CELEX: 32015M7771
Language: en
Date: 2015-10-16 00:00:00
Title: Commission Decision of 16/10/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7771 - PARCOM / PON / IMTECH MARINE) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 16.10.2015
C(2015) 7255 final

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|                                                                 |To the notifying parties:                                        |
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Dear Sirs,

Subject:    Case M.7771 – Parcom/ Pon/ Imtech Marine
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]

    0. On 14 September 2015, the European Commission received a notification of a  proposed  concentration  pursuant  to  Article  4  of  Council
       Regulation (EC) No 139/2004, by which Parcom Capital Management BV ("Parcom", the Netherlands) and Pon Holding BV ("Pon", the Netherlands)
       jointly acquire control over the Imtech Marine Group BV ("Imtech Marine", the Netherlands) by way of purchase of shares.[3] Parcom and Pon
       are jointly referred to as the "Notifying Parties". Parcom, Pon and Imtech Marine are jointly referred to as the "Parties".

THE PARTIES AND THE OPERATION

    0. Parcom is a private equity fund, controlled by NN Group N.V., holding investments in various markets  including:  oil,  gas  and  offshore
       industrial engineering and manufacturing as well as business services and food. Parcom focuses on mid-sized companies and is mainly active
       in the Benelux. One of its portfolio companies is Royal Huisman, a manufacturer and refitter of  custom-built  luxury  sailing  boats  and
       motor yachts.

    0. Pon is an international trading and service organisation focused on import, logistics, marketing, distribution, service and maintenance of
       products varying from passenger cars and commercial vehicles to  material  handling  trucks,  tyres,  road  construction  and  earthmoving
       equipment and power generation products. Three of its subsidiaries are active in the market for electrical engineering  for  the  maritime
       sector: Bakker Sliedrecht Electro Industrie BV ("Bakker"), Verhoef  Elektrotechniek  B.V.  ("Verhoef")  and  Europe  Marine  Control  B.V.
       ("EMC"). These subsidiaries are jointly referred to as "Bakker". In addition Pon is active in the supply of engines for ships.

    0. Imtech Marine is active as full-service provider and system integrator of technology solutions for ships. It  also  provides  systems  and
       maintenance services and distributes components to third parties, such as shipbuilders. Imtech Marine is a division of Royal  Imtech  N.V.
       ("Royal Imtech"). Royal Imtech offers a wide range of electrical and mechanical solutions and automation. In 2013 Royal Imtech  faced  its
       first financial problems and on 13 August 2015 was declared bankrupt.

    0. After the bankruptcy of Royal Imtech, shares of Imtech Marine, together with some other subsidiaries of  Royal  Imtech,  were  (through  a
       warehousing transaction) transferred to Waterval B.V., which is a special purpose vehicle held by the consortium of  banks  that  financed
       Imtech Marine. This transaction was approved by the bankruptcy trustees of Royal Imtech and is aimed at “warehousing” Imtech Marine  until
       it is sold.

    0. On 13 August 2015 an unconditional cash offer was submitted by the Notifying Parties to the bankruptcy trustees of Royal Imtech in view of
       acquiring Imtech Marine. In execution of the transaction a share purchase agreement will be signed and the Notifying Parties will  acquire
       all the shares in Imtech Marine with the consent and cooperation of the bankruptcy trustees. Parcom will own […]%  of  shares,  while  Pon
       will own […]% of shares of Imtech Marine.

    0. On 12 August 2015, a Consortium Term Sheet was signed between Pon and Parcom, which provides for rules governing Pon and Parcom  relations
       as shareholders of Imtech Marine and establishes their joint control over Imtech Marine. On the basis of the Consortium Term Sheet each of
       Parcom and Pon will appoint two out of five members of the Supervisory Board of Intech Marine and they  will  jointly  appoint  the  fifth
       member. As regards reserved matters such as – among others - approval and amendment of business plan they will  require  approval  of  the
       appointees of both Parcom and Pon. Parcom and Pon will thus have joint control over Imtech Marine. Therefore the transaction constitutes a
       concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

    0. On 4 September 2015 the European Commission granted the Notifying Parties, on  the  basis  of  Article  7(3)  of  the  Merger  Regulation,
       derogation from the suspension obligation laid down by Article 7(1) of the Merger  Regulation.  The  derogation  decision  is  subject  to
       conditions and obligations, in particular Pon and Parcom are to take only those steps and measures in relation to Imtech Marine, which are
       necessary in order to avoid further deterioration of its assets.

