This Decision is addressed to: Skanska AB (publ) S - 18225 Danderyd.
Done at Brussels, 11 November 1998.
For the Commission
Karel VAN MIERT
Member of the Commission
(1) OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990, p. 13.
(2) OJ L 180, 9.7.1997, p. 1.
(3) OJ C 201 16.7.1999.
(4) OJ L 61, 2.3.1998, p. 1.
(5) The Aker group is one of the largest industrial groups in Norway with activities in cement and building materials (through Scancem) and offshore oil and gas engineering.
(6) Prior to the transaction, Skanska and Partek each owned 25 % of the voting rights in Euroc and were thus the main shareholders.
(7) Commission notice on the concept of a concentration under Council Regulation (EEC) No 4064/89 on the control of concentrations between undertakings (OJ C 66, 2.3.1998, p. 5).
(8) For example, Commission decisions in Cases No IV/M.343 - Société Générale de Belgique/Générale de Banque of 3 August 1993 and No IV/M.754 - Anglo American Corporation/Lonrho of 23 April 1997.
(9) The total number of votes for Skanska is stated as the number held after all acquisitions in the period 9 to 14 October 1997. The column "votes cast/ (adjusted)" indicates, first, the actual number of votes cast at the respective meetings, and, secondly the number of votes that would have been cast if Skanska and Aker had used all their present shares in those meetings. For the group "other shareholders", the actual participation has been used for the adjustment (1996: 39,4 %, and 1997: 37,2 %). For 1998, actual figures have been used, but adjusted to show the situation as if Skanska had voted in respect of its total holding; due to this proceeding the company exercised only part of its voting rights.
(10) The table above shows a decreasing trend in the participation at the shareholders' meetings in the group "other shareholders", both in actual numbers (1996: 13,1 % of all votes cast, 1997: 12,4 % and 1998: 3,3 %) and as a percentage of the votes held by shareholders in this group (1996: 39,4 %, 1997: 37,2 % and 1998: 30,8 %).
(11) To this should be added the turnover of JM Byggnads och Fastighets AB (ECU 461 million). Skanska controls 57 % of the votes in JM, which is one of Sweden's five largest construction companies.
(12) See Commission Decision of 30 November 1994, Cases IV/33.126 and 33.322 - Cement, Case No IV/M.460 - Holdercim/Cedest and Case No IV/M.1030 - Lafarge/Redland.
(13) See Commission Decision of 30 November 1994, Cases IV/33.126 and 33.322 - Cement.
(14) Case IV/M.460, Holdercim/Cedest.
(15) See Case IV/M.460, Holdercim/Cedest.
(16) By way of illustration, in 1995 there were around 5000 pits in Sweden out of which 3785 were gravel pits and 487 were crushed rock pits. Around 2700 of these pits were in use in 1995. From the period 1984 to 1995 the share of gravel decreased from 82 % to 51 % of the total aggregates production while the share of crushed rock increased from 13 % to 37 %. The objective is to lower the share of gravel to 30 % before 2000, see the Swedish Competition Authority's decision in Case No 292/97 - NCC/Siab, 22 July 1997.
(17) See Commission Decision in Cases No IV/M.460 - Holdercim/Cedest and No IV/M.1030 Lafarge/Redland.
(18) See also the Swedish Competition Authority's decision in Case No 292/97 NCC/Siab, 22 July 1997.
(19) See Commission Decision of 30 November 1994, Cases IV/33.126 and 33.322 - Cement.
(20) Imports into these countries emanate from the former eastern block whereas Scancem's exports are made primarily to the USA and Africa. Scancem imports white cement from Denmark. Independent imports from other Member States are less than 1 % of Swedish sales.
(21) Case No IV/M.460 - Holdercim/Cedest and Case No IV/M.1030 - Lafarge/Redland.
(22) Prior to the abovementioned 1995 merger between Euroc and Aker's cement business, the Swedish and Finnish cement activities were held by Euroc, the Norwegian cement activities by Aker and the United Kingdom and other international activities by Scancem JV, a joint venture between the two companies.
(23) The parties have throughout the procedure supplied revised figures, e.g., relating to their turnover. Unless otherwise stated, all figures indicated below represent the latest submitted figures.
(24) Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets and marked with an asterisk.
(25) Scancem considers that it is only the production capacity of clinker that can be measured with any reasonable degree of accuracy.
(26) The parties submitted in the notification that Nordic Industrial Cement (NIC) is one of their main competitors in Sweden. This company was, however, acquired by Scancem in March 1998, and has been wound up. The parties have also submitted that Cem-Ox Import & Export AB is in the process of establishing a cement terminal at Oxelösund in Sweden. They, however, have been unable to verify whether it has actually started any business activities.
(27) In 1997 Scancem [...]*.
(28) Skanska has indicated that the Öresund Link contractors (where Skanska is involved) have imported cement from Spain, in connection with the construction of the bridge between Sweden and Denmark. However, as this import related to precast concrete segements, it is unclear why it would be included in official import statistics as cement imports.
