CELEX: 32021M10326
Language: en
Date: 2021-08-06 00:00:00
Title: Commission Decision of 06/08/2021 declaring a concentration to be compatible with the common market (Case No COMP/M.10326 - ALLIANZ HOLDING / SANTANDER / AVIVA COMPANIES / SANTANDER AVIVA COMPANIES) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                               Brussels, 6.8.2021
                                                               C(2021) 5960 final
                                                                                 PUBLIC VERSION
                                                                 In the published version of this decision,
                                                                 some information has been omitted
                                                                 pursuant to Article 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                                                                 information omitted has been replaced by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.
                                                               Allianz Holding eins GmbH
                                                               Hietzinger Kai 101-105
                                                               1130 Vienna
                                                               Austria
                                                               Santander Bank Polska S.A.
                                                               Al. Jana Pawła II 17
                                                               00-854 Warsaw
                                                               Poland
Subject:            Case M.10326 – Allianz Holding / Santander / Aviva Companies /
                     Santander Aviva Companies
                     Commission decision pursuant to Article 6(1)(b) of Council Regulation
                     No 139/2004 1 and Article 57 of the Agreement on the European Economic
                     Area 2
Dear Sir or Madam,
(1)       On 14 July 2021, the Commission received notification of a proposed concentration
          pursuant to Article 4 of Council Regulation (EC) No 139/2004 (“EUMR”), by which
          Allianz Holding eins GmbH (“Allianz”, Austria) will acquire sole control within the
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’).
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---         meaning of Article 3(1)(b) of the Merger Regulation over Aviva Towarzystwo
        Ubezpieczeń Na Życie S.A. (“Aviva Life”, Poland), Aviva Towarzystwo
        Ubezpieczeń Ogólnych S.A. (“Aviva GI”, Poland), and Aviva Investors Poland
        Towarzystwo Funduszy Inwestycyjnych S.A. (“Aviva Investors”, Poland) (together
        “the Aviva Companies”), as well as, together with Santander Bank Polska S.A.
        (“Santander”, Poland), joint control within the meaning of Articles 3(1)(b) and 3(4)
        of the Merger Regulation over Santander Aviva Towarzystwo Ubezpieczeń Na
        Życie S.A. (“Santander Aviva Life”, Poland) and Santander Aviva Towarzystwo
        Ubezpieczeń S.A. (“Santander Aviva GI”, Poland) (together “the Santander Aviva
        Companies”) (“the Transaction”). 3 The Aviva Companies and the Santander Aviva
        Companies are hereinafter together referred to as “the Target Companies”.
(2)     The Aviva Companies are currently solely controlled by Aviva Group Holdings Ltd
        (“Aviva”, UK), and the Santander Aviva Companies are jointly controlled by Aviva
        International Holdings Ltd (“Aviva International”) and Santander. Aviva and Aviva
        International are both part of the Aviva Group, controlled by Aviva plc of the UK.
        Post-Transaction, Allianz will obtain sole control over the Aviva Companies. In
        addition, Allianz will replace Aviva International as a jointly controlling shareholder
        of the Santander Aviva Companies, which will thus be jointly controlled by
        Santander and Allianz. Allianz and Santander are hereinafter together referred to as
        “the Notifying Parties”. Allianz, Santander and the Target Companies are hereinafter
        together referred to as “the Parties”.
1.      THE P ARTIES
(3)     Allianz is a holding company incorporated under the laws of Austria. Allianz is part
        of the Allianz Group (controlled by Allianz SE of Germany), which provides
        financial services mainly in the field of life and non-life insurance and asset
        management services in over 70 countries, in particular in Europe. The Allianz
        Group is inter alia active in Poland, where, through its subsidiaries, it conducts
        business activity in particular in life and non-life insurance, as well as in asset
        management and pensions.
(4)     Santander provides the full scope of banking services in Poland to personal
        customers, small and medium-sized companies and large corporations. Santander is
        part of Santander Group (controlled by Banco Santander, S.A of Spain), which is an
        international group of banking and financial companies.