EU DIMENSION

    0. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[4] (NN Group  EUR 13 545  million,
       Pon EUR 5 958 million and Imtech Marine EUR 476 million). Each of them has an EU-wide turnover in excess of  EUR  250  million  (NN  Group
       EUR […], Pon EUR […], Imtech Marine EUR […]), and only NN Group and Pon achieve more than two-thirds of their aggregate  EU-wide  turnover
       within one and the same Member State ([…]). The notified operation therefore has an EU dimension within the meaning of Article 1(2) of the
       Merger Regulation.

COMPETITIVE ASSESSMENT

1 Relevant markets

    0. The main area of horizontal overlap between the Parties and Imtech Marine is the  market  for  electrical  engineering  for  the  maritime
       sector, where Pon is active through Bakker. Depending on the adopted methodology of calculating  the  market  size,  the  transaction  (i)
       either does not lead to any affected markets, (ii) or it leads to affected markets in a potential narrower  sub  segment  of  the  overall
       market, namely cable engineering for ferries, for specials, and for ferries and cruises combined.

    0. The actvitivites of Bakker and Imtech Marine also overlap in trading of parts and components for electrical engineering for  the  maritime
       sector. In addition, the transaction gives raise to a vertical relationship between Imtech Marine and  Parcom  given  that  the  later  is
       active in the manufacturing of custom-built luxury sailing boats and motor yachts. Another vertical relationship  arises  between   Imtech
       Marine and Pon's activities as distributor of marine diesel engines.

    0. Neither the horizontal overlap between Bakker and Imtech Marine in trading of parts and components  for  electrical  engineering  for  the
       maritime sector, nor the mentioned vertical relatioships give raise to affected markets. Therefore these markets  will  not  be  discussed
       further.

1 Relevant product markets

    0. The Commission has no decisional practice concerning the market for electrical engineering for the maritime sector.

    0. The Notifying Parties have based their proposed market definitions on the precedents relating to the markets  for  electrical  engineering
       for onshore construction[5] and for commercial shipbuilding[6]. Thus, the Notifying Parties suggest three different  criteria  to  examine
       the overall market for electrical engineering for the maritime sector, namely: (i)  the  type  of  ships,  (ii)  the  type  of  electrical
       engineering work, (iii) the nature of the service (or solution).

    0. First, the Parties submit that there are specificities as regards electrical engineering for different types of ships, e. g. naval  ships,
       yachts, workboats/cargo, cruises/ferries, specials (that is ships which perform special functions such  as  cable  or  pipe  laying),  and
       offshore.

    0. Second, the Notifying Parties submit that there are three main categories of electrical engineering works for the maritime sector, namely:
       system integration, system installation, as well as maintance and management.

    0. Third, a market division alongside the nature of the service/solution would lead to the following product markets:  propulsion  solutions,
       power solutions (with the potential distinction between pure power generation and distribution that is cable solutions), automation,  HVAC
       (Heating Ventilation and Air Conditioning), water management, NacCom/IBS (navigation  and  communication  as  well  as  Integrated  Bridge
       Solutions or the ship motion control), entertainment and specialties (for instance tracking or laundry systems).

    0. The market investigation clearly indicates that the market participants view engineering for the maritime sector as  being  distinct  from
       engineering for onshore construction.[7] This is essentially due to differences in regulation, component selection and  specifications.[8]
       Furthermore, the majority of the replying market participants agree that the overall market could be segmented along the three  dimensions
       (namely by (i) the type of ships, (ii) the type of electrical engineering work,  (iii)  the  nature  of  the  service)  indicated  by  the
       Notifying Parties.[9] In addition, some market participants suggested that the market for electrical engineering for the  maritime  sector
       could be be delineated alongside different voltage ranges used on the ships (namely high  vs  low  voltage).  In  fact,  the  overwhelming
       majority of the respondents to the market investigation indicate that ship electricity systems run at different voltage  ranges  depending
       on the type of ships.[10]

    0. In the present case, it can be left open whether the overall  market  for  electrical  engineering  for  the  maritime  sector  should  be
       segmented further according to the delineations discussed in paragraphs 14-18 above, since the transaction does not  lead  to  competition
       concerns under any plausible product market definition.

