CELEX: 31999M1559
Language: en
Date: 1999-09-08 00:00:00
Title: COMMISSION DECISION of 08/09/1999 declaring a concentration to be compatible with the common market (Case No IV/M.1559 - STN ATLAS MARINE ELECTRONICS/SAIT RADIO HOLLAND) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

Avis juridique important

|

31999M1559

COMMISSION DECISION of 08/09/1999 declaring a concentration to be compatible with the common market (Case No IV/M.1559 - STN ATLAS MARINE ELECTRONICS/SAIT RADIO HOLLAND) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 278 , 01/10/1999 P. 0005

COMMISSION DECISION of 08/09/1999 declaring a concentration to be compatible with the common market (Case No IV/M.1559 - STN ATLAS MARINE ELECTRONICS/SAIT RADIO HOLLAND) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)Brussels, 08.09.1999 to the notifying partiesDear Sirs,Subject: Case No IV/M.1559 - STN ATLAS MARINE ELECTRONIC /  SAIT RADIO HOLLAND  Notification of 6 August 1999 pursuant to Article 4 of Council Regulation No 4064/89On 6 August 1999, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EEC) No 4064/89 [1] by which the undertakings STN ATLAS Holding GmbH ("STN ATLAS"), Germany, and SAIT RADIO Holland S.A. ("SAIT RH"), Belgium, acquire within the meaning of Article 3(1)(b) of the Council Regulation joint control of a newly created company constituting a joint venture.[1]  OJ L 395, 30.12.1989, p.1; corrected version OJ L 257 of 21.9.1990, p. 13; as last amended by Regulation   (EC) No 1310/97, OJ L 180, 9.7.1997, p. 1, corrigendum in OJ L40, 13.2.1998, p. 17.After examining the notification, the Commission has concluded that the notified concentration falls within the scope of Council Regulation (EEC) 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. THE PARTIESSTN ATLAS, which belongs to the Rheinmetall AG group, produces electronic systems for naval ships, i.e. command and weapon control systems, sonar equipment for surface vessels and submarines, land and air forces, i.e. equipment of ground-based military vehicles, satellite communication, simulation systems for military and civil applications.SAIT RH, a subsidiary of the Compagnie Financière de Paribas group ("Paribas"), sells marine electronic equipment and services, and produces electronic equipment for terrestrial and space communication. Furthermore, the company offers services in the field of maritime telecommunications, i.e. accounting and billing.II. THE OPERATIONThe proposed operation is the creation of a joint venture, which will be active in the field of navigation and marine communication equipment. Both parent companies will contribute their entire marine electronics businesses to the joint venture.III. CONCENTRATIONSTN ATLAS and SAIT RH will hold [ ] each in a jointly controlled newly created company called EMG EuroMarine Electronics GmbH ("EuroMarine"). Furthermore, the joint venture will receive from its parents their participation in EuroCom Industries ("ECI"), Denmark, a joint venture, in which STN ATLAS and SAIT RH each hold a participation of [ ] and which is jointly controlled. STN ATLAS and SAIT RH transfer their participation in ECI into EuroMarine.Joint controlEuroMarine will be managed by the Managing Board and controlled and supervised by the Shareholders' Committee to which STN ATLAS and SAIT RH each nominate [ ] members. The Shareholders' Committee shall adopt its resolutions by a simple majority vote. Unanimity is required concerning, inter alia, the business plan and the strategic commercial behaviour of EuroMarine. Therefore, the JV will be jointly controlled by its parent companies. Moreover, the requirement of unanimity concerning all matters related with ECI shall guarantee exercising joint control over ECI by STN ATLAS and SAIT RH.Fullfunction joint ventureThe joint venture will develop, manufacture and sale/distribute navigation and marine communication equipment and will provide related services for these products. For this purpose, STN ATLAS and SAIT RH transfer their respective operations to the joint venture. The joint venture will perform on a lasting basis all the functions of an autonomous economic entity. The proposed operation, therefore, constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.IV. COMMUNITY DIMENSIONThe undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 billion [2]. Each of them has an aggregate Community-wide turnover in excess of EUR 250 million. Only one undertaking, the Paribas group, does 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. It does not constitute a co-operation case under the EEA Agreement, pursuant to Article 57 of that Agreement.[2]  Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the Commission Notice on the calculation of turnover (OJ C66, 2.3.1998, p25).  To the extent that figures include turnover for the period before 1.1.1999, they are calculated on the basis of average ECU exchange rates and translated into EUR on a one-for-one basis.V. COMPETITIVE ASSESSMENT A. Relevant product marketsThe notifying parties submit that the product markets of maritime electronic equipment can be divided in principal between production, sales/distribution and services. In this respect, they refer to previous Commissions' decisions [3]. Furthermore, a principal distinction can be made between navigation and marine communication equipment as far as their production and sales/distribution are concerned. The underlying technology differs significantly in production as navigation equipment applies radar technologies whereas communication equipment uses advanced radio and satellite techniques. Moreover, both kind of equipment is purchased typically separately except for integrated navigation and marine communication systems. The latter are typically requested from shipyards when a new ship is built. However, it is the shipyard that makes the choice of equipment, and only in approximately 20% of all newbuilding tenders a sole system supplier has been requested over the last period.