(5)     The Aviva Companies are currently controlled by Aviva, which is part of the Aviva
        Group (controlled by Aviva plc of the UK), which is an international insurance
        group that is active in providing insurance, asset management and pensions. The
        Aviva Companies offer life and non-life insurance, asset management and pensions
        in Poland, as well as life insurance and pensions in Lithuania.
(6)     The Santander Aviva Companies are currently jointly controlled by Aviva
        International and Santander. The Santander Aviva Companies offer life and non-life
        insurance in Poland.
3   Publication in the Official Journal of the European Union No C 291, 21.7.2021, p. 5–6.
                                                          2
 ---pagebreak--- 2.      THE TRANSACTION
(7)     Pursuant to a Share Purchase Agreement, dated 26 March 2021, Allianz will acquire:
        (i) sole control over the Aviva Companies, which are currently under sole control of
        Aviva; and (ii) joint control over the Santander Aviva Companies by acquisition of
        direct stakes in each of these companies, which would cause Allianz to replace
        Aviva International as the jointly controlling shareholder (alongside Santander).
(8)     Allianz will purchase all of the issued shares in the capital of each of the Aviva
        Companies and will therefore acquire sole control over these companies and their
        subsidiaries.
(9)     With respect to the joint control over the Aviva Santander Companies, post-
        Transaction Allianz will hold a 51% share (formerly held by Aviva International),
        while Santander will retain a 49% share in each of these companies. Pursuant to the
        Shareholders Agreements 4, the supervisory boards of both Santander Aviva
        Companies (the “Boards”) will be composed of members appointed by Allianz and
        Santander 5, and each of the Notifying Parties will obtain veto rights over a number
        of Board Reserved Matters 6. The Board Reserved Matters include the approval and
        amendment of the annual budget, any increase or decrease by 5% in the operational
        expenses budget, and capital expenditures or investments in capital goods other than
        in the ordinary course of business and for a value exceeding […] in total in any
        financial year. […]. Therefore, the Notifying Parties will jointly control the
        Santander Aviva Companies.
(10)    The Santander Aviva Companies are existing companies, which started their
        operations in 2008, and have their own management responsible for day-to-day
        operations, employees and all other assets required to operate independently.
        [Confidential information relating to the activities of the Santander Aviva
        Companies]. [Confidential information relating to the activities of the Santander
        Aviva Companies]. Therefore, the Santander Aviva Companies constitute full-
        function joint ventures and will remain so post-Transaction.
(11)    The acquisition of sole control over the Aviva Companies and the acquisition of
        joint control over the Santander Aviva Companies are interrelated and
        interdependent transactions. Both elements of the Transaction were agreed in the
        same agreement and are interdependent (i.e. one transaction will not be carried out
        without the other) 7, and the change in the market structure is brought about by the
        whole Transaction together. The Transaction therefore constitutes a single
        concentration constituting the acquisition of control within the meaning of Article
        3(1)(b).
4   Shareholders agreements refer to two agreements between Santander and Allianz, annexed to the Share
    Purchase Agreement, that govern the two Santander Aviva Companies – “Shareholders Agreement – Life
    Company" that govern Santander Aviva Life and “Shareholders Agreement – Non-Life Company" that
    govern Santander Aviva GI.
5   [Confidential information relating to the control structure of the Santander Aviva Companies]
6   [Confidential information relating to the control structure of the Santander Aviva Companies]
7   See Clause 6.4 of the Share Purchase Agreement (Annex 5.1 (1) to the Form CO).
                                                            3
 ---pagebreak--- 3.       UNION DIMENSION
(12)     The undertakings concerned have a combined aggregate world-wide turnover of
         more than EUR 5 000 million (Allianz Group: EUR 142 508 million; Santander
         Group: EUR […]; the Target Companies: EUR […]). Each of them has an EU-wide
         turnover in excess of EUR 250 million (Allianz Group: EUR […]; Santander Group:
         EUR […]; the Target Companies: EUR […]). The Target Companies achieve more
         than two-thirds of their aggregate EU-wide turnover in Poland, but Allianz Group
         and Santander Group do not.
