CELEX: 32018M8881
Language: en
Date: 2018-12-11 00:00:00
Title: Commission Decision of 11/12/2018 declaring a concentration to be compatible with the common market (Case No COMP/M.8881 - GEFCO ESPAÑA, S.A. / BERGÉ AUTOMOTIVE LOGISTICS, S.L.) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                              Brussels, 11.12.2018
                                                              C(2018) 8754 final
  In the published version of this decision, some
  information has been omitted pursuant to Article                    PUBLIC VERSION
  17(2) of Council Regulation (EC) No 139/2004
  concerning non-disclosure of business secrets and
  other confidential information. The omissions are
  shown thus […]. Where possible the information
  omitted has been replaced by ranges of figures or a
  general description.
                                                              To the notifying parties:
Subject:            Case M.8881 - BERGÉ / GEFCO / JV
                    Commission decision pursuant to Article 6(1)(b) of Council Regulation
                    No 139/20041 and Article 57 of the Agreement on the European Economic
                    Area2
Dear Sir or Madam,
(1)       On 12 November 2018, the European Commission received notification of a proposed
          concentration pursuant to Article 4 of the Merger Regulation by which Bergé
          Automotive Logistics, S.L. ("BAL") and GEFCO España, S.A. (“GEFCO España”)
          acquire within the meaning of Article 3(1)(b) and 3(4) of the Merger Regulation joint
          control of a newly-created company that would integrate and manage the finished
          vehicle logistic businesses and assets of both companies in Spain. The concentration is
          accomplished by way of purchase of shares in a newly created company constituting a
          joint venture (the "JV")3. BAL and GEFCO España are designated hereinafter as "the
          Parties".
1    OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009, the Treaty on the
     Functioning of the European Union ('TFEU') has introduced certain changes, such as the replacement of
     'Community' by 'Union' and 'common market' by 'internal market'. The terminology of the TFEU will be
     used throughout this decision.
2    OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').
3    Publication in the Official Journal of the European Union No C 421, 21.11.2018, p. 15. The same
     concentration was already notified to the Commission on 16 October 2018, but the notification was
     subsequently withdrawn on 8 November 2018.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- 1.      THE PARTIES
(2)     BAL, an indirect subsidiary of the Spanish company Bergé y Cía, S.A., is mainly
        dedicated to finished vehicle logistic ("FVL") services to the automotive industry in
        Spain.
(3)     GEFCO España is a subsidiary of the French company, GEFCO, S.A. that is
        ultimately controlled by the Russian state-owned rail company RZD. GEFCO España
        is active in the provision of logistic services, transport solutions and integrated
        logistics to a variety of industries, particularly in the provision of FVL services to the
        automotive industry in Spain.
2.      THE OPERATION
(4)     The Parties signed on 7 July 2017 a Memorandum of Understanding and on 28 June
        2018 an "Integration Protocol" in which they agreed to negotiate the integration and to
        transfer their common activities in the provision of FVL services, namely the
        provision of (i) vehicles logistic services, (ii) vehicles compound storage services, and
        (iii) workshop services to vehicles, to the JV, a Spanish special purpose vehicle
        company (the “Operation”). The JV will run and develop all the activities and assets
        transferred by the Parties.4
3.      THE CONCENTRATION
(5)     The Operation constitutes a concentration in terms of Articles 3(1)(b) and 3(4) of the
        Merger Regulation.
     3.1. Joint control
(6)     The Parties will each hold 50% of the JV's share capital.5 The JV’s board of directors
        will include [number] members nominated by GEFCO España and [number] by BAL.6
        Although the budget will be adopted by the board of directors by simple majority,7
        unanimity will be required with respect to several strategic decisions: [description of
        decisions]8, 9, 10 Consequently the JV will be jointly controlled by the Parties.11
     3.2. Full functionality
(7)     The JV will have dedicated management, workforce and assets to run its activities.12 It
        will have a long-lasting13 and autonomous presence in the market going beyond a
        specific function for the Parties14 and will maintain an arm’s length commercial
4   Form CO, paragraphs 4-6, 50 and 112-118, Annex 1.2.
5   Form CO, paragraphs 49 and 71.
6   Form CO, paragraph 54.
7   Form CO, paragraph 57.
8   Form CO, paragraph 57 and 68.
9   Form CO, paragraphs 60-64 and 68.
10  Form CO, paragraph 57.
11  See recitals 69-71 of the Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No
    139/2004 on the control of concentrations between undertakings, OJ C95/2, 16.4.2008 ("CJN").
