CELEX: 31996M0727
Language: en
Date: 1996-08-07 00:00:00
Title: COMMISSION DECISION of 07/08/1996 declaring a concentration to be compatible with the common market (Case No IV/M.727 - BP / Mobil) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31996M0727

COMMISSION DECISION of 07/08/1996 declaring a concentration to be compatible with the common market (Case No IV/M.727 - BP / Mobil) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 381 , 17/12/1996 P. 0008

 COMMISSION DECISION of 07/08/1996 declaring a concentration to be  compatible with the common market (Case No IV/M.727 - BP / Mobil)  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 parties <ind> Subject:<ind> Case IV/M.727  BP/Mobil <ind><ind> Your notification of 5 July 1996 pursuant to Article 4 of  Council Regulation No. 4064/89 <ind> I<ind> INTRODUCTION 1.<ind> On 5 July 1996, the Commission received a notification from BP and  Mobil concerning the establishment of a joint venture which will combine  their European operations in the refining and marketing of fuels and  lubricants.   2.<ind> After examination of the notification, the Commission has  concluded that the notified operation falls within the scope of  application of Council Regulation 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. <ind> II<ind> THE PARTIES 3.<ind> BP is a multinational oil exploration, petroleum and petrochemical  group.  BP has three core businesses: BP Exploration (oil and gas  exploration and production), BP Oil (refining, marketing, supply and  transportation) and BP Chemicals (manufacturing and marketing of  petrochemicals and related products). 4.<ind> Mobil is a multinational oil, natural gas and chemical group.   Mobil has three core businesses: Exploration and Production (oil and gas  exploration and production),  Marketing and Refining (refining, marketing,  supply and transportation) and Chemical and Other Businesses  (manufacturing and marketing of petrochemicals, speciality products and  plastic packaging films). 5.<ind> BP is essentially contributing the BP Oil activities in Europe to  the joint venture.  Mobil will contribute its Marketing and Refining  activities in Europe. <ind> III<ind> THE OPERATION 6.<ind> The business of the joint venture will include the operation of  refineries, the acquisition of crude oil and further feedstocks for those  refineries, the further refining and conversion of downstream products  (e.g. lubricants), and the downstream supply, sale and marketing of  refined fuels and lubricants products including both retail sales through  service stations and sales to industrial and commercial customers.  The  geographic scope of the joint venture will be Western and Eastern Europe  (including Western Russia) plus Cyprus and Turkey.  The joint venture  excludes the parent companies' activities in international trading,  aviation, marine and shipping as well as their operations in exploration  and production, gas marketing and chemicals.  These will remain separate  from the joint venture under the control of the parents individually. 7.<ind> The two parent companies will combine their fuels and lubricants  businesses throughout Europe by means of partnerships (or their local  equivalent) in each national jurisdiction.  There will be two separate  national partnerships for the parties combined fuels businesses and  lubricants businesses.  The partnership agreements in each jurisdiction  will as far as possible be identical and based on the Pro Forma  partnership agreements.  The equity stakes in the partnerships will be  different for fuels and lubricants.  For fuels, BP will hold 70% and Mobil  30% whilst for lubricants Mobil will hold 51% and BP 49%.  Profits and  losses in each partnership will be shared in proportion to these  shareholdings.  The fuels business as a whole will be operated by BP as  Fuels Operator whilst the lubricants business as a whole will be operated  by Mobil as Lubricants Operator.  Both operators will be under the control  of the Supervisory Committee.  In each jurisdiction, the FuelsPartnership  will be operated by a BP affiliate and the Lubricants Partnership by a  Mobil affiliate.  There will be a substantial degree of integration  between the fuels and lubricants activities. 8.<ind> The joint venture will come about through a series of agreements.   These include a Framework Agreement, the Joint Venture Agreement and Pro  Forma agreements for the establishment of national partnerships.  <ind> IV<ind> JURISDICTION <ind> Joint control 9.<ind> The Joint Venture Agreement provides for the establishment of the  Supervisory Committee and the definition of reserved matters which require  unanimity between BP and Mobil.  