COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 29.06.2004

SG-Greffe(2004) D/202569/202570/202571

In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EEC) No 4064/89 concerning non-disclosure of business secrets and other confidential information. The omissions are shown thus [Ö]. Where possible the information omitted has been replaced by ranges of figures or a general description.

PUBLIC VERSION

MERGER PROCEDURE ARTICLE 6(1)(b) DECISION

To the notifying parties

Dear Sir/Madam,

Subject: Case No COMP/M.3090 ñ Volkswagen / Offset / Crescent / LeasePlan /JV Notification of 24/05/2004 pursuant to Article 4 of Council Regulation 1No 139/2004

1.By the notified transaction Volkswagen Financial Services and two financial investors acquire from ABN Amro 100% of the shares in LeasePlan, which is active in the leasing and fleet management business.

[Ö]

I. THE PARTIES

3.Volkswagen Financial Services ("VWFS") is the automobile financial services provider for the various brands of the Volkswagen Group. It belongs to the Volkswagen Group ("VW"; world-wide turnover: 87 billion EUR).

4.Offsets is owned by the government of the Emirate of Abu Dhabi. It is active under the name of "Mubadala" and invests funds in different business areas in the UAE and abroad. It is not active on any relevant, related or neighbouring markets.

5.Crescent belongs ultimately to a Saudi Arabian family. It is not active on any relevant, related or neighbouring markets.

1OJ L 24, 29.1.2004 p. 1.

Commission europÈenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11.

6.LeasePlan is active in the economic sector of full fleet leasing and management services for light vehicles (up to 3,5 t), and to a substantially lesser extent also short term rental of cars and financial lease. LeasePlan is incorporated in the Netherlands and achieves a world-wide turnover of [Ö] billion EUR.

II. THE OPERATION

7.The transaction consists in the acquisition of sole control over LeasePlan by a newly created company. VWFS will hold 50% of the shares of this company, the other 50% will be held by a vehicle company; Offsets and Crescent will each hold 50% of the shares of this company. The three parties have signed a Joint Venture Agreement which provides for joint control by the three acquirers.

III. COMMUNITY DIMENSION

8.The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 billion . Each of Volkswagen and LeasePlan have a Community-wide turnover in excess of EUR 250 million, but they do not achieve more than two-thirds of their aggregate Community-wide turnover within one and the same Member State. The notified operation therefore has a Community dimension.

IV. RELEVANT MARKETS

9.The concentration concerns the following markets:

10.According to the parties, there is an affected market for "full fleet leasing and management services for passenger cars and light commercial vehicles". The undertakings active on this market offer to their clients a combination of two services: (a) funding in form of operating leasing, and (b) outsourcing of the fleet and its management. The latter comprises a variety of management services like advisory services in relation to fleet structure and the choice of vehicles, services regarding the acquisition of the vehicle, and services during the life-time of the vehicle like administration, registration, maintenance, tyres, fuel and oil etc. In past decisions, the Commission has left open the question whether a distinction between "funded" and "unfunded" services, i.e. between fleet management services with and without funding/leasing services has to be made. The parties put forward that there is a single product market. They say that the typical customer's intention is to outsource its fleet: Depending on the nature and the financial situation of the customer and other parameters, the customer's needs may vary significantly, and may include financing or may not. Moreover, over the life-time of a framework contract between the service provider and the customer, switches between funded and unfunded services may occur. As regards the supply side, the parties say that all competitors offer both funded and unfunded services. The question can be left open in this case too, as the

2Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the Commission Notice on the calculation of turnover (OJ C66, 2.3.1998, p. 25).

3Notably M.3029 ñ SociÈtÈ GÈnÈrale/AIHL Europe.

market shares of the parties do not differ very much in both segments, and no competition concerns arise on the basis of either market definition.

11.Geographically, the markets are national in scope. This is due to several factors: national specialities in tax and duty regimes, and also different road conditions (different levels of wear and tear) lead to differing needs and preferences of the customers; there is no standardisation of products at European level; the markets differ considerably in terms of market size and maturity (the markets in the NL and in the UK being the most mature ones, the markets in the new MS being in an incipient stage and still relatively small).

12.A second affected product market is that of short term car rental. In its decision M.2510 ñ Cendant/Galileo ñ the Commission has made a distinction between corporate short term rental and leisure car rental. The parties contest this subdivision. However, the question does not have to be decided in the present case, as the concentration does not lead to competition concerns in any case. The markets are considered national in scope; the parties achieve combined market shares of more than 15% in Germany and the Belgium.