12  Form CO, paragraph 102.
13  Form CO, paragraphs 110-111.
14  Form CO, paragraphs 105-109.
                                                         2
 ---pagebreak---         relationship with them.15 The Operation will therefore lead to the creation of a full
        functional joint venture.16
4.      EU DIMENSION
(8)     The undertakings concerned have a combined aggregate world-wide turnover of more
        than EUR 5 000 million17. Each of them has an EU-wide turnover in excess of EUR
        250 million, but they do not achieve more than two-thirds of their aggregate EU-wide
        turnover within one and the same Member State.18 The notified Operation therefore
        has an EU dimension.
5.      RELEVANT MARKETS
(9)     The Parties have identified horizontally affected markets in the sector for the provision
        of FVL services. The Operation will also create a link with the activities of the Bergé
        group in the distribution (i.e. sale) of cars, giving rise to vertically affected markets.
5.1.    FVL services
5.1.1. Relevant product market
(10)    In previous decisions19 the Commission considered a separate market for FVL
        services the providers of which are capable of responding to the multiple requirements
        of car manufacturers all along the car supply chain and thus have a special know-how,
        distinct from general logistics. The Commission considered various possible
        segmentations of market according to type of vehicles (light commercial and
        passenger vehicles in a separate segment from heavy vehicles) and according to the
        mode of transport (rail, road, sea) although finding partial substitutability between the
        different modes of transport.
(11)    In the Deutsche Bahn / Transfesa decision20 the Commission noted that Deutsche
        Bahn, while not deeming it appropriate, considered nevertheless a potential
        segmentation of FVL introduced in a decision of the German Bundeskartellamt21 into
        (i) the collection of finished cars (from plant to compound), (ii) compound services
        (storage and post-production services) and (iii) regional delivery of finished cars (from
        compound to dealer). In its decision the Commission dismissed competition concerns
        in this segments but left the product market definition open.
        The Parties view
(12)    The Parties do not contest the Commissions approach identifying a market for FVL
        services distinct from the market for general logistics services. The Parties consider
        that FVL services should be segmented between transport services and compound
15  Form CO, paragraph 103.
16  See section IV of the CJN.
17  Turnover calculated in accordance with Article 5 of the Merger Regulation.
18  Form CO, section 4.
19  M.2411 – Autologic / TNT / Wallenius / CAT JV; M.2722 - Autologic / TNT / Wallenius / Wilhelmsen / CAT
    JV; M.4786 Deutsche Bahn / Transfesa.
20  M.4786 Deutsche Bahn / Transfesa.
21  Az. B9 – 2013/94 (26 June 1994) – ATG/Menke/Silcock&Colling, WuW/E BKartA 2659.
                                                           3
 ---pagebreak---         services as they are distinct services requiring different assets and know-how.22 The
        Parties argue that a distinction between collection and regional delivery would not be
        necessary as they are paid for indistinctly based on the distance travelled and provided
        by the same resources.23
(13)    With respect to FVL transport services the Parties agree with the Commission's
        approach that FVL transport services should be divided between light commercial and
        passenger vehicles in a separate segment from heavy vehicles which the Parties cannot
        transport with their equipment.24 The Parties view is that FVL transport services by
        road and by rail are to be considered as forming part of the same product market (land
        transport), noting that requests for quotation launched by car manufacturers are
        generally open to all FVL operators irrespective of their mode of transport, especially
        to railway and road transport operators that accordingly compete on the same terms.25
        Commission’s view
(14)    The market investigation tended to confirm that there is a distinct market for FVL
        services with almost all responded confirming that such services require specific
        expertise and are provided by specialised operators.26
(15)    Since the Parties only provide FVL services to light commercial and passenger
        vehicles, the Commission's market investigation focused on this segment which is the
        narrowest on which their activities overlap without it being necessary to determine
        whether it belongs to a wider market including also FVL services for heavy vehicles.
