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EN
YILDIRIM/ CMA CGM
Only the English text is available and authentic.
Date: 25/06/2013
In electronic form on the EUR-Lex website under
document number 32013M6917
Office for Publications of the European Union L-2985 Luxembourg
Brussels, 25.6.2013 C(2013) 4131 final
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been replaced by ranges of figures or a general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.
To the notifying parties
Dear Sir/Madam,
Subject: Case No COMP/M.6917 – FSI/ MERIT/ YILDIRIM/ CMA CGM Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004
(1) On 24 May 2013, the European Commission received a notification of a proposed
concentration pursuant to Article 4 of the Merger Regulation by which the undertakings
Fonds Stratégique d’Investissement ("FSI", France), Merit Corporation ("Merit",
Lebanon) and Yildirim Holding ("Yildirim", Turkey) acquire within the meaning of
Article 3(1)(b) of the Merger Regulation joint control over CMA CGM (France) by way
of purchase of shares (hereinafter the "Transaction").
(2) FSI is an investment fund that acquires minority shareholdings in listed and non-listed
companies operating in various sectors and especially in environmental services,
telecommunications, construction, infrastructure, hotels, industry, etc. FSI is controlled
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.
Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11.
by the French public group Caisse des Dépôts et Consignations ("CDC"). CDC
3 indirectly controls SNCM which is active in the sector of maritime shipping services.
(3) Merit is a holding company which does not have activity of its own in Europe besides
providing auditing services for CMA CGM. Merit is controlled by CMA CGM’s founder
and CEO, Mr. Jacques Saadé, and his immediate family.
(4) Yildirim is a joint stock company active in five main sectors: coal and metal, production
and sale of fertilizer, mining and ferroalloys, shipping and ship buildings, and port
management. Yildirim is owned and controlled by its founders, the Yildirim family.
(5) CMA CGM is active in the sector of maritime shipping services, in particular
containerised liner shipping and stevedoring services.
(6) FSI, Merit and Yildirim are collectively referred to as the "Notifying Parties" and CMA
CGM and SNCM as the "Parties".
4 (7) Since 2011, CMA CGM is jointly controlled by Merit and Yildirim.
(8) Pursuant to the Investment Agreement, FSI shall proceed with an investment of USD
150 million in CMA CGM, through the subscription of bonds redeemable into ordinary
5 shares to be issued by CMA CGM. FSI’s subscription was subject to an additional
investment by Yildirim of USD 100 million through the subscription of bonds
redeemable in preference shares representing on a fully diluted basis 4% of CMA
6 CGM’s share capital. Consequently, post Transaction, Merit, Yildirim and FSI will
7 respectively hold 68%, 24% and 6% of the share capital of CMA CGM.
(9) Decisions on the strategic commercial behaviour of CMA CGM, […], require the
8 approval of each of Merit, Yildirim and FSI. In addition, FSI enjoys veto right on any
9 investment in excess of […] . Therefore, FSI has de facto a say on […].
(10) Given these veto rights, CMA CGM will be jointly controlled by Merit, Yildirim, and
FSI. The Transaction therefore constitutes a concentration within the meaning of Article
3(1)(b) of the Merger Regulation.
10 (11) The undertakings concerned CDC, CMA CGM and Yildirim have a combined
11 aggregate world-wide turnover of more than EUR 5 000 million. At least two of them
3 CDC and Veolia Environnement jointly control Veolia Transdev, which, in turn, controls SNCM.
4 The change from sole control by Merit to joint control by both Merit and Yildirim over CMA CGM was notified to the following competition authorities: China (clearance obtained on 27 December 2010), Cyprus (clearance obtained on 7 December 2010), Italy (clearance obtained on 22 December 2010), Turkey (clearance obtained on 23 December 2010) and Ukraine (clearance obtained on 14 December 2010).
5 See […].
6 See […].
7 The remaining […].
8 See […].
9 See […]. Yildirim also enjoys veto right on significant financial investments in excess of […].
2
CGM and Yildirim, achieves more than two-thirds of its aggregate Union-wide turnover
within one and the same Member State (France). Therefore, the notified concentration
has a Union dimension pursuant to Article 1(2) of the Merger Regulation.
13 (12) CMA CGM provides short-sea Ro-Ro shipping services from Marseille to
Oran/Mostaganem (once a week), Marseille to Tunis (three times a week) and Marseille
to Casablanca (once a week).
(13) SNCM mainly provides short-sea passenger shipping services from Marseille to Corsica
(three times a week), Sardinia (up to twice a week from April to October), Algeria (once
a week to the port of Alger) and Tunisia (once a week to the port of Tunis). Essentially
off season, SNCM also carries cargo on these lines.
