CELEX: 31994M0528
Language: en
Date: 1994-11-24 00:00:00
Title: COMMISSION DECISION of 24/11/1994 declaring a concentration to be compatible with the common market (Case No IV/M.528 - British Aerospace / VSEL) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31994M0528

COMMISSION DECISION of 24/11/1994 declaring a concentration to be compatible with the common market (Case No IV/M.528 - British Aerospace / VSEL) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 348 , 09/12/1994 P. 0006

 COMMISSION  DECISION of 24/11/1994 declaring a concentration to be compatible with the common market (Case No IV/M.528  - British  Aerospace  / VSEL) 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 TO THE NOTIFYING PARTIES Subject:<ind> Case N  IV/M.528  British Aerospace/VSEL <ind> <ind> Notification of 26.10.1994 pursuant to Article 4 of Council Regulation N  4064/89 1.<ind>  On  26.10.1994,  British Aerospace  public  limited company (BAe) notified to the Commission a public offer  for the entire issued ordinary share capital of VSEL plc (VSEL). The  notification relates only to the nonmilitary activities of VSEL;  the United Kingdom, relying upon Article 223(1)(b) of  the  EC Treaty, has instructed British Aerospace not  to notify the acquisition of the military activities of VSEL. 2.<ind>   After   examination  of  the   notification,   the Commission  has  concluded that the  operation  as  notified 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   and   with   the functioning of the EEA Agreement. I.<tab> THE PARTIES 3.<ind>   BAe   is  principally  engaged  in   the   design, development and manufacture of defence equipment  and  civil aircraft.   It is also involved in property development  and engineering services to the oil and gas industries. 4.<ind>   VSEL  is  principally  engaged  in   the   design, development  and production of submarines, surface  warships and  armaments.   It also has very limited activities  which relate  to  the  oil  and  gas industry  and  general  metal fabrication. II.<tab> THE OPERATION 5.<ind>  BAe  has  launched a public offer  for  the  entire issued ordinary share capital of VSEL. III.<tab> CONCENTRATION 6.<ind> If the public offer succeeds, BAe will acquire  sole control of VSEL.  The operation is therefore a concentration within the meaning of Article 3(1)(b) of the Regulation. IV.<tab> COMMUNITY DIMENSION 7.<ind> The combined aggregate worldwide turnover of BAe and VSEL  is more than ECU 5000 million (BAe:  ECU 7291 million; VSEL:   ECU  606million).   Each of  BAe  and  VSEL  has  an aggregate  Communitywide  turnover  of  more  than  ECU  250 million  (BAe:   ECU 2999 million;  VSEL: 596 million).  BAe does  not  achieve  more  than twothirds  of  its  aggregate Communitywide  turnover  within  one  and  the  same  Member State. 8.<ind>   The   concentration  therefore  has  a   Community dimension. V.<tab> APPLICATION OF ARTICLE 223(1)(b) EC 9.<ind>  As already stated in paragraph 1 of this  decision, the  notification received relates only to  the  nonmilitary activities  of  VSEL  as  the United Kingdom,  relying  upon Article  223(1)(b) EC, has instructed British Aerospace  not to  notify  the  acquisition of the military  activities  of VSEL. 10.<ind> The Commission has considered the applicability  of Article  223(1)(b) EC in the  present case.  In this context it  has  noted, on the basis of the information provided  by the United Kingdom, that: <ind> <ind> the part of the concentration which has not been notified only relates to the production of or trade in arms, munitions and war material which are mentioned in  the  list referred to in Article 223(2) EC; <ind>  <ind>  the measures taken by the United  Kingdom  are necessary  for the protection of the essential interests  of its security; <tab>  <ind>  there are no spillover effects  from  military activities on nonmilitary activities of BAe; <ind>  <ind> the merger will have no significant  impact  on suppliers  and subcontractors of the undertakings  concerned and  on  Ministries  of Defence of other  Member  States  as neither  BAe  nor  VSEL  has made any significant  sales  of relevant  products  in  other Member  States.   Furthermore, there are no intermediate consumers in the sector involved. 11.<ind>  Therefore, the Commission is  satisfied  with  the measure  taken  by the United Kingdom and sees  no  need  to invoke  Article 225(1).  The present decision is  restricted to the nonmilitary activities of VSEL. VI.<ind> COMPATIBILITY WITH THE COMMON MARKET 12.<ind>  VSEL supplies a very limited amount of nonmilitary products which account for 2.5% of its turnover (i.e.  about ECU  15  million).  They comprise equipment for the oil  and gas industry and general metal fabrication. 13.<ind>  BAe's nondefence businesses relate essentially  to commercial aircraft and property development for which there are  no  horizontal overlaps or vertical links  with  VSEL's nondefence related activities.  BAe also has a very  limited consultancy  and  engineering activity in the  oil  and  gas sector, which accounts for [deleted business secret]. 14.<ind> Therefore, even in the oil and gas sector, there is no   material   horizontal  overlap  between  the   parties' activities.  In any case, their market shares are negligible in  this area and they face major competitors.  Furthermore, VSEL's  activities  are residual to its military  activities and BAe acts as a subcontractor to main contractors. VII.<ind> CONCLUSION 15.<ind>   For   the   foregoing   reasons,   the   proposed concentration  does  not  raise serious  doubts  as  to  its compatibility   with  the  common  market   and   with   the functioning of the EEA Agreement. <ind> For the above reasons, the Commission has decided  not to   oppose  the  notified  operation  and  to  declare   it compatible  with the common market and with the  functioning of   the  EEA  agreement.   This  decision  is  adopted   in application  of  Article  6(1)b  of  Council  Regulation  No 4064/89 and article 57 of the EEA Agreement. For the Commission