EUROPEAN COMMISSION

DG Competition

Only the English text is available and authentic.

REGULATION (EC) No 139/2004 MERGER PROCEDURE

Article 4(4) Date:18/03/2024

EUROPEAN COMMISSION

Brussels, 18.3.2024 C(2024) 1893 final

PUBLIC VERSION

HELLENIC TRAIN S.A. Syngrou Ave. 41 & Petmeza 13 11743 Athens Greece

DAMCO Energy S.A. 209, Kifissias Avenue Marousi, Attica 15124 Athens Greece

Hellenic Competition Commission 1A Kotsika str. and 70 Patision Av 10434 Athens Greece

1OJ 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.

2OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).

Commission européenne/Europese Commissie, 1049 Bruxelles/Brussel, BELGIQUE/BELGIË - Tel. +32 22991111

Date of filing: 12.02.2024 Legal deadline for response of Member States: 06.03.2024 Legal deadline for the Commission decision under Article 4(4): 18.03.2024

Dear Sir or Madam,

1. INTRODUCTION

(1) On 12 February 2024, the Commission received by means of a Reasoned Submission a referral request pursuant to Article 4(4) of the Merger Regulation with respect to the transaction cited above. The parties request the operation to be examined in its entirety by the competent authorities of Greece.

(2) According to Article 4(4) of the Merger Regulation, before a formal notification has been made to the Commission, the parties to the transaction may request that their transaction be referred in whole or in part from the Commission to the Member State where the concentration may significantly affect competition in a market within that Member State, which presents all the characteristics of a distinct market.

(3) A copy of this Reasoned Submission was transmitted to all Member States on 14 February 2024.

(4) By letter of 6 March 2024, the Hellenic Competition Commission (“HCC”), as the competent authority of Greece informed the Commission that Greece agrees to the proposed referral.

2. THE PARTIES AND THE PROPOSED TRANSACTION

(5) Hellenic Train S.A. (“Hellenic Train”) is the main provider of rail transport for passengers and freight in Greece. In addition to rail services, Hellenic Train operates certain bus services. Hellenic Train is ultimately owned by the Italian State railway group Ferrovie dello Stato Italiane.

(6) Damco Energy S.A. (“Damco”), based in Greece, is a member of the Copelouzos Group and operates in the energy sector participating in projects of construction and supply of equipment for power plants (thermal, hydroelectric), development of mines, cogeneration units and in general development and operation of infrastructure projects.

(7) Hellenic Train and Damco together will be referred to below as the “Parties”.

(8) The transaction in question (the “Proposed Transaction”) involves the acquisition of joint control by Hellenic Train and Damco over a newly created company operating under the laws of Greece (the “JV”).

(9) On 18 November 2022, the Parties signed a Cooperation Agreement, pursuant to which they jointly participated in a tender for the operation, maintenance, exploitation, completion of design, construction and equipment supply of the Thriasiο Pedio Freight Railway and Sorting Station (“Thriasio II”) owned by the

3Hellenic Railways Organization S.A. Thriasio II will be the only rail/road terminal in Greece.

(10) On 17 May 2023, the contract was awarded to the Parties. In accordance with the terms of the Parties’ tender, they are expected to establish the JV for the execution of the project.

(11) The JV will primarily offer terminal services, mainly transshipment of rail/road cargo. The JV will also provide other services to trains and wagons at the stations, such as arrangement, parking, maintenance, repair, and washing services.

Joint control

(12) Pursuant to the Shareholders’ Agreement signed on […], Hellenic Train will hold […] % and Damco […] % of the JV’s shares. Damco will hold certain veto rights over essential decisions for the strategic commercial behaviour of the JV, […].

(13) In light of the foregoing considerations, the JV will be jointly controlled by the Parties.

Full-functionality

(14) The JV will perform on a lasting basis all the functions of an autonomous economic entity. First, it will have an independent management, i.e. a board of directors as well as a CEO and a CFO. Second, the JV will have market-facing activities and commercial relations with third parties. Third, it will hire and employ its own personnel. Fourth, the JV will not rely on the Parties for its (independent) operations on the market for rail freight terminal services, and services provided by or to the Parties will be at arm’s length. Finally, the JV’s anticipated minimum duration is 30 years. Consequently, the JV will meet the criteria for full-functionality.

(15) Therefore, the establishment of the JV constitutes a concentration within the meaning of Article 3(1)(b) and 3(4) of the Merger Regulation.

