CELEX: 32020M9741
Language: en
Date: 2020-09-24 00:00:00
Title: Commission Decision of 24/09/2020 declaring a concentration to be compatible with the common market (Case No COMP/M.9741 - INES KAINDL / PETER KAINDL / M KAINDL) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                               Brussels, 24.9.2020
                                                               C(2020) 6737 final
                                                                                 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                                                                 omitted has been replaced by ranges of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.
                                                               Ines Kaindl
                                                               Seestrasse 18
                                                               8702 Zollikon
                                                               Switzerland
Subject:            Case M.9741 – INES KAINDL/PETER KAINDL/M KAINDL
                    Commission decision pursuant to Article 6(1)(a) of Council Regulation
                    No 139/20041 and Article 57 of the Agreement on the European Economic
                    Area2
Dear Sir or Madam,
(1)       On 20 August 2020, the European Commission received notification of a proposed
          concentration pursuant to Article 4 of the Merger Regulation by which Ines Kaindl
          acquires joint control over M. Kaindl OG (hereinafter: ‘M. Kaindl’ or ‘the Target’) by
          way of succession from her deceased father Ernst Kaindl (hereinafter ‘the
          Transaction’). The other controlling party in M. Kaindl is Peter Kaindl. Peter Kaindl
          and Ines Kaindl are referred to hereinafter as the 'Parties'.
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').
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- 1.      PROCEDURE
(2)     On 6 September 2019, Ines Kaindl sent a letter to the services of the Directorate-
        General for Competition (“DG COMP”), requesting a confirmation that the
        acquisition of joint control in M. Kaindl by Ines Kaindl does not constitute a
        concentration within the meaning of the Merger Regulation.
(3)     On 24 September 2019, DG COMP provided Ines Kaindl with a comfort letter (the
        “First Comfort Letter”). In the First Comfort Letter, DG COMP informed Ines Kaindl
        that she did not seem to qualify as a person in control of an undertaking within the
        meaning of Article 3 of Council Regulation (EC) 139/2004 (the “Merger Regulation”)
        and that therefore there is no obligation to notify the Transaction under the Merger
        Regulation.
(4)     On 23 December 2019, the Commission received a Case Team Allocation Request
        from Peter Kaindl for the Transaction.
(5)     By a letter dated 5 February 2020, Peter Kaindl asked DG COMP to confirm that the
        conclusion reached in the First Comfort Letter was still valid taking into account
        certain new information.
(6)     On 1 April 2020, DG COMP confirmed its conclusion set out in the First Comfort
        Letter in a further comfort letter by taking into account the submissions by Peter
        Kaindl, including the submissions dated 13 February 2020, 18 February 2020 and 3
        March 2020, various documents annexed to these submissions, and in particular the
        opinions by the Professors Oberhammer, Graf and Schenker (the “Second Comfort
        Letter”). The Second Comfort Letter was addressed to Ines Kaindl and a copy sent to
        Peter Kaindl.
(7)     On 25 May 2020, Peter Kaindl informed the Commission that he intended submitting
        a notification of the Transaction notwithstanding DG COMP’s confirmation of its
        position in the Second Comfort Letter.
(8)     On 9 June 2020, Ines Kaindl also informed the Commission that she intended
        submitting a notification of the Transaction notwithstanding DG COMP’s position in
        the First and Second Comfort Letter.
(9)     On 13 July 2020, Ines Kaindl submitted a draft notification of the Transaction for
        informal consultation with DG COMP.
(10)    On 20 August 2020, Ines Kaindl notified the Transaction to the Commission.
2.      PETER KAINDL’S SUBMISSION OF 17 SEPTEMBER 2020
(11)    On 7 September 2020, Ines Kaindl made the Commission aware of the fact that the
        German language version of the notice of prior notification of a concentration (the
        “Notice”) in the Official Journal of the European Union (“OJ”) incorrectly stated that
        Ines Kaindl acquires sole control of the Target.3
3   OJ No C 289, 1.09.2020, p. 7.
                                                  2
 ---pagebreak--- (12)    On 11 September 2020, the Commission published a corrigendum to the German
        language version of the Notice in the OJ.4
(13)    On 17 September 2020, Peter Kaindl made a submission5 in which he asked the
        Commission to correct the mistake in the (uncorrected) German language version of
        the Notice. He further asked the Commission to inform him about the effective date
        of the notification within the meaning of Article 4(3) of the Merger Regulation, by
        making reference to Article 5(5) second sentence of Commission Regulation (EC) No.
        802/2004 implementing the Merger Regulation6 (“the Implementing Regulation”).
