CELEX: 32015M7537
Language: en
Date: 2015-04-21 00:00:00
Title: Commission Decision of 21/04/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7537 - ARDIAN FRANCE / F2i SGR / F2i AEROPORTI) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 21.4.2015
C(2015) 2778 final

                                        [pic]

                                        |To the notifying parties:                                              |                                                                       |

Dear Sir/Madam,

Subject:    Case M.7537 - ARDIAN FRANCE/ F2i SGR/ F2i AEROPORTI
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 12 March 2015, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation
       by which ARDIAN France SA ("ARDIAN", France), part of the Ardian Group (France), and F2i SGR S.p.A.  ("F2i",  Italy)  acquire  within  the
       meaning of Article 3(1)(b) of the Merger Regulation joint control of F2i Aeroporti S.p.A ("FA", Italy),  currently  solely  controlled  by
       F2i, by way of purchase of shares. ARDIAN, F2i and FA will hereinafter be referred to as the "Parties".

THE PARTIES

    0. F2i is a private equity firm that manages two funds dedicated to investments in the infrastructure sector in Italy.

    0. ARDIAN is an international private equity firm that is fully owned by ARDIAN SAS (France) and part of  ARDIAN  Group  (formerly  AXA  PE).
       ARDIAN Group has no investments in the Italian  transport  sector.  ARDIAN  has  a  controlling  interest  in  the  London  Luton  airport
       operator,[3] but does not have any investment in other airport operators in the EEA.[4] Lastly, ARDIAN jointly controls the  Fives  Group,
       an industrial engineering group, whose division Fives Cinetic supplies baggage systems to airports[5] and Altares and RGI,  two  companies
       providing IT solutions.

    0. FA is a holding company that is wholly owned by F2i First Fund and managed by F2i. FA's activity is  limited  to  Italy  and  consists  in
       investments in the Italian infrastructure sector. FA holds interests in a number of companies and has sole control over  Società  Gestione
       Servizi Aeroporti Campani S.p.A. ("GESAC"), the operator of the  Naples  Airport;  Società  Azionaria  Gestione  Aeroporto  Torino  S.p.A.
       ("SAGAT"), the operator of the Turin Airport; and  Software  Design  S.p.A.  ("Software  Design"),  a  company  providing  specialised  IT
       infrastructure to airports ("FA's Controlled Companies").[6]  In  addition,  FA  has  minority  stakes  in  Società  per  Azioni  Esercizi
       Aeroportuali SEA ("SEA"), the operator of the Milan Malpensa and Milan Linate airports; in  SACBO,  the  Bergamo  Orio  al  Serio  airport
       operator (through SEA); and in SAB, the Bologna airport operator (through SAGAT).[7]

THE OPERATION AND THE CONCENTRATION

    0. The transaction consists in the indirect acquisition of 49% of FA's shareholding by  ARDIAN,  through  a  newly  created  vehicle  company
       ("BidCo") ("the Transaction").

    0. BidCo has been created by a consortium formed by ARDIAN and Crédit Agricole Assurances ("CAA", France), a company of the  Crédit  Agricole
       Group (France). BidCo’s share capital is held by ARDIAN Funds (60%) and companies of CAA (40%). The Parties  submit  that  BidCo  will  be
       solely controlled by ARDIAN, as CAA will only have limited rights in influencing FA's and FA's Controlled Companies'  activities.  Indeed,
       while ARDIAN, through BidCo, can exercise veto rights related to FA and FA's Controlled Companies strategic decisions,[8] CAA has  only  a
       right to be consulted.[9] The mere right to be consulted in relation to the veto rights over strategic decisions does not suffice to grant
       CAA joint control.

    0. FA is holding and managing interests in companies operating in the airport business in Italy. FA's Controlled Companies  are  pre-existing
       companies performing on a lasting basis all the functions of an autonomous economic entity within the  meaning  of  Article  3(4)  of  the
       Merger Regulation.[10]

    0. Therefore, the Transaction will result in a change of control over  a  full  functioning  joint  venture,  amounting  to  a  concentration
       according to the Merger Regulation.

