CELEX: 31994M0498
Language: en
Date: 1994-09-12 00:00:00
Title: COMMISSION DECISION of 12/09/1994 declaring a concentration to be compatible with the common market (Case No IV/M.498 - Commercial Union / Groupe Victoire) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

Avis juridique important

|

31994M0498

COMMISSION DECISION of 12/09/1994 declaring a concentration to be compatible with the common market (Case No IV/M.498 - Commercial Union / Groupe Victoire) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 299 , 27/10/1994 P. 0005

 COMMISSION  DECISION of 12/09/1994 declaring a concentration to be compatible with the common market (Case No IV/M.498  - Commercial  Union  / Groupe Victoire) 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.498   Commercial   Union/Groupe Victoire <ind>  <ind> Notification of 9.08.1994 pursuant  to  Council Regulation (EC) No. 4064/89 1.<ind> On 9.08.94 Commercial Union plc (CU) notified to the Commission its intended acquisition of a major part  of  the life   assurance   activities  and  the  general   insurance activities  of  Groupe Victoire (Victoire), a  large  French insurance group, from Compagnie de Suez SA (Suez). 2.<ind>   After   examination  of  the   notification,   the Commission  has concluded that the notified operation  falls within  the  scope of application of Council  Regulation  No 4064/89  and  does  not  raise  serious  doubts  as  to  its compatibility   with  the  common  market   and   with   the functioning of the EEA Agreement. I.<ind> THE PARTIES  3.<ind>  CU  is the holding company of the Commercial  Union Group whose principal activities are the transaction of  all classes   of  insurance  and  life  insurance,  other   than industrial  life,  in  the  UK,  continental  Europe,  North America and other territories throughout the world. 4.<ind>  Victoire operates in most sectors of the  insurance market, almost exclusively in France. 5.<ind>  Suez  is  a holding company with interests  in  the banking  and financial services sectors and in  a  range  of manufacturing and service enterprises. II.<ind> THE OPERATION 6.<ind>  CU  will acquire substantially all  the  shares  in Compagnie  Financière  du  Groupe Victoire  SA  (CFGV),  the holding  company  of Victoire. A number  of  existing  group interests will be excluded from the scope of the acquisition by  means  of a reorganisation prior to implementation.  The principal  subsidiaries of CFGV are Abeille Vie and  Abeille Assurances. 7.<ind>  Abeille Assurances operates in the  nonlife  sector and   has   three   small  whollyowned   nonlife   insurance subsidiaries, AMIS, Assurop and La Paix Protection Juridique et  Fiscale  (La  Paix).  Abeille  Assurances  also  has   a reinsurance  subsidiary,  Victoire   []  Réassurances  (read "Victoire Abeille Réassurances") (Vicaré). 8.<ind>  Abeille Vie operates in the life insurance  sector. Its  most  significant  customer is  AFER,  the  Association Française  d'Epargne  et  de Retraite,  a  nonprofit  making association  of members which subscribes a group  policy  on their behalf. 9.<ind>  Victoire  will also retain a controlling,  majority holding  in Société Foncière Lyonnaise (SFL), a real  estate company, and in Société de Gestion et d'Investissement (read "Société   Française   de   Gestion  et   d'Investissement") (SOFRAGI), a listed closed end investment fund, as  well  as minority  holdings in Union Financière de France  (UFF)  and Compagnie  Financière  SFAC (SFAC), a holding  company  with insurance  interests in the receivable risks  of  industrial and  trading  companies.  The acquisition  also  includes  a number  of  other small companies with negligible  operating activities. 10.<ind>  Through  the reorganisation  Suez  will  retain  a number  of  insurance,  real estate and  financial  services business, notably La Hénin Vie, active in the life insurance sector,   Sociéte d'Epargne Viagère (SFV) which  acts  as  a coinsurer with Abeille Vie to AFER and Abeille Réassurances, a reinsurance company.  III.<ind> CONCENTRATION OF COMMUNITY DIMENSION 11.<ind>  The notified operation constitutes a concentration within the meaning of Article 3(1)b of the Regulation. 12.<ind>   The  undertakings  concerned  have   a   combined aggregate worldwide turnover in excess of 5000 million  ECU. Both CU and Victoire have a Communitywide turnover in excess of  250  million ECU, but do not achieve more than twothirds of their aggregate Communitywide turnover within one and the same  Member State. The notified operation therefore  has  a Community dimension. IV.<ind> COMPATIBILITY WITH THE COMMON MARKET <ind> a)<tab> Relevant product markets 13.<ind>  Traditionally  the  Commission  has  distinguished between  life  insurance, general insurance and reinsurance. Reinsurance  constitutes a separate market  because  of  its purpose  of  spreading  risk between insurers.  It  is  more specialised and conducted between insurers and reinsurers on an  international basis because of the need to  pool  risks. The  regulatory framework is also less stringent. This gives rise to different conditions of competition compared to life and general insurance. 14.<ind> On the demand side, life and nonlife insurance  can be  divided  into  as  many product  markets  as  there  are insurances   covering  different  kinds   of   risk.   Their characteristics,  premiums  and purposes  are  distinct  and there  is  typically no substitutability  for  the  consumer between the different risk insured. Nevertheless it  can  be left open in the present case whether each specific type  of life  and  nonlife insurance constitutes a separate  product market   because,  even  on  the  basis  of  the   narrowest definition, the operation does not raise serious  doubts  as to its compatibility with the common market. <tab> b)<ind> Geographical reference markets 15.