CELEX: 32014M7238
Language: en
Date: 2014-06-20 00:00:00
Title: Commission Decision of 20/06/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7238 - AMERICAN EXPRESS COMPANY / QATAR HOLDING / GBT) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 20.6.2014
C(2014) 4240 final

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To the notifying parties

Dear Sir/Madam,

Subject:    Case M.7238 - AMERICAN EXPRESS COMPANY/ QATAR HOLDING/ GBT
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

    1) On 20 May 2014, the European Commission received a notification of a proposed concentration pursuant to Article 4 of the Merger Regulation
       by which the undertakings American Express Company ("American Express", USA) and Qatar  Holding  LLC  ("Qatar  Holding",  Qatar),  through
       Juweel Investors Limited ("Juweel", USA), acquire within the meaning of Article 3(1)(b) of the Merger  Regulation  joint  control  of  the
       whole of the undertaking GBT III B.V. ("GBT Holdco", The Netherlands) by way of purchase of shares (the "Proposed Transaction").  American
       Express and Qatar Holding are designated hereinafter as the "Parties".

       THE PARTIES

    2) American Express is a global services company, mainly active in credit card products and travel-related services worldwide.

    3) Juweel is a special purpose vehicle solely controlled by Qatar Holding. Post-transaction, Qatar Holding will hold [a controlling stake in]
       Juweel. Other non-controlling investors in Juweel will include BlackRock Inc.[2] […]%, Certares International Bank LLC[3] […]%,  Macquarie
       Group Ltd.[4] […]%, and Teacher Retirement System of Texas[5] […]%.

    4) Qatar Holding is a global investment holding company founded by the Qatar Investment Authority ("QIA", and  together  with  Qatar  Holding
       "QH/QIA"), the sovereign investment fund of the State of Qatar.

    5) GBT Holdco will be the holding company of American Express' global business travel unit ("GBT"). The  services  provided  by  GBT  include
       traditional business travel management services (e.g. online and  offline  reservation  and  booking  services)  as  well  as  value-added
       services, including advisory and travel program optimisation, and meetings and events planning and/or  coordination.  GBT's  products  and
       services are sold under the American Express brand.

       THE OPERATION

    6) In the context of the Proposed Transaction, American Express will transfer GBT to GBT Holdco, a special  purpose  vehicle.[6]  GBT  Holdco
       will then issue to Juweel new shares representing 50% of the voting interests in GBT Holdco in consideration  for  Juweel's  agreement  to
       make a financial contribution of approximately EUR 650 million. American Express will retain the remaining 50% of GBT Holdco's […].

    7) Following completion of the Proposed Transaction, GBT Holdco, American Express, and Juweel will enter into  a  shareholders  agreement  to
       govern the ownership and management of GBT Holdco (the "Shareholders  Agreement").  Furthermore,  BlackRock,  Certares,  Macquarie,  Qatar
       Holding, and Texas Teachers will enter into an investors agreement which will govern the relationships between the Juweel sharehoders (the
       "Investors Agreement").

       THE CONCENTRATION

1 Joint Control

1 Control of GBT Holdco

    8) Pursuant to the Shareholders Agreement, the board of directors of GBT Holdco will consist of […] members (American Express:  […],  Juweel:
       […], BlackRock: […]; independent board members jointly appointed by American Express and Juweel: […]). The chairman will be jointly chosen
       by American Express and Juweel among the members of the board of directors.

    9) The approval of any board resolution requires a quorum of at least […] directors to be present, including at least  […].  The  affirmative
       vote of a majority of the members of the board of directors constituting such a quorum  is  required  to  approve  any  matter.  Strategic
       decisions, such as […], require the approval of each of Juweel and American Express.

   10) Therefore, both Juweel and American Express will have the power to exercise decisive influence on the commercial policy of GBT Holdco.

2 Control of Juweel

   11) Juweel will be governed by […] board members […].

   12) Pursuant to the terms of the Investors Agreement and considering Qatar Holding's […] shareholding in Juweel and its ability to appoint […]
       of Juweel's […] board members, Qatar Holding will solely control Juweel.

   13) The affirmative approval of […] board members (excluding […]) will be required to approve any matters at Juweel besides  certain  reserved
       matters pertaining to the appointment of GBT Holdco's senior management and budget.[7] Qatar Holding will be able to unilaterally  approve
       or veto any other matters relating to Juweel.

