CELEX: 31995M0622
Language: en
Date: 1995-09-12 00:00:00
Title: COMMISSION DECISION of 12/09/1995 declaring a concentration to be compatible with the common market (Case No IV/M.622 - Ricoh / Gestetner) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31995M0622

COMMISSION DECISION of 12/09/1995 declaring a concentration to be compatible with the common market (Case No IV/M.622 - Ricoh / Gestetner) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 264 , 11/10/1995 P. 0009

  COMMISSION DECISION of 12/09/1995 declaring a concentration  to be compatible with the common market (Case No IV/M.622 -  Ricoh / Gestetner) 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 party  Dear Sirs,  Subject :<ind> Case No IV/M.622  Ricoh/Gestetner  <ind> <ind> Notification of 09.08.1995 pursuant to Article 4  of Council Regulation No 4064/89  1.<ind> The above mentioned notification concerns the  acquisition by Ricoh Company Limited ("Ricoh") of Gestetner  Holdings plc ("Gestetner") following a public offer for all  the outstanding share capital in Gestetner not already held  by Ricoh.  I <ind> THE PARTIES  2.<ind> Ricoh (a Japanese company) is a manufacturer and  distributor of office automation products and cameras, which  also provides support services and supplies associated with  these products. Ricoh distributes through a system of  subsidiaries called national sales organisations and a  network of dealers.  3.<ind> Gestetner (a British company) is a company which  distributes office automation equipment and cameras  manufactured by others under its own brands and provides  support services associated with these products. Gestetner  sells either through a dealer network or directly to end  users.   II<ind> THE OPERATION  4.<ind> The operation consists of the acquisition by Ricoh  of sole control over Gestetner, following a public bid for  all the outstanding shares of Ricoh. The operation results  in the combination of the two parties' wholesale  distribution activities.   III<ind> COMMUNITY DIMENSION  5.<ind> The operation has a Community dimension. The  worldwide turnover of all undertakings concerned amounted,  in 1993 to more than 5,000 million ECU (Ricoh: 7.777 million  ECU; Gestetner 1.507 million ECU). The Community wide  turnover of both Ricoh and Gestetner exceeds 250 million ECU  [These figures relate to the year to 31.3.1994 for Ricoh and  the fourteen months to 31.12.1994 for Gestetner.]. They do  not achieve more than two thirds of their aggregate  Community wide turnover within one and the same Member  State. None of the undertakings concerned have a turnover  exceeding ECU 250 million in the territory of the EFTA  States.   IV<ind> COMPATIBILITY WITH THE COMMON MARKET  <ind> Product markets  6.<ind> Product markets concerned by the proposed  concentration are the wholesale distribution of  photocopiers, the wholesale distribution of fax machines,  the wholesale distribution of cameras, the production of  black and white photocopiers, colour photocopiers, digital  duplicators, fax machines and cameras.  7.<ind> Wholesale distribution of photocopiers,  wholesaledistribution of fax machines, wholesale  distribution of cameras   <ind> Wholesale distribution of photocopiers, fax machines  and cameras are three affected markets. Wholesale  distribution is basically a service.  <ind> The distribution pattern used throughout the Community  for all these products consists of a number of national  sales organisations which sell the products to a network of  dealers which in turn sell directly to the end users. These  companies normally operate on a national basis. Multicountry  operations are the exception. Gestetner has a function which  is very similar to that of a distributor, its role being  limited to the branding of products supplied by  manufacturers. Gestetner either sells to dealer networks or,  most frequently, directly to the end users. In this last  case, end users are generally large customers.   <ind> As indicated below the products distributed belong to  separate product markets on the manufacturing level. In  particular, photocopiers can be divided into black and white  photocopiers, colour photocopiers, digital duplicators; fax  machines into thermal and plain paper fax machines; cameras  into simple lens reflex and compact cameras. At the  wholesale distribution level, however, the distinction  between wholesale distribution of the different product  markets within the same broad category of product (i.e.  photocopiers including digital duplicators, fax machines and  cameras) is not necessary, as for a given category  (photocopiers; fax machines; cameras) these products are  distributed by the same distribution channels. Consequently,  the distinction between wholesale distribution of  photocopiers, wholesale distribution of fax machines and  wholesale distribution of cameras is sufficient for the  analysis at the distribution level.  8.<ind> Production of photocopiers  <ind> Three distinct product markets can be identified:  <ind> Black and white photocopiers  9.