(14) CMA CGM is also engaged in the upstream market for provision of terminal services,
i.e. cargo handling (or stevedoring services consisting of loading and unloading of
vessels) and cargo storage.
(15) For the purpose of the Transaction, the Notifying Parties submit that the relevant product
market is the market for short-sea Ro-Ro shipping services, with a possible distinction
14 between Ro-Ro and Ro-Pax vessels. In any event, they consider that the market
definition may be left open since the Transaction would not significantly impede
effective competition under any possible product market definition.
15 (16) The Notifying Parties' views are in line with previous Commission's decisions and have
been broadly confirmed respondents to the market investigation.
(17) For the purposes of the present case, there is no need the take any firm view as to the
exact product market definition as no competition concern arises under any possible
segmentation.
(18) The Notifying Parties put forward that the geographic dimension of short-sea Ro-Ro
shipping services must be defined in the same way as for containerized liner shipping
services, namely on the basis of single trades, defined by the range of ports which are
served at both ends of the service. Consequently, they submit that the relevant
geographic market could be defined as trades from Southern Europe (i.e. Portugal, Italy,
Spain, and Southern part of France) to Maghreb (i.e. Morocco, Algeria, Tunisia and
Libya) and back. However, taking a more conservative approach, the Notifying Parties
consider a narrower market restricted to the port of Marseille only, and consider that
ultimately the exact geographic scope can be left open.
16 (19) The Notifying Parties' views are in line with previous Commission's decisions. In
particular, in the CMA CGM/Delmas case, the Commission considered a market
defined as trade from South Europe to other non-European areas (such as Maghreb) and
back. Eventually, it assessed the effects of the transaction on a unidirectional Southern
Europe-Maghreb trade .
(20) For the purposes of the present case, there is no need to take any firm view as to the
exact geographic market definition as no competition concern arises under any possible
segmentation.
(21) The Notifying Parties consider that the relevant market is the general market for short-
sea Ro-Ro terminal services. They also suggest that terminal services for passengers,
passengers with cars and pure Ro-Ro cargo require different infrastructures. In any event,
they consider that the market definition may be left open since the Transaction would not
significantly impede effective competition under any possible product market definition.
(22) In its practice, while ultimately leaving open the market, the Commission contemplated
in particular the possible segmentation of the terminal services between (i) short sea and
deep sea terminal services and (ii) terminal services for Ro-Ro vessels and terminal
services for Lift-on/Lift-off ("Lo-Lo") vessels .
(23) For the purposes of the present case, there is no need to take any firm view as to the
exact product market definition as no competition concern arises under any possible
segmentation.
16 See Cases COMP/ COMP/M.6305 – DFDS/C.RO Ports/Älvsborg, 2 April 2012, recitals 16 et seq, COMP/M.5756 – DFDS/Norfolk, 17 June 2010, recitals 18 et seq.
17 See Case COMP/M.3973 - CMA CGM/Delmas, 1 December 2005, recitals 8 and 11.
18 The Commission looked at the effects of the transaction on a Southern Europe-Maghreb market separately from the south bound and north bound perspective.
19 "Lo-Lo" vessels have been defined as vessels which use dock mounted cranes to lift and stack containers on vessels.
20 See Cases COMP/M.5756 – DFDS/Norfolk, 17 June 2010, recitals 26-29; COMP/M.6305 – DFDS/C.RO Ports/Älvsborg, 2 April 2012, recital 11 et seq.
2. Geographic market definition
(24) The Notifying Parties submit that the geographic scope of the market for short-sea Ro-
Ro terminal services could be defined as the entire Mediterranean coast, including
Barcelona and Genoa ports. However, taking a more conservative approach, the
Notifying Parties consider a narrower market restricted to the port of Marseille only.
Ultimately, the Notifying Parties argue that the exact geographic scope may be left open,
as the transaction cannot be considered as triggering any significant impediment to
competition under any plausible market definition.
(25) In its previous practise, the Commission assessed the effects of the transaction (i) on the
market limited to the port where was located the terminal subject of the transaction and
(ii) on a market encompassing the catchment area of ports in a certain range .
(26) For the purposes of the present case, there is no need the take any firm view as to the
exact product market definition as no competition concern arises under any possible
(27) On 22 October 2012, CDC signed a preliminary agreement with Veolia Environnement
to enter into discussions regarding the reorganization of Veolia Transdev's share capital
and the related reorganization of SNCM's share capital structure. Subsequently, CDC
would acquire within the meaning of Article 3(1)(b) of the Merger Regulation sole
control of the whole of Veolia Transdev, with the exception of SNCM, by way of
modification of its current shareholding. The reorganization of Veolia Transdev's share
capital is subject to the prior sale of Veolia Transdev's 66% shareholding in SNCM to
Veolia Environnement. In this situation, the Transaction would not bring about any
material merger specific effect. However, the Commission has investigated the
competition effects of the current Transaction as the above-mentioned operation has not
been completed yet.
