This text is made available for information purposes only. A summary of this decision is published in all Community languages in the Official Journal of the European Union. Case No COMP/M.2978 LAGARDERE / NATEXIS / VUP Only the French text is authentic. REGULATION (EEC) No 4064/89 MERGER PROCEDURE Article 8 (2) Date: 07/01/2004 COMMISSION OF THE EUROPEAN COMMUNITIES Brussels, 7 January 2004 C(2003) 5277 final PUBLIC VERSION Commission Decision of 7 January 2004 declaring a concentration compatible with the common market and the functioning of the EEA Agreement (Case No COMP/M.2978 – Lagardère/Natexis/VUP) under Council Regulation (EEC) No 4064/89 (Only the French version is authentic) (Text with EEA relevance) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, Having regard to the Agreement on the European Economic Area, and in particular Article 57 thereof, European Commission, B-1049 Brussels, Belgium. Telephone: (32 2) 299 11 11. Office: J-70 6/117. Telephone: direct line (32 2) 296 50 40. Fax: (32 2) 295 01 28. http://europa.eu.int/comm/competition This text is made available for information purposes only. A summary of this decision is published in all Community languages in the Official Journal of the European Union. Having regard to Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings1, and in particular Article 8(2) thereof, Having regard to the Commission’s decision of 5 June 2003 to initiate proceedings in this case, Having regard to the Commission’s decision of 23 July 2003 not to refer the notified transaction to the competent French authorities, Having given the undertakings concerned the opportunity to make known their views on the objections raised by the Commission, Having regard to the opinion of the Advisory Committee on Concentrations2, Having regard to the final report of the Hearing Officer in this case3, WHEREAS: (1) On 14 April 2003, the Commission was notified in accordance with Article 4 of Council Regulation (EEC) No 4064/89 (“the Regulation”) of a planned transaction whereby the undertaking Lagardère would acquire control, within the meaning of Article 3(1)(b) of the Regulation, of the assets of Vivendi Universal Publishing (“VUP”), controlled by Investima 10, itself controlled by Natexis Banques Populaires, by means of share purchases (“the notification”). SECTION I: THE PARTIES (2) Lagardère is a limited partnership with shares quoted on the French stock market. The parent company of the Lagardère group is Lagardère SCA. Lagardère SCA is a company quoted on the Paris Stock Exchange. It is not controlled directly or indirectly by any other firm or institution. (3) Lagardère controls a group of companies in business world-wide in three main areas: (i) communication/media/publishing, (ii) the motor industry and (iii) high technology. On the communication, media and publishing side, alone concerned by the notification, Lagardère’s main activities are grouped in Hachette SA ("Hachette"), wholly owned by Lagardère, doing business in the following areas: - publishing, through Hachette Livre; - the press, through Hachette Filipacchi Médias; 1 OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990, p. 13; last amended by Council Regulation (EC) No 1310/97 of 30 June 1997 (OJ L 180, 9.7.1997, p. 1). 2 OJ C ..., ... 200., p. .... 3 OJ C ..., ... 200., p. .... 2 This text is made available for information purposes only. A summary of this decision is published in all Community languages in the Official Journal of the European Union. - distribution and retailing services, through Hachette Distribution Services; - broadcasting and multimedia services, through Lagardère Active. (4) Investima 10, a public limited liability company governed by French law,4 is a wholly-owned subsidiary of Ecrinvest, itself wholly owned by Segex (Groupe Natexis Banques Populaires). Investima 10 was formed to hold the shares in VUP, which is active in various sectors of the creative publishing business and operates in logistics and distribution. SECTION II: THE TRANSACTION (5) In September 2002 Lagardère declared its interest in acquiring VUP’s publishing assets in Europe and Latin America (except Brazil), which Vivendi Universal had just decided to put up for sale5. At the end of October, Vivendi Universal announced that it had accepted Lagardère’s offer. (6) Lagardère’s procedure for acquiring these assets had to meet one of the seller’s desiderata, which was for a quick operation and quick payment. It was in order to meet this concern for speed that, at Lagardère’s request, Natexis Banques Populaires became involved in the process of acquiring the relevant VUP assets. (7) On 3 December 2002, the Natexis Banques Populaires Group concluded a firm sale contract with Lagardère, enabling Lagardère (via Ecrinvest 4), subject to authorisation from the Commission, to acquire full ownership of the capital in Investima 10, the company owning VUP’s assets. The acquisition price for these shares was paid immediately, and in advance, by Lagardère to Segex, a company owning all the shares constituting the capital in Ecrinvest 4, on the same date. (8) Consequently, the transaction is an acquisition of total control within the meaning of Article 3(1)(b) of the Regulation. SECTION III: COMMUNITY DIMENSION (9) The firms concerned had total worldwide turnover of €5 billion6 in 2001 (Lagardère, […]∗ million; VUP, […]* million). Each of them had turnover in the Community of more than €250 million in 2001 (Lagardère, […]* million; VUP […]* million), and 4 Since the date of the notification, Investima 10 has become Editis SA. 5 Vivendi Universal also divested itself of its publishing assets in the United States (Houghton Mifflin), acquired by a third party. 