13.The Parties further mention the (national) markets for finance lease. There are overlaps in Germany, the Czech Republic and Slovakia.

14.As Volkswagen achieves market shares of more than 25% in some markets for vehicles, the car manufacturing market is affected from a vertical point of view. In previous passenger vehicle cases the Commission has left open both product and geographic market definitions, the narrowest possible market definition being separate segments in individual countries. With respect to the product market, the following market segmentation according to vehicle categories is possible:

ñ A: mini cars

ñ B: small cars

ñ C: medium cars

ñ D: large cars

ñ E: executive cars

ñ F: luxury cars

ñ S: sport cars

ñ M: multi-purpose cars

ñ J: sport utility vehicles.

The boundaries between the different segments are blurred by different factors. This leads to the conclusion that cars in one segment are subject to at least some

4Cf. Case IV/M.1515 ñ Renault/Nissan, par. 19, with further references.

competitive pressure from cars in neighbouring sectors. The precise market definition can be left open in the present case, too, as in no case competitive concerns arise.

The same is true with regard to the geographic market definition. There are some indications that the market is EEA-wide; on the other hand, from a customer's point of view, some national differences still exist with respect to prices, market penetration of different brands and other aspects. It can be assumed that the markets in the Acceding Countries have been national in scope until Accession, but that a tendency towards Europeanization exists. However, this question can be left open, too. Even on the basis of the narrowest market definition ñ which would lead to high market shares of the parties especially in the "B segment" in the Czech and Slovak Republics ñ no competition concerns arise.

However, there are no indications that Volkswagen is dominant on any of these markets, and it can be excluded that the concentration will lead to a significant strengthening of VW's position on these markets. The parties stress that one of the competitive advantages of LeasePlan on this market is its independence from car manufacturers. The customers expect independent advice on the question which vehicles to chose. It is Volkswagen's intention to let the target company continue this policy after the merger, which is one of the reasons why VW decided to acquire only joint control together with two "neutral" financial investors. If, after the merger, LeasePlan continues to advise its customers "independently", no change in Volkswagen's market position as a car manufacturer will occur. If LeasePlan's policy changes after the merger, this might lead to a minor increase in Volkswagen's market shares, but there are no indications that this increase will be so important that the creation of a dominant position or another type of significant impediment to effective competition will occur.

V. COMPETITIVE ASSESSMENT

V.1. Market for short term car rental

Germany

18.In Germany, the market share of VWFS' subsidiary Europcar on the market for short term car rental is [20 - 30] %, LeasePlan's position is de minimis (less than [0 - 5] %). Sixt has a market position equivalent to that of Europcar; Avis and Hertz have important market positions, too. The market shares are very similar if the business and leisure markets or market segments are viewed separately. Under these circumstances, competition concerns do not arise.

Belgium

19.In Belgium, the concentration will lead to the creation of a clear market leader, with a market share of [30 - 40] % (LeasePlan: [20 - 30] %, Europcar: [10 - 20] %); these figures are based on the number of rental days. The main competitor would be Avis, with a market share that rose from 17% in 2001 to 23% in 2003, Hertz (13%), Budget, Interleasing and ING (4% to 7% each).

20.If the leisure and the business markets are looked at separately, the combined market share is slightly higher in the business market ([40 - 50] %, resulting from the addition of ([30 - 40] % of LeasePlan and [0 - 10] % of Europcar); the market shares of the competitors are not known. However, the general picture is the same as for the overall market for short term car rental. Even without a further investigation of the market, it can be assumed that the merged entity's margin of manoeuvre is sufficiently constrained by the existing competitors. In this context, it has to be borne in mind that one of the specific characteristics that distinguishes the business market from the leisure market is that the services are provided on the basis of framework contracts which are awarded on the basis of bidding procedures. This should give the customers a significant degree of negotiating strength. Furthermore, if ñ contrary to the submission of the parties ñ a separate market for business car rental is defined, leisure car rental has to be considered as a closely neighbouring market. Business customers can easily switch to the suppliers active on that market, e.g. by reserving cars via the Internet. On the segment for leisure customers, the combined market shares of the parties is [20 - 30] %. As LeasePlanís position is less important on this segment, the market share addition is low (around [0 - 5] %).