1 Joint control over FA and FA's Controlled Companies

    0. A minority shareholder is deemed to jointly control a JV, if it is able to exert decisive influence over  the  JV’s  strategic  commercial
       behaviour through veto rights attached to its shareholding. Such veto  rights  can  relate  to  the  JV’s  business  plan,  budget,  major
       investments or appointment of the senior management. [11]

    0. ARDIAN does not have an explicit veto right over FA and FA's Controlled Companies' budget,[12] or investments of  a  size  that  would  go
       beyond the usual minority shareholding protection. it has, however, the right to nominate senior management and  a  veto  right  over  the
       business plan.

    0. ARDIAN and F2i will both nominate representatives to FA  and  FA's  Controlled  Companies’  boards  of  directors,  [Rules  governing  the
       designation of the management][13] […][14] […].

    0. All decisions of FA or FA's Controlled Companies, [description of decisions], will be taken at the respective board level by way of simple
       majority and the Chairmen will not have a casting vote. [Details on the adoption of board decisions]

    0. However, in an agreed draft of the shareholders agreement, the Parties provided for an exception to this rule in relation to a  number  of
       "Reserved Matters" that require the prior approval of both F2i and ARDIAN. The Parties further set up a deadlock resolution mechanism.  In
       case of a veto by ARDIAN, a consultation is foreseen, aiming at reconciling the position of the Parties. Should this procedure not lead to
       an agreement [duration], the respective proposal of F2i will have to be withdrawn and not resubmitted for at least [duration].

    0. According to the draft shareholders agreement, the approval of any amendments to existing or new business plans for FA or FA's  Controlled
       Companies is included in the "Reserved Matters" and therefore ARDIAN has a veto right over any amendment. The current  business  plans  of
       GESAC and SAGAT include a longer-term planning extending to [duration and details on adoption of the  business  plans].[15]  All  business
       plans will be reviewed on an annual basis. The Parties submit that FA does  not  yet  have  a  business  plan  but  will  have  one  post-
       Transaction. Even though the scope of the future business plan of FA has not yet been agreed, the fact that ARDIAN will be in  a  position
       to block any proposed business plan lacking the scope or level of detail  that  would  enable  them  to  pursue  their  business  strategy
       indicates that, in this case as well, this veto right would suffice to establish joint control.

    0. Moreover, ARDIAN is granted a number of additional veto rights. Most of these rights correspond to the usual minority  rights  protection;
       two of them however are also significant for FA and FA's Controlled Companies' businesses. These are (i) a right to veto decisions related
       to the setup of executive committees or the delegation of power to the CEO, as a guarantee that ARDIAN would  be  involved  in  structural
       changes in the companies' operation and (ii) a right to veto any material amendment to the concession agreements for the operation of  the
       two airports and any related provisions potentially affecting the applicable airport tariffs.

    0. As airport operation is a heavily regulated activity, GESAC and SAGAT undertake this business within the framework of concessions  granted
       by the Italian Civil Aviation Authority. This concession agreement (the Convention) and the adjacent Program Agreement set up a regulatory
       framework including tariffs, planned major investments etc. ARDIAN's ability to veto any amendment of these agreements therefore grants it
       an additional degree of influence over the operation and income development of GESAC and SAGAT.

2 Conclusion

    0. In light of the above, it can be concluded that the powers of ARDIAN  in  influencing  FA's  and  FA's  Controlled  Companies'  commercial
       strategy go beyond the usual rights of minority shareholders' protection. Therefore, ARDIAN and  F2i  will  have  joint  control  and  the
       Transaction amounts to a concentration, according to Article 3(2) of the Merger Regulation.

EU DIMENSION

    0. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[16] (ARDIAN:  EUR  […],  F2i:  EUR
       […]). Each of them has an EU-wide turnover in excess of EUR 250 million (ARDIAN: EUR […], F2i: […]), but they do not achieve more than two-
       thirds of their aggregate EU-wide turnover within one and the same Member State. The notified operation therefore has an EU dimension.

MARKET DEFINITION

    0. The Parties submit that they are both active in the management and operation of airport infrastructures; however since ARDIAN is active in
       the UK and FA in Italy no horizontal overlaps arise in this Transaction.

    0. In addition, the Parties engage in certain ancillary activities to the operation of airports.  A  vertical  relationship  would  therefore
       arise on the basis of the activities of ARDIAN's subsidiary  Fives  Cinetic,  which  supplies  automatic  handling  material  systems  and
       accompanying services and provides baggage handling services to airports in the EEA. These systems  and  services  can  be  considered  as
       inputs for the downstream market for airport infrastructure services in which FA is active.

