CELEX: 31993M0350
Language: en
Date: 1993-06-30 00:00:00
Title: COMMISSION DECISION of 30.06.1993 declaring a concentration to be compatible with the common market (Case No IV/M.350 - WEST LB / THOMAS COOK) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31993M0350

COMMISSION DECISION of 30.06.1993 declaring a concentration to be compatible with the common market (Case No IV/M.350 - WEST LB / THOMAS COOK) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 216 , 11/08/1993 P. 0000

 COMMISSION DECISION of 30.06.1993 declaring a concentration to  be compatible with the common market (Case No IV/M.350 - WEST  LB / THOMAS COOK) 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.350 - WEST LB / THOMAS COOK  <ind>  <ind> Your notification of 28.05.1993 pursuant to  Article 4 of Council Regulation N* 4064/89.  1. <ind> The above-mentioned operation concerns the termination  of a shareholders' agreement by which Westdeutsche Landes Bank  (West LE) and LTU Lufttransport Unternehmen (LTU) currently  have joint control of Thomas Cook.   <ind> The acquisition of joint control was notified to the  Commission (see Case IV/M.229). The majority of funds necessary  for LTU's participation in the JV was provided by West LB,  which in return received a call option for 76% of the shares in  Thomas Cook. This call option was exercised by West LB in  December 1992, but joint control has been maintained by way of  a shareholders' agreement. Following the notified operation  West LB will hold 86% of the shares in Thomas Cook, and by  terminating its shareholder agreement with LTU, West LB will  acquire sole control of Thomas Cook.  2. <ind> After examination of the notification, the Commission  has concluded that the notified operation falls within the  scope of application of Council Regulation N* 4064/89 and does  not raise serious doubts as to its compatibility with the  common market.  I. <tab> THE PARTIES  3. <ind> West LB is a german bank, of which no undertaking or  person has control, the largest shareholder being the state of  North-Rhine Westphalia (43.2%). The main activities of West LB  are state banking operations and clearing operations for  savings banks in North-Rhine Westphalia.  4. <ind> Thomas Cook consists of the UK-based Thomas Cook Group  Ltd and its US affiliate Thomas Cook Inc. Thomas Cook's  principal activities include travel agencies, tour operating,  travellers' cheques and foreign exchange retailing.  II. <ind> CONCENTRATION WITH A COMMUNITY DIMENSION  5. <ind> West LB and LTU currently have joint control of Thomas  Cook. On termination of the shareholders' agreement, West LB  will have sole control of Thomas Cook. This acquisition of sole  as opposed to joint control represents a change in the quality  of decisive influence exercised by West LB and brings about a  lasting change in the structure of both undertakings. The  acquisition of sole control therefore constitutes a  concentration within the meaning of Article 3(1) of the  Regulation.  6. <ind> The thresholds set out in Article 1(2) of the  Regulation are met since both the world- and Community-wide  turnover of West LB, calculated in accordance with Art. 5(3)a  of the Regulation, is well in excess of 5000 million ECU and  the Community-wide turnover of Thomas Cook is 422 million ECU.  As the majority of Thomas Cook's Community-wide turnover was  achieved in the UK and the majority of West LB's turnover was  achieved in Germany, the parties do not achieve more than two- thirds of their aggregate Community-wide turnover in one and  the same Member State. The notified operation therefore has a  Community dimension.  III. <ind> COMPATIBILITY WITH THE COMMON MARKET  A. <tab> The relevant product and geographic markets  7. <ind> Thomas Cook is a travel agent and tour operator,  offering leisure and business travel, and is also active in the  issue and sale of traveller's cheques, foreign exchange  retailing and the wholesale trading and distribution of foreign  currency.   <ind> Apart from its hares in Thomas Cook, West LB does not  control any undertaking which is active on the markets for  supply of travel services. It does, however, hold minority  interest in LTU (34.3%) and in the leading German tour operator  Touristik Union International (6.8%).  8. <ind> The markets within Europe for the supply of travel  services are still essentially national in character. In the  leisure sector, for example, tour operators in a particular  Member State typically sell packages with a point of departure  in that Member State and markets them to residents of that  Member State. On the demand side there are also factors such as  the inconvenience and additional cost of travelling by own  arrangement to the point of departure in the territory of a  foreign tour operator and linguistic and information-related  difficulties which suggest that the market is mainly national  in character.  9. <ind> The parties have stated that Thomas Cook hods  approximately 33% of the European market for travellers'  cheques. On the other hand, West LB's activities in the field  of travellers' cheques and foreign currency are limited to the  provision of such services for employees of the bank and a  small number of high net worth individuals.   <ind> As regards the markets for issuing and wholesale  distribution of travellers' cheques, there is a strong  suggestion by the very nature of the products and services  involved that this market is broader in geographical terms than  the market for travel services. Further, it would seem that  travellers' cheques to a certain degree are in competition with  other methods of payment, such as e.g. credit cards and  eurocheques.   <ind> Thomas Cook is also active in the market retail foreign  exchange where it competes with commercial banks, specialist  bureaux de change and independent money changers.  10. <ind> However, a precise definition of relevant markets  does not have to be adopted in this case, since, in the absence  of any significant overlap, the operation does not raise  serious doubts about its compatibility with the common market,  even if the narrowest possible market definition was to be  adopted.  B. <ind> Competition assessment  11. <ind> In the Commission's decision (M.229) relating to the  previous notification, i.e. the acquisition of joint control  over Thomas Cook by West LB and LTU, the only limited overlap  found to exist was in the travel sector between Thomas Cook and  LTU. Following the proposed operation LTU will no longer have  any control over Thomas Cook. Thus there will not be any  significant overlap between the parties to the concentration.  12. <ind> There is neither any horizontal overlap, nor any  vertical links, between the parties to this concentration. The  possible conglomerate effects of the operation, given the  strong financial support offered by West LB, are not such as to  give rise to concerns on competition grounds, since thomas Cook  will face competition from financially strong competitors on  all markets where it is active. Therefore, the concentration  will not create or strengthen a dominant position as a result  of which effective competition will be significantly impeded in  the Common market or in a substantial part of it.  13. <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 4064/89.  For the Commission