(13)     Therefore, the notified concentration has an EU dimension pursuant to Article 1(2)
         of the Merger Regulation.
4.       RELEVANT MARKETS
(14)     Both Allianz and the Target Companies are active in the provision and direct
         distribution of life and non-life insurance services, as well as in asset management
         and pensions in Poland. 8
(15)     The large majority of horizontal and vertical overlaps arising from the Transaction is
         non-affected and thus not discussed further in this Decision. 9 The Transaction only
         gives rise to horizontally affected markets in certain segments of the markets for life
         insurance and pensions in Poland. Specifically, in the following segments of life
         insurance: Class 3, Class 4 to individuals, Class 5 to individuals (see paragraph
         (21)), and in open pension funds in Poland (pension funds that operate in the second
         pillar of the Polish pension system, see paragraphs (32) to (34)).
(16)     The remainder of this Section therefore discusses market definitions in the life
         insurance and pension sectors.
4.1.     Life insurance
4.1.1. Product market definition
4.1.1.1. Previous Commission decisions
(17)     In its decisional practice, the Commission consistently identifies three categories of
         insurance services: life insurance; non-life insurance and reinsurance. 10
(18)     With respect to the provision of life insurance, the Commission has in addition
         considered that life insurance products could be distinguished based on further
         criteria.
8   The Aviva Companies also have some limited activities in life insurance and pensions in Lithuania, but
    these do not give rise to any affected markets and are thus not further discussed in this Decision.
9   The non-affected horizontal overlaps arise in the markets for non-life insurance, insurance distribution and
    asset management in Poland. In each of these overlaps, the combined market shares of the Parties does not
    exceed 20% under any plausible market definition. In addition, the vertical links between the Parties’
    activities in the provision of reinsurance, insurance, insurance distribution and asset management in
    Poland result in a small number of non-affected vertical markets.
10  See recently, Commission decision of 29 July 2020, Case M.9796 – Uniqa/Axa (Insurance, Asset
    Management and Pensions – Czechia, Poland and Slovakia), recital 7; Commission decision of 26
    September 2019, Case M.9432 – Allianz Holdings/Legal and General Insurance, recitals 7 ff.
                                                           4
 ---pagebreak--- (19)    First, the Commission has considered segmenting the life insurance market
        according to the purpose served by the product, distinguishing between: (i) pure risk
        protection products; (ii) pension products and (iii) savings and investment products
        (sometimes grouping the latter two). 11
(20)    Second, the Commission has previously considered whether the life-insurance
        market would appropriately be segmented between life insurance for individuals and
        life insurance for group/corporate customers. 12
(21)    Third, the Commission has considered distinguishing between life insurance
        products based on the type of risk covered. 13 When considering potential
        segmentation based on the type of risk covered, the Commission’s approach has
        varied from case to case, based on insurance classifications used by the regulatory
        framework applicable at national level. Specifically in relation to the insurance
        sector in Poland, the Commission has considered a possible segmentation of the life
        insurance market on the basis of the classification under the Polish Insurance Act
        (“PIA”). 14     Based on the PIA the following groups could be potentially
        distinguished:
        (a)      Class 1 - Life insurance;
        (b)      Class 2 - Dowry insurance, children provision;
        (c)      Class 3 - Life insurance, if connected with insurance capital fund;
        (d)      Class 4 - Pension insurance; and
        (e)      Class 5 - Accident and sickness insurance, if they supplement the above
                 insurance.