   14) The approval of Juweel's annual budget requires the affirmative approval of a majority of the Juweel Board members.[8] Qatar Holding  will
       be the only Juweel shareholder that can unilaterally veto the approval of Juweel's annual budget.

   15) Therefore, Qatar Holding will have sole control over Juweel.

3 Overall conclusion on control

   16) Qatar Holding is the only Juweel shareholder who is able to unilaterally cause Juweel to veto the appointment of senior executives of  GBT
       Holdco[9] as well as the approval of GBT Holdco's annual budget where […][10]

   17) Therefore, American Express and Qatar Holding will jointly control GBT Holdco for the purposes of the Merger Regulation.

2 Full functionality

   18) The Parties submit that GBT Holdco is a pre-existing business which will continue to have its own management, generate its own revenue  by
       sales on an open market and will own the assets necessary for providing and selling business travel management services. GBT  Holdco  will
       supply services primarily to businesses that are not affiliated with it.

   19) [The description of the joint venture agreement regarding the lasting basis of the transfer of the GBT business].[11]

   20) Therefore the GBT JV will operate as a full-function joint venture performing on a lasting  basis  all  the  functions  of  an  autonomous
       economic entity within the meaning of Article 3(4) of the Merger Regulation.

       EU DIMENSION

   21) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[12]  (American  Express:  EUR  […]
       million; Qatar Holding: EUR […] million). Each of them has an EU-wide turnover in excess of EUR 250 million  (American  Express:  EUR  […]
       million; Qatar Holding: EUR […] million), 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 pursuant to Article 1(2) of the Merger Regulation.

       MARKET DEFINITION

   22) GBT is active in the provision of business travel agency services, which include the offering of stand-alone or  package  travel  products
       and services provided by airlines, hotels, car rental companies, destination service providers, and other providers.

   23) In its previous decisions, the Commission has defined a separate market for the  distribution  of  travel  services.  The  Commission  has
       further subdivided this market on the basis of the customer-type, distinguishing between the distribution of business travel  and  leisure
       travel services travel services.[13] Business travel agency services meet the needs of companies for business  travel  of  management  and
       employees in accordance with corporate travel budgets and plans. Leisure travel agencies provide services  to  individuals  in  connection
       with their non-business vacation and personal travel needs.

   24) As regards further segmentations of the market for the distribution of travel services, the Commission has indicated  that  it  cannot  be
       excluded that the provision of travel agency services online may constitute a separate product market within the  overall  market  of  the
       distribution of travel agency services but ultimately left the product market definition open.[14] The Parties submit  that  they  do  not
       consider appropriate to segment the market for business travel agency services between online travel agencies and  traditional  brick-and-
       mortar travel agencies.

   25) In past Commission decisions, the geographic market for the distribution of business travel  services  has  been  considered  national  in
       scope.[15]

   26) For the purposes of this case, the exact market definition can be left open since the Proposed Transaction does not raise  serious  doubts
       as to its compatibility with the internal market under any plausible product and geographic market definitions.

       COMPETITIVE ASSESSMENT

   27) GBT, but not QH/QIA, offers business travel agency services. QH/QIA is active in the  hotel  accommodation  and  air  passenger  transport
       businesses which can be considered to be upstream of GBT's business travel agency activities. Therefore, the Proposed Transaction does not
       involve any horizontal overlap. However, it gives rise to vertical relationships between GBT's business travel agency services, on the one
       hand, and QH/QIA's activities in the hotel accommodation and air passenger transport businesses, on the other hand.[16]

   28) In the overall business travel agency services market, GBT's estimated market share is below 30% at the EEA level and in the individual EU
       Member States in which GBT is directly active.[17] Likewise,  even  if  online  travel  agencies  and  traditional  travel  agencies  were
       considered as part of separate relevant markets, GBT's share would be below 30% at the EEA level and in the individual EU Member States in
       which GBT is directly active.

   29) QH/QIA's activities in the hotel accommodation market are limited and its  share  is  estimated  to  be  below  30%  under  any  plausible
       alternative geographic and product market definition. Therefore, the vertical relationship between GBT's business travel  agency  services
       and QH/QIA hotel business does not give rise to any affected market.[18]

   30) QH/QIA is also active in the air passenger transport business through Qatar Airways, a commercial airline based in Doha, Qatar,  which  is
       […] owned by […]. Qatar Airways is the only airline directly connecting Doha to a number of European destinations, including e.g.  Berlin,
       Madrid, London, Paris, and Rome. The Parties estimate Qatar Airways' share on these direct routes to be [90-100]%.[19]  Qatar  Airways  is
       however a small player in the overall European air transport sector and represents only [0-5]% of total airline transactions in Europe.