The strategic policy of the joint venture  is governed by the Supervisory Committee on an individual country and  European wide basis.  BP and Mobil have equal voting rights on the  committee.  The Supervisory Committee will take decisions in the following  areas: business plans, major acquisitions, closures, disposals and  investments and certain other strategic decisions.  The other strategic  decisions include [Deleted business secret.].  The Strategic Business Plan  will be presented to the committee [...] and will cover [...].  In  addition, the committee will set financial control parameters which will  help to determine the Annual Operating Business Plan.  Major acquisitions  [...] will also be subject to the control of the Supervisory Committee.   10.<ind> The Fuels and Lubricants partnerships will be subject to the  control of the Supervisory Committee.  The partnership agreements will set  out the powers and duties of the relevant fuels or lubricants operator and  will allow that operator to have responsibility for the operational  management of the business subject to the powers of the Supervisory  Committee. 11.<ind> In the light of the above information, the joint venture is  jointly controlled by BP and Mobil. <ind> Full function joint venture operating on a lasting basis 12.<ind> The joint venture is established for an indefinite period [...].   The formation of the joint venture will lead to an integration of the two  companies' activities through the formation of the joint venture, the  national partnerships and the transfer of BP's lubricant activities to  Mobil as Lubricants Operator and Mobil's fuel activities to BP as Fuels  Operator.  Employees will also transfer from one company to the other  where appropriate eg BP lubricants employees will transfer to Mobil as  lubricants operator.  The joint venture will adopt a common brand image  and the retail outlets will be rebranded with this new brand image.   13.<ind> BP and Mobil will make all the relevant fuels and lubricants  assets available to the joint venture.  Fuels assets will be made  available to the Fuels partnership whilst lubricants assets will be made  available to the Lubricants partnership.  In certain jurisdictions, where  the partnerships may not constitute distinct legal entities, the assets  will be made available to the respective operator on behalf of the Fuels  or Lubricants Partnership, as the case may be.  The Fuels Operator will  have the indefinite and exclusive right to use and manage all the fuels  assets for the benefit of the joint venture subject to the Supervisory  Committee.  The Lubricants Operator enjoys a similar right.  Even though  the ownership of the assets is not transferred to the joint venture, this  does not prejudice the full function nature of the operation as the joint  venture will enjoy indefinite and exclusive use of those assets. 14.<ind> Certain activities will be excluded from the joint venture.  The  upstream activities of exploration and production will be carried on  separately by the parties.  In addition, international trading, basic  research and development, aviation fuels and lubricants, marine fuels and  lubricants and shipping will be kept out of the joint venture.  15.<ind> Exploration and production activities are excluded from the scope  of the joint venture.  There is relatively little vertical integration  between the two companies' exploration and production activities and their  downstream activities.  This is indicated by the fact that for example BP  currently purchases about [less than 25%.] of its crude oil requirements  from its own production activities. 16.<ind> The joint venture will take its own decisions on the purchase and  sale of crude oil inputs and refinery outputs but will instruct BP's oil  trading division (which will in effect act as asubcontractor) to carry out  the trading activities for the crude oil inputs to the joint venture's  refineries and those fuels and lubricants surplus to the joint venture's  own requirements.  A similar arrangement will apply with Mobil in respect  of lubricants.  Both trading divisions will remain outside the joint  venture. 17.<ind> The central research and development activities of BP and Mobil  have not been included in the joint venture.  The joint venture will be  able to contract with BP and Mobil's own R&D centres or third parties to  carry out the R&D requirements which those centres can provide.  However,  the joint venture will have the ability to carry out resource and  technical support facilities, for example to carry out product quality  assurance or to provide technical assistance to customers.  