CELEX: 31995M0577
Language: en
Date: 1995-04-28 00:00:00
Title: COMMISSION DECISION of 28/04/1995 declaring a concentration to be compatible with the common market (Case No IV/M.577 - GE / Power Controls BV) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31995M0577

COMMISSION DECISION of 28/04/1995 declaring a concentration to be compatible with the common market (Case No IV/M.577 - GE / Power Controls BV) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 163 , 29/06/1995 P. 0008

 COMMISSION  DECISION of 28/04/1995 declaring a concentration to be compatible with the common market (Case No IV/M.577  - GE  /  Power  Controls BV) 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:  Case No. IV/M.577  GE/POWER CONTROLS B.V. <ind> Notification of 27th March 1995 pursuant to Article  4 of Council Regulation No 4064/89. 1.<ind>  On  27th March 1995 GENERAL ELECTRIC (GE)  notified the  acquisition  of  POWER CONTROLS B.V.  (PC)  by  way  of purchase of shares.  2.<ind>   After   examination  of  the   notification,   the Commission  has concluded that the notified operation  falls within the scope of Council Regulation 4064/89 and does  not raise serious doubts as to its compatibility with the common market. I.<ind> THE PARTIES  3.<ind> GENERAL ELECTRIC (GE) is a US company active  in  12 industrial   business   including    electrical    household appliances,  aircraft  engines, capital  services,  lighting products,  plastic  products,  electrical  distribution  and control products and others.   <ind>  POWER  CONTROLS B.V. (PC) is a Dutch holding  company active  in  the  manufacturing of   low  voltage  electrical equipment for residential, industrial and commercial use. II. THE OPERATION 4.<ind>  The  proposed operation consists in the acquisition by  GE  of sole control on PC by way of purchase of  shares. Hitherto  PC  has been jointly controlled by GE and  GENERAL ELECTRIC COMPANY P.L.C. (GEC), a U.K. corporation active  in a    number    of    sectors   such   as   power    systems, telecommunications   [bussinesses   secret   deleted]    and electronic components among many others.  <ind>  Under the proposed operation PC becomes a whollyowned subsidiary  of GE, consequently the operation results  in  a changefrom  joint  control  to  sole  control.   After   the operation,  all  shares of PC and its subsidiaries  will  be owned  by  GE  either  directly  or  through  a  whollyowned affiliate company of GE. III.  CONCENTRATION 5.<ind> The operation constitutes a concentration within the meaning  of  article 3(1) (b) of the merger regulation.   It consists  in the passage from joint control to sole  control over PC, which subsequently ceases to be a joint venture. IV. COMMUNITY DIMENSION 6.<ind>  The  combined  worldwide turnover  of  the  parties exceeds 5,000 million ECU ([...] GE and [Bussinesses  secret deleted]  PC).    The aggregate Community wide  turnover  of each  party exceeds 250 million ECU (more than [...] GE  and [Bussinesses  secret deleted] PC)  They do not achieve  more than two-thirds of their turnover in one and the same Member State. The operation has therefore a Community dimension. V.  THE RELEVANT MARKETS 7.<ind>  According to the notifying party  the  low  voltage electrical equipment sector could be divided in 5  different market  segments.   It specified that to be  significant,  a company has to compete in all the 5 segments: <ind>    Wiring   Devices   (residential,   industrial   and commercial):  Household  and  industrial  switches,   plugs, sockets,  connectors,  boxes,  trunking  systems  and  other installation material. <ind>    Modular   protective   devices   (residential   and industrial  breakers,  distribution  boards  and   consumers units):  these are used for the distribution of  electricity and  for  the protection of line and people for low current, including five categories (codes IEC 9472, IEC 899, IEC 1008 and  1008i, IEC 1009 and IEN 6 1009 and distribution  boards and consumer units). <ind>   Industrial  and  commercial electrical  distribution components   (breakers   and   switches)   including   three categories (code IEC 9472 air circuit breakers, molded  case circuit breakers and fuse switches) <ind>  Industrial and commercial controls: products used for command  and  control  and protection  against  overload  of motors  and  other  electrical apparatus  and  products  for controlling,  switching and signalling electrical  circuits, including  four categories (codes IEC 9744,  IEC  9475,  IEC 9472/4 and IEC 11311) <ind>   Other equipment: Industrial, commercial and  utility power  centers  (switchboards)  and  motor  control  centers (MCC). 8.<ind>   The   Commission's  "NC"  (Combined  Nomenclature) classification  provides a different splitup of the products concerned: <ind>    8536   (electrical  equipment  for   switching   or protecting electrical circuits, or for making connections to or  in electrical circuits for a voltage not exceeding  1000 V) <tab>  8537 (boards, panels, etc. for electrical control  or the distribution of electricity) <ind> and, for higher voltage products, <ind>    8535   (electrical  equipment  for   switching   or protecting electrical circuits, or for making connections to or in electrical circuits for a voltage exceeding 1000 V). 9.<ind>  The  notifying  party considered  the  geographical market   as  essentially  European  due  to  the  continuing standardization  of specifications for low voltage  products and  to  other  factors such as the existance  of  the  same competitors in the different Member States. 10.<ind>  In  any event, the precise product and  geographic market  definition  can  be left open,  as  the  competition analysis is unaltered even if the narrower market definition is used.  VI.<ind> ASSESSMENT 11.<ind> The operation consists in the passing from joint to sole  control  of GE on PC, it will thus not result  in  any addition of market share. Moreover, although PC was  subject to  joint  control prior to the operation, GE appointed  the executives in charge of the day to day commercial management of PC.  <ind> Prior to the operation, the activities of the GE group in  the  low voltage equipment sector in Europe were carried out  through  PC.   GE was also marginally  active,  through another subsidiary GEFanuck, in the automation sector with a market  share  at  EU  level of around  [Bussinesses  secret deleted.   Between 1 and 10 %.]. GEFanuck manufactures  some products  which belongs to PC's activity and  were  as  such sold  through  PC  [Bussinesses secret deleted].  This  will remain unchanged0 after the operation. 12.<ind>  The GE group is overall a relatively small  player in  this  sector  in Europe as PC's market share  (including sales  of  GEFanuck's  products by PC) is  estimated  around [Bussinesses  secret deleted.  Between 1 and 10  %.]  at  EU level  and, with one exception, does not exceed [Bussinesses secret deleted.  Between 1 and 10 %.] at Member State level, in  any of the five segments identified by the parties which constitute the narrowest market definition. The only  Member State in which  PC enjoys a more significant market share is Belgium  where the operation will not result in  any  market share accrual in favour of GE. In addition, GE will have  to face  stronger  competitors at EU as well  as  Member  State level  such as Schneider ([...] estimated EU market  share), Siemens  ([...]),  ABB  ([...])  and  Legrand  ([Bussinesses secret deleted.  All figures between 10 to 35 %.]).  <ind>  It  results  that the operation will  not  create  or strengthen a dominant position neither in the Common  Market nor in a substantial part of it. VII.  CONCLUSION 13.<ind>  In  view  of  the nature  of  the  operation,  the relatively modest market shares of GE, and the existence  of strong competitors, 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. For the Commission,