CELEX: 32014M7398
Language: en
Date: 2014-11-19 00:00:00
Title: Commission Decision of 19/11/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7398 - MIRAEL / FERROVIAL / NDH1) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 19.11.2014
C(2014) 8919 final

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                       To the notifying party

Dear Sir/Madam,

Subject:    Case M.7398 - MIRAEL/ FERROVIAL/ NDH1
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1] and Article 57 of the Agreement  on  the  European  Economic
Area[2]

    0. On 17 October 2014, the European Commission received notification of a  proposed  concentration  pursuant  to  Article  4  of  the  Merger
       Regulation by which the undertakings Macquarie Infrastructure and Real Assets (Europe) Limited ("MIRAEL", the United Kingdom), through its
       management of the Macquarie European Infrastructure Fund 4 LP investment fund ("MEIF 4"), and  Ferrovial  Aeropuertos  S.A.U.  ("Ferrovial
       Aeropuertos"), an indirect wholly owned subsidiary of Ferrovial, S.A. ("Ferrovial", Spain), through its wholly-owned subsidiary  Faero  UK
       Holding Limited ("Faero"), acquire within the meaning of Article 3(1)(b) of the Merger Regulation joint control of Airport  Holdings  NDH1
       Limited ("NDH1", the United Kingdom) by way of purchase of shares (the "Transaction").[3] MIRAEL and Ferrovial are  collectively  referred
       to as the "Parties".

THE PARTIES

    0. MIRAEL is a wholly-owned subsidiary of Macquarie Group Limited, which is the ultimate parent of Macquarie  group  ("Macquarie")  based  in
       Australia. Macquarie is a global provider of banking, financial,  advisory,  investment  and  fund  management  services.  MIRAEL  manages
       Macquarie's European  infrastructure  funds,  including  MEIF  4,  a  diversified  essential  services  infrastructure  fund  focusing  on
       transportation and utilities assets located in the EU, the limited partners of which are mainly institutional investors.[4]

    0. Ferrovial Aeropuertos is an indirect wholly-owned subsidiary of Ferrovial, a multinational company active  in  the  design,  construction,
       financing, operation and maintenance of transport, urban and services infrastructure. Ferrovial Aeropuertos  jointly  controls  FGP  TopCo
       Limited ("FGP") together with Qatar Holding LLC ("QH"), Caisse de dépôt et placement de Québec ("CDPQ") and Baker  Street  Investment  Pte
       ("Baker Street"). FGP is the ultimate company of Heathrow Airports Holdings Limited ("HAHL"), which owns NDH1 and London Heathrow  Airport
       ("LHR") in the South of England.

    0. NDH1 is the parent company of Aberdeen International Airport Limited,  Glasgow  Airport  Limited  and  Southampton  International  Airport
       Limited which respectively own and operate three airports in the United Kingdom: Aberdeen Airport  ("ABZ"),  Glasgow  Airport  ("GLA")  in
       Scotland and Southampton Airport ("SOU") in the South of England (together, the "Target Airports"). Currently,  NDH1  is  wholly-owned  by
       HAHL.

THE OPERATION

    0. The Transaction consists in the acquisition of joint control over NDH1 by MIRAEL, through its management of MEIF 4  investment  fund,  and
       Ferrovial Aeropuertos, through its wholly-owned subsidiary Faero.

    0. NDH1 is currently jointly controlled by Ferrovial Aeropuertos (together with QH, CDPQ and Baker  Street)  through  HAHL  and,  ultimately,
       FGP[5].

    0. Following the Transaction, the governance of NDH1 would be as follows: […].

    0. The Parties will set up a special purpose vehicle, AGS Airports Holdings Limited ("HoldCo"), which will indirectly acquire  100%  of  NDH1
       shares from HAHL.[6]

    0. HoldCo will be owned indirectly by Ferrovial Aeropuertos, through Faero (50%+1 share) and another special purpose  vehicle,  AGS  Ventures
       Airports Limited ("MacCo") (50% - 1 share).

    0. MacCo will be owned by MIRAEL, through MEIF 4, [details of governance structure] [7]

    0. Ferrovial Aeropuertos and MIRAEL will have the rights to appoint […] of directors of the Board of HoldCo.

    0. Pursuant to the shareholders' agreement, the following matters will require the approval of shareholders holding more than […] [8].