(16)    The market investigation tended to support the Parties argument that it is unnecessary
        to distinguish within FVL transport service between collection services and regional
        delivery services. None of the respondents to the market investigation opined that FVL
        transport services should be segmented to collection and delivery services. Respondent
        explained that although it is possible that some smaller local FVL companies will
        focus on regional transport to dealers, in general FVL companies provide both
        collection and delivery services and customers purchase door-to-door transport
        solutions from their FVL services providers.27 This conclusion is supported also by
        recent decisions of the Spanish competition authority28 and several other national
        competition authorities.29
(17)    The large majority of respondents to the market investigation consider that there is a
        high degree of substitutability between all modes of transport (sea, rail and road) when
        large volumes are concerned. Large volumes typically concern cross-border flows and
22 Form CO, paragraph 247.
23 Form CO, paragraph 250.
24 Form CO, paragraphs 253.
25 Form CO, paragraph 257.
26 Questionnaire to competitors, responses to question 12; questionnaire to customers, responses to question
   11.
27 Agreed non-confidential minutes of call of 14 November 2018 with Grupo Sesé, point 5; Agreed non-
   confidential minutes of call of 15 November 2018 with Transfesa and Deutsche Bahn, point 4.
28 Decision of the Spanish Competition Authority of 23 of December 2016, C/0823/16: CAT/SINTAX.
29 See for example: Decision of the French Competition Authority nº 17-DC-165 of 10 October 2017; Decision
   of the Italian Competition Authority in case C11032 - GEFCO/GRUPPO MERCURIO Provvedimento n.
   22386 of 4 May 2011; Decision of the Italian Competition Authority in case C11823 - JSC RUSSIAN
   RAILWAYS/GEFCO Provvedimento n. 24086 of 28 November 2012.
                                                        4
 ---pagebreak---         also domestic flows from factories to compounds, from sea terminals to compounds
        and to a lesser extent between compounds.30
(18)    On the basis of the decisional practice of the Commission and the outcome of the
        market investigation, the Commission concluds that there is a separate market for FVL
        services. Within this market the Commission will assess the case on the basis of the
        segment for FVL services to passenger and light commercial vehicles which is the
        narrowest segment on which the Parties' activities overlap. For the purpose of this
        case, the Commission will examine the effects of the Operation considering sub-
        segments for compound and transport services without distinguishing between
        collection and delivery. Finally, it can be left open whether FVL transport services for
        passenger and light commercial vehicles according to mode of transport (sea, land, rail
        and road) constitute separate product markets as the present concentration does not
        raise serious doubts under any of these segmentations.
5.1.2. Relevant geographic market
(19)    In past decisions31 the Commission considered but ultimately left open the question
        whether the market for FVL services and its potential plausible submarkets is national
        or EEA-wide. It also found indications for a further plausible segmentation of inbound
        and outbound FVL services to and from Spain within which further sub-segmentation
        by routes may be considered.32
(20)    The Parties submit that the market for FVL services is EEA-wide.33
(21)    The market investigation tended to support the view that the relevant geographic
        market for FVL services in this case should be limited to Spain with a distinction
        between domestic flows and cross-border flows. FVL services providers who
        responded to the market investigation consider other FVL services providers from
        outside of Spain as competitors mainly for cross-border flows to and from Spain.34
        This view is confirmed by the customers who responded to the market investigation.
        The large majority of them do not contract FVL services providers from outside of
        Spain. Those who contract foreign FVL service providers do so for cross-border flows
        to and from Spain.35
(22)    For the purpose of this case the question could be left open whether the relevant
        geographic market is EEA-wide or whether it should be segmented between a Spanish
30  Questionnaire to competitors, responses to question 16; questionnaire to customers, responses to question
    14, Agreed non-confidential minutes of call of 13 November 2018 with UECC, points 5 and 9; Agreed non-
    confidential minutes of call of 13 November 2018 with Volkswagen (Spain), points 3 and 6; Agreed non-
    confidential minutes of call of 13 November 2018 with Pecovasa, point 5; Agreed non-confidential minutes
    of call of 12 November 2018 with SEAT S.A., points 2 and 3; Agreed non-confidential minutes of call of 14
    November 2018 with Grupo Sesé, point 3; Agreed non-confidential minutes of call of 15 November 2018
    with Transfesa and Deutsche Bahn, point 3.