2 Geographic Market

    0. According to the Notifying Parties, the geographic scope of the market  for  electrical  engineering  for  the  maritime  sector  and  its
       potential sub segments is global for the following reasons: (i) the market for shipbuilding is global[11], (ii) players in the  electrical
       engineering for the maritime sector are active mostly at worldwide level, (iii) ship owners are active  globally  and  they  select  their
       providers of electrical engineering also globally.

    0. The market investigation very clearly supports the Notifying Parties' views. All replying competitors active in the market for  electrical
       engineering for the maritime sectors act globally.[12] The majority of customers source at global level or the EEA level  .[13]  Moreover,
       both customers and competitors confirmed that there are no specific barriers, such as for instance regulatory regimes  and  tariffs,  that
       characterize the EEA region and suppliers based outside the EEA could easily provide electrical engineering for  maritime  sector  in  the
       EEA.[14]

    0. In the present case, the exact scope of the geographic market can be left open since the transaction does not lead to competition concerns
       under any plausible geographic market definition (i.e. global or EEA-wide).

2 Competitive assessment

    0. The Notifying Parties submit that a large part of Imtech Marine's business (equivalent to 60% of  its  turnover)  consists  in  activities
       unrelated to the Parties' business. They also argue that while Imtech Marine is a truly global player in the  electrical  engineering  for
       maritime sector, Bakker has more limited geographic presence and does not offer all the solutions. Therefore, the  scope  of  the  overlap
       between the two companies is limited. Finally, according to the Notifying Parties, in the  potential  narrower  segments  of  the  market,
       Imtech Marine and Bakker are not close competitors in view of their focus on different types of solutions.

    0. Based on the Notifying Parties' estimates,[15] at global level the combined market share of Bakker and Imtech Marine  in  the  market  for
       electrical engineering in the maritime sector is insignificant ([0-5]%). The global maket appears to be rather fragmented and  many  other
       players have more significant position than the Parties' (see Table 1).

|Table 1: Market shares for market for the supply of electrical engineering in the maritime sector (Value-based)           |
|                                                                                                           |
|              |By nature of the service/type of ship                                                       |
|              |Cables for ferries –       |Cables for specials – worldwide|Cables for ferries and cruises - |
|              |worldwide                  |                               |worldwide                        |
|Bakker        |[0-5]%                     |[20-30]%                       |[0-5]%                           |
|Imtech        |[40-50]%                   |[0-5]%                         |[20-30]%                         |
|Combined      |[40-50]%                   |[20-30]%                       |[20-30]%                         |
|Source: Parties' best estimate based on [a third party] report                                             |

    0. However, the Notifying Parties contest these market shares and  submit  that  they  do  not  represent  the  market  reality  due  to  the
       underestimation by [a third party], the author of the market report, of the  size  of  the  overall  market  for  cable  engineering.  The
       Notifying Parties claim that cable engineering does not represent 5% of the overall electrical engineering market for maritime sector  (as
       assumed by [a third party]) but instead it represents 6–7% of the value of the total ship. The Notifying Parties claim  that  support  for
       this assumption can be found in (i) their market intelligence as to the position of Bakker and Imtech Marine on the market for  electrical
       engineering for maritime sector, (ii) review of the data on the number of ships built in the recent years, (iii) internal  estimations  of
       both Bakker and Imtech Marine as to the cable installation costs for ferries, and (iv) review of two  recent  projects  for  which  either
       Bakker or Imtech Marine tendered for cable engineering.

    0. On the basis of the Notifying Parties' calculation of the size of cable engineering segment, the combined share at global level  would  be
       below [5-10]% in the potential segments for cable engineering for ferries and for cable engineering for  specials,  whereas  it  would  be
       below [0-5]% in the segment for cable engineering for ferries and cruises combined.[16]

    0. On the basis of the results of the market investigation, the Commission cannot conclude whether the Parties' estimation as  to  the  cable
       engineering work's share of the value of a newly built ship are correct. Competitors took the view that cable engineering  work  accounted
       for 1–5% of the total value of a newly built ship. According to customers, this value amounts to 2–10% in general and  to  up  to  20%  in
       compex vessels, e. g. dredgers or diesel electric ships.[17] However, even considering the narrowest size of the market (i.e. taking  into
       account market shares based on the [a third party] report), the transaction does not give rise to competition concerns.

    0. Regardless of the precise delineation of the market, the Notifying Parties  submit  that  multiple  other  companies  are  active  in  the
       electrical engineering for the maritime sector, including the field of cable  installation.  These  companies  include  Alewijnse,  Croon,
       Eekels, Van der Leun and IHC D&A. Moreover, the Notifying Parties submit that the market  for  electrical  engineering  for  the  maritime
       sector is a bidding market and customers usually organize competitive tender procedures to select their supplier of electrical engineering
       services. Therefore, post-transaction the market will remain highly competitive.

