I.EXECUTIVE SUMMARY (1)This case concerns the takeover by Siemens of the Austrian...(2)Siemens is a diversified engineering group active in the following...(3)VA Tech, headquartered in Linz, is Austria's largest industrial group...(4)On 10 December 2004, Siemens launched a public bid for VA...(5)The proposed acquisition, whereby Siemens acquires sole control over VA...(6)The undertakings concerned have a combined aggregate worldwide turnover of...(7)The Commission's market investigation confirmed that the proposal leads to...(8)The Commission came to the conclusion in its Decision that,...II.DETAILED SUMMARY A.POWER GENERATION A1.EQUIPMENT FOR HYDROELECTRIC POWER PLANTS Relevant markets (9)Equipment for hydroelectric power plants comprises a large number of...(10)As to the relevant geographic market, the Decision explains that...(11)[…] The Decision concludes that conditions of supply and demand...Competition assessment (12)For the period from 2000 to 2004 Siemens estimates its...(13)Although Siemens argues that this is a bidding market and...(14)From the replies to the market investigation […], a group...(15)Bidding lists submitted by Siemens, […] indicate, furthermore, that Siemens...(16)A large number of customers and competitors complained in their...(17)Siemens appears to agree with the Commission’s finding that Siemens...(18)According to Siemens, Chinese and small European suppliers would readily...(19)The Decision concludes that Siemens’s arguments are speculative and amount...A2.FOSSIL POWER PLANT EQUIPMENT (20)In fossil power plant equipment, VA Tech supplies combined-cycle power...B.TRANSMISSION AND DISTRIBUTION (T&D) EQUIPMENT (21)Like power generation equipment, the T&D market comprises a wide...(22)On product markets, the market investigation provided some indications that,...(23)On geographic market definition, the Decision concludes that the T&D...(24)The following market share estimates provided by Siemens in the...(25)Siemens, VA Tech, Areva and ABB supply a wide range...(26)The transaction leads to high market shares in excess of...(27)In the remaining (tentative) T&D markets, Siemens/VA Tech’s combined market...(28)Replies by customers and competitors to the Commission's market investigation...(29)In the HV-turnkey market, the main competitive overlap between Siemens...(30)In GIS, the same competitors as in HV turnkey are...(31)Although the safety-critical nature of HV products limits the number...(32)The market investigation examined bidding lists for HV-turnkey projects, GIS...(33)Ganz-Transelektro of Hungary has submitted several bids in the EEA...(34)The Commission also compared bids from […] tenders, where all...(35)As outlined in the Decision, the GIS market could potentially...(36)The Decision also examines the possibility that the notified transaction...(37)The Decision concludes that no significant impediment to effective competition...C.RAIL TECHNOLOGY C1.RAIL ROLLING STOCK (38)The takeover of VA Tech leads to the disappearance of...(39)Following past cases the present Decision analyses the impact of...(40)The market investigation showed that in the markets affected by...(41)The non-integrated companies will not be foreclosed for the following...C2.CATENARY WIRES (42)The Decision concludes that the question whether there is an...C3.TRACTION POWER SUPPLY (43)Traction power supply concerns the supply of electricity into the...(44)In Germany, Siemens and VA Tech would have a similarly...C4.LEVEL CROSSINGS (45)Both Siemens and VA Tech are suppliers of level crossings....D.FREQUENCY INVERTERS (46)Both Siemens and VA Tech are suppliers of frequency inverters....(47)The combined market share of Siemens and VA Tech in...E.METALLURGICAL AND OTHER INDUSTRIAL PLANT BUILDING 1.RELEVANT PRODUCT MARKETS a.Fundamental distinctions (48)In the area of industrial plant building a distinction can...(49)Mechanical industrial plant building involves planning the use of machines...(50)Electrical plant building primarily covers general plant electrification, the configuration...(51)Plant maintenance and services include ongoing maintenance work and service...b.Mechanical metallurgical plant building (52)Siemens considers the mechanical part of industrial plants to be...(53)The Commission concludes from the results of the market investigation...(54)However, the precise definition of the product market can be...c.Electrical metallurgical plant building (55)Electrical metallurgical plant building covers so-called ‘level 0’ automation (electricity...No uniform market (56)Siemens does not consider electrical industrial plant building for the...