CELEX: 32013M7028
Language: en
Date: 2013-10-25 00:00:00
Title: Commission Decision of 25/10/2013 declaring a concentration to be compatible with the common market (Case No COMP/M.7028 - CVC / CERTAIN EUROPEAN SUBSIDIARIES OF CAMPBELL SOUP) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

                                        Brussels, 25.10.2013
                                        C(2013) 7245 final

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|                                                                       |To the notifying party:                                                |

Dear Sir/Madam,

Subject:    Case No COMP/M.7028 - CVC/ Certain European subsidiaries of Campbell Soup
         Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

    1) On 20 September 2013, the European Commission received notification of a proposed concentration  pursuant  to  Article  4  of  the  Merger
       Regulation by which the undertaking CVC Capital Partners SICAV-FIS S.A. (“CVC”, Luxembourg), part of the CVC group,  acquires  within  the
       meaning of Article 3(1)(b) of the Merger Regulation control of the whole of the undertakings  Campbell  Belgium  Holding  BVBA  (Belgium),
       Campbell France Holding S.A.S. (France) and Campbell Finance B.V. (Netherlands) (together referred to as the "Target") by way of  purchase
       of shares. CVC is also referred to as the “Notifying Party”. CVC and the Target are hereinafter together referred to as the “Parties”.

       THE PARTIES

    2) CVC provides investment advice to and manages investments on behalf of investment funds (the "CVC Funds"). The CVC Funds hold  controlling
       interests in a number of companies in various industries  including  chemicals,  utilities,  manufacturing,  retailing  and  distribution,
       primarily in Europe and the Asia-Pacific region.

    3) The Target comprises the continental European business (excluding biscuits) of the Campbell Soup Company, a producer  of  packaged  foods.
       The Target is headquartered in Puurs, Belgium, with principal operations in France, Belgium, Germany,  Sweden  and  Finland  (and  further
       sales in other EU Member States). The Target produces wet and dry (regular and instant)  soups,  stews  (Eintopf),  snacks,  wet  and  dry
       sauces, bouillon, dry mix desserts, tray meals, baby food, and vegetable-based shelf stable juices.

       THE CONCENTRATION

    4) The proposed transaction consists of the acquisition of sole control by CVC over the Target.

    5) […] signed an offer letter on 12 August 2013, which provides Campbell Soup Company, CSC Brands LP and  Campbell  Investment  Company  (the
       sellers) with a put option whereby, upon completion of the relevant information and consultation processes, the sellers shall be  entitled
       to sell the Target to CVC in accordance with the terms and conditions of the agreed form Sale and Purchase Agreement (SPA).

    6) Pursuant to the SPA, […] will acquire indirectly from the sellers the total issued and outstanding share capital of each of the  companies
       constituting the Target[2], therefore acquiring sole control over each of them.

    7) The proposed transaction therefore constitutes a concentration pursuant to Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

    8) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[3]  (CVC:  EUR  […],  Target:  EUR
       […]). Each of them has an EU-wide turnover in excess of EUR 250 million (CVC: EUR […], Target: EUR […]), 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 Art 1(2) of the Merger Regulation.

       COMPETITIVE ASSESSMENT

    9) The transaction does not give rise to horizontal overlaps. However, there are limited vertical links between the activities of the  Target
       and one of CVC […]companies, namely Autobar, which is active in vending machine services.[4]

   10) Although Autobar is not an actual customer of the Target, it purchases, among other products, instant dry soups for sale  in  its  vending
       machines. As the Target produces and sells instant dry soups, Autobar's activities are vertically related to those of the Target.

1 Product and geographic market definitions (downstream)

   11) Vending machine services refer to the sale of products at an unattended point of sale through a machine operated by coins or  other  means
       of payment.[5] In COMP/M.5973 – CVC / Charden International, the Commission also discussed whether vending services could be further  sub-
       segmented according to the type of product sold i.e. vending of hot beverages, cold drinks and snacks/food (including confectionery).  The
       market definition was, however, ultimately left open.[6]

   12) Autobar is active in vending machine services primarily in Europe. Within the EEA, Autobar is active in Belgium, Denmark, Finland, France,
       Germany, Ireland, the Netherlands, Norway, Spain, Sweden and the UK.[7]

   13) In previous decisions, the Commission has concluded that the relevant geographical market for vending  machine  services  is  national  in
       scope due to differences in legislation, culture and security requirements among different  EU  countries  and  the  need  to  have  staff
       available in the proximity of the point of vending machines.[8]

   14) The Notifying Party agrees that the relevant geographic market for vending machine services is national in scope. Nevertheless, the  exact
       market definition can be left open since no competition  concerns  have  been  identified  even  under  the  narrowest  reasonable  market
       definitions.