3. EU DIMENSION

(16) The Parties have a combined aggregate worldwide turnover of more than EUR 5 000 million (Hellenic Train together with the Ferrovie dello Stato Group: EUR 13.7 billion; Damco together with the Coupelouzos Group EUR […]). Each of the parties has achieved EU-wide turnover in excess of EUR 250 million (Hellenic Train together with the Ferrovie dello Stato Group: EUR […]; Damco together with the Coupelouzos Group: EUR […]). The Parties do not each achieve two thirds of their EU-wide turnover within one and the same Member State. Therefore, the Proposed Transaction has an EU dimension within the meaning of Article 1(2) of the Merger Regulation.

3Hellenic Railways Organization S.A. is the rail infrastructure manager in Greece. It manages, maintains, operates, modernizes and expands a railway network extending over 2,200 km all over the country.

4[…]. See Form RS, paragraphs 36–39.

4. ASSESSMENT

(17) The Proposed Transaction results in non-horizontally affected markets in Greece between the rail freight transport services provided by Hellenic Train and the freight terminal services which will be provided by the JV. The Proposed Transaction does not give rise to affected markets outside of Greece.

4.1. Relevant markets

4.1.1. Rail freight transport

4.1.1.1. Product market definition

(18) Freight transport covers the activity of the physical transfer of objects carried out by the transport provider with equipment it owns, leases, or otherwise legally uses itself. The European Commission has found that not all modes of transport are generally substitutable to each other in view of the geographic situation of the customer as well as the specific characteristics of the goods to be transported.

(19) Against that background, in line with the outcome of market investigations in previous cases, a distinction of land freight transport into rail, road and inland waterways could be made. In this regard, the European Commission has found in previous cases that there are indications for a distinct market for the transport of goods by rail.

(20) In previous cases, the European Commission also considered – but left open – possible distinctions (i) between block train services and single wagon services and (ii) with regard to the goods transported.

(21) The Parties consider that the relevant product market is the market for the transport of goods by rail and do not deem any further subdivision between block train services and single wagon train services necessary, given that the rail freight transport market in Greece has not been developed at such a scale (either in terms of supply or demand) in order to be able to identify sub-segments, considering also the limitations of the rail network.

5See Parties’ Response to RFI 1 of 19 February 2024, paragraphs 7–8.

6Case COMP/M.5855 – DB/ARRIVA.

7Ibid.; Case COMP/M.4294 – Arcelor/SNCFL/CFL Cargo; Case COMP/M.3150 – SNCF/Trenitalia; Case COMP/M.5096 – RCA/MÁV Cargo.

8Case COMP/M.3971 – Deutsche Post/Exel, Case COMP/M.4746 – Deutsche Bahn/EWS.

9Case COMP/M.5480 – DEUTSCHE BAHN/ PCC LOGISTICS.

10Case COMP/M.5855 – DB/ARRIVA; Case COMP/M.5480 – Deutsche Bahn/PCC LOGISTICS; Case COMP/M.5096 – RCA/MÁV Cargo; Case COMP/M.4746 Deutsche Bahn/EWS; Case M.10169 – EPLI/SZ/JV.

11Ibid.; Case COMP/M.4746 – Deutsche Bahn/EWS; Case COMP/M.5480 – Deutsche Bahn/PCC LOGISTICS; Case M.10169 – EPLI/SZ/JV.

12Case COMP/M.5855 – DB/ARRIVA.

13Form RS, paragraph 59.

(22) In any event, for the purposes of the Commission’s assessment under Article 4(4) of the Merger Regulation, the precise scope of the product market can be left open as the Proposed Transaction gives rise to an affected market for rail freight transport services under the widest plausible market definition.

4.1.1.2. Geographic market definition

(23) The European Commission has previously held that in view of different technical and regulatory requirements the markets for domestic and for international rail freight services tend to be national, but could become international on certain routes which are part of a corridor. In certain situations, the European Commission also found that a corridor-based approach might best reflect the competitive situation. In a recent decision, the European Commission considered a distinct market for cross-border rail freight transport services between two neighbouring countries.

(24) The Parties consider that the geographic scope of the market for rail freight transport is national. In fact, firstly, the provision of seamless rail freight transport services between the interconnected countries of Greece, Bulgaria and Romania is not an option and no operator is currently offering these cross-border services. Hellenic Train participates in the international delivery of cargo solely within the Greek territory, through traditional cooperation agreements with foreign railway operators for on-transport beyond national borders. Secondly, the barriers to entry for cross-border rail freight transport are significant (country-specific regulatory and technical requirements, licences and personnel). And thirdly, there are no geographical or technical reasons for assessing by route or corridor (as was the case in the relevant EC precedents), as there are multiple alternative routes between Greece and the Balkans.

