CELEX: 31996M0710
Language: en
Date: 1996-05-02 00:00:00
Title: COMMISSION DECISION of 02/05/1996 declaring a concentration to be compatible with the common market (Case No IV/M.710 - BHF-Bank / Crédit Commercial de France) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31996M0710

COMMISSION DECISION of 02/05/1996 declaring a concentration to be compatible with the common market (Case No IV/M.710 - BHF-Bank / Crédit Commercial de France) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 154 , 29/05/1996 P. 0025

 COMMISSION DECISION of 02/05/1996 declaring a concentration  to be compatible with the common market (Case No IV/M.710 -  BHF-Bank / Crédit Commercial de France) 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 Subject :<ind> Case No IV/M.710 BHFBank/Crédit Commercial de  France <ind> <ind> Notification of 29 March 1996 pursuant to  Article 4 of Council Regulation No 4064/89 1.<ind> On 29.3.1996, the Commission received a notification  of a proposed concentration by which the undertakings  BHFBank Aktiengesellschaft (BHF) and Crédit Commercial de  France S.A. (CCF) acquire joint control of MMTG  Mietgesellschaft fuer medizinischtechnische Geraete GmbH  (MMTG), which will be renamed BHF & CCF Leasing GmbH. 2.<ind> After examination of the notification, the  Commission has concluded that the proposed operation falls  within the scope of the Council Regulation No 4064/89 (The  Merger Regulation) 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 AND THE OPERATION 3.<ind> The business activities of the undertakings  concerned are : <ind> <ind> BHFBank Aktiengesellschaft:<ind> banking <ind> <ind> Crédit Commercial de France SA:<ind> banking <ind> <ind> BHF & CCF Leasing GmbH:<ind> leasing business  such as  airplane, ship, and industrial plant leasing (that  is, "bigticket", leasing, and not leasing of consumer goods  such as cars). 4.<ind> According to a sales contract signed by the  notifying parties and the present shareholders of MMTG,  these shareholders cede the majority of their shares to BHF  and CCF. CCF will acquire its shares in the joint venture  through its 100% subsidiary Société Financière et Mobilière.  The resulting distribution of shares and the decision  mechanisms will be such, that BHF and CCF acquire joint  control of MMTG (see below). MMTG will afterwards be renamed  BHF & CCF Leasing GmbH. II.<ind> THE CONCENTRATION A.<ind> Joint Control 5.<ind> After the majority of shares has been sold to BHF  and CCF and after an increase in capital, the share capital  of BHF & CCF Leasing GmbH will be held as follows: <ind>  BHF <ind> 30% <ind>  CCF <ind> 30% <ind>  private shareholder 1 <ind> 11% <ind>  private shareholder 2 <ind> 11% <ind>  private shareholder 3 <ind> 9% <ind>  private shareholder 4 <ind> 9% 6.<ind> The draft articles of association  (Gesellschaftsvertrag) of BHF & CCF Leasing GmbH, being part  of the submitted notification, stipulate that decisions can  only be taken if 75% of share capital is present, i.e. BHFs'  and CCFs' presence is always necessary. 7.<ind> According to the abovementioned articles of  association the shareholders take decisions with a majority  of 75% of votes, except the decision to dissolve the  company, which is taken with a simple majority of votes. The  75%quorum confers a veto right to BHF and CCF. According to  a regulation concerning the organisation of the joint  venture (Geschaeftsordnung), being part of the submitted  notification, the shareholders have to decide  among others   on the following: <ind> <ind> questions of structure, organisation and  strategy of the business <ind> <ind> middle and longterm business plan <ind> <ind> budget <ind> <ind> leasing contracts, where the cost of the leasing  objectexceeds five times the share capital of the joint  venture <ind> <ind> investments above 100'000 DM (German Marks), if  not budgeted <ind> <ind> appointment of senior management 8.<ind> The distributions of shares and the decision  mechanisms are such, that BHF and CCF are able to veto  strategic decisions, but they do not have the power, each on  their own or together, to impose such decisions. But because  CCF and BHF each can produce a deadlock situation they  acquire decisive influence and will therefore jointly  control BHF & CCF Leasing GmbH in the sense of Article 3(3)  of the Merger Regulation.  B.<ind> Full Function 9.<ind> BHF & CCF Leasing GmbH is a startup company destined  to operate in a specific segment of the leasing sector. An  important part of its business activity will consist in the  consultancy in and the conception of solutions for financing  bigvolume investments (see above). In some cases the joint  venture will also be lessor, but in each such case it will  refinance such deals by reselling the income resulting from  the lease contract to a bank or other finance institution. 10.<ind> For these reasons, also a share capital of one  million German marks will be sufficient to carry out the  business of the joint venture. The joint venture will have  sufficient staff and assets to perform the functions  normally carried out by other undertakings operating in the  same market and  according to the articles of association it  is intended to operate on a lasting basis. C.<ind> Absence of Scope of Coordination of Competitive  Behaviour 11.<ind> BHF is not operating in the same market where the  joint venture will be active and has therefore no relevant  knowhow. According to a draft shareholder agreement, being  part of the submitted notification, BHF and CCF will not  engage in new business in the specific leasing segment in  Germany, where the joint venture will operate. The same  agreement provides that whenever the banks would have to  acquire such leasing business in Germany in the future, they  will assign it to the joint venture. 