2 Product and geographic market definitions (upstream)

   15) Instant dry soups are typically sold for consumption in single portions and are seen as a savoury alternative to tea or coffee.  They  are
       ready-to-drink products, requiring the addition of boiling water in a mug. The Commission has previously  considered  them  distinct  from
       other types of soups, such as ambient wet soups and regular dry soups.[9] Furthermore, the Commission has  previously  sub-segmented  soup
       for sale to the food service sector into ingredient based soups, "ready-to" soups and instant soups.[10]

   16) In past decisions in the food sector, the Commission has considered the relevant geographic market definition  for  food  products  to  be
       national both for the retail and the food service sector.[11] The Notifying Party agrees with this market definition. However,  the  exact
       market definition can be left open since no competition  concerns  have  been  identified  even  under  the  narrowest  reasonable  market
       definitions.

3 Competitive assessment

   17) The proposed transaction would give rise to vertically affected markets in Belgium, Finland and the Netherlands.

1 Belgium

   18) The Target is active in the Belgian market for instant dry soups with its brands Royco and Liebeg.  Its  estimated  market  share  in  the
       supply of instant dry soups to the food service sector is approximately [70-80]% in value (EUR […]). Autobar is a purchaser of instant dry
       soups in Belgium. Autobar's estimated market share for vending machine services in Belgium is [10-20]%. Its share of purchases of  instant
       dry soup sold to the food service sector is estimated at around [0-5]%.

   19) However, the Notifying Party submits that the Target's activities in the supply of instant dry soup to the food service sector in  Belgium
       focus not on sale for use in vending machines, but on sales to restaurants and cafes. The Target estimates the market segment  in  Belgium
       for the sale of instant dry soups specifically in the vending machine channel within the food service sector to be around  […]  units  per
       year, of which the Target estimates it only has a [10-20]% share ([…] units). If one were to consider this narrow segment of the  sale  of
       instant dry soups in the vending machine channel, no affected market would even arise.

   20) The Notifying Party also submits that the Target's main competitors in the instant dry soup sector, Nestlé  (with  its  Maggi  brand)  and
       Unilever (with its Knorr brand), are active in the provision of instant dry soups through the vending machine channel. It  estimates  that
       both Nestlé's and Unilever's market shares of supply of instant dry soups to the food service sector remain below [10-20]% but  is  unable
       to estimate their potential share in the sale of instant dry soups through the vending machine channel.

   21) As regards the provision of vending machine services, companies such as Coca-Cola ([10-20]%), Sodexo ([5-10]%),  Maas  International  ([5-
       10]%), Drink O Mat ([5-10]%) and Aramark ([0-5]%) are all active on the Belgian market.

   22) Given the Target's strong position in the provision of instant dry soups  to  the  food  service  sector  in  general,  a  limited  market
       investigation was conducted with Autobar's main competitors. None of  those  expressed  any  concerns  relating  to  the  transaction  and
       confirmed that alternative suppliers to the Target exist.

   23) The Commission considers that given (i) the Target's limited market shares relating to sales of instant  dry  soups  through  the  vending
       machine channel; (ii) Autobar's limited share of purchases of instant dry soups; (iii) Autobar's limited market share in  vending  machine
       services; (iv) the existence of alternative suppliers of instant dry soups, such  as  Nestlé  and  Unilever;  and  (v)  the  existence  of
       alternative competitors in the supply of vending machine services, the merged entity is unlikely to  have  the  ability  or  incentive  to
       engage in input or customer foreclosure.

2 Finland

   24) Autobar is active in the Finnish market for the supply of vending machine services, and has a market share of approximately [30-40]% while
       the Target is active in the supply of instant dry soup to the food service sector in Finland with a market share  of  around  [10-20]%  in
       value (less than EUR […]). Autobar is not a significant purchaser of instant dry soups in Finland; its share of purchases of  instant  dry
       soup sold to the food service sector is estimated at less than [0-5]%.

   25) The Notifying Party submits that the proposed transaction does not give rise to any foreclosure concerns in Finland since the Target has a
       market share of 10% in the supply of instant dry soup to the food service sector and alternative suppliers of instant dry soups,  such  as
       Nestlé and Unilever, are active in the market in Finland. Moreover, the Notifying Party submits that the  Target  is  not  active  in  the
       supply of instant dry soup to the vending machine channel in Finland. According to the Notifying Party, there are  also  many  alternative
       vending machine services providers, such as Vendor Oy ([20-30]%), Selecta Oy ([10-20]%), Premium Coffee Oy ([0-5]%), Coffee Place Oy  ([0-
       5]%) and Cafe Break Finland Oy ([0-5]%).

   26) The Commission considers that given (i) that the Target has no sales relating to instant dry soups through the  vending  machine  channel;
       (ii) Autobar's limited share of purchases of instant dry soups; (iii) the existence of alternative suppliers of instant dry soups, such as
       Nestlé and Unilever; and (iv) the existence of alternative competitors in the supply of vending machine services,  the  merged  entity  is
       unlikely to have the ability or incentive to engage in input or customer foreclosure.