2.1.    Position of Peter Kaindl
(14)    Peter Kaindl submits that the mistake in the (uncorrected) German language version
        of the Notice in this case may have been caused by misleading information provided
        by Ines Kaindl. Therefore the notification was incorrect and could only be effective
        once the mistake had been corrected.
(15)    Peter Kaindl further claims that even if the information from Ines Kaindl had not
        caused the mistake in the German language version of the Notice, third parties would
        be deprived of their rights to comment on the notified concentration, if the
        Commission were to consider that the initial notification date was valid.
2.2.    Commission’s assessment
(16)    The Commission finds that Ines Kaindl provided sufficient information for the
        Commission to be able to conclude that it does not have jurisdiction over the
        Transaction.
(17)    The Commission notes that the error in the German language version of the Notice of
        Publication was due to a translation error. Ines Kaindl notified an acquisition of joint
        control over M. Kaindl, not of sole control.
(18)    Further, it can be left open whether in the present case the Commission was under duty
        to publish the Notice under Article 4(3) of the Merger Regulation, which requires a
        publication only when “a notified concentration falls within the scope of this
        Regulation”. In any event, the translation error was corrected in the OJ as soon as it
        was noticed and sufficiently early to allow third parties to adapt their initial
        observations or to submit new adapted observations. In this regard, the initial 10
        calendar day deadline referred to by the Notices of Publication, in this case in the OJ
        of 1 September 2020, was not affected by the corrigendum, which only changed the
        description of the nature of control. In any event, even after the publication of the
        corrigendum on 11 September 2020, third parties still had 10 calendar days to make
        their views known before the adoption of the decision on 25 September 2020.
(19)    In conclusion, the Commission finds that third parties’ rights were not infringed by
        the publication of the incorrect German language version of the Notice of Publication
        in this case on 1 September 2020.
4   OJ No C 301, 11.09.2020, p. 22.
5   Peter Kaindl’s response to RFI 5 dated 17 September 2020.
6   OJ No., L 133, 30.04.2004, p. 1.
                                                        3
 ---pagebreak--- 3.     THE PARTIES TO THE TRANSACTION AND OTHER PARTIES
(20)   The Transaction involves several members of the Kaindl family and three wood
       processing undertakings controlled by different members of the family.
(21)   The main family members involved are Ernst Kaindl (deceased on 11 April 2017)
       and his daughter Ines Kaindl as well as the brother of Ernst Kaindl Martin Matthias
       Kaindl (deceased on 21 August 2019) and his son Peter Kaindl.
(22)   M. Kaindl is an Austrian company and a wood processing and manufacturing
       undertaking. M. Kaindl produces wood-based materials such as raw and coated
       particle board, medium density board and high-density board, laminate flooring, and
       decorative laminate.7
(23)   M. Kaindl was in the past jointly controlled by its two general partners, the brothers
       Ernst Kaindl and Martin Matthias Kaindl. In 1984, the shares in M. Kaindl were
       redistributed among the two general partners and continued to be jointly controlled by
       them. The brothers each held 40% of the shares and each 50% of the voting rights.
       The remaining 20% of the shares were held by Peter Kaindl.
(24)   In 2018, Martin Matthias Kaindl, who died on 21 August 2019, gifted his shares in M.
       Kaindl to Peter Kaindl. According to Peter Kaindl, he became an unlimited partner as
       a result of this donation. Ines Kaindl submits that, however, to this day, Peter Kaindl
       is still registered as a limited partner of M. Kaindl. Martin Matthias Kaindl’s death has
       not been recorded in the commercial register yet. The dispute concerning the approval
       to change the entry in the commercial register is currently subject to litigation at the
       Salzburg Regional Court (Case 8 Cg 64/19h) due to doubts concerning the effective
       transfer of the shares to Peter Kaindl.
(25)   In parallel with their respective shareholding in M. Kaindl, Ernst Kaindl controlled
       SWISS KRONO Group and Martin Matthias Kaindl controlled Kronospan Group
       (‘Kronospan’).
(26)   SWISS KRONO Group is active in wood processing and manufacturing with a
       turnover of approximately EUR […] worldwide in the last completed business year.
       It is active in the same markets for wood-based materials as M. Kaindl and, in addition,
       produces oriented strand board.
(27)   Ines Kaindl became a member of the board of directors of SWISS KRONO Holding
       AG (‘SWISS KRONO’), the Swiss-based ultimate parent company of the SWISS
       KRONO Group in 2006. Since 2009 until today, Ines Kaindl holds the position of the
       chairperson of this board. Until his death, it was however Ernst Kaindl who held […]%
       of the shares in SWISS KRONO.