   31) Qatar Airways and GBT's relative importance in their respective businesses is not such as to create an incentive for  them  to  engage  in
       customer or input foreclosure. Furthermore, considering GBT's share of less than 30% in all EU Member  States  and  Qatar  Airways'  small
       presence in the overall European air transport sector, any foreclosure strategy would not have a material  effect  on  Qatar  Airways  and
       GBT's respective competitiors.

   32) Based on the foregoing, it can be concluded that the Proposed Transaction does not raise any serious doubts as to its  compatibility  with
       the internal market.

       CONCLUSION

   33) 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.

For the Commission

(signed)
Joaquín ALMUNIA
Vice-President

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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]   BlackRock Inc. is a US company active in the  provision  of  global  investment  management,  risk  management  and  advisory  services  to
institutional and retail clients around the world ("BlackRock").

[3]   Certares International Bank LLC is a USA based investment company ("Certares").

[4]   Macquarie Group Ltd. is a global provider of banking, financial, advisory, investment and funds management services ("Macquarie").

[5]   Teacher Retirement System of Texas operates a teacher retirement system of the State of Texas ("Texas Teachers").

[6]   American Express also operates a global leisure travel services  business, which will not be contributed to GBT Holdco  and  will  continue
to be owned and operated by American Express post-transaction.

[7]   Clause 3.3.1(f) of the Investors Agreement.

[8]   Clause 3.3.3 of the Investors Agreement.

[9]   Clause 3.3.1(c) of the Investors Agreement.

[10]  Clause 3.3.1(a) of the Investors Agreement.

[11]  [The description of the joint venture agreement regarding the lasting basis of the transfer of the  GBT  business];  Clause  2.1.1  of  the
Shareholders Agreement.

[12]  Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
C95, 16.04.2008, p. 1).

[13]  Case M.6163 – Axa/Permira/Opodo/Go Voyages/Edreams, para. 18; Case M.2627 – Otto Versand/Sabre/Travelocity JV,  para.  12;  Case  M.2197  –
Hilton/Accor/Forte/Travel Services JV, para. 14.

[14]  Case M.6163 - Axa/Permira/Opodo/Go Voyages/Edreams, para. 23.

[15]  Case M.4601  –  Karstadtquelle/Mytravel,  para.  38;  Case  M.4600  –  Tui/First  Choice,  para.  51;  Case  M.4234  –  Carlson/One  Equity
Partners/Carlson Wagonlit, para. 20; Case M.6163 – Axa/Permira/Opodo/Go Voyages/Edreams, para 29.

[16]  American Express, but not QH/QIA, is active in payment card issuing and merchant acquiring in Europe,  therefore  there  is  no  horizontal
overlap in this sector. Furthermore, American Express credit cards are used as a tool for paying and, in some  instances,  promoting  hotels  and
airlines but do not constitute a significant input for QH/QIA's European businesses. In any event, American Express' share does  not  exceed  30%
in payment card issuing and merchant acquiring, the sole exception being Croatia where American Express holds an estimated share of [30-40]%.

[17]  GBT licenses its trademark and know-how to independent third party licensees in various EU Member States. GBT estimates the  share  of  its
licensees to be below [5-10]%.

[18]  On 5 June 2014, the Commission approved the acquisition of joint control over five hotels located in Amsterdam,  Rome,  Frankfurt,  Cannes,
and Madrid, by Katara Hospitality and InterContinental Hotels Group (Case M.7245).

[19]  Qatar Airways is the only airline offering direct connections between Doha and the  following  European  Destinations:  Madrid,  Barcelona,
Rome, Venice, Milan, Paris, Nice, Brussels, Vienna, Budapest, Bucharest, Berlin, Warsaw, Copenhagen, Stockholm,  London,  Manchester,  Edinburgh,
Athens, Larnaca, Luxembourg, Munich, and Zagreb. On the Frankfurt–Doha route, Qatar Airways holds a share of approximately [60-70]%.

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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