CELEX: 31993M0304
Language: en
Date: 1993-02-12 00:00:00
Title: COMMISSION DECISION of 24.02.1993 declaring a concentration to be compatible with the common market (Case No IV/M.304 - VOLKSWAGEN AG / V.A.G. (UK) LTD) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31993M0304

COMMISSION DECISION of 24.02.1993 declaring a concentration to be compatible with the common market (Case No IV/M.304 - VOLKSWAGEN AG / V.A.G. (UK) LTD) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 038 , 12/02/1993 P. 0000

 COMMISSION DECISION of 24.02.1993 declaring a concentration to  be compatible with the common market (Case No IV/M.304 -  VOLKSWAGEN AG / V.A.G. LTD) 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. 304 - Volkswagen AG / V.A.G. (UK)  Limited  <ind>  <ind> Notification of 23.12.1992 pursuant to Article 4  of Council Regulation No. 4064/89  1. <ind> Volkswagen AG ("VWAG") notified on 23 December 1992  its proposed acquisition of 100% of the issued share capital of  its UK importer and distributor, V.A.G. (UK) Limited ("VAG")  from Lonrho plc.  2. <ind> After examination of the notification, the Commission  has concluded that the notified operation falls within the  scope 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> VWAG develops, manufactures and markets passenger  cars, light commercial vehicles (LCV's) and related spare parts  and accessories under its own name and the Audi marque. VWAG  also has a 99.99% stake in SEAT and a 31% stake in SKODA (due  to be increased to 70% in 1995 but already affording VWAG  management control).   <ind> VAG is the exclusive importer and distributor of  Volkswagen and Audi cars, light commercial vehicles, spare  parts and accessories to the UK, but SEAT and SKODA both  distribute to the UK market through their own wholly-owned  subsidiaries.  II. <ind> CONCENTRATION  4. <ind> Although Lonrho plc currently owns all the share  capital of VAG, under the terms of a 1987 agreement, VWAG  shares joint control of VAG with Lonrho through a Coordination  Committee which takes joint decisions on major issues of  commercial policy. This transaction will result in VWAG  acquiring sole control of VAG and thus both represents a change  in the quality of decisive influence exercised by VWAG and  bings about a lasting change in the structure of the parties.  It therefore constitutes a concentration within the meaning of  Article 3(1)b of Council Regulation No. 4064/89.  III. <ind> COMMUNITY DIMENSION  5. <ind> The operation has a Community dimension as the  combined aggregate turnover of the undertakings is more than  5,000 million ECU (38,631 million ECU), the aggregate  Community-wide turnover of each of the undertakings exceeds 250  million ECU, and whilst VAG achieves more than two thirds of  its Community turnover in the UK, VWAG does not.  IV. <ind> COMPATIBILITY WITH THE COMMON MARKET  6. <ind> VAG distributes passenger cars, LCVs, related  accessories and spare parts. Vehicle distribution is usually  undertaken through a pyramidal structure whereby manufacturers  supply importers/distributors who in turn supply dealers and  sub-dealers.  7. <ind> Although importers/distributors are typically given  exclusive rights with regard to a Member State (as is the case  of VAG in the UK), the issue of whether the distribution of  passenger cars, LCV's and related accessories and spare parts  comprises a national or EC market can be left open since even  on the basis of national markets the proposed operation does  not raise serious doubts as to its compatibility with the  common market. Likewise, the question of whether the market for  passenger cars should be broken down into various segments  (e.g. small, medium, executive or luxury) can be left open for  the same reason.   <ind> VWAG's share of the UK markets in 1991 were:   <ind> passenger cars <tab> 6.6%  <ind> LCV's <tab>  <tab>  <tab> 3.1%  <ind> spares <tab>  <tab>  <ind> c. 4.0%   <ind> and its share of any individual UK passenger car market  segment did not exceed 8%. VWAG's overall Community market  shares were 16.5% for passenger cars and 10.3% for LCV's in  1991.  8. <ind> The proposed concentration will result in no  additional market foreclosure: VAG's distribution network was  reserved exclusively for VWAG group cars and will remain so  following its acquisition by VWAG.  V. <ind> ANCILLARY RESTRAINTS  9. <ind> Under the terms of the Agreement between Lonrho and  VWAG, Lonrho undertakes not to solicit or poach dealerships  which dealt previously with VAG, or certain VAG employees, for  1 year following completion and that it will not use for a  competitive purpose itself or disclose to VAG's competitors  confidential information about VAG.  These two conditions  ensure the transfer to VWAG of the full value of VAG's assets,  including goodwill and must be considered as directly related  and necessary to the implementation of the concentration and  thus as ancillary.  VI. <ind> CONCLUSION  10. <ind> There is no horizontal overlap between the activities  of the parties and the proposed concentration will not give  rise to any increment in market shares. The main economic  effect will be the increase in value added by the Volkswagen  Group though vertical integration of its activities in the UK  market and does not give rise to any competition concerns.  11. <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