CELEX: 31995M0659
Language: en
Date: 1995-11-17 00:00:00
Title: COMMISSION DECISION of 17/11/1995 declaring a concentration to be compatible with the common market (Case No IV/M.659 - GE Capital / Sovac) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31995M0659

COMMISSION DECISION of 17/11/1995 declaring a concentration to be compatible with the common market (Case No IV/M.659 - GE Capital / Sovac) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 322 , 02/12/1995 P. 0021

 COMMISSION  DECISION of 17/11/1995 declaring a concentration to be compatible with the common market (Case No IV/M.659  - GE Capital / Sovac) 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 Dear Sirs, Subject :<ind> Case No IV/M.659  GE CAPITAL/SOVAC <ind> <ind> Notification of 13.10.95  pursuant to Article  4 of Council Regulation No 4064/89 1.<ind>  The  above  mentioned  notification  concerns   the announced  tender  offer  made by General  Electric  Capital Corporation  (GE  Capital) on 11 October 1995  for  all  the shares  of the French specialist financing group SOVAC  S.A. (Sovac).  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. I.<ind> THE PARTIES 3.<ind>  GE Capital is a wholly owned subsidiary of  General Electric  Capital Services,  Inc. which is in turn a  wholly owned  subsidiary  of the U.S. Corporation General  Electric Company.   GE  Capital  operates  in  several  finance   and insurance  segments.  Their services are  offered  primarily throughout the United States, Canada, Europe and the Pacific Basin. 4.<ind>  Sovac, is a French specialist financing  group.  It operates  mainly in France and, to a minor extent, in  Spain and  Italy. Sovac is controlled by  Eurofrance et Financière et  Industrielle  Gaz et Eaux, linked to the  Lazard  Fréres financial  group,  jointly controlling 62.7%  of  its  share capital  and  76.37%  of  its  voting  rights.   The   rest, publicly owned, is quoted on the Paris Stock Exchange. Sovac activities include lending and finance,  life and  non  life insurance, insurance brokerage and factoring.  II.<ind> CONCENTRATION 5.<ind>  After completion of the operation, GE capital  will acquire  control of SOVAC. Thus the operation constitutes  a concentration  according to Article 3(1)(b)  of  the  Merger Regulation. III.<ind>  COMMUNITY DIMENSION  6.<ind>  The  combined aggregate worldwide  turnover  of  GE Company  and SOVAC, exceeded 5,000 million ECU in  the  last financial year.  The turnover for nonfinancial activities of GE  Company  amounted  to  ECU 35.7  billion  in  1994.  The turnover  of  Sovac, calculated in accordance  with  Article 5(3)(a)  of  the Merger Regulation, exceeded  484.6  million ECU.  Both GE Capital and Sovac have communitywide  turnover in  excess  of 250 million ECU but do not achieve more  than twothirds of their aggregate communitywide turnover  in  one and  the  same Member State. The operation therefore  has  a Community dimension. IV.<ind> COMPATIBILITY WITH THE COMMON MARKET <tab> Relevant product market 7.<ind>  The parties offer  specialist financing and related insurance  services including  private label  credit  cards, real  estate financing, automobile and equipment  financing, consumer  financing,  autofinancial  services,  project  and structure finance, leasing,  municipal bond insurance, life, mortgage  and  creditor  insurance, insurance brokerage  and factoring.  These  services constitute segments  of  broader lending,    insurance   or  factoring    activities   mainly provided,  in  each  case,  by retail  banks,  insurance  or factoring companies. 8.<ind>  For  the  purpose of the present  case  it  is  not necessary  to  provide  a  definitive  delimitation  of  the relevant  product  market  since,  on  the  basis   of   the assessment set out below, a dominant position would  not  be created  or reinforced even on the narrowest product  market definition. <tab> Relevant geographic market  9.<ind> Given the activities of the parties, defined broadly as  lending money and insurance, the Commission has the view that  such  services are provided on a national basis  [Case IV/M.342  Fortis/CGER  Case IV/M.465  GE/CIGI]. The relevant geographical markets are therefore the national  markets  of each Member State. <tab> Assessment 10.<ind>  Overlap  only  exists in  the  following  business areas:   automobile   financing;  real   estate   financing; equipment   financing,  consumer  finance   and   insurance. However,  the respective activities of GE Capital and  Sovac are   geographically  complementary except   for  automobile financing in France, Spain and Italy and equipment financing in France.  11.<ind>  In the automobile financing segment in France  the new  entity will have a segment share of [Deleted   Business secret  (10  to  15  %)]. However the segment  is  primarily dominated   by  universal  banks   [45  to  50   %].   Other competitors  include  Diac [15 à  20  %],  a  subsidiary  of Renault; Cetelen [5 to 10 %]; Credit Universel [up to  5  %] and  Sofinco  [up  to  5 %]. Segment shares  for  automobile financing in Spain and Italy are negligible [up to 5 %]. The equipment finance activities of the merged entity in  France constitute  a segment share of [5 to 10 %] on the  total  of outstanding loans provided by specialized equipment  finance companies.. 12.<ind>  The  new  entity  will compete  in  the  financial services  sector  with  banks  and  other  stronger  finance houses.   In  view  of this, the operation  does  not  raise serious  doubts  about  its compatibility  with  the  common market. V<tab> CONCLUSION 13.<ind>  It  follows  from  the  above  that  the  proposed concentration  would  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. 14.<ind>  For the above reasons, the Commission has  decided not  to  oppose  the notified operation and  to  declare  it compatible with thecommon 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,