    0. Therefore, none of MIRAEL and Ferrovial can decide upon strategic decisions on its own, but each of them can block them.

    0. In light of the above, MIRAEL and Ferrovial will be able to influence the commercial behaviour of NDH1 and thus will jointly control it.

   Full-functionality

    0. NDH1 owns, manages and operates ABZ, GLA and SOU, which are businesses with market presence and turnover.

    0. Therefore the Transaction will lead to a change in the quality of control over full-function undertakings.

    0. In light of the above, the Transaction results in a concentration under Article 3(1)(b) of the Merger Regulation.

EU DIMENSION

    0. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5  000  million[9]  (MIRAEL:  EUR  […]  million;
       Ferrovial: EUR […] million; NDH1: EUR 211 million). Two of them have an EU-wide turnover in excess of EUR 250  million  (MIRAEL:  EUR  […]
       million; Ferrovial: EUR […] million) but neither of them achieves more than two-thirds of their aggregate EU-wide turnover within one  and
       the same Member State. Therefore, the notified operation has an EU dimension within the meaning of Article 1(2) of the Merger Regulation.

COMPETITIVE ASSESSMENT

1 Market definition

1 Management and operation of airport infrastructures

1 Relevant product market

    0. In previous decisions the Commission has considered, while leaving the exact scope of the market open, that the market for management  and
       operation of airports consists of three distinct relevant product markets[10]:

        i. the provision of airport infrastructure services, which includes the development,  maintenance,  use  and  provision  of  the  runway
           facilities, taxiways and other airport structures as well as the co-ordination and control  of  the  activities  performed  on  these
           infrastructures. The market could be further segmented according to the categories of customers of  airline  infrastructure  services
           (full service airlines, low cost airlines and charter airlines) or according to the type of service provided by the airports  (short-
           haul or long-haul routes);

       ii. the provision (or contracting) of ground-handling services, which includes ramp handling, passenger and baggage  handling,  fuel  and
           oil handling, aircraft maintenance, ground administration and supervision, and crew administration); and

      iii. the provision (or contracting) of associated commercial services, which includes, car-parking services to airport  users,  car  hire,
           catering facilities and sale of advertising space.[11]

    0. The Parties submit that the exact definition of the relevant product market can be left open, since no competition  concerns  arise  under
       any plausible market definition.

2 Relevant geographic market

    0. As regards the market for the provision of airport infrastructure services, the Commission has considered, while  eventually  leaving  the
       exact market definition open, that the geographic scope could be the catchment area of individual airports. In particular, the  Commission
       has considered that the catchment area of an airport is no larger than 300 kilometres for international airports  or  100  kilometres  for
       regional airports.[12]

    0. As regards the provision (or contracting) of ground-handling services, the Commission has concluded that  the  geographic  scope  of  this
       market is restricted to a specific airport, or is at most local.[13]

    0. Likewise, the Commission has previously concluded that the geographic market for the provision (or contracting) of  associated  commercial
       services is limited to a specific airport or its immediate surroundings.[14] As regards a  possible  segment  for  the  provision  of  car
       parking services at airports, based on the UK decisional practice, the market includes on-airport (i.e. car parks located at  the  airport
       premises) as well as off-airport parking within the vicinity that offers transfers to the airport  concerned  (i.e.  a  dedicated  shuttle
       service to and from the airport terminal).[15]

    0. The Parties submit that there is no need to reach a conclusion on the exact geographic scope of  the  relevant  markets,  given  that  the
       Transaction does not give rise to any competition concerns under any plausible geographic market definition.

3 Conclusion on market definition

    0. The Commission concludes that for the purpose of the present case the precise scope of the product and geographic  market  definition  for
       the management and operation of airport infrastructures can be left open since the Transaction does not raise serious  doubts  as  to  its
       compatibility with the internal market under any plausible market definitions.

2 Car park management services

1 Product market definition

    0. In M.4613 – Eurazeo SA/Apcoa Parking Holdings GmbH, the Commission considered a possible  market  for  parking  management  services,  but
       ultimately left the exact scope of the product market definition open.[16]

    0. The Parties submit that there is a market for car parking management services, as the service provided does not vary greatly according  to
       the type of facility managed (whether in a city centre or retail complex, at an airport,  at  hotel  or  events  venue  or  at  a  railway
       station). This would be confirmed by the high degree of supply-side substitutability, as it would be very easy for a  player  to  re-focus
       from one type of facility to another without significant costs. From a demand-side perspective, customers for car park management services
       do not distinguish between car park management services providers in terms of their expertise in relation to particular facility types.