31  See references in footnote 19.
32  M.4786 Deutsche Bahn / Transfesa, paragraphs 51 and 76.
33  Form CO, paragraphs 267.
34  Questionnaire to competitors, responses to question 20; Agreed non-confidential minutes of call of 14
    November 2018 with Grupo Sesé, point 5; Agreed non-confidential minutes of call of 15 November 2018
    with Transfesa and Deutsche Bahn, point 5; Agreed non-confidential minutes of call of 13 November 2018
    with UECC, point 10.
35  Questionnaire to customers, responses to question 19.
                                                          5
 ---pagebreak---         market for domestic flows and separate market for cross-border flows. The operation
        does not raise competition concern under any plausible market definition.
     5.2. Distribution of cars
(23)    The Commission has in previous decisions distinguished between the wholesale and
        retail distribution of motor vehicles. The Commission has also considered but
        ultimately left open the further sub-segmentation of the market according to types of
        vehicles (passenger, light commercial and industrial vehicles). The Commission also
        left open the question whether the geographic scope of the market should be regional,
        national or EEA-wide.36
(24)    The Parties do not object to the Commission's previous decisional practice and argue
        that the exact market definition can be left open. In the Parties' view considering the
        low presence of the Bergé group in the relevant markets and segments, it is unlikely
        that the Operation will lead to negative effect on competition.37
(25)    The Commission considers that for the purpose of the present case the precise market
        definition can be left open since the Operation does not raise serious doubts as to its
        compatibility with the internal market under any of these plausible market definitions.
6.      COMPETITIVE ASSESSMENT
     6.1. Horizontal overlap: FVL services
(26)    The Parties did not identify in their notification any affected markets when the
        relevant geographic market is considered to be the EEA. 38 BAL has only marginal
        activity outside of Spain and is not competing with GEFCO España. It is therefore
        appropriate to examine the effects of the Operation in Spain, the narrowest geographic
        market in which the Parties overlap.39
(27)    Considering that BAL provides only marginal cross-border FVL transport services and
        does not compete with GEFCO España, the Operation does not give rise to
        competition concerns also on a separate market for cross-border FVL transport.
(28)    The Operation will create affected markets in Spain. The table below presents the
        Parties' estimates of their individual and combined market shares in the affected
        segments of the market for FVL services. Since it is left open whether cross-border
        transport should be considered as a separate (and not affected) market, the table
        presents market shares under the two possibilities. A segment for transport by rail and
        road excluding sea is considered separately because sea transport is not used for
        internal FVL transport in mainland Spain.40
36 See most recently M.8309 Volvo / Car Corporation / First Rent a Car, paragraphs 15-18 and 22-26 and the
   references there.
37 Form CO, paragraph 295.
38 See also the Parties' submission of 29 November 2018, Annex 2.
39 BAL's cross-border activity in the EEA in 2017 was limited to the transportation of approximately […];
   Form CO, paragraph 304.
40 Within Spain vehicles are transported by sea to the Spanish Islands, Ceuta and Melilla; Parties' submission
   of 31 October 2018, response to question 6.
                                                         6
 ---pagebreak---  ---pagebreak---        services.44 The large majority of respondents considered that one competitor, CAT
       group, will enjoy similar size as the JV45 and that several other credible competitors
       will remain in the market such as Tradisa, Setram, Metratir and Grupo Sesé. 46 Other
       smaller competitors will also remain in the market.47 The majority of respondents also
       considered that it would be relatively easy for a new FVL services provider to enter
       the Spanish market providing examples of several recent new entrants.48
       A small number of customers, large car manufacturers, account for significant
       proportion of the Parties’ activities. […]% of the turnover of GEFCO España is
       generated from services provided to [customer],49 […].50 The top three customers of
       BAL account to […]% of its turnover.51 These figures suggest that the Parties’
       customers enjoy buyer power as they could threaten to switch volume to one of the
       several remaining competitors.