(28) CMA CGM and SNCM's activities overlap on the following narrow markets: (i) the
unidirectional short-sea Ro-Ro shipping services on the Marseille-Tunis lane and (ii) the
unidirectional short-sea Ro-Ro shipping services on the Marseille-
Algiers/Mostaganem/Oran lane.
(29) The market shares of the different companies on the market for short-sea freight shipping
services carried on Ro-Ro vessels in 2012 on the lanes (i) from Marseille to Tunis, and
(ii) from Marseille to Algiers/Mostaganem/Oran are as follows:
21 See Cases COMP/M.6305 – DFDS/C.RO Ports/Älvsborg, 2 April 2012, recitals 16-18, COMP/M.5756 – DFDS/Norfolk, 17 June 2010, recitals 28 and 29.
22 See Case COMP/M.6794 – Caisse des dépôts et consignations/Veolia Transdev, 26 April 2013, footnote 5.
5
Marseille → Tunis Tunis → Marseille
CMA CGM [20-30]%
[20-30]%
[0-5]%
[0-5]%
SNCM
Combined [20-30]%
[20-30]%
Cotunav [40-50]%
[50-60]%
DFDS - LD [20-30]% Lines
[20-30]%
Source: Form CO
(30) Table 1 reflects that the combined market shares of Parties will be up to [20-30]% (on
the Marseille-Tunis lane) with a negligible increment ([0-5]%) on both segments.
Additionally, post Transaction, the Parties will face a competitive constraint by other
credible market players such as the state-owned Tunisian operator Cotunav and DFDS -
23LD Lines.
Marseille→Algiers/Mostaganem/Oran Algiers/Mostaganem/Oran → Marseille
CMA CGM [20-30]% [40-50]%
SNCM [5-10]% [0-5]%
Combined [20-30]% [40-50]%
CNAN MED [20-30]% [20-30]%
NISA [10-20]% [10-20]%
Marfret [10-20]% [10-20]%
Neptune Lines [5-10]% [5-10]%
Nolis [0-5]% [0-5]%
Source: Form CO
(31) Table 2 reflects that the combined market shares of Parties will be no more than [20-
30]% on the Marseille-Algiers/Mostaganem/Oran lane with an insignificant increment of
[5-10]%, while on the Algiers-Mostaganem-Oran/Marseille lane, the combined market
25 shares would reach [40-50]% but with no merger-specific increment. In addition, other
competitors such as the well-established state-owned Algerian shipping company CNAN
MED, as well as NISA, Marfret and Neptune Lines will continue to exert a significant
competitive constraint on the Parties post Transaction .
23 Even though the Marseille – Tunis lane is operated by CMA CGM within a Vessel Sharing Agreement ("VSA") with DFDS – LD Lines, CMA CGM and DFDS – LD Lines market their services separately, as each company retains its own customers and has its own tariffs. In any event, taking into consideration the marginal increment brought about by the Transaction as well as the fact that the Parties will continue facing a significant competitive constraint from the state-owned Tunisian operator Cotunav, the existence of a VSA on the Marseille – Tunis lane does not change the conclusion of the competitive assessment of the Transaction.
24 […] .
25 If a line-by-line market delineation had to be made, for instance Marseille – Algiers and Marseille – Oran/Mostaganem, the Transaction would not give rise to any overlap with respect to the Parties' activities towards/from Algeria.
26 On both lanes, respondents to the market investigation broadly confirmed the positions of the market participants.
(32) CMA CGM offers only pure short-sea Ro-Ro services while SNCM's main activity on
both lanes is to provide passenger transport and incidentally short-sea Ro-Ro shipping
services. SNCM provides short-sea Ro-Ro shipping services essentially off season,
namely from September to June. The market investigation confirmed that CMA CGM
and SNCM are not each other's closest competitor. According to [a customer]: "CMA
CGM and SNCM are not competitors at all". Likewise, [a customer] indicated that:
"SNCM and CMA CGM are not active on the same markets. SNCM mostly provides
services to passengers", whereas, as mentioned by [a customer]: "CMA CGM does not
provide any Ro-Pax services" .
(33) Additionally, since 2009, new regulatory constraints impose a general prohibition to
deliver new vehicles to the Algiers port. Therefore, CMA CGM does not serve anymore
the Algiers port while SNCM only serves this port in Algeria.