2 Geographic market definition

    0. The Commission has considered that the market for car park management services could be wider than national (EEA-wide or  regional)  given
       strong supply-side substitutability, but ultimately left the exact geographic definition of the market open.[17]

    0. The Parties concur with the Commission's position.

3 Conclusion on market definition

    0. The Commission concludes that for the purpose of the present case the precise scope of the product and geographic  market  definition  for
       car park management services can be left open since the Transaction does not raise  serious  doubts  as  to  its  compatibility  with  the
       internal market under any plausible market definitions.

2 Competitive assessment

1 Management and operation of airport infrastructures

    0. Neither MIRAEL nor Macquarie has interests in any UK airport. Therefore, no horizontal overlap will arise as  a  result  of  the  proposed
       Transaction in respect of the management and operation of airport infrastructures, the  provision  (or  contracting)  of  ground  handling
       services to airlines or of associated commercial services.

2 Car park management services

    0. MIRAEL, through its management of Macquarie European Infrastructure Fund II (MEIF 2), controls NCP, a  provider  of  car  park  management
       services to a range of third parties in the United Kingdom, including UK airport operators, one of which is GLA.[18] Therefore, a vertical
       relationship exists between MIRAEL and NDH1, since MIRAEL controls a company active in the provision  of  car  park  management  services,
       which may be considered upstream to the market for the provision (or contracting) of associated commercial services (including car parking
       services) to airport users.

    0. On the assumption of a relevant product market that is confined to the provision of car park management  services  at  off-street  parking
       facilities in the United Kingdom, NCP estimates that it has only a [5-10]% share of this narrow market by revenue and  by  number  of  car
       parking spaces. Furthermore, NCP estimates its market share on the market for car park management services at airport level in the  United
       Kingdom to be less than 10%. As such, a vertically-affected market arises only by reason of NDH1’s position  on  the  narrower  downstream
       market for the provision of associated commercial services (including car parking services) to airport users.

    0. On this basis, NDH1’s share in the geographic area covering on-airport parking at  the  airport  itself  and  all  off-airport  car  parks
       offering a shuttle transfer to the airport terminal, will be over 30% at each of ABZ, GLA and SOU.[19]

    0. However, the Transaction would not lead to anticompetitive effects on the market for provision of parking management services. On the  one
       hand, there is no risk of input foreclosure, because at the upstream level in the market for the provision of car park management services
       NCP's share is well below 30% and there are a number of credible alternative providers such as APCOA, VINCI Park, ECP and Q-Park.

    0. On the other hand, with regard to customer foreclosure, MIRAEL lacks the ability and the incentive to foreclose.

    0. First, MIRAEL has no ability to foreclose competing providers of car park management services. Indeed, other car park management  services
       providers will continue to be able to compete to manage off-airport parking facilities. In relation to on-airport parking, the Transaction
       will make no difference in the short-to-medium term to the issue of which company manages the on-airport parking facilities at ABZ or SOU.
       These on-airport parking facilities are currently managed by APCOA and are secured under contracts which are due to  expire  in  […]  with
       respect to ABZ and in […] with respect to SOU.[20] In addition, even once the existing contracts with APCOA and NCP have  expired,  MIRAEL
       will have no ability to ensure that NCP is selected as provider, since Ferrovial Aeropuertos, which will retain joint control  over  NDH1,
       has no incentive to accept a contract being awarded to NCP  except  on  the  basis  that  it  offers  the  most  economically-advantageous
       proposition.

    0. In addition, the ABZ, GLA and SOU on-airport contracts are three contracts among a very  large  array  of  car  park  management  services
       contracts that periodically come up for tender in the United Kingdom. NDH1’s share of demand on the relevant procurement market  would  be
       less than 5% on a UK-wide basis.

    0. Second, MIRAEL lacks the incentive to foreclose. NDH1 will be owned by a different Macquarie investment fund (MEIF 4)  to  the  investment
       fund which owns NCP (MEIF 2), each of which has different owners. Consequently, MIRAEL would act against the interests of  the  owners  in
       one of its fund to benefit the owners of another if it favoured NCP as the car park manager at the ABZ, GLA and SOU airports of NDH1.