12.<ind> It could be said that BHF and CCF are active in  neighbouring markets  banking markets  of the one the joint  venture will be active. Although these neighbouring markets  are of significant economic importance compared with that of  the joint venture, a coordination of the competitive  behaviour of the mother companies can realistically be  excluded, because BHF and CCF operate mainly in different  geographic markets. III.<ind> COMMUNITY DIMENSION 13.<ind> The operation has a Community dimension as  specified in Article 1 (2) of the Merger Regulation.  Calculated in accordance with Article 5(3)(a) of the Merger  Regulation, the undertakings concerned have an aggregate  worldwide turnover of more than Ecu 6.5 billion (BHF: Ecu  2.29 billion, CCF: Ecu 4.34 billion), which is above the Ecu  5 billion requested in the Merger Regulation. BHF and CCF do  not achieve more than twothirds of their aggregate  Communitywide turnover within one and the same Member  State. IV.<ind> COMPATIBILITY WITH THE COMMON MARKET A.<ind> Relevant Product Market 14.<ind> As mentioned above, BHF & CCF Leasing GmbH will  offer financial consultancy services related to higher  volume investment leasing and fund leasing (a leasing fund  is a limited partnership with the purpose of financing  capital goods through private investors). This service will  be offered on a fee basis in connection with leasing  contracts and fund leasing. The joint venture will also act  as a lessor. Therefore the parties submit that the relevant  product market is the leasing market excluding real estate  and consumer goods (cars, furniture etc.) leasing. 15.<ind> It is necessary to assess whether the method of  financing these goods is relevant (see IV/M.664 GRS Holding  and IV/M.669 Charterhouse/Porterbrook). A potential operator  of goods that necessitate a high investment will consider  all kinds of possible solutions in order to finance this  investment. This will certainly include renting, leasing and  outright purchase of these goods. 16.<ind> It is also conceivable that consultancy in and  concept development of financing solutions for bigvolume  investments could be considered a separate market, because  this service is not necessarily linked to the leasing,  renting or selling operation. The assumption of a separate  market for this service is strengthend bythe fact that it  will be offered on a fee basis and will therefore not be  included in the rent or leasing cost. 17.<ind> However, for the purposes of this case, the  question of whether the relevant product market includes all  types of financing or only financing through leasing or if  consultancy in solutions for financing investment goods is a  separate product market can be left open as, on the basis of  the assessment set out below, a dominant position would not  be created or strengthened even on the narrowest definition  of the product market. B.<ind> Relevant Geographic Market 18.<ind> According to its business plan, the joint venture  will almost exclusively operate in Germany and its envisaged  customers consist of BHFs' target customers. It is therefore  the parties' opinion, that the relevant geographic market is  Germany. 19.<ind> When defining the relevant geographic market, not  only the conditions on the supplyside, but also those on the  demandside have to be considered. A potential operator of  goods that necessitate a high investment, e.g. aeroplanes or  trains, is willing to look for an optimal financing solution  and competent consultants probably in all Europe, if not  worldwide. Therefore the relevant geographic market is wider  than Germany. 20.<ind> However, for the purposes of this case, the exact  definition of the relevant geographic market can be left  open, because a dominant position would not be created or  strengthened even on the narrowest, but also on a wider  definition of the geographic market. C.<ind> Competitive Assessment 21.<ind> As stated above, BHF and CCF Leasing GmbH is a  startup company, destined to operate in a specific segment  of the leasing sector, that is, "bigticket" leasing. It is  being created out of MMTG, which is currently just a shell  company with no activities in the leasing sector. Therefore  no combination of market shares in the leasing sector can or  will occur as a result of the current transaction. 22.<ind> No overlap between the operations of BHF and CCF  will result through the concentration, because BHF is not  active in the future business of the joint venture. BHF &  CCF Leasing GmbH is a market entrant and the concentration  will therefore not have anticompetitive effects, even if the  relevant geographic market were considered to be Germany  alone. 23.<ind> CCFs' subsidiary Loxxia is specialised in equipment  and financial leasing operations, structured as a consulting  business, similar to the field of activities the joint  venture will be operating in. It might therefore be argued  that CCF strengthens its position in the relevant market  through the participation in the joint venture. However,  CCFs actual market share on the Europeanwide market is below  1% and its main competitors  only in France and Germany  are  companies like BNP, Société Générale, Paribas, Crédit  Lyonnais, Deutsche Leasing AG, KG Allgemeine Leasing AG and  so on. 24.<ind> Consequently, the creation of the joint venture by  BHF and CCF does not create or strengthen a dominant  position in the common market. V.<ind> CONCLUSION 25. <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,