(22)    However, the Commission has recognised with regard to life insurance that from a
        supply side perspective, the conditions for insurance of different risk types are quite
        similar and most large insurance companies are active in several risk types and that
        this suggests that many different types of life insurance could be included in the
        same relevant product market. 15
11  See recently, Commission decision of 29 July 2020, Case M.9796 – Uniqa/Axa (Insurance, Asset
    Management and Pensions – Czechia, Poland and Slovakia), recital 8; Commission decision of 20 July
    2018, Case M.8837 - Blackstone/Thomson Reuters F&R Business, recital 29; Commission decision of 7
    April 2017, Case M.8257 - NN Group/Delta Lloyd, recital 12.
12  See recently, Commission decision of 29 July 2020, Case M.9796 – Uniqa/Axa (Insurance, Asset
    Management and Pensions – Czechia, Poland and Slovakia), recital 8; Commission decision of 20 July
    2018, Case M.8837 - Blackstone/Thomson Reuters F&R Business, recital 29; Commission decision of 7
    April 2017, Case M.8257 - NN Group/Delta Lloyd, recital 12.
13  See recently, Commission decision of 29 July 2020, Case M.9796 – Uniqa/Axa (Insurance, Asset
    Management and Pensions – Czechia, Poland and Slovakia), recital 8; Commission decision of 20 July
    2018, Case M.8837 - Blackstone/Thomson Reuters F&R Business, recital 29; Commission decision of 7
    April 2017, Case M.8257 - NN Group/Delta Lloyd, recital 12.
14  See Commission decision of 29 July 2020, Case M.9796 – Uniqa/Axa (Insurance, Asset Management and
    Pensions – Czechia, Poland and Slovakia), recital 9; Commission decision of 19 November 2012, Case
    M.6743 - Talanx International/Meiji Yasuda Life Insurance Company/Hdi Poland, recitals 22 ff.
15  See Commission decision of 3 October 2007, Case M.4844 – Fortis / ABN Amro Assets, recital 71;
    Commission decision of 28 August 2006, Case M.4284 – AXA / Winterthur, recitals 9 and 10.
                                                        5
 ---pagebreak--- (23)    The Commission ultimately left open the precise product market definition for life
        insurance products for all plausible segmentations mentioned above. 16
4.1.1.2. Notifying Parties’ view
(24)    The Notifying Parties note that none of the above segmentations of the market for
        life insurance reflects the competitive dynamics in the market, and that it would be
        more appropriate to define a broader market for life insurance. Nevertheless, the
        Notifying Parties provide data on all plausible market delineations and argue that the
        precise product market definition should be left open because the proposed
        Transaction does not give rise to competition concerns under any plausible market
        delineation. 17
4.1.1.3. Commission’s assessment
(25)    The Commission’s investigation did not provide any indications that it would be
        appropriate for the Commission to depart from its previous decisional practice of
        segmenting the market for life insurance along the above mentioned criteria.
(26)    In the present case, the question whether the market for life insurance should be
        further segmented on the basis of the purpose served by the product, customer type
        and/or different risks covered can be left open since the Transaction does not give
        rise to serious doubts as to its compatibility with the internal market or the
        functioning of the EEA agreement under any of these plausible market definitions.
4.1.2. Geographic market definition
4.1.2.1. Previous Commission decisions
(27)    In previous cases, the Commission considered the market for life insurance and its
        segments to be national, due to national distribution channels, established market
        structures, fiscal constraints and specific regulatory systems among Member States.
        However, the exact geographic market definition has been left open. 18
4.1.2.2. Notifying Parties’ view
(28)    The Notifying Parties do not contest that the relevant markets concerning life
        insurance services (including all potential delineations) are national in scope.
4.1.2.3. Commission’s assessment
(29)    The Commission’s investigation did not provide any indications that would require
        the Commission to depart from its previous decisional practice on the geographic
        scope of the markets for life insurance being national.