The parties  argue that it is these technical support activities that drive R&D  activity in the industry.  In addition, they argue that much of the R&D  activity is not carried out by the oil companies but by other companies.   This non oil company R&D includes the design and build of refineries and  other oil production plants and the formulation of additives by additive  suppliers.  Other R&D is carried out by universities and other third party  companies.  18.<ind> The parties are retaining their aviation fuels, marine fuels and  lubricants and (in the case of Mobil only) their aviation lubricants  businesses outside the joint venture.  This is because of their  international nature where companies demand worldwide deliveries.  These  activities are not essential to the operation of a joint venture in this  sector, though they will take output from the parties' refineries and  lubricants blending plants. [...] 19.<ind> The parties have also stated that they have a large number of  existing joint ventures which each party has with third parties for  various purposes eg oil refineries or pipelines.  These joint ventures do  not raise competition issues as they are of a very limited technical  nature.  [...], as these existing joint ventures in total account for  [...] of the joint venture's expected turnover, the joint venture would  still be able to operate on the market with the parent companies making  the facilities available to the joint venture [...]. 20.<ind> In the light of the above information, the operation will be a  full function joint venture operating on a lasting basis. <ind> Coordination of competitive behaviour 21.<ind> The excluded businesses set out above do not threaten to cause  coordination of competitive behaviour.  Even though the two parent  companies will be present on the markets for aviation fuels, marine fuels  and lubricants, exploration and production, shipping and petrochemicals  these markets are distinct from those of the joint venture.  These  businesses will remain independent. 22.<ind> In the case of the business which is upstream from the joint  venture: namely exploration and production, the joint venture will not be  the principal customer of the parent companies (as mentioned in paragraph  15 above).  For the downstream businesses, the petrochemicals activities  of the parent companies currently source a minority of the requirements  from their own refineries.  In addition, the value added in petrochemicals  businesses in general is significant.  The parent companies will source  substantial quantities of the requirements for aviation fuels and marine  fuels and lubricants from the joint venture.  Some value is added in  delivering the product to the customer eg for aviation fuels, the quality  requirements of the customer are high and therefore the quality control  mechanisms for the delivery of the product from the refinery (where it  will be purchased by the joint venture) and the point of delivery need to  be stringent.  However, the market shares of the parties in Europe at  present are comparatively low, and the market for these products is likely  to be wider given that customers often demand supplies on a worldwide  basis.  Therefore, there is no likelihood of competition distorting  effects resulting from the possible coordination of these independent  businesses through the creation of the joint venture. 23.<ind> Mobil has a 28% stake in Aral, the fuels retailing and  wholesaling company principally active in Germany.  The other shareholders  are Veba (55%), Wintershall (15%) and a number of benzene producers with  2% between them.  [...].  Mobil has a right and is obliged under the terms  of the Aral agreement to supply Aral with [between 25 and 35%. ] of Aral's  requirements for petrol and diesel for retail sale in Germany.  [...].   Mobil has rights to certain strategic information and to participate in  meetings of theAral shareholders, supervisory board, advisory board and  other subcommittees of these committees.  It does not participate in the  daytoday management of Aral.  Mobil's stake in Aral will not be  contributed to the joint venture, but will be retained by a Mobil  subsidiary in Germany.   Mobil will continue to fulfil its supply  obligations but will receive all its supplies of fuels for Aral from the  joint venture and will contribute its revenues from Aral to the joint  venture. 24.<ind> Mobil is not present on the retail fuel market in Germany.  