[3]   IV/M.622 - Ricoh/Gestetner, IV/M.563 - British Steel/UES; IV/M.511 - Texaco/Norsk Hydro; IV/M.622 - Ricoh/Gestetner; IV/M.1004 - Blohm/Voss, IV/M.221 - ABB/BRELIn contrast to the notifying parties' views, customers, which replied to the Commission's request for information, have expressed their view that no separate product markets exist in the field of navigation and marine communication as far as sales/distribution are concerned. Customers appear to purchase these products as a complete package, and, moreover any product purchase is connected with a service contract. Small individual purchases are done with specialised dealers whereas purchasers of navigation and maritime communication equipment for vessels requiring such devices by regulation prefer sales channels, which are directly or indirectly linked with the manufacturer.Production of navigation equipmentA further distinction could be made between radars as stand alone equipment and integrated navigation systems. The former is considered as a basic navigation aid installed on almost every vessel and, if applicable, required by regulation. Integrated navigation systems are more sophisticated and comprise typically systems such as radars, collision avoidance systems, GPS, echosounders. Ship owners and shipyards purchase integrated navigation systems as a whole. For the purpose of this case, however, it can be left open whether or not these are separate relevant product markets, since even on a narrower definition, the proposed operation would not lead to the creation or strengthening of a dominant position.Services relating to navigation and marine communication equipmentIn contrast to production and sales/distribution for which a distinction has been made between navigation and marine communication equipment, the notifying parties submit that services for such equipment constitute a single product market as they are typically offered for both product categories. Vessels, which are required to have certain navigation and marine communication equipment by regulation, in general have service contracts for the complete installation. Moreover, it appears that few ships, mostly for private and leisure purposes, could only have either product category installed.Customers, however, refer to the technical complexity of such equipment. In most circumstances, therefore, a specialist would be required, typically from the manufacturer and/or the sales/distribution channel, to repair or exchange, in particular with larger installations. However, service contracts usually cover both product categories as they are often sold through the same distributor.ConclusionIt can be concluded from the above, that, for the purpose of this case, production of navigation equipment, production of marine communication equipment, sales/distribution of navigation equipment, sales/distribution of marine communication equipment and services relating to navigation and marine communication equipment can be considered as the relevant product markets.B. Relevant geographic marketsThe notifying parties have taken the view that the markets for production and sales/distribution of both, navigation and marine communication equipment, comprises at least the EEA, and is produced for a world-wide market. Such equipment has to meet international minimum technical requirements. Moreover, within the EU, some Directives [4] govern maritime equipment. Customers purchase maritime equipment world-wide, as vessels operate almost anywhere in the world. Third parties largely have confirmed the parties' view. The Commission, therefore, considers the geographic scope to be at least EEA-wide.[4]   Council Directive 96/98/EC of December 20, 1996; Commission Directive 98/85/EC of November 11, 1998As far as services related to navigation and marine communication equipment is concerned, the notifying parties claim that the geographical scope is national. Maintenance and repair is typically carried out at the closest possibility. Ship owners either contact the local representative of the manufacturer or sales/distribution agent, or request services from the company with which a maintenance contract has been signed and which hence sent a local repair/maintenance agent. However, more complex service work always requires to sent the service experts from its headquarter to in principal anywhere in the world. Customers, who replied to the Commission's request for information, however, expressed the view that the service market could be considered wider than national. In view of the fact that vessels, mainly for commercial purposes, operate on a world-wide basis, services have to be carried out from both, national agents and international operating agents. The Commission, therefore, considers the geographic market to be national with a tendency to widen its scope towards at least EEA-wide. C. Competitive Assessment a) ProductionSTN ATLAS is active in the production of navigation equipment whereas SAIT RH has no production operations. Furthermore, STN ATLAS receives approximately [