(57)In the context of the market investigation carried out by...(58)Although level-0 products (electrical, drives) are metallurgy-specific to a relatively...(59)For the said reasons, the existence of a specific market...Possible separate submarkets for individual process areas or steps (60)Market participants also take the view that the market for...Separate submarkets for level-1 and level-2 automation? (61)It can also be left open for the purposes of...Separate markets for the iron and steel sector and the...(62)The question whether or not there should be a separation...Possible market for IT solutions for plant logistics/MES/level 3 (63)The Commission's market investigation also revealed indications of a separate,...d.Maintenance and services (64)Siemens takes the view that there is a specific market...e.Electrical industrial plant building in non-metal sectors (65)For the purposes of this Decision the question of the...f.Conclusion concerning the definition of product market in the areas...(66)For the purposes of this Decision, therefore, the product markets...(67)For the purposes of this Decision, the product markets are...(68)For the purposes of this Decision, at least one separate...(69)The definition of product market in electrical industrial plant building...2.RELEVANT GEOGRAPHIC MARKETS a.Mechanical metallurgical plant building (70)Siemens takes the view that the market for mechanical metallurgical...(71)However, it is not necessary to determine the geographic market...b.Electrical metallurgical plant building (72)Siemens also assumes the existence of a world market in...(73)According to the findings of the market investigation, the relevant...(74)This is true for all possible submarkets and markets for...(75)Siemens can agree with the Commission's definition of the geographic...(76)However, the Commission continues to take the view that different...c.Maintenance and services (77)In Siemens's view, this market should be defined as EEA-wide,...(78)For the purpose of this Decision, a precise market definition...d.Electrical industrial plant building in other areas (79)VA Tech's internal organisation, according to which VAI is active...(80)The question of the precise definition of the relevant geographic...3.COMPETITION ASSESSMENT a.Mechanical metallurgical plant building (81)The merger substantially weakens competition between Siemens/VAI and its main...(1)Market conditions (82)Only VA Tech is active in this area, not Siemens....(83)By contrast, market participants argued for considerably higher market shares...(84)Statements by market participants also suggest that the market or...(85)SMS sees VAI as its main competitor in most of...(2)Overall market for mechanical metallurgical plant building in the area...(86)The Commission's market investigation shows that the merger will lead...(87)VAI and SMS are the closest competitors in the relevant...(88)Danieli is usually regarded as the third strongest competitor, but...(89)There is no significant competitive pressure from other competitors. The...(90)A large supplier of mechanical metallurgical plant building has a...(91)The merger would substantially weaken the competitive pressure exerted by...(92)Siemens has exercised a put option to sell its share...(93)[…]. (94)[…]. (95)[…]. Given Siemens's continuing 28 % share in SMS, the merger...(3)Submarkets of mechanical metallurgical plant building: Creation of a dominant...(96)The above conclusions apply even more forcefully to the possible...(97)In the possible market in mechanical plant building for steelmaking,...(98)In the possible market for mechanical plant building for continuous...(99)Under these circumstances […] would result in a dominant position...b.Electrical metallurgical plant building Market for electrical metallurgical plant building (level 0-2, iron/steel), possible...Market structure and market shares (100)The Commission's market investigation has shown that Siemens is seen...Market shares (101)Market shares are rather difficult to quantify objectively in this...(102)In the view of the Commission (and of some of...(103)The Commission carried out an analysis of the strength of...(104)The figures show that the merger will probably not lead...Tender analysis (105)The relevant market/markets are bidding markets, where market shares are...