For  certain other products in Germany, and the operations Aral has in other  countries, Mobil is a competitor of Aral (retail motor fuel in Austria,  and some nonretail products in Germany, Luxembourg, Belgium and Austria).   BP is currently a competitor of Aral in Germany. 25.<ind> As far as its continuing shareholding in Aral is concerned,  Mobil's entry into the joint venture does not give rise to a likelihood of  coordination of competitive behaviour between itself and BP.  This is  because as a result of the operation, all BP's activities in competition  with Aral in the territory of the joint venture will be conducted through  the joint venture. Similarly, Mobil's activities where it currently  competes with Aral will also be contributed to the joint venture.  In  addition, following the formation of the joint venture, the parent  companies have no incentive to reenter its markets.  Third parties have  expressed some concerns about possible conflicts of interest which could  arise as a result of Mobil's continuing shareholding in Aral and its entry  into the joint venture which will compete with Aral in some markets.   Whilst these concerns do not raise any issues of dominance, they might  raise questions of restrictions of competition which could be addressed  under Article 85.  26.<ind> In the light of the above information, the joint venture does not  give rise to the likelihood of coordination of the competitive behaviour  of undertakings which remain independent. <ind> V<ind> COMMUNITY DIMENSION 27.<ind> The world wide turnover for BP for 1995 was 50 billion ECU of  which 38 billion ECU was generated in the Community.  For 1994, the  worldwide turnover of Mobil was 50 billion ECU of which 8 billion was  generated in the Community.  Neither BP nor Mobil generates more than  twothirds of its turnover in one member state.  Accordingly, the operation  has a Community dimension. <ind> VI<ind> COMPETITIVE ASSESSMENT <ind> Product market 28.<ind> The concentration covers a large number of product markets at a  number of levels from the refining of crude oil downstream.  The following  activities can be identified: at the refining level, the refining of fuels  and exrefinery sales.  Immediately downstream of refining is the  manufacture and sales of base oils, the manufacture and sale of process  oils and the manufacture and sale of slack wax (the latter products being  byproducts of various refining processes).  At the distribution level  downstream of refining, the operation covers the retail sales of fuels  (petrol (ie gasoline), diesel and LPG); the nonretail sales of fuels  (which is further subdivided into sales of diesel, fuel oil, LPG, gas oil)  and the sale of bitumen.  Also downstream of refining are the manufacture  and sale of automotive lubricants and industrial lubricants.   29.<ind> At the refining and lubricant blending level, there is a  considerable degree of supply side substitutability.  Refineries can be  run to produce different outputs of different types of fuels, base oils or  other products.  A refinery will not be able to change its product mix  completely, but there are considerable flexibilities in its operation  based on the input quality of crude oil and the way in which the refinery  is configured.  The actual output of the refinery will also react to the  demand for different products and the market price for those products.   Lubricant manufacture also has considerable supply side substitutability.   In blending plants, base oils can be blended with different additives to  manufacture different types of lubricants.  Switching between different  types of industrial or different types of automotive lubricants is a  relatively simple operation.  It is also possible to switch between  industrial and automotive lubricant production using the same equipment,  though it generally takes longer to clean out the system to ensure that  there is no contamination between products.   30.<ind> On the demand side, there is much less substitutability.  Both  fuels and lubricants are manufactured for specific uses and arenot  substitutable for the vast majority of applications.  However,  distribution of these products may well occur together so that different  products are always available at the same point of sale.  For example,  service stations will generally always sell petrol, diesel and sometimes  LPG as they will seek to serve the maximum number of automotive customers  and so the market shares for each type of fuel will roughly coincide with  the aggregate market share.  Accordingly, market data does not normally  distinguish between different types of fuels.  The aggregation of retail  fuels into one category is supported by responses from third parties.   