16  See recently, Commission decision of 29 July 2020, Case M.9796 – Uniqa/Axa (Insurance, Asset
    Management and Pensions – Czechia, Poland and Slovakia), recital 8; Commission decision of 20 July
    2018, Case M.8837 - Blackstone/Thomson Reuters F&R Business, recital 29; Commission decision of 7
    April 2017, Case M.8257 - NN Group/Delta Lloyd, recital 12.
17  Form CO, paragraph 93.
18  See Commission decision of 29 July 2020, Case M.9796 – Uniqa/Axa (Insurance, Asset Management and
    Pensions – Czechia, Poland and Slovakia), recital 10; Commission decision of 7 April 2017, Case M.8257
    - NN Group/Delta Lloyd, recital 13 and cases cited.
                                                          6
 ---pagebreak--- (30)     For the purposes of this decision, therefore, the Commission considers the
         geographic scope of the market for life insurance (and its possible sub-segments) to
         be national in scope.
4.2.     Pensions – Open pension funds
4.2.1. Product market definition
4.2.1.1. Previous Commission decisions
(31)     As noted by the Commission in a previous case, the Polish pension system has a
         relatively complex and unique structure. 19 Since 1999, it has had three pillars, each
         based on different types of pension. The first two pillars are based upon mandatory
         contributions from salaries. The first one is a mandatory pay-as-you-go scheme
         based on notional defined contribution accounts and run by the state-owned Social
         Insurance Institutions (“ZUS”), while the second constitutes mandatory individual
         accounts. The first two mandatory pillars are complemented by a third pillar that
         includes voluntary occupational pension plans.
(32)     The second pillar was initially run by open pension funds (“OFE”, Polish: otwarte
         fundusze emerytalne). These are independent legal entities created and managed by a
         joint stock company that needs to obtain a permission from the Insurance and
         Pension Funds Supervisory Commission.
(33)     However, the system was significantly reformed in 2013 and further changes are
         planned in the near future. Pursuant to the reform of the Polish pension system in
         2013, contributions of OFE participants (previously allocated to open pension funds
         only) were allocated towards ZUS, which manages the first pillar (unless the account
         holder decided to keep a part in the open pension fund). As a result, the market for
         OFEs decreased by nearly one half.
(34)     Additionally, in 2019, the government announced a plan to liquidate OFEs in its
         current form by transferring the remaining savings from OFEs either to ZUS or to
         personal voluntary schemes. The relevant draft bill has been passed by the Polish
         government to the Polish Parliament. Irrespective of whether the bill is eventually
         passed or not, OFEs are diminishing and ultimately all assets in OFEs will be
         liquidated. That is because according to the Polish Act of 13 October 1998 on Social
         Insurance System, OFEs are required to systematically transfer given participants’
         assets to ZUS, starting from 10 years before such person’s retirement. Every year,
         the contributions received by OFEs are much smaller than contributions transferred
         to ZUS. The Parties therefore forecast that OFEs will disappear altogether in 30 – 40
         years (or in the near future if the above-described bill is passed). 20
(35)     The Commission has previously concluded that the exact market definition of the
         Polish pensions’ system can be left open. In a previous case, the market investigation
         had indicated that obligatory pensions (pillars one and two) and voluntary pensions
19   See Commission decision of 5 February 2008, Case M.4950 – Aviva/Bank Zachodni, recital 21.
20   Form CO, paragraph 161.
                                                       7
 ---pagebreak---         (pillar three) form two separate product markets, but the Commission ultimately left
        the market definition open. 21
4.2.1.2. Notifying Parties’ view
(36)    The Parties indicate that the exact definition of the pensions market in Poland can be
        left open in this case as no competition concerns arise irrespective of the approach
        taken. 22
4.2.1.3. Commission’s assessment
(37)    The Commission’s investigation did not provide any indications that it would be
        appropriate for the Commission to depart from its previous decisional practice of
        segmenting the market for pensions in Poland into obligatory (pillars one and two)
        and voluntary pensions (pillar three).