(28)   At the time of Ernst Kaindl’s death, Ines Kaindl held a […] % share in SWISS
       KRONO In addition, she holds 11 % of the shares in a startup firm. There are no veto
       or other controlling rights attached to this participation. Ines Kaindl also holds the
       majority of shares in the asset management company […]. The purpose of this asset
       management company is to hold one apartment property in […]. It does not offer
       goods or services on any product or service market.
7  M. Kaindl does not produce oriented strand board.
                                                     4
 ---pagebreak--- (29)    Kronospan is headquartered in Czechia. It is also active in the same markets for
        wood-based materials. In addition, Kronospan produces oriented strand board. Peter
        Kaindl has shares in Kronospan.8
4.      THE OPERATION
(30)    According to the testament of Ernst Kaindl, Ines Kaindl inherits […]% of Ernst
        Kaindl’s possessions and the remaining […]% are inherited by his wife Christiana
        Kaindl. In relation to SWISS KRONO, Ernst Kaindl left […]% of the voting shares to
        Ines Kaindl and […]% of the voting shares to Christiana Kaindl as a legacy (Legat).
        Furthermore, Ernst Kaindl left his shares in M. Kaindl (40 % of the total shares and
        50 % of the voting rights) to his daughter Ines Kaindl as a legacy.
(31)    Since Ernst Kaindl’s death, the shares in the two undertakings were under estate
        administration by Dr. Urs Mühlebach. The ultimate purpose of the estate
        administration by Dr. Urs Mühlebach was the execution of Ernst Kaindl’s testament.
        The transfer of the M. Kaindl shares from the estate administrator Dr. Urs Mühlebach
        to the legatee Ines Kaindl took place on 1 November 2019.9
5.      THE CONCENTRATION
(32)    Article 3(1) EUMR states that a concentration arises where a change of control on a
        lasting basis results from the merger of at least two undertakings or an acquisition of
        control by one or more persons already controlling at least one undertaking or by one
        or more undertakings, whether by purchase of securities or assets, by contract or by
        any other means, of direct or indirect control of the whole or parts of one or more other
        undertakings.
5.1.    Acquisition, by one or more persons already controlling at least one undertaking,
          or by one or more undertakings
(33)    It has to be determined whether Ines Kaindl on the relevant date for establishing the
        Commission’s jurisdiction was a person already controlling at least one undertaking
        with economic activity or a natural person carrying out economic activities in her own
        account.
5.1.1. Views of the Parties
5.1.1.1. Position of Ines Kaindl
(34)    According to Ines Kaindl, she acquired the late Ernst Kaindl’s shares in M. Kaindl as
        well as his shares in SWISS KRONO by legacy (Legat) based on the testamentary
        disposition of Ernst Kaindl. Under Austrian law, the testator can bequeath (vermachen
        or Vermächtnis) parts of the inheritance to a legatee (Legatar). The legatee acquires
        the legacy (Legatsausfolgung) by way of singular succession (Einzelrechtsnachfolge)
        and the legacy is then not part of the estate anymore. The transfer from the trustee of
8   Submission of Peter Kaindl in response to RFI 1 dated 7 September 2020.
9   See Form CO, Annex 7. Ines Kaindl has explained this delay to the Commission by reference to litigation
    in Austrian courts.
                                                         5
 ---pagebreak---         the estate to the legatee (in this case from Dr. Urs Mühlebach to Ines Kaindl) took
        place by declaration of transfer (Übertragungserklärung) on 1 November 2019.
(35)    Ines Kaindl is therefore of the view that in this case she acquired the shares of and,
        therefore, joint control in M. Kaindl by way of a declaration of transfer from the trustee
        Dr. Urs Mühlebach on 1 November 2019. According to her, she also acquired sole
        control over SWISS KRONO on 1 November 2019 by way of a declaration of transfer
        from Dr. Urs Mühlebach to Ines Kaindl of 1 November 2019, in conjunction with the
        circular resolution of the board of directors of SWISS KRONO of the same day. At
        that moment she was according to her not an undertaking or a person controlling at
        least one undertaking within the meaning of Article 3(1)(b) of the Merger Regulation.
        Ultimately Ines Kaindl emphasises that there was therefore no notifiable
        concentration.