3 The Netherlands

   27) Autobar is active in the Dutch market for the supply of vending machine services, and has a market share of approximately  [20-30]%  while
       the Target is active in the supply of instant dry soup to the food service sector in the Netherlands with a market share of less than  [0-
       5]% in value (less than EUR […]). Autobar's share of purchases of instant dry soup sold to the food service sector is estimated at  around
       [10-20]%.

   28) The Notifying Party submits that the proposed transaction does not give rise to any foreclosure concerns given that the  Target  has  less
       than [0-5]% of market shares in the supply of instant dry soup to the food service sector, and that alternative suppliers of  instant  dry
       soups, such as Nestlé and Unilever, are active in the market in the Netherlands. Moreover, there  are  many  alternative  vending  machine
       services providers active in the downstream market in the Netherlands, such as Douwe Egberts Netherlands  BV  ([10-20]%),  Maas  Automaten
       ([10-20]%), Selecta ([10-20]%), Nestle Nederland BV ([5-10]%) and Fortune ([5-10]%).

   29) The Commission considers that given (i) the Target's limited market shares relating to sales of instant dry  soups  to  the  food  service
       sector, let alone through the vending machine channel; (ii) Autobar's relatively limited share of purchases of instant  dry  soups;  (iii)
       Autobar's relatively limited market share in vending machine services; (iv) the existence of alternative suppliers of instant  dry  soups,
       such as Nestlé and Unilever; and (v) the existence of alternative competitors in the supply of vending machine services, the merged entity
       is unlikely to have the ability or incentive to engage in input or customer foreclosure.

4 Conclusion

   30) The proposed transaction is unlikely to result in the merged entity having the ability or the incentive to engage in input and/or customer
       foreclosure in any of the relevant markets. Therefore, it is unlikely that the transaction would  lead  to  a  significant  impediment  to
       effective competition.

       CONCLUSION

   31) 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]   Campbell Foods Belgium has minority shareholders representing approximately 0.11%. None of these minority shareholders hold veto rights  or
      any other powers that would confer them any form of control.

[3]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
      C95, 16.04.2008, p1).

[4]   For the sake of good order, it is noted that two other companies in CVC […] portfolio, namely Grupo Zena and Univar, have activities  which
      are in a vertical relationship with those of the Target. Grupo Zena is a Spanish multi-brand restaurant group that is only active in Spain,
      though it makes purchases also in the Netherlands. The Target's market shares in sales to each of the food service segments in  both  Spain
      and the Netherlands is below [0-5]% and Grupo Zena's share of the purchasing market of products manufactured by the Target is below [5-10]%
      both in Spain and in the Netherlands. Univar, on the other hand, is  a  chemicals  distribution  company  active  in  the  distribution  of
      commodity and speciality chemicals. Univar's market shares stay below 25% (the highest being in specialty chemicals  in  Sweden,  [20-30]%,
      and Belgium, [10-20]%) while the Target purchases less than [0-5]% of both specialty and commodity  chemicals.  Therefore,  these  vertical
      links do not give rise to vertically affected markets and they are not discussed further in this decision.

[5]   See, e.g. Case No. COMP/M.5973 – CVC / Charden International, paragraphs 11–2; Case No. COMP/M.4202 – Charterhouse / Elior,  paragraph  13;
      and Case No. COMP/M.2373 – Compass/Selecta, paragraph 13. In Compass/Selecta (see paragraph  16),  the  Commission's  market  investigation
      showed that a potential segmentation of vending services between full vending services (comprising the supply and installation  of  vending
      machines, the cleaning and maintenance of such machines, the management and supply or procurement  of  products/ingredients  to  stock  the
      machines and the collection of cash takings or other means of payment) and ancillary vending services (which refers to the use  of  vending
      machines as part of a wider foodservice offering and typically comprises the procurement of products/ingredients to stock the machines  and
      some cleaning services) is not a relevant consideration for the purpose of the market definition.

[6]         Case No. COMP/M. 5973 – CVC / Charden International, paragraph 13.

[7]   Note for completeness that Autobar has recently started a small business  in  Portugal  which  is  yet  to  generate  any  market  presence
      whatsoever and does not involve the purchase of instant dry soups.

[8]   Case No. COMP/M. 2373 – Compass/Selecta paragraph 27, Case No. COMP/M. 5973 – CVC /  Charden  International,  paragraph  16.  In  Case  No.
      COMP/M.4202 – Charterhouse / Elior, paragraph 23, a similar finding was made but the market definition was ultimately left open.

[9]   Case No. COMP/M.1990 – Unilever / Bestfoods, paragraphs 14–17.

[10]  Case No. COMP/M.1990 – Unilever / Bestfoods, paragraph 47.

[11]  Case No COMP/M.1990 Unilever / Bestfoods, paragraphs 57 and 59, and Case No. COMP/M.3658 – Orkla / Chips, paragraph 17

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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