CELEX: 31992M0263
Language: en
Date: 1992-09-29 00:00:00
Title: COMMISSION DECISION of 29.09.1992 declaring a concentration to be compatible with the common market (Case No IV/M.263 - AHOLD / JERONIMO MARTINS) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31992M0263

COMMISSION DECISION of 29.09.1992 declaring a concentration to be compatible with the common market (Case No IV/M.263 - AHOLD / JERONIMO MARTINS) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 261 , 10/10/1992 P. 0000

 COMMISSION DECISION of 29.09.1992 declaring a concentration to  be compatible with the common market (Case No IV/M.263 - AHOLD  / JERONIMO MARTINS) 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 parties Dear Sirs, Re.: <tab>  Case No IV/M.263 - Ahold / Jerónimo Martins <ind> Notification of 28.8.1992 pursuant to Article 4 of  Council Regulation No 4064/89  1.<ind> The notified operation concerns a joint venture,  Jerónimo Martins Retail (JMR), between Koninklijke Ahold N.V.  (Ahold) and Estabelecimentos Jerónimo Martins & Filho  Administração e Participações S.A. (Jerónimo Martins).  <ind> Jerónimo Martins which is active on the Portuguese food  retail and wholesale market will transfer its 41 retail stores  (Pingo Doce and Supergarb) to JMR in which it will hold 51% of  the shares.  <ind> Ahold which is active in the US and in the Netherlands  and not yet in Portugal will acquire the remaining 49% of the  capital of JMR.  2.<ind> This operation constitutes a concentration 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> CONCENTRATION  3.<ind> JMR is a joint venture created on a lasting basis which  will perform all the functions of an autonomous economic entity  in the retailing business. <ind> The shareholders' agreement provides for joint control of  JMR by Ahold and Jerónimo Martins. It will be run by a Board of  Directors which will consist of 7 members, 4 being appointed by  Jerónimo Martins and 3 by Ahold, and decisions of the Board  will be taken unanimously (Art. 5 of the agreement).  4.<ind> Jerónimo Martins will keep other distribution  activities in the Portuguese market with 5 specialised stores  in the luxury confectionery market ("Hussel/Douglas") and 7  cash and carry stores that operate through a JV with Booker PLC  (a British based company). However, there will be no  coordination of the competitive behaviour between Jerónimo  Martins and the joint venture since on the one hand the  Hussel/Douglas shops are specialised outlets selling one family  of products only (luxury confectionery goods) and on the other  hand the cash and carry stores operate on the wholesale market  supplying small retailers on a regional basis.  5.<ind> Ahold has important food retail operations in other  geographic markets (the Netherlands and the USA) but has no  operations at all in Portugal. <ind> There is no interaction between these different  geographic markets and therefore no risk of coordination of the  competitive behaviour between Ahold and JMR in the Portuguese  food retail market.  6.<ind> There are no indications that any of the parent  companies could enter this market independently in the  foreseable future. In addition to that Ahold and Jerónimo  Martins agreed not to be in the Portuguese general food retail  market by other means than through JMR (see paragraph 15).  7.<ind> Ahold and Jerónimo Martins are also active in food  manufacturing but these companies are in different product  markets. Ahold has manufacturing activities in the Netherlands  concerning beverages (Sherry), meat processing, dietary meat  products, bread and vacuum-wraped prepared meals, while  Jerónimo Martins is primarily concerned with the production of  fats and edible oils and ice cream in Portugal in association  with Unilever.  8.<ind> The cooperative element which could result from the  possibility of the JV to use Ahold's purchasing organisation  [Ahold is engaged in a cooperative agreement known as  Associated Marketing Services (AMS) that has been notified to  the Commission on April 5, 1991 (case IV/33.360).] can be  separated from this structural change resulting from the  creation of the JV and falls to be assessed separately under  Regulation No 17 if the conditions for the applicability of  Article 85 are met.  9.<ind> For these reasons, the creation of the joint venture  will not give rise to the coordination of the competitive  behaviour of the parties amongst themselves or between them and  the joint venture. The joint venture is therefore a  concentration within the meaning of Article 3 of the Merger  Regulation.  II. COMMUNITY DIMENSION  10.<ind> The aggregate worldwide turnover of Ahold and Jerónimo  Martins exceeds 5 billion Ecu in 1991 (Ahold 9,078 million Ecu,  Jerónimo Martins 479 million Ecu). Both have a Community-wide  turnover of more than 250 million Ecu (Ahold 4,190 million Ecu,  Jerónimo Martins 479 million Ecu), and they did not achieve  more than two-thirds of their Community-wide turnover in one  and the same Member State. Therefore, the proposed operation  meets the thresholds of Article 1(2) of the Merger Regulation.  IV.<ind> COMPATIBILITY  11.<ind> The assessment of a concentration in the retail  business market has to take into account on the one hand the  market power that can be exercised towards the consumers and on  the other hand the market power that can be exercised towards  the suppliers.  12.<ind> Until now Ahold has had no presence in Portugal. The  joint venture's market share derives from the turnovers  represented by the 41 supermarkets transferred by Jerónimo  Martins. Since the operation only concerns the retail business  market there is therefore no addition of market shares.  13.<ind> Concerning the market power that could be exercised  towards the suppliers, this operation does not modify  substantially by itself the buying power of the supermarkets  transferred to the JV.  <ind> The purchasing power accruing to JMR and possibly to  Ahold as it would stem from its purchasing cooperation through  AMS (see § 8) can be assessed separately under Regulation No  17.  14.<ind> In the light of the above, it is concluded that the  proposed concentration does not lead to the creation or  strengthening of a dominant position.  V.<ind> ANCILLARY RESTRAINTS  15.<ind> Under clause 1.4 and 1.5 of the joint venture  agreement, both parents, Ahold ans Jerónimo Martins, undertake  not to make any further acquisitions of or to acquire  participations in food retail companies in Portugal by other  means than through JRM.  <ind> These clauses constitute a restriction directly related  and necessary to the implementation of the concentration.  16.<ind> Both parents will retain, under clause 6.3 of the  joint venture agreement, the exclusive ownership of their  trademarks and will licence them on an indefinite basis to JMR.  These licences as they serve only as a stubstitute for the  transfer of property rights must be considered an integral part  of the concentration.  VI.<ind> FINAL ASSESSMENT  17.<ind> Based upon the above findings, the Commission has come  to the conclusion that the proposed transaction does not raise  serious doubts as to its compatibility with the common market.  <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 the Merger Regulation.  For the Commission,