(25) In any event, for the purposes of the Commission’s assessment under Article 4(4) of the Merger Regulation, the precise scope of the geographic market can be left open as the Proposed Transaction gives rise to an affected market for rail freight transport services only in Greece, at national level. For the sake of completeness, if the market were to be considered as wider-than-national (e.g. at corridor level), it would not be affected. The Commission notes that the Parties have very limited

14Case COMP/M.2905 – Deutsche Bahn/Stinnes, Case COMP/M.4746 – Deutsche Bahn/EWS, Case COMP/M.5096 – RCA/MÁV Cargo, Case COMP/M.5855 – DB/ ARRIVA; Case M.10169 – EPLI/SZ/JV.

15Case COMP/M.4746 – Deutsche Bahn/EWS, Case COMP/M.4786 – Deutsche Bahn/Transfesa; COMP/M.5855 – DB/ARRIVA; Case M.10169 – EPLI/SZ/JV.

16A corridor-based approach considers that transport services between certain regions are, due to mainly geographical or technical reasons, only offered on one certain route or corridor, where other possible routes are not equally feasible either economically or technically. In that case, each corridor has to be regarded as one distinct geographical market. See e.g. Case COMP/M.3150 SNCF/Trenitalia regarding the tunnel of Fréjus between France and Italy

17Case COMP/M.5096 – RCA/MAV Cargo regarding cross-border rail services between Austria and Hungary. See also Case M.10169 – EPLI/SZ/JV.

18See Form RS, paragraph 59.

19See the Parties’ Response to RFI 1 of 19 February 2024, paragraphs 3–6.

(20) In a wider-than-national corridor market, taking into account the interconnection with Bulgaria, and possibly even further inside the Balkans (Romania), the market would not be affected as Hellenic Train’s market share would be significantly smaller, below 25%. See Parties’ Response to RFI 1 of 19 February 2024, paragraphs 7–8.

21 combined market shares under any wider-than-national market definition and therefore considers that the Proposed Transaction is unlikely to affect competition in those potential markets/corridors.

4.1.2. Freight Terminal Services

4.1.2.1. Product market definition

(26) In previous decisions, the European Commission has not definitely decided on the relevant markets for terminal services. The European Commission considered that handling services in terminals (involving loading, unloading, storage, etc.) are a market on their own. The interchangeability of bimodal and trimodal terminals depends on the substitutability of the modes of transport.

(27) The Parties consider that the relevant product market is the overall market for terminal services (i.e. loading, unloading, temporary storage, etc.). It should be noted that the market in Greece is now being developed. Thriasio II will be the only rail/road terminal in Greece. Hence, the Parties are not in a position to fully assess the demand such activities will meet in order to take a view on potential sub-segments of the market.

(28) In any event, for the purposes of the Commission’s assessment under Article 4(4) of the Merger Regulation, the precise scope of the product market can be left open as the Proposed Transaction gives rise to an affected market for terminal services under the widest plausible market definition.

4.1.2.2. Geographic market definition

(29) As regards the geographic market definition for terminal services, the European Commission considered that for terminal services in deep seaports, the relevant geographic market is determined by the geographic area the terminal generally serves. For midland terminal services, the European Commission took the view that the relevant geographic market is determined through the distance from the terminal to the customer (consignor or consignee of the sending).

(30) The Parties consider that the geographic scope of the market for freight terminal services is national.

(31) In any event, for the purposes of the Commission’s assessment under Article 4(4) of the Merger Regulation, the precise scope of the geographic market can be left open as the Proposed Transaction gives rise to affected markets for freight terminal services in Greece, at national or sub-national level, and does not give rise to any affected markets at wider-than-national level. Since the JV is greenfield and will not be active in freight terminal services outside of Greece, the Commission considers that the Proposed Transaction is unlikely to affect competition in any markets outside of Greece.

4.2. Assessment of the referral request

4.2.1. Legal requirements

(32) According to the Commission Notice on case referral (the “Notice”), in order for a referral to be made by the Commission to one or more Member States pursuant to Article 4(4), the following two legal requirements must be fulfilled:

(a) there must be indications that the concentration may significantly affect competition in a market or markets, and

(b) the market(s) in question must be within a Member State and present all the characteristics of a distinct market.

