CELEX: 32015M7747
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.7747 - PGA / MSA) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

                                        Brussels, 16/10/2015
                                        C(2015) 7257 final

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|To the notifying party:                                                |                                                                       |
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Dear Sir/Madam,

Subject:    Case M.7747 - PGA/ MSA
         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]

    1) On 11.09.2015, the Commission received a notification of a proposed concentration pursuant to Article 4  of  Council  Regulation  (EC)  No
       139/2004 by which PGA Motors SAS of France ("PGA" or "Notifying Party"),  ultimately  controlled  by  Volkswagen  AG  of  Germany  ("VW"),
       acquires within the meaning of Article 3(1)(b) of the Merger Regulation control of the whole of MSA Groupe SAS of France ("MSA") by way of
       purchase of shares[3]. (PGA and MSA are designated hereinafter as the "Parties".)

       THE PARTIES

    2) PGA is active in the distribution of passenger cars and light commercial vehicles ("LCV") of various  manufacturers  as  well  as  in  the
       distribution of spare parts and repair services for these vehicles and other vehicle related services in France.

    3) VW is active worldwide in the development, manufacture, marketing and sale of passenger cars, LCV and other  vehicles  as  well  as  spare
       parts and vehicle related services.

    4) MSA is active in the distribution of passenger cars and LCV as well as spare parts of various car manufacturers and other vehicle  related
       services in nine départements in France.

       THE OPERATION

    5) On 30 July 2015 MSA and PGA entered into a share purchase agreement for the acquisition of 80% of the shares in  MSA,  the  remaining  20%
       being retained by the sellers (a private individual and his family) (the "Transaction").

    6) PGA has a call option on the shares held by the seller which can be exercised between 1 April 2016 and 30 June 2021.

       THE CONCENTRATION

    7) The Transaction will result in the acquisition of sole control over MSA by PGA as the minority shareholding which  will  be  held  by  the
       seller following the Transaction will not grant any veto right.

    8) In light of the foregoing the proposed transaction constitutes a concentration within the  meaning  of  Art.  3(1)(b)  of  the  EU  Merger
       Regulation.

       EU DIMENSION

    9) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million (VW: EUR 202 458 million, MSA: EUR
       […]). Each of them has an EU-wide turnover in excess of EUR 250 million (VW: EUR […], MSA: EUR […]), but they do not 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.

       MARKET DEFINITION

   10) The Transaction concerns the distribution of automotive vehicles and related business activities in  France.  Particularly,  although  the
       transaction will give rise to a number of reportable markets it will – depending on the exact geographic market definition – only generate
       an affected market with regard the retail distribution of new passenger cars and LCV in certain departments ("départements") in France.

1 Product Market Definition

   11) In previous decisions the Commission has distinguished between retail and wholesale distribution of new passenger cars.[4] The  Commission
       has further distinguished between the (retail) distribution of passenger cars on the one hand  and  of  LCV  on  the  other  hand.[5]  The
       Commission considered that with respect to passenger cars a further segmentation by car type (e.g. mini cars, small or medium  cars  etc.)
       is not necessary because vehicle manufacturers usually distribute different car types under the same distribution channel.[6]

   12) The Parties agree with the above market definition and submit that the segmentation of the product market between passenger cars  and  LCV
       is sufficient and any further segmentation, particularly by type of car, would be inappropriate.

   13) The market investigation broadly confirmed that the market for the retail sales of motor vehicles likely constitutes  a  distinct  product
       market that is different from the wholesale of motor vehicles, with different competitive dynamics and different players acting on the two
       plausible markets.

   14) Also, the market investigation gave strong indications that the retail sales of new motor vehicles (particularly  passenger  cars)  likely
       constitutes a separate product market from the market for the retail sale of used motor vehicles (particularly passenger cars).

   15) In any event, the exact market definition can be left open, as under none of the  plausible  market  definitions  the  Transaction  raises
       serious doubts as to its compatibility with the internal market.

2 Geographic Market Definition

   16) In previous decisions the Commission has left open whether the market for the retail  distribution  of  new  passenger  cars  and  LCV  is
       regional, national or EU-wide in scope. However, it considered a tendency towards a more EU-wide geographic market due to  the  effect  of
       the block exemption for vertical agreements in the motor vehicle sector.[7]

   17) The Parties submit that the geographic scope of the market should be  at  least  national.  However,  in  the  Parties'  view,  the  exact
       definition of the geographic scope of the market can be left open.