(38)    In this case, the question whether the market for pensions should be further
        segmented can be left open since the Transaction does not give rise to serious doubts
        as to its compatibility with the internal market or the functioning of the EEA
        agreement under any of these plausible market definitions.
4.2.2. Geographic market definition
4.2.2.1. Previous Commission decisions
(39)    In its previous case law, the Commission considered that that the market for pension
        products for Poland is national in scope, but left the final market definition open. 23
4.2.2.2. Notifying Parties’ view
(40)    The Parties submit that for the purposes of this Transaction, the relevant market for
        pensions is national in scope. 24
4.2.2.3. Commission’s assessment
(41)    The Commission’s investigation did not provide any indications that would require
        the Commission to depart from its previous decisional practice on the geographic
        scope of the markets for pensions being national.
(42)    For the purposes of this decision, therefore, the Commission considers the
        geographic scope of the market for pensions (and its possible sub-segments) to be
        national in scope.
21  Commission decision of 5 February 2008, Case M.4950 – AVIVA/Bank Zachodni, recital 21.
22  Form CO, paragraph 167.
23  See Commission decision of 29 July 2020, Case M.9796 – Uniqa/Axa (Insurance, Asset Management and
    Pensions – Czechia, Poland and Slovakia), recital 20; Commission decision of 5 February 2008, Case
    M.4950 – AVIVA/Bank Zachodni, recital 24.
24  Form CO, paragraph 169.
                                                       8
 ---pagebreak--- 5.       COMPETITIVE ASSESSMENT
5.1.     Introduction
(43)     Article 2 of the Merger Regulation requires the Commission to examine whether
         notified concentrations are compatible with the internal market, by assessing whether
         they would significantly impede effective competition in the internal market or in a
         substantial part of it, in particular as a result of the creation or strengthening of a
         dominant position.
(44)     A merger giving rise to a significant impediment of effective competition may do so
         as a result of the creation or strengthening of a dominant position in the relevant
         market(s). Moreover, mergers in oligopolistic markets involving the elimination of
         the important competitive constraints that the parties previously exerted on each
         other, together with a reduction of competitive pressure on the remaining
         competitors, may also result in a significant impediment to effective competition,
         even in the absence of dominance.
(45)     The Commission Guidelines on the assessment of horizontal mergers under the
         Merger Regulation (the “Horizontal Merger Guidelines”) 25 describe horizontal non-
         coordinated effects as follows: “A merger may significantly impede effective
         competition in a market by removing important competitive constraints on one or
         more sellers who consequently have increased market power. The most direct effect
         of the merger will be the loss of competition between the merging firms. For
         example, if prior to the merger one of the merging firms had raised its price, it
         would have lost some sales to the other merging firm. The merger removes this
         particular constraint. Non-merging firms in the same market can also benefit from
         the reduction of competitive pressure that results from the merger, since the merging
         firms’ price increase may switch some demand to the rival firms, which, in turn, may
         find it profitable to increase their prices. The reduction in these competitive
         constraints could lead to significant price increases in the relevant market.” 26
(46)     The Horizontal Merger Guidelines list a number of factors which may influence
         whether or not significant non-coordinated effects are likely to result from a merger,
         such as the large market shares of the merging firms, the fact that the merging firms
         are close competitors, the limited possibilities for customers to switch suppliers, or
         the fact that the merger would eliminate an important competitive force. 27 That list
         of factors applies equally regardless of whether a merger would create or strengthen
         a dominant position, or would otherwise significantly impede effective competition
         due to non-coordinated effects. Furthermore, not all of these factors need to be
         present for significant non-coordinated effects to be likely. The list of factors, each
         of which is not necessarily decisive in its own right, is also not an exhaustive list. 28
(47)     Finally, the Horizontal Merger Guidelines describe a number of factors, which could
         counteract the harmful effects of the merger on competition, including the likelihood
         of buyer power, the entry of new competitors on the market, and efficiencies.