5.1.1.2. Position of Peter Kaindl
(36)    Relying on the legal opinions of three university professors, Peter Kaindl takes the
        view that Ines Kaindl acquired ownership over the […]% shareholding in SWISS
        KRONO and, therefore, de jure control over this undertaking already before the
        transfer of the shares in M. Kaindl. According to the legal opinions, this reflects certain
        differences between the national laws governing the succession in Austria and
        Switzerland, where the two undertakings’ parent companies are registered.10
(37)    According to the submission by Peter Kaindl, all material elements of the succession
        would be governed by Austrian law (the so-called Erbstatut). This would follow from
        the explicit choice in the last will of Ernst Kaindl. Generally, the rules governing the
        procedural questions of the actual asset transfer (the so-called Eröffnungsstatut)
        would, in such case, according to Austrian International private law, also be governed
        by Austrian law.11
(38)    However, according to one of the legal opinions annexed to the submission by Peter
        Kaindl, Austrian courts would not have jurisdiction to take a decision about the
        transfer of shares in a company that is listed in Switzerland. The legal opinion by Prof.
        Paul Oberhammer discusses possible solutions to this problems in several pages before
        co0ncluding that the most convincing approach would be to adopt an “assets before
        heritage” (Einzelstatut geht vor Gesamtstatut) principle and apply Swiss law for the
        actual transfer of the shares in SWISS KRONO to Ines Kaindl.12
(39)    A difference between Austrian and Swiss law would be that under Austrian law, an
        heir or legatee would only acquire ownership over assets of the deceased by way of a
        formal act, the devolution (Einantwortung). In Switzerland, to the contrary, there
        would be no such act and ownership would transfer immediately following the death
        of the deceased.13
(40)    The legal opinions of Prof. Paul Oberhammer and Prof. Georg Graf both conclude that
        a Swiss authority cannot be expected to perform a formal act that is unknown in their
10  Peter Kaindl’s response to RFI 1, question 6 dated 7 September 2020, and three legal opinions submitted
    by Peter Kaindl on 13 February 2020.
11 Case team allocation request in M.9741 by Peter Kaindl dated 23 December 2019.
12 Legal opinion of Professor Oberhammer, submitted by Peter Kaindl on 13 February 2020.
13 Legal opinion of Professor Oberhammer, submitted by Peter Kaindl on 13 February 2020.
                                                         6
 ---pagebreak---          own legal system.14 According to Prof. Paul Oberhammer, a letter sent to Ines Kaindl
         by the Swiss authority would show that the authority did not intend to transfer the
         shares of SWISS KRONO by way of a devolution.15
(41)     Both opinions conclude that, despite different views in the legal literature on the
         application of the inheritance statute under international private law, Ines Kaindl
         already acquired joint ownership, together with Christiana Kaindl, over all the shares
         in SWISS KRONO at the time of Ernst Kaindl’s death. The transfer of shares by Dr.
         Mühlebach on 1 November 2019 would have only terminated the joint ownership and
         resulted in sole ownership of Ines Kaindl over […]% of the shares in SWISS KRONO.
(42)     Further, Peter Kaindl claims that Ines Kaindl already acquired de facto control over
         SWISS KRONO before the death of Ernst Kaindl by means of her appointment as a
         chairwoman (in 2009) and as heir/ legatee (in 2012).16
(43)     Another point in time for which Peter Kaindl claims that Ines Kaindl acquired de facto
         control over SWISS KRONO is 2013 when Ernst Kaindl suffered from a stroke and a
         subsequent deterioration of his health. Peter Kaindl asserts that as of that event, Ernst
         Kaindl would have had no more contacts with any employees of SWISS KRONO
         Group, while the management only reported to Ines Kaindl. Peter Kaindl submitted a
         statement from a former manager of SWISS KRONO Group according to which Ines
         Kaindl acted as if she was the owner of SWISS KRONO and took all significant
         decisions by herself as of early 2014, at the very latest.17
(44)     Peter Kaindl therefore considers that Ines Kaindl acquired joint control in M. Kaindl
         at a moment in time when she already controlled another undertaking. He considers
         therefore that the acquisition of joint control in M. Kaindl is a notifiable concentration.
5.1.2. The Commission’s assessment
(45)     The Commission finds that the Transaction does not constitute a notifiable
         concentration within the meaning of Article 3(1)(b) of the Merger Regulation because,
         on the relevant date for assessing jurisdiction in situations of acquisition of control by
         succession, i.e. the moment of the death of the testator, Ines Kaindl did not control an
         undertaking.18
(46)     Firstly, the Commission finds that as a matter of law the relevant date for assessing its
         jurisdiction in a case of an acquisition by means of succession for the purposes of
         Article 3(1)(b) of the Merger Regulation is the moment of the death of the testator (see
         below Section 5.1.2.1.). Secondly, it finds as a matter of fact that Ines Kaindl did not
         already control at least one undertaking on the relevant date, i.e. that of the death of
         her father Ernst Kaindl (see Section 5.1.2.2). Thirdly and in any event, irrespective of
         the relevant date for establishing the Commission’s jurisdiction, the acquisitions of
14  Legal opinions of Professor Graf and Professor Oberhammer, submitted by Peter Kaindl on 13 February
    2020.