31.<ind> The nonretail sale of fuels is not similarly aggregated.  The  different fuels are supplied for different uses to different types of  customer.  The distribution channels can also differ significantly, the  provision of fuel oil to a power generation plant will differ from the  supply of LPG for domestic heating purposes.  The investment required for  these distribution channels will be different from that of retail fuels.   For the two fuels which are sold in significant quantities in both retail  and nonretail markets, namely diesel and LPG, the uses of the fuel depend  on the distribution channel.  Retail diesel is purchased by users of  diesel powered cars and other vehicles where the owner does not possess  their own supply of diesel.  Nonretail diesel is typically supplied to  large scale transport companies with a substantial fleet of vehicles and  their own storage facilities.  Similarly, LPG will be supplied to vehicles  through retail sites and to households for heating purposes though  nonretail channels.  Bitumen is distinct from nonretail fuels as it has a  specific set of uses eg road construction and a small number of customers  (a small number of independent resellers) which clearly differentiates it  from other nonretail fuels. 32.<ind> On the demand side, there is little substitutability between  different types of lubricants, especially industrial lubricants.   Automotive customers are more influenced by factors such as the location  of sale, brand strength and the price/quality relationship.  Industrial  customers are more likely to be influenced by the technological  specification, the availability of the product and price (rather than  brand).  Automotive lubricants cannot sensibly be further divided as the  range of products is fairly limited.  Industrial lubricants have different  customers for different types of lubricant, but this is not sufficient for  the market to be further subdivided.  Some industrial customers demand the  full range of lubricants for their operations from their lubricants  supplier, rather than sourcing individual lubricants from different  suppliers.  This range effect, combined with the very strong supply side  substitutability would seem to indicate a single market for industrial  lubricants despite the specific products which are produced for different  uses. 33.<ind> In this case the product markets do not have to be defined  precisely as on the basis of the markets defined above, the operation does  not create or strengthen a dominant position on any market. <ind> Geographic market 34.<ind> On the basis of the information collected by the Commission, the  relevant geographical market for exrefinery sales appears to be EU or  Western European wide.  Refined products are traded exrefinery in Western  Europe at competitive prices which are freely available.  The relatively  small price differences in product prices between different regions in  Europe are mainly due to the cost of shipping.  Similarly, the relevant  geographical scope for base oils manufacture and sale is the EU or Western  Europe. There is significant crossborder trade of base oils in Europe and  there are no tariff barriers or substantial cost discouragements  preventing crossborder trade. The geographic markets for slack wax and  process oils are national/EUwide.  Though traditionally, these products  have been traded near to refineries, trade now takes place on a European  wide basis or for export outside Europe. 35.<ind> Pricing policies of retail fuels are often set on a national  level while prices are set at a regional or even on a local level.  For  certain member states, the petrol station network is not spread evenly  across all the regions.  However, the regional market shares for the  parties in these member states generally correspond quite well with their  national market share.  Therefore, for these markets there is in this case  no reason to define whether the market is regional or national.  The only  exception is the UK, where theparties have a market share (based on  outlets of [between 20 and 30%.]) which is significantly higher than their  national market share.  However, this does not raise a competition problem  and in any case, only BP is present in Scotland and the operation will not  therefore lead to an addition of market shares.  Therefore, even for the  UK, the question of whether the markets are regional or national can be  left open.  