V.2. Market for full fleet leasing and management services

Czech Republic

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 29.06.2004

SG-Greffe(2004) D/202569/202570/202571

In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EEC) No 4064/89 concerning non-disclosure of business secrets and other confidential information. The omissions are shown thus [Ö]. Where possible the information omitted has been replaced by ranges of figures or a general description.

PUBLIC VERSION

MERGER PROCEDURE ARTICLE 6(1)(b) DECISION

To the notifying parties

Dear Sir/Madam,

Subject: Case No COMP/M.3090 ñ Volkswagen / Offset / Crescent / LeasePlan /JV Notification of 24/05/2004 pursuant to Article 4 of Council Regulation 1No 139/2004

1.By the notified transaction Volkswagen Financial Services and two financial investors acquire from ABN Amro 100% of the shares in LeasePlan, which is active in the leasing and fleet management business.

[Ö]

I. THE PARTIES

3.Volkswagen Financial Services ("VWFS") is the automobile financial services provider for the various brands of the Volkswagen Group. It belongs to the Volkswagen Group ("VW"; world-wide turnover: 87 billion EUR).

4.Offsets is owned by the government of the Emirate of Abu Dhabi. It is active under the name of "Mubadala" and invests funds in different business areas in the UAE and abroad. It is not active on any relevant, related or neighbouring markets.

5.Crescent belongs ultimately to a Saudi Arabian family. It is not active on any relevant, related or neighbouring markets.

1OJ L 24, 29.1.2004 p. 1.

Commission europÈenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11.

6.LeasePlan is active in the economic sector of full fleet leasing and management services for light vehicles (up to 3,5 t), and to a substantially lesser extent also short term rental of cars and financial lease. LeasePlan is incorporated in the Netherlands and achieves a world-wide turnover of [Ö] billion EUR.

II. THE OPERATION

7.The transaction consists in the acquisition of sole control over LeasePlan by a newly created company. VWFS will hold 50% of the shares of this company, the other 50% will be held by a vehicle company; Offsets and Crescent will each hold 50% of the shares of this company. The three parties have signed a Joint Venture Agreement which provides for joint control by the three acquirers.

III. COMMUNITY DIMENSION

8.The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 billion . Each of Volkswagen and LeasePlan have a Community-wide turnover in excess of EUR 250 million, but they do not achieve more than two-thirds of their aggregate Community-wide turnover within one and the same Member State. The notified operation therefore has a Community dimension.

IV. RELEVANT MARKETS

9.The concentration concerns the following markets:

10.According to the parties, there is an affected market for "full fleet leasing and management services for passenger cars and light commercial vehicles". The undertakings active on this market offer to their clients a combination of two services: (a) funding in form of operating leasing, and (b) outsourcing of the fleet and its management. The latter comprises a variety of management services like advisory services in relation to fleet structure and the choice of vehicles, services regarding the acquisition of the vehicle, and services during the life-time of the vehicle like administration, registration, maintenance, tyres, fuel and oil etc. In past decisions, the Commission has left open the question whether a distinction between "funded" and "unfunded" services, i.e. between fleet management services with and without funding/leasing services has to be made. The parties put forward that there is a single product market. They say that the typical customer's intention is to outsource its fleet: Depending on the nature and the financial situation of the customer and other parameters, the customer's needs may vary significantly, and may include financing or may not. Moreover, over the life-time of a framework contract between the service provider and the customer, switches between funded and unfunded services may occur. As regards the supply side, the parties say that all competitors offer both funded and unfunded services. The question can be left open in this case too, as the

2Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the Commission Notice on the calculation of turnover (OJ C66, 2.3.1998, p. 25).

3Notably M.3029 ñ SociÈtÈ GÈnÈrale/AIHL Europe.

market shares of the parties do not differ very much in both segments, and no competition concerns arise on the basis of either market definition.

11.Geographically, the markets are national in scope. This is due to several factors: national specialities in tax and duty regimes, and also different road conditions (different levels of wear and tear) lead to differing needs and preferences of the customers; there is no standardisation of products at European level; the markets differ considerably in terms of market size and maturity (the markets in the NL and in the UK being the most mature ones, the markets in the new MS being in an incipient stage and still relatively small).

12.A second affected product market is that of short term car rental. In its decision M.2510 ñ Cendant/Galileo ñ the Commission has made a distinction between corporate short term rental and leisure car rental. The parties contest this subdivision. However, the question does not have to be decided in the present case, as the concentration does not lead to competition concerns in any case. The markets are considered national in scope; the parties achieve combined market shares of more than 15% in Germany and the Belgium.