    0. Moreover, FA is active, through Software Design on a market for the supply of information technology solutions to the airport sector. This
       market can be considered upstream from the market for the provision of airport infrastructure services in  the  UK,  in  which  ARDIAN  is
       active by controlling the London Luton airport operator.

1 Management and operation of airport infrastructures

    0. The Commission delineated a separate market for the management and operation of airport infrastructures. In its  most  recent  cases,  the
       Commission indicated that three activities can be distinguished in this market: (i) the  provision  of  airport  infrastructure  services,
       including the development, maintenance, use and provision of the runway facilities, taxiways and other airport  infrastructure;  (ii)  the
       provision (or contracting) of ground handling services, consisting of ramp, passenger, baggage handling and air cargo services; and  (iii)
       the provision (or contracting) of associated commercial services, including catering  facilities,  car  parking,  car  hire  and  sale  of
       advertising space.[17]

    0. As for its geographical scope, the Commission defines the market for the management  and  operation  of  airport  infrastructures  as  all
       airports within the same catchment area. |The determination of the exact catchment areas of the airports concerned can be  left  open,  as
       the Parties' activities are located in different, non-neighbouring countries with no potential geographic overlap.[18]

2 The granting of airport operation concessions

    0. The Commission considered in past cases that the grant of a license or a concession for the exploitation of a  particular  state-regulated
       activity is distinguishable from the market for the running of such activity.[19]

    0. The specific market for the granting of airport management and operation concessions has also  been  analysed  in  the  Commission's  past
       practice.[20] The market for the award of airport operation concession thus consists in the economic activity where supply is  represented
       by the Public Administration and demand by undertakings of consortia of undertakings with  an  interest  in  acquiring  airport  operation
       concessions.

    0. The Parties submit that the geographic scope of this market is EEA-wide, if not world-wide;[21] the Commission has  however  in  the  past
       left the precise geographic market definition open.

    0. In this case as well, as the Transaction would not give rise to competition concerns under any plausible  geographic  delineation  of  the
       market since the Parties' activities are located in different non-neighbouring countries, the precise scope of the geographic  market  may
       be left open.

3 Supply of automatic baggage handling systems

    0. The Parties submit that the narrowest possible product market definition would consist  in  the  supply  of  automatic  handling  material
       systems and accompanying services for baggage handling at airports, but that a broader product market for the supply of automatic handling
       material systems and accompanying services was not excluded.[22] As the Transaction will not give rise to competition concerns  under  any
       plausible product market, the exact product market definition may however be left open.

    0. In its past practice, the Commission considered that the geographic market for the provision of automatic handling material  systems  used
       for baggage handling would be at least EEA-wide, but ultimately left the exact definition open.[23]

    0. In the present assessment, the Transaction will similarly not raise serious doubts  under  any  plausible  geographic  market.  The  exact
       definition may therefore be left open.

4 Supply of information technology solutions for airports

    0. The Parties submit that in relation to the supply of information technology solutions, the narrowest possible  product  market  definition
       would be the supply of information technology solutions to airports. The Commission held in previous decisions that the product market can
       either be the overall IT services market or a segmented IT services market depending on: i) the functionality of the services,  subdivided
       in seven categories,[24] or ii) the different industry sectors concerned, of which eleven have  been  identified  in  previous  cases.[25]
       Ultimately however, the Commission left the exact sub-segmentation open.[26] The Parties submit that under all alternative product  market
       definitions, the geographic scope of the market should be at least EEA-wide.

    0. There is no need to reach a definite view regarding the precise definition of a potential market for the supply of information  technology
       solutions to airports for the purpose of this assessment, since the Transaction does not raise  serious  competition  concerns  under  any
       plausible product and geographic market definition.

COMPETITIVE ASSESSMENT

1 Horizontal overlaps

    0. Both ARDIAN and FA are active on a market for the provision of airport infrastructure services. As  however  ARDIAN  operates  the  London
       Luton airport, FA operates airports in Italy and the geographic scope of these markets is limited to the airports' catchment  area,  there
       is no horizontal overlap between the activities of the Parties on the same market.

    0. In relation to the market for the granting of airport management and operating concessions, the Parties submit that FA will not be  active
       on such market and that F2i and ARDIAN will independently compete for concessions, if they decide to do so. The Parties' current share  on
       a market for the granting of airport operation concessions is well below 20% on both the Italian and an EEA-wide market. Moreover, this is
       a bidding market at both national and EEA-wide level, on which several sizeable operators are active and fiercely competing.