    0. For all these arguments, it seems very unlikely that MIRAEL will have the ability and  the  incentive  to  engage  in  input  or  customer
       foreclosure.

    0. In the light of the above and of the other available evidence, the Commission considers that the Transaction does not  raise  any  serious
       doubts as to its compatibility with the internal market under any plausible market definition.

CONCLUSION

    0. 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  and
       Article 57 of the EEA Agreement.

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]   OJ L 1, 3.1.1994, p.3 ('the EEA Agreement').
[3]   Publication in the Official Journal of the European Union No C 378, 24.10.2014, p. 6.
[4]   MIRAEL also manages the Macquarie European Infrastructure Fund LP ("MEIF 1") investment fund, which previously held  a  jointly-controlling
stake in Bristol Airport ("BRS") in the South-West of England. On 30 September 2014, MIRAEL sold MEIF 1's interest in BRS  to  Ontario  Teachers'
Pension Plan. For completeness, it should be noted that MIRAEL manages other infrastructure funds that have investments  in  Copenhagen  Airports
and Brussels Airport in the EEA as well as interests in non-EEA airports.
[5]   As a result of the Transaction, FGP will continue to be jointly controlled by Ferrovial  Aeropuertos  together  with  QH,  CDPQ  and  Baker
Street. However, as HAHL is selling its stake in the Target Airports, HAHL and, ultimately  FGP,  will  only  control  LHR  post-Transaction.  In
addition, Ferrovial Aeropuertos will continue to jointly control the Target Airports together with MIRAEL.
[6]   The Sale Purchase Agreement was signed on 16 October 2014.
[7]   [Details of governance structure].
[8]   See […] of the SHA.
[9]   Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission Consolidated Jurisdictional  Notice  (OJ  C95,
16.04.2008, p1).
[10]  See M.786 - Birmingham International Airport, decision of 25 March 1997, recitals 14 and  15;  M.3823  -  MAG/Ferrovial  Aeropuertos/Exeter
Airport, decision of 8 August 2005, recital  15;  M.4164  -  Ferrovial/Quebec/GIC/BAA,  decision  of  23  May  2006,  recital  11.  In  M.5648  -
OTPP/Macquarie/Bristol Airport of 11 December 2009, the Commission concluded  that  there  exist  distinct  markets  for  airport  infrastructure
services and ground handling services, but did not consider associated commercial services (recitals 8 and 9).
[11]  Associated commercial services encompass various services that are not substitutable to each  other,  such  as  retail  shops,  advertising
space, car parking and car hire. As the Transaction creates a vertical link only with regards car-parking services,  the  competitive  assessment
will focus only on the car parking segment within associated commercial services.
[12]  M.7008 - AENA Internacional/AXA PE/LLAGL, decision of 9 October 2013, recitals 12 to 14.
[13]  M.4164 - Ferrovial/Quebec/GIC/BAA, decision of 23 May 2006, recitals 15 to 24.
[14]  M.4164 - Ferrovial/Quebec/GIC/BAA, decision of 23 May 2006, recital 24. M. 6862 – Vinci/Aeropuertos de Portugal, decision of 10 June  2013,
recitals 19 and 20.
[15]  See Report on BAA airports market investigation of 19 March 2009 of the UK's (former) Competition Commission.

[16]  Parking management services mainly consists in the maintenance and the supervision  of  parking  spaces,  located  at  the  road  side,  in
airports, hospitals, shopping centres, cities, hotels, etc. Parking management services can be for paid parking or  not.  See  M.4613  –  Eurazeo
SA/Apcoa Parking Holdings GmbH, decision of 20 April 2007, recital 8.
[17]  M.4613 – Eurazeo SA/Apcoa Parking Holdings GmbH, decision of 20 April 2007, recital 18.

[18]  Apart from GLA, NCP does not operate any other on-airport or off-airport car parks at any of  NDH1’s  other  owned  and  operated  airports
(i.e. ABZ or SOU).
[19]  At around [60-70]% for ABZ, [30-40]% for GLA and [80-90]% for SOU (market shares calculated on the basis of number of car parking spaces).
[20]  GLA’s on-airport car parking for airline customers is managed by NCP under contracts which are due to expire in […] and […].

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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