<ind>  Insurance  markets  are  becoming  more  open   to intracommunity competition, particularly for industrial  and comercial  policies,  as  a result  of  current  and  future measures  to  facilitate crossborder selling.  Nevertheless, geographical reference markets seem at present to be  mainly national  in view of the established market structures,  the need  for adequate distribution channels, fiscal constraints in  some  cases and differing national systems of regulatory supervision.   Given  the  need  to   pool   risks   on   an international basis and the conduct of reinsurance  business on  a worldwide basis, the geographical reference market for reinsurance is global. <tab> c)<tab> Competitive assessment 16.<ind>  The proposed operation does not give rise  to  any affected  markets.  The only geographic area  in  which  the operation produces any significant overlap is France. <tab> i)<tab> Life insurance 17.<ind> Taking the French life insurance market as a whole, the   combined  market  share  of  the  parties  after   the concentration   will  be  approximately  [deleted   business secret,  between  0 and 10%] based on 1993  premium  income. Considering  individual and group policies  separately,  the respective  total  market shares are approximately  [deleted business  secrets, both in range of 0 to 10%].  Abeille  Vie is  particularly  strong in the product area  of  unitlinked savings/pensions   business  [deleted   business   secrets]. Abeille   Vie's  market  share  is  only  [deleted  business secrets,  between  10  and  20%].  After  the  concentration CU/Victoire will remain the sixth largest player in the life insurance market in France after CNP, Prédica, UAP, AGF  and GAN.  <tab> ii)<tab> Nonlife insurance 18.<ind>  Taking the nonlife market as a whole the  combined market share of the parties based on 1993 premium income  is less than [deleted business secret, between 0 and 10%].  The aggregate  market share for the various segments into  which the  overall  nonlife market may be divided,  i.e.  property damage  subdivided by individual, corprate and agricultural, health  and accident, motor, transport, civil liability  and others,  is  always  less than 6%. After  the  concentration CU/Victoire will be the eighth largest player in the  French nonlife  insurance  market behind  companies  such  as  UAP, Groupama, AGF and AXA. <ind> iii)<ind> Reinsurance 19.<ind>  CU  will  acquire the Vicaré reinsurance  company. Over  twothirds of Vicaré's 1993 premium income was  derived from  Abeille Réassurances. The addition to CU's reinsurance activities is negligible in market share terms. 20.<ind>  The  proposed  concentration  will  not  therefore create  or  strengthen a dominant position as  a  result  of which effective competition will be significantly impeded in the common market or in a substantial part of it. V.<ind> ANCILLARY RESTRAINTS 21.<ind>  The notifying parties have requested that  certain restrictions   be   considered   as   ancillary    to    the concentration. 22.<ind>  CU  and Suez have agreed that the continuing  Suez group  will  cease  all  use  of  the  words  'Abeille'  and 'Victoire'  and  the  corresponding  trademarks  and  logos, subject  to  certain  residual  rights  in  favour  of  Suez companies and former members of the Victoire Group. 23.<ind> Abeille Vie will [deleted business secrets] by  UFF in order to allow it sufficient time to develop products for perceived  niche clientele. UFF is majority owned by  Banque Indosuez,  a  wholly  owned  subsidiary  of  Suez,  although Victoire  will  retain  an  11 per  cent  interset  in  UFF. [deleted  business secrets] could be considered as  part  of the goodwill attached to the purchase of Abeille Vie by CU. 24.<ind>  These restrictions are necessary to guarantee  the transfer to CU of the full value of the assets purchased  or are  otherwise  directly related to and  necessary  for  the successful  implementation of the  concentration.  They  can therefore be treated as ancillary to the concentration. 25.<ind>  The  parties have also put in place various  other arrangements  intended to facilitate the  implementation  of the  concentration.  These  are that  Banque  Indosuez  will continue   to  provide  custody  services  in   respect   of securities  held  for Victoire and will subsequently  remain one  of  the  major  counterparties of Victoire  in  certain transactions and will continue to manage the fund  generated by  the sale of certain Abeille Vie products;  Victoire will continue  to  distribute specific consumer  credit  products created  by  Banque  Sofino, another Suez  subsidiary;   and AMIS,  a subsidiary of Abeille Assurances, will sell  health products  through  Banque Sofinco.  These arrangements  last for different periods. 26.<ind> Although they are linked to the concentration, none of these arrangements confers exclusivity on any party to it or  creates  any  other form of restriction of  competition. They  are  thus not ancillary restraints falling within  the meaning of Article 8(2) of the Regulation. VI.<ind> CONCLUSION 27.<ind>   For   the   foregoing   reasons,   the   proposed concentration  does  not  raise serious  doubts  as  to  its compatibility   with  the  common  market   and   with   the functioning of the EEA Agreement. 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. <tab> For the Commission