    0. The Commission therefore considers that the Transaction does not raise  serious  doubts  on  the  basis  of  horizontal  overlaps  on  any
       market.[27]

2 Vertical relationships

    0. The Transaction would give rise to affected markets due to vertical relationships created  by  the  Parties'  activities  in  upstream  or
       downstream markets. Indeed, the Parties' market shares on the market for the provision of airport infrastructure services would  reach  up
       to 100%, if the narrowest relevant markets, limited to each airport, were considered.

    0. A vertical relationship would thus arise between ARDIAN, supplying automatic handling  material  systems  and  accompanying  services  for
       baggage handling at airports through Fives Cinetic, and FA as shareholder in Italian airport operators. A  further  vertical  relationship
       could be created by the Transaction between FA, providing information technology solutions to airports through Software Design, and ARDIAN
       as operator of the London Luton airport, if the market for the provision of information technology solutions to airports was EEA-wide.

    0. The Parties submit that in the upstream markets, the activities of both ARDIAN as supplier of baggage handling systems for airports and FA
       as supplier of information technology solutions for airports are de minimis and purely marginal. The market shares  in  the  two  upstream
       markets of ARDIAN and FA are estimated at less than [0-5]% in the EEA. Furthermore, neither of these companies controls  key  technologies
       or inputs that could be seen as essential for airport operators.

    0. Moreover, the Parties submit that there are a high number of competitors active in both these markets,  which  are  expected  to  continue
       exerting competitive constraint on Five Cinetic and Software Design post-Transaction. Such companies will thus constitute alternatives for
       airport operators also after the Transaction.

    0. In view of the above considerations, the vertical relationships likely to arise by the Transaction are not capable of raising any risk  of
       foreclosing competing airport operators of an essential input.

    0. Regarding possible customer foreclosure, the Parties submit that they have no ability or incentive to engage  in  a  customer  foreclosure
       strategy.

    0. Firstly, the Parties claim that they are unable to foreclose competitors in the  upstream  markets  given  that,  even  if  their  airport
       operators decided to acquire all supplies from vertically integrated companies, the customer base of competitors in these EEA-wide markets
       is very broad and would therefore barely be affected.

    0. Secondly, the possibility to engage in any foreclosure strategy is largely limited by  the  fact  that  airport  operators  are  bound  by
       mandatory provisions under national and EU public procurement regulation, according to which they  must  organise  tenders  for  acquiring
       their supplies.

    0. Thirdly, the Parties submit that they do not have the incentive to foreclose a rival supplier  of  baggage  handling  systems  in  Italian
       airports. In particular, F2i has no incentive to allow ARDIAN favouring Fives Cinetic over alternative baggage handling systems suppliers.
       Indeed, unless Fives Cinetic offers competitive services, F2i would not have an interest in sourcing from them as part  of  a  foreclosure
       strategy, since this would negatively impact its investment in FA.

    0. Similarly, the Parties will not have the incentive to foreclose a rival supplier of information technology solutions at the  London  Luton
       Airport. Especially AENA, the other controlling parent company of the airport operator, would  be  able  to  stop  ARDIAN  from  favouring
       Software Design ahead of alternative suppliers if it were not competitive.

    0. In light of the above, the Commission considers that the Transaction is unlikely to raise serious doubts as to the vertical  relationships
       arising between the Parties' activities on a market for automatic handling material systems and accompanying services for baggage handling
       at airports or a hypothetical EEA-wide market for information technology solutions to  the  airport  sector  on  the  one  hand,  and  the
       provision of airport infrastructure services on the other hand.

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]   The Commission approved the acquisition of joint control by ARDIAN and AENA  over  the  Luton  airport  operator  in  case  M.7008  –  AENA
INTERNACIONAL/ AXA PE/ LLAGL of 9 October 2013.

[4]   ARDIAN also controls NHV, a helicopter operator, which has no activities  in  Italy.  As  FA’s  airports  provide  services  to  helicopter
operators to a negligible degree, no actual or potential vertical relation can be identified and the activity of NHV is not analysed  further  in
this Decision.

[5]   The Commission approved the acquisition of joint control by ARDIAN over Fives in case M.6691 – AXA IMPEE / FIVES of 10 September 2012.