25   OJ C 31, 5.2.2004, p. 5.
26   Horizontal Merger Guidelines, paragraph 24.
27   Horizontal Merger Guidelines, paragraphs 27 and following.
28   Horizontal Merger Guidelines, paragraphs 24-38.
                                                         9
 ---pagebreak---  ---pagebreak---  ---pagebreak---           (b)       The increment contributed by Allianz is limited, and always below 5%. Thus,
                    the Transaction is unlikely to cause significant change in the competitive
                    landscape of individual segments of life insurance in Poland;
          (c)       Post-Transaction, in the relevant life insurance segments in Poland, the
                    combined entity would continue facing competitive constraints from several
                    competitors (see Table 2 above), including:
                    –       In case of Class 3: PZU ŻYCIE S.A., Nationale-Nederlanden TUnŻ
                            S.A. and Open Life TU Życie S.A., all of which have market shares
                            higher than the increment brought by Allianz.
                    –       In case of Class 4 and of Class 5: PZU ŻYCIE S.A., Nationale-
                            Nederlanden TUnŻ S.A. and TUnŻ WARTA S.A. All of these have
                            market shares higher than the increment brought by Allianz, with
                            PZU ŻYCIE S.A remaining a clear market leader with a share above
                            the combined entity’s share.
(55)      The market investigation fully confirmed the Parties’ view on the market shares and
          the claim that there will remain enough competitive pressure from competing
          insurers in the Polish life insurance market and all of its segments after the
          Transaction. 32 Moreover, the majority of respondents indicated that the Parties either
          do not compete at all between them, or compete, but there are other insurers who
          also compete as strongly/closely. 33 Finally, all of the respondents indicated that the
          Transaction will have either neutral or positive effects on the Polish life insurance
          market.
(56)      In light of the above considerations, the Commission concludes that the Transaction
          does not raise serious doubts as to its compatibility with the internal market or the
          functioning of the EEA agreement in terms of its competition impact in the plausible
          markets for Class 3 life insurance products (or Class 3 life insurance for individuals
          and Class 3 life insurance for group customers), Class 4 life insurance products for
          individuals and Class 5 life insurance products for individuals in Poland.
5.4.      Open pension funds (OFEs) in Poland
(57)      Allianz Group and the Target Companies are active in the second and the third pillar
          of the Polish insurance system. However, only the Parties’ activities in the second
          pillar (the Parties’ OFEs) give rise to an affected market. 34
32   See replies to Q1 - Life insurance, question 3.
33   See replies to Q1 - Life insurance, question 4.
34   The Parties are not active in the first pillar, and the plausible market combining the first and the second
     pillar of the Polish pension system is therefore not affected.
                                                             12
 ---pagebreak---  ---pagebreak---         (c)       The segment for open pension funds is a diminishing market in Poland,
                  which will cease to exist in the near future due to reforms in the Polish
                  pension system. In this respect, please see details in paragraphs (33) and (34)
                  above.
(62)    The market investigation fully confirmed the confirmed the Parties’ view on the
        market shares and the claim that the importance of open pension funds is
        diminishing, and that they will ultimately be liquidated and cease to exist. 37
        Moreover, all of the competitors of the Parties consider that there will remain
        enough effective competitive pressure in the Polish open pension funds market after
        the Transaction. 38 Consequently, the market investigation clearly indicated that the
        Transaction’s impact on competition for the provision of open pension funds in
        Poland will be neutral. 39
(63)    In light of the above considerations, the Commission concludes that the Transaction
        does not raise serious doubts as to its compatibility with the internal market or the
        functioning of the EEA agreement in terms of its competition impact in the plausible
        markets for open pension funds in Poland.
6.      CONCLUSION
(64)    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
                                                              Executive Vice-President
37  See replies to Q2 Pensions / open funds – Competitors, question 2.
38  See replies to Q2 Pensions / open funds – Competitors, question 3.
39  See replies to Q2 Pensions / open funds – Competitors, question 4.
                                                        14