   the Merger Regulation by which the undertakings Centerbridge Partners L.P. ("Centerbridge", USA), Corsair Capital LLC ("Corsair", USA) and the
   Royal Bank of Scotland Group ("RBSG", UK) acquire within the meaning of Article 3(1)(b) of the Merger Regulation joint  control  over  certain
   assets of RBSG, namely the Rainbow Business (UK), by way of purchase of securities (the "Transaction").

2. Centerbridge, Corsair and RBSG are designated hereinafter as the "Notifying Parties".

 3. After examination of the notification, the Commission has concluded that the notified Transaction  falls  within  the  scope  of  the  Merger
    Regulation and does not raise serious doubts as to its compatibility with the internal market and the EEA Agreement.

    I.      THE PARTIES

4. Centerbridge is a multi-strategy institutional investment management firm, with activities principally in North America and  Europe,  focusing
   on private equity and credit investments  across  a  variety  of  sectors,  including  transportation  and  logistics,  retail  and  consumer,
   hospitality, business services, financial institutions, healthcare, industrial, communications and media and real estate.

5. Corsair is a private equity firm, based in New York, focusing on investing in companies in the financial services industry.  Corsair,  through
   firm-managed funds and by selected co-investors, provides capital to financial institutions  in  return  for  (primarily  minority)  interests
   through various instruments.

6. RBSG is the holding company of the RBS group of companies, which provides a wide range of  banking  and  financial  services  worldwide.  RBSG
   operates retail and commercial businesses with a focus on the UK, Republic of Ireland and United States, while its investment banking,  wealth
   management and payments network have a wider international presence.

7. The Rainbow Business is one of the businesses which RBSG has committed to divest in  connection  with  the  Commission’s  State  aid  approval
   decision of 14 December 2009 on RBSG’s restructuring (hereinafter referred to as "Decision of 14 December 2009".[2] The  Rainbow  Business  is
   currently wholly owned by RBSG and consists of certain parts of RBSG branch-related retail and SME business and certain mid-corporate accounts
   in the UK.

II.   THE OPERATION

8. On 21 October 2013, RBSG (pursuant to the Investment Agreement entered into by the Notifying Parties on  27  September  2013)  issued  a  £600
   million (app. EUR 740 million) bond (the "Bond") to […], a special purpose vehicle controlled by Centerbridge  and  Corsair  created  for  the
   purpose of the Transaction.[3] Under the terms of the Investment Agreement, the Rainbow Business will continue to be wholly owned by RBSG, but
   Centerbridge and Corsair, through […], will acquire certain  veto  rights  over  the  commercial  conduct  of  the  Rainbow  Business.[4]  […]
   Consequently, Centerbridge, Corsair and RBSG will acquire the joint control over the Rainbow Business.

9. The Transaction confers the ability to Centerbridge, Corsair and RBSG to exercise decisive influence over the Rainbow Business  and  therefore
   constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

III.  EU DIMENSION

10. […][5]. […] The notified operation therefore has an EU dimension within the meaning of Article 1(3) of the Merger Regulation.

IV. COMPETITIVE ASSESSMENT

1. Market definition

11. The Transaction will lead only to a minimal overlap between the private equity investment activities of Corsair and Centerbridge in  the  UK,
   which is completely unrelated to the Transaction and to the activities of the Rainbow Business.

12. In addition, the Transaction will create certain minimal vertical relationships in the  EEA  between  portfolio  companies  of  Centerbridge,
   Corsair and RBSG in relation to:

        a) supply of automated cash handling products on the one hand and supply of cash sales services  to  the  providers  of  automated  cash
           handling products on the other hand, and

        b) loan/mortgage servicing and the provision of corporate loans.

2. Assessment

13. There are no merger-specific, i.e. horizontal, overlaps between the activities of Centerbridge, Corsair and RBSG on  the  one  hand  and  the
   Rainbow Business on the other hand in the same potential product and geographical market that would result in a combined market share  of  15%
   or more.

14. Furthermore, Centerbridge, Corsair and RBSG do not have an individual or combined market share at either level of 25% or more in a  potential
   product market which is upstream or downstream of a product market in which the Rainbow Business is engaged.

15. For these reasons, the Commission concludes that the Transaction will not lead to a  significant  impediment  of  competition  in  the  above
   mentioned markets.

16. Furthermore, spill-over effects in the meaning of Article 2(4) of the Merger Regulation as a result of the Transaction can be discarded.

17. Apart from the links between the Rainbow Business and RBSG which are not merger-specific, none of the Notifying  Parties  has  activities  in
   the same market as the Rainbow Business or in a market which is up- or downstream from that of the Rainbow Business or in neighbouring markets
   closely related to this market.

18. In fact, the Rainbow Business, Centerbridge and Corsair perform different types of activities. The  Rainbow  Business  is  active  in  retail
   banking in the UK, while Corsair and Centerbridge are US based private equity firms, while links between the Rainbow Business and RBSG  exists
   pre-merger. Furthermore, the Rainbow Business only represents a small part of the Notifying Parties' portfolio, so that  coordination  between
   independent undertakings that restricts competition within the meaning of Article 101(1) of the Treaty on  the  Functioning  of  the  European
   Union ("TFEU") is highly unlikely.

19. The present assessment under the Merger Regulation in no way prejudices the on-going monitoring of RBSG' implementation of its obligation  in
   line with the above mentioned Decision of 14 December 2009.

V. CONCLUSION

20. For the above reasons, the European Commission has decided not to oppose the notified Transaction 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)

                                        Joaquín ALMUNIA
                                        Vice-President
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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]         Cases No N422/2009 and N621/2009.
[3]   The Bond will convert into shares in the Rainbow Business at the time of its IPO, anticipated to take
      place within the next two to three years.
[4]   Granting of these veto rights is conditional upon the Merger Regulation clearance.
[5]   […].

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                                                                  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.

                                                                 MERGER PROCEDURE