15  Legal opinion of Professor Oberhammer, submitted by Peter Kaindl on 13 February 2020
16  Peter Kaindl’s response to RFI 1, question 6, dated 7 September 2020.
17  Peter Kaindl’s response to RFI 1, question 6, dated 7 September 2020.
18  The Commission notes that in its substantive assessment for the purposes of this decision, it does not find
    it necessary to distinguish between the concepts of testament and legacy, as both the testament as a whole
    as well as the two legacies pursue the same economic aim of transferring the two undertakings to Ines
    Kaindl.
                                                           7
 ---pagebreak---         control over M. Kaindl and SWISS KRONO should be qualified as forming part of a
        single concentration under Article 3 of the Merger Regulation because of their unitary
        nature (see Section 5.1.2.3).
5.1.2.1. The relevant date for establishing the Commission’s jurisdiction in case of an
          acquisition by means of succession is the moment of the death of the testator
(47)    The Transaction concerns an acquisition of control by way of succession and thus, by
        “other means” within the meaning of Article 3(1)(b) of the Merger Regulation.
(48)    Article 3(1)(b) of the Merger Regulation applies to acquisitions of control by an
        undertaking or by a person controlling at least one undertaking on the relevant date
        for establishing the Commission’s jurisdiction.
(49)    The Commission has in its decisional practice not yet considered or established the
        relevant date for determining whether an acquirer already controls “at least one
        undertaking” or is an “undertaking” in case of an acquisition of control through
        succession.
(50)    Neither the Merger Regulation nor the Commission Consolidated Jurisdictional
        Notice on the control of concentrations between undertakings (“Jurisdictional
        Notice”)19 provide explicit guidance as to the relevant date for determining whether
        an acquirer already controls “at least one undertaking” or is itself an “undertaking” in
        the situation of an acquisition of control by succession. The Commission notes that
        the Jurisdictional Notice, in Paragraphs 154 to 156 establishes the relevant date for
        determining the Commission’s jurisdiction for several types of acquisition of control
        (e.g. conclusion of the binding legal agreement, the announcement of a public bid or
        the acquisition of a controlling interest or the date of the first notification, whichever
        date is earlier). It does not explicitly address the situation of acquisition of control by
        means of succession. However, the list at Paragraph 156 of the Jurisdictional Notice
        is not exhaustive.
(51)    In this regard, the Commission notes that Paragraphs 154-156 of the Jurisdictional
        Notice refer to the concept of “triggering event”, which materialises when the
        undertakings concerned demonstrate a sufficiently concrete plan for the proposed
        concentration.20 In the context of an acquisition by means of succession, the
        Commission finds that it is necessary to establish the triggering event by reference to
        the date of the testator’s death, which cannot be known in advance. Indeed, the death
        of the testator is the natural “triggering event” in cases of succession.
(52)    The Commission considers that it is essential in light of the principle of legal certainty,
        the functioning and coherence of merger control and in order to ensure the uniform
        application of the Merger Regulation in cases of acquisition by means of succession
        that economic actors such as the Parties can easily and with legal certainty at the
        moment of the notification assess the relevant date for establishing the Commission’s
        jurisdiction. This is the case if the date of the testator’s death is taken as the relevant
        date.
19  OJ No. C 95, 16.4.2008, p. 1.
20  Recital 34 of the Merger Regulation.
                                                     8
 ---pagebreak--- (53)    Moreover, this date can be established independently from different applicable laws.21
        Compared to dates after the death of the testator when the heir(s) effectively receive
        the shares in a corporate entity under the different applicable national laws, the
        Commission finds that only the date of the death of the testator can be assessed with
        sufficient ease and certainty, which is essential in light of the principle of legal
        certainty, the functioning and coherence of merger control and in order to ensure the
        uniform application of the Merger Regulation, at least in cases in which the testator
        did not attach any suspensive conditions to his legacy.