(33)   The large majority of respondents to the market investigation, customers or
       competitors, were either neutral or even positive with respect to the Operation.52 This
       may also be due to the fact that FVL services represent only a small share of the total
       cost of a vehicle (1-5%).53 Among customers, some consider the Operation serving
       their interest as it will create an additional large operator in the market with capacities
       that will allow it to offer the scope of services they require.54 One competitor opined
       that the Operation may create opportunities for competitors to grow since customers
       prefer working with several FVL companies in parallel and will look for alternatives
       to the JV.55
(34)   In conclusion, the horizontal overlap in the Parties' FVL services is unlikely to give
       rise to competition concerns.
     6.2. Vertical overlap: FVL services and distribution of cars
(35)   The Bergé group is active in the wholesale and retail distribution of cars in Spain. In
       the wholesale segment the Bergé group imports and distributes several brands with
       reduced presence in Spain.56 In the retail segment it is active through its 29 dealerships
44 Questionnaire to competitors, responses to question 23; questionnaire to customers, responses to question
   22.
45 According to the Parties’ estimates, the CAT group will have market shares between [20-30] % and [30-
   40]% in the different transport segments; Form CO, paragraphs 319-325.
46 Responses to the Commission’s follow-up questions of 20 November 2018.
47 Form CO, paragraphs 312-315.
48 Questionnaire to competitors, responses to question 25; questionnaire to customers, responses to question
   24; Agreed non-confidential minutes of call of 14 November 2018 with Grupo Sesé, point 6; Form CO,
   paragraph 349.
49 Form CO, paragraph 349.
50 Form CO, paragraph 71.
51 Parties’ submission of 31 October 2018, response to question 3.
52 Questionnaire to competitors, responses to question 29; questionnaire to customers, responses to question
   28.
53 Questionnaire to competitors, responses to question 11; questionnaire to customers, responses to question
   10.
54 Agreed non-confidential minutes of call of 13 November 2018 with Volkswagen (Spain), point 8.
55 Agreed non-confidential minutes of call of 14 November 2018 with Grupo Sesé, point 8.
56 Form CO, paragraph 287.
                                                         8
 ---pagebreak---         in Spain.57 The Parties estimate that the market share of the Bergé group is not more
        than [0-5]% on any plausible market and segment in Spain.58
(36)    The Operation creates a vertical link between the car distribution activities of the
        Bergé group and the Parties' FVL services. Affected markets are created only when the
        segments for road transport (including or excluding cross-border transport) are
        considered where according to the Parties' estimates their joint market shares exceed
        30%.59
(37)    In light of its small presence in the markets for car distribution in Spain, the Bergé
        group represents a very limited share of demand for FVL services in Spain and
        therefore will not be able to engage in effective customer foreclosure.
(38)    By the same token, the JV is unlikely to engage in effective input foreclosure because
        the limited demand for FVL services of the Bergé group will not be able to replace the
        foreclosed customer volumes. In addition, GEFCO España is not active in car
        distribution and therefore does not have an incentive to engage in input foreclosure.
(39)    The ability of the JV to engage in input foreclosure in the road transport segments is
        limited by the existence of other strong competitors and competition from other modes
        of transport.60 It is further limited because FVL services do not represent a significant
        factor in the total cost of vehicles (1-5%).61
(40)    In conclusion, the vertical link between the car distribution activities of the Bergé
        group and the Parties' FVL services is unlikely to give rise to competition concerns.
7.      CONCLUSION
(41)    For the above reasons, the European Commission has decided not to oppose the
        notified operation and to declare it compatible with the internal market and with the
        EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the
        Merger Regulation and Article 57 of the EEA Agreement.
                                                             For the Commission
                                                             (Signed)
                                                             Margrethe VESTAGER
                                                             Member of the Commission
57 Form CO, paragraph 288.
58 Form CO, paragraph 294.
59 See table in paragraph (28) above.
60 See paragraph (32) above.
61 See paragraph 0 above and recital 34 of the Guidelines on the assessment of non-horizontal merger under
   the Council Regulation on the control of concentration between undertakings, OJ C 265, 18 October 2008,
   p.6.
                                                         9