   18) The market investigation gave indications that the scope of this market is regional. Competitors to the Parties in fact indicated that the
       majority of customers are not willing to move to other regions to purchase a new car and that retailers perceive competition on a regional
       level. Notwithstanding the above, the market investigation also gave indications that the market may be national in  scope  as  prices  as
       well as marketing and promotional campaigns are decided centrally by the car manufacturers.

   19) In any event, the exact geographic market definition can be left open, as under none of the plausible market definitions  the  Transaction
       raises serious doubts as to its compatibility with the internal market.

       COMPETITIVE ASSESSMENT

   20) The Parties' activities horizontally overlap in a number of markets, and particularly: (i) distribution of spare parts, (ii) trading  with
       used passenger cars and LCV, (iii) short term car rental, (iv) car repair and maintenance of automotive vehicles  and  (v)  car  insurance
       brokerage services. However in none of these markets the combined market share of the Parties will exceed 20% under any  plausible  market
       definition and in most of these markets increments brought about by the transaction will be minimal. Thus, these markets are  not  treated
       any further.

   21) Finally, the proposed transaction will give rise to a vertical relationship between the upstream production and wholesale of new cars  and
       LCV, where VW is active, and the downstream markets for distribution of new passenger cars and LCV, where MSA is active. However  in  none
       of these markets the Parties have a market share in excess of 30% and therefore are not treated any further.

   22) Both Parties are active – inter alia – in the retail sale of new passenger cars in France. If the geographic scope of the market was to be
       defined as national their combined market share would be [5-10]% with a minimal increment of [0-5]% brought about by MSA.

   23) If the market for the retail sale of new vehicles was to be defined as regional in scope, the activities of the Parties  overlap  only  in
       seven départements with respect to passenger cars and in three départements with respect to LCV. However, in only one of  them  –  Pas-de-
       Calais (62) – their combined market share exceeds 20% for both passenger cars – with a combined market share  of  [20-30]%  (VW/PGA:  [20-
       30]%; MSA: [0-5]%) – and LCVs, with a combined market share of [30-40]% (VW/PGA: [20-30]%; MSA: [0-5]%).

   24) On the market for retail sale of new passenger cars in the Pas-de-Calais département the Parties will face competition from Groupe  Sofida
       with an estimated market share of around 15% and Groupe Geudet and Groupe Mariscal both with an estimated market share of  5%.  All  these
       three competitors have higher market shares than the increment ([0-5]%) resulting from the transaction.

   25) On the market for retail sale of LCVs in the Pas-de-Calais department the Parties will  face  competition  from  two  stronger  companies,
       Groupe Sofida with an estimated market share in the range of 40% to 50 % and Groupe Mariscal wth an estimated market share in the range of
       20% to 30%. In addition Groupe Gueudet is active with estimated market share in the range of 10% to 20%. The market  share  of  all  three
       competitors is higher than the increment ([5-10]%) resulting from the transaction.

   26) The Parties identified overall at least 37 "main competitors", that is competitors of a certain size and  excluding  small  retailers,  of
       which at least seven are active on a national level: Groupe Gueudet, Groupe Sofida, Groupe Mariscal, Groupe Corteel, Groupe Chabot, Groupe
       Lempereur and Groupe Tuppin. This finding was also supported by the market investigation.

   27) Also, customers can freely switch from one retailer to the other and from one brand to the other. When an end customer decides to purchase
       a new car he has the possibility to freely choose between different manufacturers and between different  retailers  selling  cars  of  the
       manufacturer of choice. This is true at local and national level.

   28) Finally, all the competitors responding to the market investigation indicated that following the Transaction the competitive dynamics will
       not change substantially on the market for retail sales of new cars and LCV.

   29) In light of the above and all the available evidence, the Commission considers that the concentration does not give rise to serious doubts
       as to its compatibility with the internal market as a result of non-coordinated horizontal effects on the markets for the retail sales  of
       new cars and LCV in France and in the Pas-de-Calais department.

       CONCLUSION

   30) 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 310, 19.09.2015, p. 4.

[4]   COMP/M.2832 General Motors / Daewoo Motors.

[5]   COMP/M.2832 General Motors / Daewoo Motors, COMP/M.3352 VW / Hahn + Lang and COMP/M.3388 Ford Motor Company / Polar Motor Group.

[6]   COMP/M.2832 General Motors / Daewoo Motors.

[7]   COMP/M.3352 VW / Hahn + Lang and COMP/M.3388 Ford Motor Company / Polar Motor Group.

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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