6 Turnover calculated in accordance with Article 5(1) of the Regulation and the Commission communication on the calculation of turnover (OJ C 66, 2.3.1999, p. 25). ∗ Parts of this document have been omitted to ensure that no confidential information is disclosed; these are contained in square brackets and marked with an asterisk. 3 This text is made available for information purposes only. A summary of this decision is published in all Community languages in the Official Journal of the European Union. Lagardère does not achieve more than two thirds of its turnover in a single Member State. The transaction therefore has a Community dimension. SECTION IV: PROCEDURE (10) After examining the notification, the Commission has concluded that the transaction is caught by the Regulation and raises serious doubts as to its compatibility with the common market. By decision of 5 June 2003, it accordingly began proceedings under Article (6)(1)(c) of the Regulation. I. THE FRENCH REQUEST FOR REFERRAL (11) On 14 May 2003, the French authorities asked for part of the case to be referred to them under Article 9 of the Regulation. The request concerned the analysis of the effects of the transaction on the markets for publishing general literature titles in large format (French grand format), general literature titles in pocket format (format de poche), the acquisition of copyright for editions in pocket format, school textbooks, educational supporting materials, single-language dictionaries, bilingual and multilingual dictionaries, single-volume general encyclopaedias, and marketing and distribution services provided to publishers. The French authorities argued that each of these markets had a national dimension. (12) By decision of 23 July 2003, the Commission rejected the French authorities’ request. (13) For the markets in copyright for pocket-format editions, marketing and distribution services, large-format general literature titles, pocket-format general literature titles, single-language dictionaries, bilingual and multilingual dictionaries and single-volume general encyclopaedias, the Commission considered that the condition that there should be a distinct geographic market was not satisfied, and that these markets could therefore not be referred to the French authorities under the second subparagraph of Article 9(3) of the Regulation. (14) For the market for sales of school textbooks by publishers to dealers, the Commission considered that all the conditions imposed by Article 9(2)(a) of the Regulation were satisfied. For the market for sales of educational supporting materials by publishers to dealers, the Commission, at the time when it took its decision under Article 9 of the Regulation, was not able to determine whether the geographic dimension was national or supranational, though the other conditions imposed by Article 9(2)(a) of the Regulation were satisfied. For these two markets, even if the market for educational supporting materials had a national geographic dimension, the Commission decided to analyse the effects of the merger itself, in accordance with point (a) in the first subparagraph of Article 9(3) of the Regulation, in view of the close links between these two markets and the remainder of the book business. 4 This text is made available for information purposes only. A summary of this decision is published in all Community languages in the Official Journal of the European Union. II. THE SUSPENSION OF TIME-LIMITS (15) To enable it to examine the notified transaction the Commission sent Lagardère requests for information under Article 11 of the Regulation, in particular on 12 May, 16 May and 2 July 2003. The time-limits for answering these requests were 14 May, 26 May and (after extension) 25 July 2003 respectively. But Lagardère did not provide all the information requested within the time allowed. (16) The Commission accordingly adopted two decisions addressed to Lagardère, on 16 June and 8 August 2003, in accordance with Article 11(5) of the Regulation. Under Article 10(4) of the Regulation, the time allowed for adopting a decision in accordance with Article 8 of the Regulation was twice suspended from the date of the time-limit set by the request for information to the date when the information requested by the Commission was received, that is to say from 14 May to 11 July 2003 and from 25 July to 26 August 2003.