<ind> Black and white photocopiers here under  consideration are photocopiers making black and white copies  using an analog technology. Digital black and white  photocopiers are not considered for the purpose of this  decision since Ricoh has virtually no production of digital  black and white photocopiers, and Gestetner does not  distribute these products.   <ind> The independent market research company Dataquest  groups together photocopiers into seven product categories  or segments based upon copy speed and copy volume (PC  ("personal copier") and segments from 1 to 6).   <ind> PCs are mainly used in very small businesses where the  use is by one person only or where more generally the use of  the photocopier is very limited and it does not require any  particular option (double sided copy, stapling etc.).  Segment 1 photocopiers represent about 60% of the market (in  volume terms). These machines are standard photocopiers used  in small offices with a limited number of employees and they  correspond to a limited need of performances. Segments 2 to  6 represent variations and improvements of photocopiers  models in terms of speed, quality of the copy, possible  options and price. In terms of value, black and white analog  photocopiers represent approximately 5.700 million ECU in  the European Union (and 1.2 million of units). A precise  product market definition within the category of analog  black and white photocopiers is however not necessary in the  present case, as the operation does not create or strengthen  a dominant position even on the narrowest market  definition.  10.<ind> Digital duplicators consitute a particular category  of photocopiers. They are the modern day equivalent of the  old stencil duplicators and are designed to produce a large  quantity of single sheet copies. They have limited  performances (in terms of quality of the copy and possible  options, as, for example, it is not possible to have  doublesided copies) even when compared to the lowend ranges  of photocopiers. This limited performance makes them  unsuitable for general office purposes. On the other hand,  they are much quicker and need, because of the technology  use, less maintenance service. Their price is considerably  lower than the price of a high speed photocopier (about  12.000 ECU against 28.000 ECU). The biggest customer groups  are schools and churches. Due do their characteristics and  performances, digital duplicators constitute a niche market  consisting of [Business secrete deleted. Less than 25 000  units.] units sold in Europe in 1994. In terms of value,  they represent about [Less than 200 million Ecu.]  millionECU.  11.<ind> Colour photocopiers are mainly bought by very  specific categories of customers, i.e. advertising and  design agencies. They are normally used in centralised copy  facility environments. In Europe, approximatively 20.000  colour photocopiers have been sold in 1994, representing a  value of about 500 million Ecu.  <ind> Production of faxsimile machines  12.<ind> Two different product markets are identified. A  clear distinction exists in terms of characteristics, use  and price between thermal paper fax machines on the one hand  and plain paper fax machines on the other hand. Thermal  paper fax machines use heat to produce the characters on the  specialised paper, whilst plain paper fax machines use a  variety of printing techniques to produce an image on the  same plain paper as used in other office machines (for  example, laser printers etc.). Plain paper fax machines  present technical advantages in comparison to thermal fax  machines, which render them a distinct product; in  particular, plain paper fax machines produce a better copy  of the document transmitted, with a permanent printed image  on which it is possible to write, unlike thermal paper on  which writing tends to smudge. Furthermore, plain paper fax  machines are far more expensive than thermal paper machines:  the average price of a thermal paper fax machine is of 608  ECU, while the average price of a plain paper fax machine is  1.747 ECU (Dataquest figures, 1994). Thermal paper fax  machines are normally used in small offices or at home,  while plain paper fax machines are normally used in larger  offices.  <ind> A further distinction could be drawn within thermal  paper fax machines, according to the classification operated  by the independent research company Infosource, which  further classifies these machines into four segments,  according to their specific technical characteristics and  their price. However, for the purpose of this decision it is  not necessary to decide whether different relevant product  markets exist within the category of thermal paper, as the  operation will not create or strengthen dominance even on  the narrowest product market definition.  <ind> Production of cameras  13.<ind> Two different product markets have been identified  :  <ind> 1.<ind> compact cameras  <ind> 2. <ind> single lens reflex   <ind> Compact cameras are the largest sector of the camera  market. They are designed to be sold to ordinary customers.  They are small, usually fully automatic and very easy to  use. Their prices range from 10 ECU to 650 ECU.  <ind> Single lens reflex cameras (SRL) are more  sophisticated products. Unlikely compact cameras, they  enable the photographer to vary the angle and magnification  of the subject matter. Their prices range from 130 ECU to  800 ECU.  <ind> Geographic market  14.<ind> Wholesale distribution  <ind> It is not necessary to decide whether there exists a  Community or national market for the wholesale distribution  services for photocopiers (including digital duplicators),  fax machines and cameras since, even in the latter  alternative the operation does not create or strengthen a  dominant position.  15.<ind> Production of black and white photocopiers, digital  duplicators, colour photocopiers is at least a Community  market. These products sold in the Community do not present  technical differences. There are no legislative or technical  barriers between Member States. Conditions of competition  are similar in the different member States There is  intensive trade among Community the Member States.   16.<ind> Production of fax machines is subject to national  technical requirements in most Member States; however, it is  not necessary to decide whether the market is the Community  or a national, since even in the latter alternative the  operation does not create or strengthen dominance in the  common market.  17.<ind> Production of cameras is at least a Community  market. The same products are sold across the Community.  There are no legislative or technical barriers between  Member States.  V<ind> COMPETITIVE ASSESSMENT  <ind> Horizontal aspects  18.<ind> Horizontal overlaps arise with respect to the  wholesale distribution activities of Ricoh and Gestetner.  19.<ind> The combined market shares of the parties after  theoperation on the different wholesale distribution product  markets are the following:  <tab> Photocopiers <tab> Fax machines <tab> Cameras  Austria <tab> [1525%] <tab> 7% <tab> 1%  Belgium + Lux <tab> [1525%] <tab> 7% <tab> 4%  France <tab> [1525%] <tab> 7% <tab> 4%  Italy <tab> [1525%] <tab> 10% <tab> 3%  Germany <tab> [515%] <tab> [< 5%] <tab> 3%  United Kingdom <tab> [515%] <tab> [< 5%] [Business secrets  deleted (these figures not being publicly available).] <tab>  9%  Netherlands <tab> [1525%] <tab> 7% <tab> 7%  Spain <tab> [515%] <tab> 4% <tab> 8%  Sweden <tab> [515%] <tab> 6% <tab> 5%  Denmark <tab> [515%] <tab> 5% <tab>    Finland <tab> [<5%] [Business secrets deleted (these figures  including sales of digital duplicators).] <tab> 10% <ind>   20.<ind> The combined market shares of Ricoh and Gestetner  do not exceed 25%, in any of the markets under  consideration. In each country the parties face competition  by strong competitors, having in most cases higher market  shares.   <ind> The operation produces its major effects on the market  for wholesale distribution of photocopiers. In some cases  the parties obtain market shares of about 20%. On the other  hand, there are vertically integrated companies like Canon  and Rank Xerox with strong distribution systems in each  member state, which have higher market shares.   <ind> On the market for distribution of fax machines and the  market for distribution of cameras the parties have even  lower combined market shares. In the case of fax machines  the strongest competitors are either the national telecoms  organisations or companies like Canon or Philips, as it is  illustrated below. In the case of cameras, companies like  Canon, Minolta or Olympus have much stronger market  positions.  <ind> Market shares of the main competitors for the three  product markets in different member states are the  following:  <ind> Photocopiers  Austria <tab> Canon (23%) <tab> RankXerox (13%) <tab> Sharp  (12%)  Belgium + Lux <tab> Canon (18%) <tab> RankXerox (10%) <tab>  Minolta (9%)  France <ind> Canon (25%) <tab> RankXerox (17%) <tab> Toshiba  (8%)  Italy <tab> Olivetti (15%) <tab> Canon (14%) <tab> Rank  Xerox (8%)   Germany <tab> Canon (30%) <tab> Sharp (11%) <tab> Rank Xerox  (10%)  United Kingdom <tab> Canon (25%) <tab> Rank Xerox (14%)  <tab> Sharp (14%)  Netherlands <tab> Rank Xerox (20%) <tab> Canon (19%) <tab>  Minolta (5%)  Spain <tab> Canon (28%) <tab> Rank Xerox (13%) <tab>  Olivetti (7%)  Sweden <tab> Canon (26%) <tab> Sharp (12%) <tab> Toshiba  (11%)  Denmark <tab> Canon (23%) <tab> Rank Xerox (15%) <tab>  Minolta (14%)  Finland <tab> Canon (52%) <tab> Rank Xerox (11%) <tab>  Toshiba (9%)  <ind> Fax machines  Austria <tab> Philips [2030] <tab> Canon [1020] <tab>  Panasonic [510]  Belgium + Lux <tab> Philips [1020] <tab> Panasonic [1020]  <tab> Belgacom [1020]  France <tab> Fr.Telecom [3040] <tab> Sagem [2030] <tab>  Alcatel [510]  Italy <tab> Olivetti [1020] <tab> Panasonic [515] <tab>  Philips [510]  Germany <tab> Post [1525] <tab> Siemens [515] <tab> Alcatel  [510]  United Kingdom <tab> BT [2535] <tab> Samsung [515] <tab>  Panasonic [515]  Netherlands <tab> Telefax [2535] <tab> Philips [1020] <tab>  Canon [510]  Spain <tab> Telyco [3040] <tab> Olivetti [1020] <tab>  Panasonic [515]  Sweden <tab> Telia [1525] <tab> Philips [1020] <tab> Canon  [515]  Denmark <tab> Efax [515] <tab> Philips [1020] <tab> Olivetti  [515]  Finland <tab> Canon [3040] <tab> Brother [1020] <tab>  Toshiba [510]  <ind> Cameras  Austria <ind> Canon (17%) <tab> Minolta (9%) <tab> Olympus  (7%)  Belgium + Lux <tab> Minolta (16%) <tab> Olympus (14%) <tab>  Canon (13%)  France <tab> Canon (18%) <tab> Minolta (16%) <tab> Olympus  (9%)  Germany <tab> Canon (11%) <tab> Olympus (10%) <tab> Minolta  (8%)  United Kingdom <tab> Canon (14%) <tab> Olympus (11%) <tab>  Minolta (6%)  Netherlands <tab> Minolta (13%) <tab> Canon (9%) <tab>  Olympus (9%)  Spain <tab> Nikon (12%) <tab> Canon (12%) <tab> Minolta  (7%)  Sweden <ind> Minolta (24%) <tab> Canon (15%) <tab> Olympus  (10%)  Sources : Inforsource Dataquest; GFK.  <ind> On the basis of the above elements it is concluded  that the proposed operation will not create or strengthen a  dominant position on any of these markets.  21<ind> The market shares on the black and white  photocopiers' market are the following :  COMPANY <tab> %  Canon <tab> 29%  Ricoh <tab> 12%  Sharp <tab> 12%  Mita <tab> 11%  Rank Xerox <tab> 9%  Toshiba <tab> 7%  Source : Dataquest (May 1995)  22.<ind> Digital duplicators is a niche market in which only  very few companies currently operate (beacuse of the limited  interest represented by this market). It accounts for about  [ Less than 25 000 units.] units with a total value of about  [Less than 200 million Ecu.] million ECU. Riso Kaganu  Corporation ("Riso") is a Japanese manufacturer present on  this market, together with Ricoh and the other Japanese  manufacturers Gakken, Duplo and Seiki. On the basis of the  information available to the Commission and in the absence  of any official statistics it can be assumed that Riso has  about [Between 40% and 60%.] of the European market, Ricoh  about [Between 20% and 40%.], the remaining [ Between 10%  and 20%.] being split between Gakken, Duplo, Seiki.   23.<ind> The market shares by manufacturer of the main  players in the colour photocopiers market in the Community  are 60% for Canon, 14% for Rank Xerox, 10% for Ricoh and 35%  for Minolta (Source : Dataquest).  24.<ind> The operation will not contribute to reinforce the  position of Ricoh on the above mentioned markets to a  significant extent. On the market for black and white  photocopiers Ricoh (with approximatively 12% market share in  terms of production) faces competition from Canon, Sharp,  Mita and Rank Xerox, which are strong competitors in terms  of market share and of structure (they are all vertically  integrated manufacturers of these products). In addition, in  1994 Gestetner bought about 80% of its requirements for  these products from Ricoh. Ricoh's position on the  production market for analog black and white photocopiers is  therefore not changed because of the proposed operation.   <ind> The operation will not strengthen Ricoh's position on  the production of digital duplicators neither. There is  another Japanese competitor, Riso, with about [Between 40%  and 60%.] of the market, with a strong distribution system.  In 1994, [Business secret deleted.] digital duplicators sold  by Gestetner were supplied by Ricoh. The operation will not  as a consequence have any adverse effect on the production  market and no forclosure effect can arise.  <ind> The operation will not strengthen Ricoh's position on  the production for colour photocopiers neither, where its  position is well behind that of Canon and Rank Xerox.   25.<ind> The market shares by manufacturer on the fax  machines market the following in the Community:    Manufacturer <tab> Thermal % <tab> Plain Paper %  Sagem <tab> [< 30%] <tab> [< 10%]  Matsushita <tab> [< 10%] <tab> [< 25%]  Ito <tab> [< 15%] <tab> [< 2%]  Philips <tab> [< 10%] <tab> /  Canon <tab> [< 5%] <tab> [< 20%]  Ricoh <tab> [< 5%] <tab> [< 10%]  <ind> The respective market shares remain approximately the  same when calculated on a segment by segment basis. If  national markets are considered, it appears that Ricoh's  market share does not exceed25% in any Member State.  Depending on the Member State under consideration, Ricoh  faces competition with Sagem, Matsushita, Ito, Philips or  Canon to a significant extent. In addition, Gestetner  currently buys about 50% of its sales from Ricoh. The  remaining 50% is bought from Samsung, HS Electronics, Sagem  and Rank Xerox. Given the importance of these companies, it  is not considered that any significant forclosure effect  will be created.  26.<ind> According the figures of the independent research  company GFK, Ricoh's share on the compact cameras market in  the Community is 2%. The main players on the market are  Olympus (16%), Canon (14%), Minolta (10%), Pentax (11%).  <ind> For SRL cameras, Ricoh's share in the Community is  insignificant (0.7%). The major players on this market are  Canon (35%), Minolta (26%), Nikon (14%) and Olympus (5%).  <ind> On both the markets Ricoh's position is insignificant  and it is considered that the present operation does not  contribute to a significant reinforcement of this position.    VI<ind> Conclusion  27.<ind> In the light of the above considerations, the  proposed concentration does not give raise to serious doubts  as to the compatibility of the operation with the common  market and with the functioning of the EEA.  28.<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.  For the Commission,