In some countries prices are set at a national level and tend  therefore to be uniform throughout the country. In other countries, the  government sets the maximum prices on a national basis. Moreover, in those  countries with well developed network of hypermarket/supermarket outlets  prices tend to be set on a national level which has the effect of widening  the geographical scope of the relevant market for retail fuels. Retail  fuel brands are often Europeanwide which has the effect of further  widening the market. 36.<ind> The parties argue that the relevant geographic market for the  nonretail fuel products (diesel, fuel oil, gas oil and LPG) is at least  national. This is because, even if the products are distributed on a  subnational level, there is price transparency, overlapping supply  boundaries, exchange and supply agreements between suppliers and some  purchasers who buy on a national basis.  This has been confirmed by the  Commission's investigation, and some third parties argue that the market  definition is wider than national.  On the basis of the information  received by the Commission, the market for bitumen is national. 37.<ind> The parties argue that the relevant geographic markets for  automotive and industrial lubricants are at least national and probably as  wide as the EU (or Western Europe). The Commission's investigation has  indicated that the relevant geographical scope for both products is at  least national and likely EUwide. Several customers are international and  may prefer to deal with one supplier only on the basis of supply in  several countries. In the last couple of years, tenders by major vehicle  manufacturers have increasingly been made on a Europeanwide basis.  Furthermore, lubricants are specified according to international  standards.  Likewise, for several industrial lubricants, since the  machinery in which they are used is similar or identical across  boundaries, the relevant market may be wider than national.   38.<ind> For all the above markets, their geographical scope can be left  open since on the basis of the above market definitions the concentration  will not create or strengthen a dominant position which will significantly  impede competition. <ind> Assessment 39.<ind> In all the markets covered by the operation, there are a number  of common factors.  The joint venture will compete against the other large  transnational oil companies who are present across Europe in the same way  as the joint venture.  In addition, the parties will often face  competition at a national level from a strong national player which  operates wholly or primarily in that national territory.  Finally, there  are specialist companies who operate in one or a few market sectors such  as lubricant only manufacturers. 40.<ind> In addition to the above competitors, in retail motor fuels there  are also new entrants coming to the market in the form of supermarket and  hypermarket companies expanding their operations to include the sale of  retail fuels.  This is particularly prevalent in the UK and France and  increasingly so in Germany.  These new competitors have adopted aggressive  pricing strategies which the existing market players have had to match.   National market players are also moving across borders into other  countries and upstream producers are moving downstream into retail fuels. 41.<ind> The other common factor is the substantial overcapacity in the  downstream oil industry.  Refining capacity is in excess of supply, as is  base oil manufacturing capacity.  Environmental legislation creates a  barrier to exit which indicates that the overcapacity is likely to prove  difficult to reduce in the short term. Refineries may well be sold rather  than closed which will not reduce the overcapacity problem.  The number of  retail fuel outlets is falling across Europe and is expected to continue  to fall, despite the entry of the supermarkets into this sector. 42.<ind> The operation covers a large number of markets.  The Commission  has analyzed the markets covered by the operation, in the light of the  common factors indicated above, and investigated in detail those markets  where the market shares are high.  Market sharetables for these markets  are attached.  The markets concerned are: <ind> <ind>Retail motor fuels: <ind> <ind>Greece, Germany, Portugal,  Austria <ind> <ind> Non retail diesel:<ind> <ind> Germany, Greece, Portugal <ind> <ind> Non retail fuel oil:<ind> <ind> UK, Netherlands <ind> <ind> Non retail gas oil:<ind> <ind> Greece, Portugal, Germany <ind> <ind> Non retail LPG:<ind> <ind> Greece, Portugal <ind> <ind> Automotive lubricants:<ind> <tab> Austria, Greece, Sweden <ind> <ind>Industrial lubricants:<ind> <ind>Austria, Greece, Sweden <ind> <ind>Slack wax:<ind> <ind><ind> EU. 43.