(29) The profit margins in Finland have been indicated as [...]* in 1995 and [...]* in 1997. For Norway, the corresponding figures have been indicated as [...]* and [...]*.
(30) The company has not provided any indication as to how these figures have been calculated.
(31) To these start-up costs it would be necessary to add costs for arranging transport from the cement production plant to the terminals (for which Scancem owns three purpose built vessels), and costs for product approval costs, working capital, staff, marketing costs, etc.
(32) In its Reply, Skanska has submitted examples where, prior to the establishment of Scancem in 1995, it sought quotes from other European cement producers or traders. However, as none of these contacts appears to have resulted in it buying any cement from these sources, it is unclear how this, in the view of Skanska, is relevant to the present assessment.
(33) It should be noted that the Stockholm City Court (Stockholms Tingsrätt), in a judgment of 19 March 1998, stated that Scancem has a dominant position on the Nordic cement market (Case No T 8-1002-97, p. 17).
(34) Scancem's market share in Finland is indicated as [50 to 60 %]* for ready-mixed concrete and about [20 to 30 %]* for precast concrete products.
(35) Skanska press-release, 3 August 1998.
(36) It should be noted that in accordance with a decision from the Swedish Competition Authorities, No 292/97 - NCC/Siab, NCC/Siab will divest its interests in this joint venture.
(37) In order to assess the true competitive strength of the parties, these figures include the total turnover of Sydsten AB in which Skanska has joint control. Skanska had originally only included its share part in this company (i.e. 50 % on the basis that Skanska holds 50 % of the shares in that company). However, as long as the test of control is fulfilled, it must be concluded that Skanska has decisive influence over the whole production of the company).
(38) Scancem has been unable to provide information on prices for 1995 to 1996.
(39) Based on the information submitted by Skanska, the cost of providing a suitable rock-crushing plant is up to ECU 1 million while in the case of a plant for extraction of gravel, the cost would be around ECU 0,3 million.
(40) Case No 292/97 - NCC/Siab, 22 July 1997.
(41) Case DNo 292/97 - NCC/Siab, 22 July 1997.
(42) The local estimates submitted by the five companies show a higher degree of variation (as an example, Skanska's estimate for Stockholm is more than [...]* lower than that of Scancem (by volume) and more than [...]* lower by value. However, since the relative position among the main ready-mixed suppliers remains unchanged regardless of which figures are used, those submitted by Skanska have been used below.
(43) In order to assess the true competitive strength of the parties, these figures include the total turnover of Sydsten AB and Strömstadsbetong AB, in both of which Skanska has joint control, as well as Essbetong KB, which is jointly controlled by Scancem. Skanska had originally only included the parties' share part in these companies (e.g. 50 % of Sydsten's turnover, on the basis that Skanska holds 50 % of the shares in that company). However, as long as the test of control is fulfilled, it must be concluded that the parties have decisive influence over the whole production of these companies.
(44) Skanska has been unable to provide comparable data for 1995.
(45) Measured as result after financial costs/turnover.
(46) Neither Skanska, nor Scancem, have explained the reasons for the indicated local variations.
(47) In a submission, subsequent to the statement pursuant to Article 18, Skanska has indicated that its Finnish subsidiary, Tekra OY, is active in ready-mixed concrete. In addition to further reducing the likelihood of entry from Finnish companies on the Swedish market, this also indicates that, contrary to what was disclosed in the notification, the notified operation may have a significant horizontal impact in Finland.
(48) In the reply, Skanska has indicated that its sales figure for 1997 (in value) was about [10 to 20 %]* lower than previously indicated, but has provided no evidence of this. However, as the revised figure would only mean that Skanska's market share (insignificant change)*, this would in any case not materially affect the assessment.
(49) According to Skanska, the statistics overstate the market shares of the parties since, in its view, approximately 10 % of all sales are not reported. Even if Skanska's view were to be accepted, the figures would nevertheless to the same extent overstate also the figures of the competitors. Therefore, the relative positions of the main suppliers would remain unchanged.
(50) As noted above in relation to ready-mixed concrete, Skanska has in a submission subsequent to the statement pursuant to Article 18 acknowledged that its Finnish subsidiary, Tekra OY, is active in precast concrete in Finland. Also, Scancem has a market share of about [20 to 30 %]* in Finland.
(51) Skanska has no production of bricks, but sells such products, in order to complement its sales of other products. Skanska estimates that its sales correspond to [< 10 %]* of total Swedish market.
(52) Decision No 292/97 NCC/Siab, 27 July 1997.
(53) According to its 1996 Annual Report, Skanska is in total more than twice as large as NCC. Moreover, according to the same source, Skanska ranks as the ninth largest construction company in Europe.
(54) On 3 and 9 November 1998 Skanska submitted clarifications of its originally submitted undertakings.
