CELEX: 31993M0196
Language: en
Date: 1993-10-11 00:00:00
Title: COMMISSION DECISION of 11.10.1993 declaring a concentration to be compatible with the common market (Case No IV/M.196 - VOLVO / PROCORDIA) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31993M0196

COMMISSION DECISION of 11.10.1993 declaring a concentration to be compatible with the common market (Case No IV/M.196 - VOLVO / PROCORDIA) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 281 , 19/10/1993 P. 0000

 COMMISSION DECISION of 11.10.1993 declaring a concentration to be compatible with the common market  (Case No IV/M.196 - VOLVO / PROCORDIA) 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 Registered with advice of delivery To the notifying party Dear Sirs,  Subject: <ind> Case No. IV/M.196 - Volvo/Procordia <ind> <ind> Notification of 09.09.1993 pursuant to Council Regulation (EEC) No. 4064/89  1.<ind> The above mentioned notification concerns an agreement between AB Volvo (Volvo) and  Foervaltningsaktiebolaget Stattum (Stattum) whereby  Volvo  will acquire the majority of the share capital and  voting rights of a new group to be formed within Procordia AB (Procordia), comprising the "Branded Consumer  Products" (BCP) as described below.  2.<ind> After examination of the notification, the Commission has concluded that the notified operation falls  within the scope of application of Council Regulation No 4064/89 and does not raise serious doubts as to its  compatibility with the common market.  I<ind> THE PARTIES  3.<ind> Volvo is a publicly held company mainly engaged in the transport vehicle field, with cars, trucks, buses  and coaches as its largest operating sectors. Other sectors include marine and industrial engines and aerospace.  4.<ind> Procordia is mainly active in manufacturing and distribution of pharmaceuticals, biotechnology  equipment, food, beer, soft drinks, matches, lighters and tobacco. Procordia is a publicly held company. The two  dominating shareholders are Volvo (42.8 per cent of the votes and 39.5 per cent of capital) and Stattum (42.7 per  cent of the votes and 34.2 per cent of the capital), which is in its turn wholly-owned by the Swedish state.  5.<ind> The businesses, of  which BCP will be composed, are today part of the Procordia group. BCP will  comprise Procordia's consumer  products operation, mainly consisting of: Procordia United Brands, Procordia  Beverages, Procordia Food and Procordia Invest, together with Procordia Fastighter AB and the shareholdings in  Cultor AB and US Tobacco Inc.  II.<ind> THE OPERATION  6.<ind> Volvo and Stattum will vote at a general meeting in Procordia for a distribution of the shares in BCP in  the form of a dividend to the shareholders in proportion to their shareholding in Procordia. Volvo and Stattum  will thereafter exchange shares in Procordia and BCP whereby Volvo will acquire all of Stattum's shares in BCP.  Volvo will, as consequence of the exchange, acquire full control over BCP, which it  previously controlled jointly  with Stattum through its shareholding in Procordia. Volvo will thereafter launch a public bid to the other  shareholders in BCP to acquire the remaining shares publicly held. This acquisition of sole as opposed to joint  control represents a change in the quality of decisive influence exercised by Volvo and brings about a lasting  change in the structure of both undertakings.  The acquisition of sole control therefore constitutes a  concentration within the meaning of Article 3(1) of the Regulation.  III<ind> COMMUNITY DIMENSION  7.<ind> The undertakings concerned have a combined aggregate worldwide turnover in excess of 5.000 million  ECU. Both Volvo and BCP have a Community-wide turnover in excess of 250 million ECU but do not achieve  more than two-thirds of their aggregate Community-wide turnover within one and the same Member State. The  notified operation therefore has a Community dimension.  IV<ind> COMPATIBILITY WITH THE COMMON MARKET  Conglomerate aspects  8.<ind> The parties to the proposed concentration are active in totally different fields of activities and the  notifying party has not been able to identify any affected markets.  9.<ind> Volvo Truck Corporation, a subsidiary of AB Volvo, together with Renault Vehicules Industriels hold  market shares above 25 per cent on the markets for heavy trucks and buses and coaches in some Member States.  Volvo's subsidiary AB Volvo Penta, which is active in the fields of marine and industrial engines, has, according  to own estimates, a market share within the Community for inboard and sterndrive marine engines of  approximately 35-40 per cent.  10.<ind> BCP has a strong position on the Dutch and German cigars and cigarillos business with market shares  exceeding 46 and 25 per cent respectively. Through the Abba group, BCP has a strong position in some  processed food submarkets in Denmark.  11.<ind> Through Swedish Match BCP has a strong business position  with market shares exceeding 25 per cent  in five  Member States (disposable cigarette lighters) and in nine Member States (matches).  Competition assessment  12.<ind> As stated in paragraph 8 above, the transaction does not lead to combination of market shares in any  market. Volvo will be a stable and internationally established owner. According to the notifying party, Volvo's  financial position will be strengthened by the positive cash flow in BCP. Volvo will thus gain a balanced  structure that will facilitate higher return on its asset base. However, the effect of the possible strengthening of  the financial position of the new conglomerate is not such as to give rise to concerns on competition grounds,  given the financial strength of Volvo's competitors.  13.<ind> The proposed concentration will therefore not create or strengthen a dominant position as a result of  which effective competition will be significantly impeded in the common market or in a substantial part of it.  V.<ind> CONCLUSION  14.<ind> For all the foregoing reasons, the proposed concentration does not raise serious doubts as to its  compatibility with the common market.  <ind> For the above reasons, the Commission has decided not to oppose the notified concentration and to  declare it compatible with the common market.  This decision is adopted in application of Article 6(1)(b) of  Council Regulation No. 4064/89.  For the Commission