<ind> Most of the tables use data provided by the parties based on the  1993 Wood Mackenzie report on the downstream oil market which was  published in 1995.  This has been updated where possible to take account  of the information received in the course of the Commission's  investigation.  Where figures from 1995 are shown, these are figures  supplied by the parties and updated to take account of further information  received during the investigation. 44.<ind> According to the parties, in Europe (the OECD countries), the  joint venture will have an overall market share for retail motor fuels of  about 10% which will put it in third place behind Exxon and Shell.   The  combined market share in Greece for retail motor fuels is particularly  high.  The joint venture will face significant competition from the  national players present on the Greek market, in particular EKO, as well  as from Shell and Texaco who are also present.  These companies will  prevent the joint venture from enjoying a dominant position in retail  motor fuels.  The same arguments apply for the high nonretail diesel  market share also in Greece.   45.<ind> For lubricants, overall the joint venture will have approximately  18% of the total market in Europe.  The joint venture will have  particularly high market shares in Austria for industrial lubricants and  Greece for both automotive and industrial lubricants.  In Austria, it is  very unlikely that the joint venture will be able to create a dominant  position.  As stated above, there is considerable overcapacity in base  oils (for the development of lubricants) which facilitates market entry  for lubricant blenders if the joint venture attempts to exercise market  power.  At present at least 30% of the domestic demand for automotive  lubricants in Austria is met by imports.  The corresponding figure for  industrial lubricants is even higher, in the region of 6065%. This  indicates that new entrants could supply customers in Austria which would  prevent the joint venture from exercising market power.    Similar  considerations apply in Greece, where the joint venture enjoys a high  market share for both automotive and industrial lubricants, though the  possibility for imports to act as a competitive constraint on the joint  venture is somewhat lower.  However, new Greek entrants can enter the  market and there are in any case strong competitors already on the market.   For slack wax, which is a byproduct of the base oil manufacturing process,  the parties have a market share of approximately [between 15 and 25%.] in  the EU.  However, competition exists from each base oil manufacturer and,  independent slack wax suppliers who are not base oil manufacturers.  The  parties' market share, therefore, do not lead to any concerns on this  market. 46.<ind> The Commission has also examined the issue as to whether the  Mobil stake in Aral should lead to the combination of the market shares of  the joint venture and Aral.  The principal area of operation is Germany,  where the combined market share for retail motor fuels would be about  [less than 30%.] and for nonretail diesel [less than 30%.].  For some  products Veba is also present on the market as well as the joint venture  and Aral and therefore its market share should also be taken into  consideration.  If all of the market shares were combined, this would give  rise to a market share of [ between 40 and 50%.] for nonretail diesel and  [between 25 and 35%.] for gas oil.  Even if the market shares were to be  aggregated, these market shares would not give rise to the creation of a  dominant position.  It would be simple for other companies to produce more  diesel and compete with the joint venture, Aral and Veba on the nonretail  diesel and gas oil markets.  Barriers to entry for the distribution of  nonretail diesel do not appear to be high, so the entry of new competitors  will be possible.   47.<ind> There are no vertical effects as a result of the mergerwhich give  rise to serious doubts about the creation or strengthening of a dominant  position.  Both companies are already vertically integrated in that they  are represented at a number of levels in downstream oil markets.   Substantial trading takes place between the different levels, such as for  the purchase of crude oils for refineries and the sales of exrefinery  fuels, base oils and other products.  Nevertheless, the establishment of  this joint venture does not change this situation so as to give rise to  serious doubts.   