(54)    The Commission notes that the Commission’s jurisdiction would be dependent on
        varying national laws, and events potentially taking place after notification, if the
        relevant date depended on an event after the death such as for example the acquisition
        of shares as defined by national law. This would jeopardise the uniform application of
        the Merger Regulation
(55)    In this regard, the two legal opinions submitted by Peter Kaindl and dealing with the
        determination of the appropriate regime for the transfer of the shares in SWISS
        KRONO explicitly acknowledge that the question of the applicable national law is
        disputed in the legal literature. The legal literature cited in the opinions seem to discuss
        different solutions to address the fact that Swiss law (same as German law) would not
        know a legal act that is central to acquiring ownership as an heir/ legatee under
        Austrian law.
(56)    These findings are also supported by the rationale for the established choice of the
        relevant date for the acquisition of control by contract or public bid as laid down in
        Paragraph 154 et seq. of the Jurisdictional Notice (i.e. the conclusion of the binding
        legal agreement in case of acquisition by means of purchase of shares or the
        announcement of the public bid in case of acquisition through public bid). In both
        situations the relevant date can be determined with legal certainty, can easily be
        ascertained at the moment of the notification and in line with the ex ante control logic
        of the Merger Regulation, occurs before the actual acquisition of control.
(57)    The relevant date laid down in the Jurisdictional Notice further show that the relevant
        date for establishing the Commission’s jurisdiction over a concentration can be before
        the actual acquisition of the shares in a company, such as in cases of the conclusion of
        the purchase agreement or the announcement of the public bid.
(58)    For these reasons, the Commission finds that for acquisitions of control by succession,
        the relevant date under Article 3(1)(b) for assessing whether the acquisition of control
        is by an undertaking or a person already controlling an undertaking is the moment of
        the death of the testator.
(59)    Thus, in the present case, the relevant date for assessing the Commission’s jurisdiction
        in relation to the inheritance is the date of the death of Ernst Kaindl on 11 April 2017.
5.1.2.2. Ines Kaindl was not an undertaking or a person controlling an undertaking on the
          relevant date of the death of her father Ernst Kaindl
(60)    Having established that the relevant date for determining the Commission’s
        jurisdiction is that of the death of the testator, and thus, in the present case the date of
21  The national law may also allow for the retroactive transfer of the shares.
                                                           9
 ---pagebreak---        the death of Ernst Kaindl, namely 11 April 2017, it has to further be determined
       whether, as a matter of fact, Ines Kaindl already controlled at least one undertaking on
       11 April 2017. Ines Kaindl is a natural person and not an undertaking herself, nor does
       she carry out economic activities in her own account.
(61)   The Commission finds that Ines Kaindl did neither have de jure (see below Section
       (A)) nor de facto control (see below Section (B)) over at least one undertaking on the
       relevant date of the death of her father on 11 April 2017.
       (A)       Ines Kaindl did not have de jure control over any other undertaking with
                 economic activity before the death of Ernst Kaindl
(62)   According to established case law, an undertaking within the meaning of EU
       Competition Law is “any entity engaged in an economic activity, regardless of its
       legal status and the way in which it is financed.”22 Economic activity means “offering
       goods or services on the market which, at least in principle, could be carried on by a
       private undertaking in order to make profits.”23
(63)   Both M. Kaindl and SWISS KRONO were under the de jure joint and sole control
       respectively of Ernst Kaindl until his death. Only following his death, control over
       both companies would, according to Ernst Kaindl’s last will, be transferred to Ines
       Kaindl.
(64)   On the date of the death of Ernst Kaindl, the only entity over which Ines Kaindl had
       de jure control was the asset management company […]. Since 2007, Ines Kaindl
       holds all shares in […]. She is the sole shareholder and therefore has sole control of
       […]. […]’s sole purpose is to hold a 3 ½ room apartment in a condominium property
       in […], which is used exclusively by Ines Kaindl and her family for private purposes.
       […] is therefore not an undertaking that is engaged in an economic activity, offering
       goods and services on the market.
(65)   Therefore, on the date of the death of Ernst Kaindl, Ines Kaindl did not have de jure
       control over any undertaking within the meaning of the Merger Regulation.
       (B)       Ines Kaindl did not have de facto control over SWISS KRONO before the
                 death of Ernst Kaindl
(66)   Further, the Commission finds that Ines Kaindl did not exercise de jure control over
       an undertaking on the relevant date of the death of her father Ernst Kaindl.
(67)   The Commission finds that Ines Kaindl did not acquire de facto control over the
       company SWISS KRONO prior to 11 April 2017 on the dates brought forwared by
       Peter Kaindl (see above Section 4.1.2), namely in 2009 following her appointment as
       chairwomen of SWISS KRONO (see Section (B.i.) below), in 2012 following her
       naming as the heir and legatee (see Section (B.ii) below), and in 2013 following the
       deterioration of Ernst Kaindl’s health (see Section (B.iii) below).