[6]   The Parties submit that FA has two further subsidiaries, F2i Sistema Aeroportuale Lombardo S.r.l.,  a  holding  company  with  no  business
activities, which will likely be winded it up after the transaction and F2i Sistema Aeroportuale Campano S.p.A, which is an intermediate  holding
company managing FA's shareholding in GESAC and Software Design. As these companies have no market presence, the impact  of  the  transaction  on
them is not analysed further in this Decision.

[7]   The Parties submit that FA has a non-controlling minority stake of 35.7% in the Milan Linate and Milan Malpensa airport  operator,  a  non-
controlling indirect (through the Milan airports' operator) minority stake of 31% in the Bergamo airport operator and a non-controlling  indirect
(through SAGAT) stake of 7% in the Bologna airport operator.

[8]   [Details on the type of strategic decisions].

[9]   [CAA’s veto rights in relation to BidCo’s governance].

[10]  FA has its own management, staff and adequate funding to perform its activities, will not be taking over a specific function on  behalf  of
its parents, but is intended to increase its current or acquire shareholding in other airport operators in  Italy  and  has  was  formed  for  an
indefinite period of time.

[11]  Paragraph 62 and following of Commission’s Consolidated Jurisdictional Notice.

[12]  [Details on ARDIAN's veto rights].

[13]  The nomination of members to the boards will be organised as follows in the different companies. […].

[14]  [Details on the designation of the management].

[15]  The current business plans of FA's Controlled Companies contain significant level of detail,  [details  on  the  content  of  the  business
      plans].

[16]  Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission Consolidated Jurisdictional Notice.

[17]  See, among others, M.7008 – AENA INTERNACIONAL/ AXA PE/ LLAGL, paragraph 12; M.6862 – VINCI / Aeroportos de Portugal, paragraph 16,  M.7270
      – CESKY AEROHOLDING / TRAVEL SERVICE / CESKE AEROLINIE, paragraph 50 and following.

[18]  See, among others, M.7008 – AENA INTERNATIONAL/AXA PE/LLAGL, paragraph 14; M.6862 – VINCI / Aeroportos de Portugal, paragraph 19.

[19]  See among others, M.4087 – Eiffage / Macquarie  / APRR, paragraphs 11 and 12, M.5855 – DB / Arriva, paragraphs 64 and following.

[20]  See Case M.6862 – VINCI / Aeroportos de Portugal, paragraphs 11 and following.

[21]  An analysis of the companies that participated in negotiations for the acquisition of GESAC and  SAGAT  during  their  privatisation  could
suggest that no narrower geographic market definition than national is plausible, since operators  from  different  countries  submitted  offers:
during the privatisation of GESAC in 1997, the British Airports Authority (UK) acquired the majority of GESAC’s share capital , which it sold  in
2010 to F2i SGR. Other investors competing with F2i were […] (UK), […] (IT), and […]  (IT).  SAGAT  was  partially  privatised  in  2000  when  a
consortium  led  by  Sintonia  (IT,  ultimately  controlled  by  the  Benetton  family),  Equiter  (IT,  part  of  the  Intesa  SanPaolo  group),
Tecnoinvestimenti (IT) and Aviapartners(BE), acquired a minority stake in SAGAT.

[22]  M.7008 – AENA INTERNACIONAL/ AXA PE/ LLAGL at paragraph 22.

[23]  M.7008 – AENA INTERNACIONAL/ AXA PE/ LLAGL at paragraph 25.

[24]  Sub-segmentations considered for i) communications, media & services; ii) education;  iii)  transportation,  iv)  utilities;  v)  wholesale
trade; vi) manufacturing & natural resources; vii) healthcare providers;  viii)  banking  &  securities;  ix)  retail;  x)  government;  and  xi)
insurance, M.6921 – IBM ITALIA / UBIS, paragraph 21.

[25]  M.6921 – IBM ITALIA / UBIS at paragraph 25.

[26]  If a broader market definition covering the provision of information technology solutions to all  sectors  were  considered,  a  horizontal
overlap could in theory be identified due to ARDIAN’s activities through Altares and RGI on a market for the provision of IT  solutions.  Alteres
provides specific products in four key areas (changes to companies’ legal information, new customer prospecting for sales growth,  credit  rating
and solvency financial information, and non-financial ratings) and RGI specialises in providing software  and  advisory  services  for  insurance
policy management. Software Design is not active in any of these segments. In any event, the aggregated market share of the  three  companies  in
such market post-Transaction would be below 20%.

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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