13.The Parties further mention the (national) markets for finance lease. There are overlaps in Germany, the Czech Republic and Slovakia.

14.As Volkswagen achieves market shares of more than 25% in some markets for vehicles, the car manufacturing market is affected from a vertical point of view. In previous passenger vehicle cases the Commission has left open both product and geographic market definitions, the narrowest possible market definition being separate segments in individual countries. With respect to the product market, the following market segmentation according to vehicle categories is possible:

ñ A: mini cars

ñ B: small cars

ñ C: medium cars

ñ D: large cars

ñ E: executive cars

ñ F: luxury cars

ñ S: sport cars

ñ M: multi-purpose cars

ñ J: sport utility vehicles.

The boundaries between the different segments are blurred by different factors. This leads to the conclusion that cars in one segment are subject to at least some

4Cf. Case IV/M.1515 ñ Renault/Nissan, par. 19, with further references.

competitive pressure from cars in neighbouring sectors. The precise market definition can be left open in the present case, too, as in no case competitive concerns arise.

The same is true with regard to the geographic market definition. There are some indications that the market is EEA-wide; on the other hand, from a customer's point of view, some national differences still exist with respect to prices, market penetration of different brands and other aspects. It can be assumed that the markets in the Acceding Countries have been national in scope until Accession, but that a tendency towards Europeanization exists. However, this question can be left open, too. Even on the basis of the narrowest market definition ñ which would lead to high market shares of the parties especially in the "B segment" in the Czech and Slovak Republics ñ no competition concerns arise.

However, there are no indications that Volkswagen is dominant on any of these markets, and it can be excluded that the concentration will lead to a significant strengthening of VW's position on these markets. The parties stress that one of the competitive advantages of LeasePlan on this market is its independence from car manufacturers. The customers expect independent advice on the question which vehicles to chose. It is Volkswagen's intention to let the target company continue this policy after the merger, which is one of the reasons why VW decided to acquire only joint control together with two "neutral" financial investors. If, after the merger, LeasePlan continues to advise its customers "independently", no change in Volkswagen's market position as a car manufacturer will occur. If LeasePlan's policy changes after the merger, this might lead to a minor increase in Volkswagen's market shares, but there are no indications that this increase will be so important that the creation of a dominant position or another type of significant impediment to effective competition will occur.

V. COMPETITIVE ASSESSMENT

V.1. Market for short term car rental

Germany

18.In Germany, the market share of VWFS' subsidiary Europcar on the market for short term car rental is [20 - 30] %, LeasePlan's position is de minimis (less than [0 - 5] %). Sixt has a market position equivalent to that of Europcar; Avis and Hertz have important market positions, too. The market shares are very similar if the business and leisure markets or market segments are viewed separately. Under these circumstances, competition concerns do not arise.

Belgium

19.In Belgium, the concentration will lead to the creation of a clear market leader, with a market share of [30 - 40] % (LeasePlan: [20 - 30] %, Europcar: [10 - 20] %); these figures are based on the number of rental days. The main competitor would be Avis, with a market share that rose from 17% in 2001 to 23% in 2003, Hertz (13%), Budget, Interleasing and ING (4% to 7% each).

20.If the leisure and the business markets are looked at separately, the combined market share is slightly higher in the business market ([40 - 50] %, resulting from the addition of ([30 - 40] % of LeasePlan and [0 - 10] % of Europcar); the market shares of the competitors are not known. However, the general picture is the same as for the overall market for short term car rental. Even without a further investigation of the market, it can be assumed that the merged entity's margin of manoeuvre is sufficiently constrained by the existing competitors. In this context, it has to be borne in mind that one of the specific characteristics that distinguishes the business market from the leisure market is that the services are provided on the basis of framework contracts which are awarded on the basis of bidding procedures. This should give the customers a significant degree of negotiating strength. Furthermore, if ñ contrary to the submission of the parties ñ a separate market for business car rental is defined, leisure car rental has to be considered as a closely neighbouring market. Business customers can easily switch to the suppliers active on that market, e.g. by reserving cars via the Internet. On the segment for leisure customers, the combined market shares of the parties is [20 - 30] %. As LeasePlanís position is less important on this segment, the market share addition is low (around [0 - 5] %).

V.2. Market for full fleet leasing and management services

Czech Republic