22 See European Court of Justice, Case C-41/90, Höfner and Elser, ECLI:EU:C:1991:161, para. 21.
23 See European Court of Justice, Case C-475/99, Ambulanz Glöckner, ECLI: EU:C:2001:577, para. 19; Case
   C- 49/07, MOTOE, ECLI:EU:C:2008:376, paras. 21 et seq. and Advocate General Jacobs, Opinion in Case
   C-67/96, Albany, ECLI: EU:C:1999:28, para. 311.
                                                      10
 ---pagebreak--- (68) The Commission notes in this regard that in the present case, as well as in any cases
     involving a succession, all transfers should only take place once the testator died. By
     including the assets in his last will, Ernst Kaindl has made clear that he did not want
     to transfer the shares in either company, including SWISS KRONO during his
     lifetime.
     (B.i)     2009 following the appointment as chairwomen of SWISS KRONO
(69) In 2009, Ines Kaindl was appointed chairwomen of SWISS KRONO.
(70) According to Article 3(2) Merger Regulation, control is constituted by “rights,
     contracts or any other means which, either separately or in combination […] confer
     the possibility of exercising decisive influence on an undertaking”. Examples
     mentioned are ownership or decisive influence on the composition, voting or decisions
     of the organs of an undertaking.
(71) The Commission notes that a chairperson of a board of directors can have significant
     influence on an undertaking. However, irrespective of the exact composition of such
     board and the statutes of the undertaking, the position as a chairperson of the board of
     directors can be terminated. Furthermore, the chairperson does not decide on their own
     but rather as a member of the board (even taking potential rights as chair into account).
     Most importantly, any organ of an undertaking is to be considered as part of such
     undertaking. Even if an undertaking has only one managing director, such director
     would not exercise control despite being able to take all decisions within the
     undertaking by himself because as a managing director he is part of the undertaking
     (obviously, the same person could nonetheless control the undertaking if he holds
     other rights that confer control on him).
(72) Specifically looking at SWISS KRONO, the corporate governance structure of the
     company implements a unitary board structure. The General Meeting of the
     shareholders is the supreme organ and appoints the Board of Directors. According to
     the articles of association, the Board of Directors names a chairperson. This person
     presides over the General Meetings but has no particular voting rights (e.g., no casting
     vote). In meetings of the Board of Directors, the chairperson has a casting vote. Until
     the death of Ernst Kaindl, the Board of Directors had four members. Among these
     members were Ernst Kaindl and Ines Kaindl. Following his death, the Board of
     Directors consisted of three members.
(73) In a structure such as SWISS KRONO, control is exercised in the General Meeting. A
     majority in the General Meeting can appoint the members of the Board of Directors.
     Neither the Board of Directors nor the chairperson of the board exercise control of
     SWISS KRONO. This holds true regardless of the level of scrutiny a controlling
     shareholder exercises over the company.
(74) The situation in this case is different from a situation in which a person exercises de
     facto control because of their decisive influence on the company. As chairwoman of
     SWISS KRONO, Ines Kaindl was naturally in charge of all affairs of the company.
     However, this was based on her role as chairwoman, not as shareholder. Any other
     conclusion would mean that managing directors or chairpersons could potentially
                                                 11
 ---pagebreak---        control the respective undertaking if the shareholders trust in them and do not actively
       exercise their control rights.24
(75)   For these reasons, the Commission finds that Ines Kaindl did not acquire de facto
       control over SWISS KRONO in 2009 when she was appointed as chairwoman.
       (B.ii)     2012 following the drafting of Ernst Kaindl’s will
(76)   On 29 August 2012, Ernst Kaindl drafted the first version of his will and amended it
       at multiple points thereafter (last known amendment 5 October 2016). Ines Kaindl was
       ultimately designated to inherit […]% of the voting shares in SWISS KRONO,
       however it is unknown when this was first included in Ernst Kaindl’s will.
(77)   The Commission considers that from a legal perspective, naming Ines Kaindl as
       heir/legatee for the shares in SWISS KRONO does not change its above assessment
       in relation to her appointment as chairwoman (see Section (B.i) above). The position
       as heir/legatee does not confer any rights in itself during the lifetime of the testator.
(78)   Therefore, the Commission finds that Ines Kaindl did not acquire de facto control over
       SWISS KRONO when she was named as heir/legatee in a testament by Ernst Kaindl
       in or after 2012.