(34) It appears from responses to the market investigation that there is no brand loyalty with
respect to short-sea Ro-Ro shipping services and customers switch from one operator to
another quite easily. Additionally, the shipping contracts are either quite short-term
(less than one year) or concluded on the spot, as confirmed during the market
investigation .
(35) Moreover, most market participants confirmed that most of the Parties' customers multi-
source from alternative companies and hence have a fall-back solution should the
combined entity increase its prices post Transaction. For instance, [a customer] indicated
that: "On the Marseille-Mostaganem lane, [a customer’s name] uses each of the four
companies which are active on this lane, in order to take advantage of competition
between them" .
(36) First of all in terms of capacity, due to its Ro-Pax nature, SNCM dedicates only a small
fraction of its capacities to the freight transport. Hence, on the basis of data provided by
the Parties, SNCM's capacity devoted to cargo in terms of linear meters amounted to [0-
5]% on the Marseille-Algiers/Mostaganem/Oran lane and to only [0-5]% of the total
capacity on the Marseille-Tunis lane in 2012. Second, SNCM gives priority to the
boarding of passengers over goods. SNCM does not in principle offer Ro-Pax services in
July nor August, as the demand from passengers is high enough to completely fill their
vessels. As stated by [a customer]: "SNCM gives priority to passengers. If there are more
passengers than expected, the trucks will not be loaded onto the vessel". Therefore, as
confirmed by market participants, this creates a degree of uncertainty for shippers who
therefore tend to favour pure Ro-Ro shipping companies.
(37) Therefore, the Commission concludes that, given the small increment arising from
SNCM's short-sea Ro-Ro shipping activities, the strong presence of other competitors,
the easiness of switching between short-sea Ro-Ro shipping service suppliers for
customers, the lack of closeness of competition as well as the absence of elimination of
an important competitive force, the Transaction does not raise serious doubts as to its
compatibility with the internal market with respect to the market for short-sea Ro-Ro
shipping services or any of its segments on the lanes from Marseille to Tunis and vice
versa and from Marseille to Algiers/Mostaganem/Oran and vice versa.
(38) On March 2013, independently from the Transaction, CMA CGM acquired sole control
over Marseille Manutention which operates the Terminal Roulier Sud, which provides
short-sea Ro-Ro terminal services in the port of Marseille.
(39) SNCM operates solely its own terminals in the Marseille port, where it outsources the
handling of its cargo to […] – as opposed to the handling of passengers, which it
internalizes.
(40) First, on a segment for "pure" short- sea Ro-Ro terminal services, Marseille Manutention
enjoys quite a limited market position ([10-20]%) while on an overall market for Ro-Ro
terminal services Marseille Manutention has an even smaller market share (ca. [5-10]%)
Post Transaction, there would be a number of credible players on the upstream segment
for "pure" short-sea Ro-Ro terminal services, as well as on the broader upstream market
for overall short-sea Ro-Ro terminal services. In addition, there would be no vertical
link between the Parties' activities, since SNCM exclusively operates Ro-Pax vessels
whereas Marseille Manutention only provides "pure" Ro-Ro terminal services. In
addition, it seems that SNCM could hardly become a customer of Marseille Manutention
since the handling of Ro-Pax vessels requires a dedicated infrastructure, as well as
33 See the minutes of the conference call with [a customer] on 29 April 2013: "L'avantage est donné aux passagers, qui seront ainsi prioritaires sur les remorques : s'il y a davantage de passagers que prévu initialement, les remorques resteront à quai", paragraph 7.
34 Whilst SNCM does not provide any cargo terminal services to third parties, it provides terminal services for passengers for [a customer’s name] and [a customer’s name] vessels in the port of Marseille. In any case, the Transaction does not lead to any overlap on the Ro-Pax terminal services segment as CMA CGM does not provide any passenger terminal services in Marseille.
35 The Parties would face post Transaction a competitive constraint from Socoma (which holds Socoman and Intramar Roro), from Compagnie Méridionale de Manutention, a subsidiary of Compagnie Méridionale de Navigation, and from Nicolas Frères.
appropriate regulatory approvals. Finally, the market investigation did not yield any
concern. Therefore, the Commission considers that the Transaction would not give rise to
any risk of input foreclosure.
(41) Second, the increment brought about by SNCM on the downstream market for short-sea
Ro-Ro shipping services is comprised between 0 and 5%. Furthermore, SNCM operates
its own terminal. Therefore, the Commission therefore considers that the Transaction
would not give rise to any risk of customer foreclosure.
(42) 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.
(43) The present decision is adopted without prejudice to applicable State Aid rules.
For the Commission, (signed) Michel BARNIER Member of the Commission
9