(106)The tender analysis of data from Siemens and VAI showed...Effect of Siemens's shareholding in SMS (107)The commitments that were required from Siemens regarding its shareholding...Possible level 1 and 2 automation markets (108)The market investigation has confirmed that competitors’ level 1 and...(109)[…]. However, in these possible markets also, a sufficient number...Electrical metallurgical plant building for aluminium hot rolling and aluminium...(110)The possible markets for aluminium rolling mill building are, in...(111)The overwhelming majority of customers regard the impact of the...(112)Entry barriers in the aluminium field are appreciably lower for...IT solutions for plant logistics/MES/level 3 (113)In this relatively young and relatively strongly growing market, the...Conclusion on a possible overall market for electrical metallurgical plant...(114)Since no competition problems arise in any of the possible...c.Metallurgical plant maintenance and servicing (115)The activities of Siemens and VA Tech overlap in this...(116)The merger would therefore not lead in this market to...d.Electrical industrial plant building in other sectors (117)The planned merger is unobjectionable from a competition point of...e.Conclusions on the electrical metallurgical plant building markets and on...(118)For the reasons given above, the notified transaction would not...F.LV SWITCHGEAR AND COMPONENTS (119)The relevant product market for low-voltage switchgear (‘LV switchgear’) can...(120)On that basis the markets for LV switchgear and some...G.BUILDING TECHNOLOGY AND FACILITY MANAGEMENT 1.RELEVANT PRODUCT MARKETS G1.Building technology (121)Siemens and VA Tech are active in the field of...(122)At the installation level, a distinction can be made between...G2.Facility management (123)The market investigation shows that the market may be segmented...2.RELEVANT GEOGRAPHIC MARKETS G1.Building technology (124)In Siemens's view, all the markets referred to above in...G2.Facility management (125)The same holds true for the market or markets in...3.COMPETITION ASSESSMENT G1.Building technology (126)At the component level, it is only in a vertical...(127)The market investigation provided insufficient indications that Siemens would as...(128)According to the company itself, VA Tech is not at...(129)At the installation level, it is only in Austria that...G2.Facility management (130)Most of Siemens's and VA Tech's customers indicated in the...H.INFRASTRUCTURE INSTALLATIONS AND ELECTRICAL EQUIPMENT FOR ROPEWAYS H1.TRAFFIC INFRASTRUCTURE INSTALLATIONS (131)With respect to traffic infrastructure installations, only in Austria would...H2.WATER TREATMENT INSTALLATIONS (132)The same holds true for water treatment installations. H3.ELECTRICAL EQUIPMENT FOR ROPEWAYS (133)The same holds true for electrical equipment for ropeways. I.OTHER IT SERVICES (134)The same holds true for electrical equipment for other IT...CONCLUSIONS (135)The Decision therefore concludes that the notified concentration would lead...J.COMMITMENTS (136)In order to address the aforementioned competition concerns in the...(137)In hydroelectric power equipment, the parties commit to divest VA...(138)In mechanical metallurgical plant building, divestiture of Siemens's 28 % shareholding...(139)In its Decision, the Commission has, therefore, reached the conclusion...K.CONCLUSION (140)The Decision concludes that, subject to full compliance with the...III.ADVISORY COMMITTEE (141)At its 133rd meeting on 29 June 2005 the Advisory Committee...(142)Pursuant to Article 19(7) of the Merger Regulation, the Commission is...
Commission Decision
of 13 July 2005
declaring a concentration compatible with the common market and the EEA Agreement
(Case No COMP/M.3653 — Siemens/VA Tech)
(notified under document number C(2005) 2676)
(Only the German text is authentic)
(Text with EEA relevance)
(2006//EC) (revoked)
F1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
On 13 July 2005 the Commission adopted a Decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings, and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case and in the working languages of the Commission on the website of the Directorate-General for Competition, at the following address: http://ec.europa.eu/comm/competition/index_en.html.
Annotations:
Amendments (Textual)
Decision revoked (31.12.2020) by The Competition (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/93), reg. 1(1), Sch. 3 para. 2 (as amended by S.I. 2020/1343, reg. 34(3)); 2020 c. 1, Sch. 5 para. 1(1)