48.ind> It follows from the above that the proposed concentration will not  create or strengthen a dominant position as a result of which competition  would be significantly impeded in the common market or in a substantial  part of it. <ind> VII<ind> ANCILLARY RESTRAINTS 49.<ind> The notifying parties have requested that a number of restraints  be declared ancillary to the concentration. 50.<ind> Clause 8 of the Framework Agreement provides that between the  signature of that agreement and the signature of the joint venture  agreement neither party will act outside the normal course of business in  respect of the businesses to be contributed to the joint venture.  This  provision ensures that no material changes can be made unilaterally to the  businesses of either party before the signature of the joint venture  agreement. 51.<ind> Clause 21 of the Joint Venture Agreement provides that each of BP  and Mobil will not for the duration of the joint venture directly or  indirectly carry on or be concerned or interested within the territory any  business which is similar to or is likely to be in competition with any  part of the joint venture's business.  This clause includes the sale of  finished products for export and subsequent reimport into the territory in  competition with any partnership.  Clause 15 of each of the proforma fuels  and lubricants partnership agreements mirror this general noncompete  clause. 52.<ind> These clauses can be considered to be directly related and  necessary to the concentration.  The clause in the Framework Agreement is  a clause which protects the parties in the limited period before the joint  venture agreement is signed.  The noncompete clauses reflect the reality  of the withdrawal of the parents from the market of the joint venture.   All these clauses can be considered as ancillary to the concentration. <ind> VIII<tab> LINKS BETWEEN MOBIL AND ARAL 53.<ind> Even though Mobil's shareholding in Aral does not lead to the  coordination of competitive behaviour between BP and Mobil, the supply  arrangements and the information flows from Aral to Mobil following the  entry of Mobil into the joint venture may raise issues under Article 85 of  the EC Treaty.  Therefore, this decision does not cover the supply  arrangement between the joint venture, Mobil and Aral nor the information  flows between Aral and Mobil. <ind> IX   CONCLUSION 54.<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, Market Shares in Retail Motor Fuel (1993) Country <tab> BPMobilSumOthers Austria <tab> [515%]*[515%]*[1525%]*OMV: 22%  Shell: 15.9% Exxon: 7.8% Agip : 7.4%  Aral: 7.1% Germany <tab> [515%]*[515%]*Aral : 20.5%  Shell: 13.1% Exxon: 12%  DEA: 8% ELF: 6% Greece <tab> [1525%]*[1525%]*[3040%]*Shell: 17.5%  EKO: 13.8% Texaco: 8.3% Portugal <tab> [515%]*[1020%]*[1525%]*Petrogal: 50.6%  Shell: 16.8% Exxon: 1.3% ELF: 1.2% Market shares in Nonretail Diesel (1993) Country <tab> BPMobilSumOthers Germany <tab> [515%]*[515%]*[1020%]*DEA: ca 13%  Shell: 12.4% Exxon: 14.4%  Aral: 11.5% Greece <tab> [1525%]*[1020%]*[3040%]*EKO: 15.7%  Shell: 16.5% Texaco: 7.9% Portugal <tab> [010%]*[515%]*[1020%]*Petrogal: 49%  Shell: 17.2% Exxon: 0.6% * <tab> Deleted business secret:  approximate ranges indicated. Market shares in Nonretail Fuel Oil (1993) Country <tab> BPMobilSumOthers The Netherlands <tab> [1020%]*[010%]*[1525%]*De Humber BV: ca 20% Shell:  15.7% United Kingdom <tab> [1525%]*[010%]*[2030%]*Shell: 21%  Exxon: 10% Charringtons Ltd: ca 6% British Fuels Ltd: ca 6% UK Petroleum Products Limited: ca 5% Fina: 5%  Texaco: 3% Market Shares in Nonretail Gas Oil (1993) Country <tab> BPMobilSumOthers Germany <tab> [010%]*[010%]*[1020%]*Shell: 12.2%  DEA: 11.3% Exxon: 11% Greece <tab> [1020%]*[010%]*[1525%]*Shell: 12%  EKO: 10% Texaco: 7% Portugal <tab> [010%]*[1020%]*[1525%]*Petrogal: ca 70% Shell: 12.4% Market Shares in Nonretail LPG (1993) Country <tab> BPMobilSumOthers Greece <tab> [1020%]*[010%]*[2030%]*Petrogas: 37%  Shell: 21.2% Petrolina: ca 10% EKO: 8.5% Portugal <tab> [1020%]*[1020%]*[253520%]*Petrogal: 47% Shell: 13.7% Exxon: 7.4%  * <tab> Deleted business secret:  approximate ranges indicated. Market Shares in Automotive lubricants(1995) Country <tab> BPMobilSumOthers Austria <tab> [515%]*[1020%]*[2535%]*Shell: 17.5% Greece <tab> [1525%]*[1020%]*[3040%]*Shell: 16%  EKO: 6.85% Sweden <tab> [515%]*[515%]*[2030%]*Q8: 10.05% Market Shares in Industrial lubricants(1995) Country <tab> BPMobilSumOthers Austria <tab> [1525%]*[2030%]*[4050%]*Shell: 22.7% Greece <tab> [1020%]*[1525%]*[3040%]*Shell: 23.9%  EKO: 8% Sweden <tab> [010%]*[1525%]*[2030%]*Q8: 6.26% Market Shares in Slack Wax (1995) Area <tab> BPMobilSumOthers EU <tab> [1020%]* <tab> [010%]*[1525%]* * <tab> Deleted business secret:  approximate ranges indicated.