Merger Of Cargo Handling Firms Approved

by Ulrika Lomas, for LawAndTax-News.com, Brussels

22 August 2006

The European Commission has cleared - under the EU Merger Regulation - Sea-Invest’s proposed acquisition of joint control in EMO-EKOM, it announced last week.

Both companies are cargo-handling companies mainly active in the loading, unloading and storage of iron ore and coal.

The Commission was initially concerned about horizontal overlaps of the parties’ activities on the market for coal and iron ore terminal services at the ports of Antwerp, Rotterdam and Amsterdam, including Zeeland, the so called ARA range, and therefore opened a detailed inquiry.

However, the in-depth investigation has shown that in practice there is only very limited competition for the services concerned between the ports of Antwerp and Rotterdam. Thus the Commission has now concluded that the transaction would not significantly impede effective competition within the European Economic Area (EEA) or a significant part of it.

During its investigation, the Commission found that, for the provision of terminal services for coal and iron ore, the port of Antwerp constitutes a separate market from the port of Rotterdam and the other Dutch ports. There is only a limited fringe competition between Sea-Invest and these Dutch ports as only a small number of customers which represent a marginal part of the terminals’ total volumes could and would switch between the terminal of Sea-Invest in Antwerp and the terminals in the Dutch ports.

The Commission however assesed also the possible effect of the merger on this remaining fringe competition between Sea-Invest on the one hand and EMO-EKOM and other Dutch terminals on the other hand.

As most of the fringe customers would consider other terminals in the ARA range as better alternatives for Sea-Invest and EMO-EKOM, the transaction would not lead to any competition concerns even with regard to the remaining fringe competition between Sea-Invest and EMO-EKOM. Further, the in-depth investigation showed that there would be little scope for Sea-Invest and the other controlling shareholders of EMO-EKOM to coordinate their behaviour with respect to these fringe customers.

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