4.2.1.1. The Proposed Transaction may significantly affect competition in a market or markets.

(33) According to paragraph 17 of the Notice, the existence of an affected market is generally considered sufficient to meet the first criterion set forth in Article 4(4) of the Merger Regulation.

(34) The Parties submit that there is a vertical relationship between the JV’s upstream services as a terminal services provider and Hellenic Train’s downstream services as a rail freight transportation provider. Hellenic Train, as the incumbent rail freight transport provider, has a market share of approximately [70-80]–[90-100]% on the market for rail freight transport in Greece. The Parties submit that is not possible to estimate market shares for the JV as this is a wholly new market with no relevant activity currently taking place in Greece. Given that – at least in the short-term – there will not be any competition from other market players, the Commission expects the market shares to be sizeable.

(35) On the basis of Hellenic Train’s market share in Greece and even in the absence of market shares for the JV, there are vertically affected markets in Greece, given the relationship between the JV (as a terminal services provider) and Hellenic Train (as a rail freight transport provider).

(36) Therefore, the first legal requirement set forth in Article 4(4) of the Merger Regulation appears to be met.

4.2.1.2. The market(s) in question must be within a Member State and present all the characteristics of a distinct market.

(37) According to paragraph 18 of the Notice, the second requirement set forth by Article 4(4) of the Merger Regulation is satisfied if the geographic scope of the markets where competition is affected is national or narrower than national. This entails that competition concerns in other Member States than Greece can be excluded.

(38) The markets for terminal services and rail freight transportation are both characterised by national elements and defined mostly as national in scope by the Commission. In any case, as indicated above, the Proposed Transaction does not give rise to affected markets outside of Greece, i.e. at wider-than-national level or in any other Member State. Its effects appear to be confined to Greece, as this is the only Member State where Hellenic Train and the JV will both be active.

(39) Therefore, the second legal requirement set forth by article 4(4) of the Merger Regulation also appears to be met.

4.2.2. Additional factors

(40) In addition to the verification of the legal requirements, point 19 of the Notice provides that it should also be considered whether referral of the case is appropriate, and in particular “whether the competition authority or authorities to which they are contemplating requesting the referral of the case is the most appropriate authority for dealing with the case”.

(41) First, the Parties submit that the relevant railway markets in Greece have the following particularities:

(a) The characteristics and the limitations of the railway network in Greece and the fact that certain areas of the country (e.g. the Peloponnese Region, Epirus) are not covered by railway transportation and thus depend almost exclusively on freight transportation by road;

(b) The absence of noteworthy rail freight transportation and bimodal (rail/road) transportation activity and the subsequent need to develop this area of activity;

(c) The country’s dependency on sea cargo and the importance of the two ports in Piraeus and Thessaloniki for the import of goods in Greece and their export towards the Balkans and Turkey; and

(d) The characterisation of Thriasio II as a greenfield project.

(42) These particularities demonstrate that the Proposed Transaction is country-specific, and that the HCC would be better equipped to grasp the characteristics of the Greek freight transport market.

(43) Second, in light of the information submitted in the Reasoned Submission by the Parties, the Commission considers that the effects of the Proposed Transaction are confined to Greece either at a national or sub-national level. Thus, the case may require investigative efforts at local level that the HCC seems better placed to conduct.

(44) Third, a referral of the Proposed Transaction to the HCC satisfies the need to preserve the benefit of the ‘one-stop-shop’ as there are no affected markets outside of Greece. The case would thus be referred in its entirety to a single competition authority (i.e. the HCC), which is an important factor of administrative efficiency.

4.2.3. Conclusion on referral

(45) In light of the foregoing on the basis of the information provided by the Parties in the Reasoned Submission, the Commission concludes that the case meets the legal requirements set out in Article 4(4) of the Merger Regulation in that the concentration may significantly affect competition in a market(s) within Greece which present all the characteristics of distinct markets.

(46) Moreover, the requested referral would be consistent with paragraphs 19–23 of the Notice, in particular because the HCC appears to be the most appropriate authority to examine the Proposed Transaction.

5. CONCLUSION

(47) For the above reasons, and given that Greece has expressed its agreement, the Commission has decided to refer the Proposed Transaction in its entirety to be examined by the HCC. This decision is adopted in application of Article 4(4) of the Merger Regulation and Article 57 of the EEA Agreement.

For the Commission

(Signed) Olivier GUERSENT Director-General

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