CELEX: 31996M0681
Language: en
Date: 1996-02-05 00:00:00
Title: COMMISSION DECISION of 05/02/1996 declaring a concentration to be compatible with the common market (Case No IV/M.681 - RB of Scotland / Bank of Ireland) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

Avis juridique important

|

31996M0681

COMMISSION DECISION of 05/02/1996 declaring a concentration to be compatible with the common market (Case No IV/M.681 - RB of Scotland / Bank of Ireland) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 057 , 27/02/1996 P. 0003

  COMMISSION DECISION of 05/02/1996 declaring a concentration  to be compatible with the common market (Case No IV/M.681 -  RB of Scotland / Bank of Ireland) 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)(a) DECISION  To the notifying parties  Dear Sirs,  Subject :<ind> Case No IV/M.681  RB of Scotland/Bank of  Ireland  Notification of 3.1.1996 pursuant to Article 4 of Council  Regulation No 4064/89  1.<ind> On 03.01.1996, the Commission received a  notification of a proposed concentration by which the Royal  Bank of Scotland Group plc ("RBSG") and the Bank of Ireland  ("BOI") will merge their American banking activities.  2.<ind> After examination of the notification, the  Commission has concluded that the notified operation does  not have a Community dimension and therefore does not fall  within the scope of the Merger Regulation.  I.<ind> THE PARTIES  3.<ind> RBSG is a holding company whose only direct  operating subsidiary is the Royal Bank of Scotland plc  ("RBS"). RBS is a commercial bank based in Scotland but  operating throughout the United Kingdom. RBS and its  subsidiaries are engaged principally in providing a  comprehensive range of banking, insurance and other  financial services.  4.<ind> Citizens Financial Group ("Citizens") is a Delaware  corporation and whollyowned subsidiary of RBSG. It is active  in consumer banking and lending to small and medium sized  enterprises in the New England area of the U.S.A.  5.<ind> BOI is a holding company. It is a credit  institution. BOI and its subsidiaries are engaged in  providing a comprehensive range of banking services through  its four divisions; Retail; Corporate and Treasury; Bank of  Ireland First Holdings; and Other Group Activities. BOI  operates primarily in Ireland.  6.<ind> Bank of Ireland First Holdings, Inc. ("BOIFH") is a  New Hampshire corporation and whollyowned subsidiary of BOI.  It is active in consumer banking and lending enterprises in  the New England area of the U.S.A.  II.<ind> THE OPERATION  7.<ind> The proposed transaction will involve the merger of  BOIFH and Citizens. BOI will sell the entire common stock of  BOIFH to Citizens, and BOIFH will be merged into Citizens.  In exchange, BOI will receive stock representing 23.5% of  the enlarged Citizens, whilst RBSG will retain the remaining  76.5% of the stock.  III.<ind> CONCENTRATION  8.<ind> The transaction constitutes a concentration within  the meaning of Article 3(1)(b) of the Merger Regulation in  view of the change of control of BOIFH.  IV.<ind> COMMUNITY DIMENSION  9.<ind> RBSG and BOI have jointly agreed a [Deleted:  business secret] business plan for the enlarged Citizens.  This business plan sets out the proposed development of  Citizens for the period [Deleted: business secret]. It is  summarised in a Strategic Plan.[Deleted: business secret]   10.<ind> As far as the market behaviour of the enlarged  Citizens is concerned the most important elements in the  Strategic Plan relate to [Deleted: business secret]  11.<ind> The Strategic Plan does not make explicit prevision  for the codetermination by RBSG and BOI of detailed annual  business plans and budgets. Rather, the Strategic Plan  contains merely general declarations concerning the business  aims of the enlarged Citizens, and as such is not sufficient  to confer joint control.   12.<ind> The stockholder agreement stipulates that each year  Citizens shall prepare a detailed annual budget and business  plan. Both RBSG and BOI will have the right to comment on  the annual plan, but it is the board of directors of  Citizens that has the right to approve the plan.  13.<ind> The enlarged Citizens may have up to fifteen  directors. BOI will be entitled to appoint two, whilst RBSG  will be entitled to appoint three of these directors. The  remaining directors will represent various community  interests in the locality in which Citizens will operate.  Thus RBSG directors will outnumber BOI directors on the  board, which latter, as stated above, approves detailed  annual plans. Hence BOI directors will not have a veto right  over annual plans.  14.<ind> In view of the above, the stockholder agreement  does not confer joint control over the enlarged Citizens.  BOI is selling the common stock of BOIFH to Citizens, and  will receive a minority shareholding in the latter. In view  of Article 5(2) of the merger regulation, only the turnover  relating to the subject of the transaction is to be taken  into account with regard to the seller.Hence the turnover to  be taken into account for the purposes of determining  whether the notified transaction has a community dimension  is that of BOIFH, Citizens and RBSG. Only RBSG has a  community wide turnover of more than 250 million ECU.  15.<ind> Therefore, the conditions of Article 1.2(b) of the  Merger Regulation are not satisfied, and the notified  transaction does not have a Community dimension.N  4064/89.  V.<ind> CONCLUSION  16.<ind> Based on the above, the Commission has concluded  that the notified operation does not have a Community  dimension within the meaning of Article 1 of the Merger  Regulation and therefore does not fall within the scope of  the Merger Regulation. This decision is adopted in  application of Article 6(1)(a) of Council Regulation No  4064/89.  For the Commission,