       (B.iii)    2013 following a deterioration of Ernst Kaindl’s health
(79)   According to the submissions of Peter Kaindl, Ernst Kaindl had health issues from
       2013 onwards which lead to Ines Kaindl representing Ernst Kaindl as owner in all
       practical aspects vis-à-vis the company (such as decisions on investments, important
       discussions with customers and suppliers, opening of new factories and hiring/firing
       of senior staff), in addition to her position as chairwoman.
(80)   The Commission considers that even if Ines Kaindl represented Ernst Kaindl in all
       practical aspects, this position would still be derived from the legal position of Ernst
       Kaindl as owner of SWISS KRONO. As set out in Paragraph 13 of the Commission’s
       Jurisdictional Notice, control is normally acquired by the persons or undertakings,
       which are the holders of the respective rights. In case of ownership, that means the
       owner. Despite the submissions made by Peter Kaindl on the subject of Ernst Kaindl’s
       deteriorating health and Ines Kaindl’s consequent role, Ines Kaindl did in any case not
       have control over SWISS KRONO at this stage.
(81)   Therefore, the Commission finds that Ernst Kaindl still had sole control over SWISS
       KRONO despite the described deterioration of his health until the moment of his death
       on 11 April 2017. Ines Kaindl did not have de facto control over SWISS KRONO
       prior to his death and thus on the relevant date for establishing whether she had control
       over an undertaking for the purposes of the Merger Regulation.
24 This reasoning is consistent with the Commission decisional practice on management buy-outs: managers
   can only be notifying parties if they already control another undertaking.
                                                          12
 ---pagebreak---         (B.iv)     Conclusion in relation to de facto control over SWISS KRONO prior to Ernst
                   Kaindl’s death
(82)    In conclusion, the Commission finds that Ines Kaindl did not have de facto control
        over SWISS KRONO or any other undertaking within the meaning of the Merger
        Regulation on the relevant date of the death of her father Ernst Kaindl.
5.1.2.3. The acquisitions of control over M. Kaindl and SWISS KRONO form part of a single
          concentration under Article 3 of the Merger Regulation because of their unitary
          nature
(83)    In any case, even if the relevant date for establishing the Commission’s jurisdiction
        was not the moment of the death of the testator, the acquisitions of control over the
        two undertakings M. Kaindl and SWISS KRONO are unitary in nature and, therefore
        form part of a single concentration under Article 3 of the Merger Regulation.
        Therefore, their acquisition has to be assessed together.
(84)    The two acquisitions are unitary in nature according to the “economic plan” of Ernst
        Kaindl. In the specific situation of acquisition of control by succession, in the absence
        of a contract between the testator and the heir or legatee, the plan envisaged by the
        testator, evidenced by the terms of his will, is the relevant factor. Ernst Kaindl’s will
        envisaged that Ines Kaindl obtains control of the two undertakings without any
        indications of Ernst Kaindl planning that Ines Kaindl should acquire control at
        different points in time. This is consistent with the fact that Ernst Kaindl’s will was
        that Ines Kaindl, as his daughter, fully replaces him as the person having joint control
        (M. Kaindl) and sole control (SWISS KRONO) in both undertakings. Conversely,
        Ernst Kaindl did not foresee that Ines Kaindl would obtain control in only one of the
        undertakings. 25
(85)    The economic reality of the Transaction is therefore that Ines Kaindl succeeds her
        father in his position, in accordance with the terms of her father’s will. It would be
        artificial to look at the inheritance of the shares conferring sole control over SWISS
        KRONO and those conferring joint control over M. Kaindl separately.
5.2.    Conclusion with regard to a concentration within the meaning of Article 3(1)(b)
          of the EUMR
(86)    In conclusion, the Commission finds that on the date of the death of Ernst Kaindl on
        11 April 2017, Ines Kaindl did in fact not have control over any other undertaking
        with economic activity, nor was she a natural person carrying out further economic
        activities in her own account.
(87)    Therefore, the Transaction does not constitute a concentration within the meaning of
        Article 3(1) of the Merger Regulation.
25  There was no indication that Ines Kaindl would not accept the testament or legacy.
                                                        13
 ---pagebreak--- 6.   CONCLUSION
(88) For the above reasons, the European Commission has concluded that the notified
     operation does not constitute a concentration within the meaning of Article 3 of the
     Merger Regulation and consequently does not fall within the scope of that Regulation.
     This decision is adopted in application of Article 6(1)(a) of the Merger Regulation and
     Article 57 of the EEA Agreement.
                                                     For the Commission
                                                     (Signed)
                                                     Margrethe VESTAGER
                                                     Executive Vice-President
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