    0. The Commission considers, taking into account the market investigation, that customers can rely on several potential suppliers in addition
       to Bakker and Imtech.[18] Companies such as for instance Alewijnse, ELTEC, Brouwer  Seaking,  Mareleng,  Van  der  Leun  were  pointed  by
       customers as viable alternatives to the Parties in terms of range of services offered in the market for  electrical  engineering  for  the
       maritime sector and its potential sub segments.

    0. The Notifying Parties also submit that cabling services are standardized type of services and thus this  hypothetical  market  would  have
       very low enry barriers. The Commission notes that competitors confirmed this claim  in the course of the  market  investigation,  as  they
       explained that cable engineering is considered as a technically non-complex activity, which is thus usually performed usually directly  by
       customers (i.e. shipyards).[19] The overwhelming majority of customers consider that cable engineering is a  standard  and  basic  service
       provided by most competitors.[20] The low complexity of the cable engineering service suggests that  suppliers  could  easily  enter  this
       specific service domain.

    0. Finally, in the course of the market investigation no substantiated concern was raised by either customers[21]  or  competitors[22]  about
       the potential impact of the transaction.

    0. Based on the above and on all the other available evidence, the Commission therefore considers that  the  proposed  transaction  does  not
       raise serious doubts as to its compatibility with the internal market  with  respect  to  the  horizontal  overlap  between  the  Parties'
       activities in market for the electrical engineering for the maritime sector.

CONCLUSION

    0. 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

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[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 312 22.09.2015 p. 4.

[4]   Turnover calculated in accordance with Article 5 of the Merger Regulation.
[5]   Case COMP/M.6623 – Vinci/EVT Business.
[6]   Case COMP/M.4101 – Aker Yards/Chantiers de l'Atlantique.
[7]   Responses to question 6 of Questionnaire Q1 – Competitors in electrical engineering for maritime sector and to question 4 of  Questionnaire
Q2 - Customers in electrical engineering for maritime sector.
[8]   Responses to question 6 of Questionnaire Q1 – Competitors in electrical engineering for maritime sector and to question 4 of  Questionnaire
Q2 - Customers in electrical engineering for maritime sector.
[9]   Responses to question 8, 9, 10 of Questionnaire Q1 – Competitors in electrical engineering for maritime sector and to question 6, 7,  8  of
Questionnaire Q2 - Customers in electrical engineering for maritime sector.
[10]  Responses to question 7 of Questionnaire Q1 – Competitors in electrical engineering for maritime sector and to question 5 of  Questionnaire
Q2 - Customers in electrical engineering for maritime sector.
[11]  This has been confirmed by the Commission in the decision in case COMP/M.4956 – STC/Aker Yards.
[12]  Responses to question 12 of Questionnaire Q1 – Competitors in electrical engineering for maritime sector.
[13]  Responses to question 10 of Questionnaire Q2 - Customers in electrical engineering for maritime sector.
[14]  Responses to question 13 of Questionnaire Q1  –  Competitors  in  electrical  engineering  for  maritime  sector  and  to  question  11  of
Questionnaire Q2 - Customers in electrical engineering for maritime sector.
[15]  The Notifying Parties have provided estimates of market shares on the basis of a third party report ([a third party]), which  was  prepared
at the request of Imtech Marine in April 2014 and is not related with the notified transaction.
[16]  At the EEA level there would still not be any affected market.

[17]  Responses to question 16 of Questionnaire Q1 – Competitors in electrical engineering for maritime sector and question 13 of Q2 -  Customers
in electrical engineering for maritime sector.

[18]  Responses to question 12 of Questionnaire Q2 - Customers in electrical engineering for maritime sector.
[19]  Responses to question 17 of Questionnaire Q1 – Competitors in electrical engineering for maritime sector.
[20]        Responses to question 14 of Questionnaire Q2 - Customers in electrical engineering for maritime sector.
[21]  Responses to question 17 and 18 of Questionnaire Q2 - Customers in electrical engineering for maritime sector.
[22]  Responses to question 20 and 21 of Questionnaire Q1 – Competitors in electrical engineering for maritime sector.

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 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.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE
                                                              ARTICLE 6(1)b DECISION