EUROPEAN COMMISSION DG Competition Case M.9582 - SIEMENS GAMESA RENEWABLE ENERGY / SENVION (EUROPEAN ONSHORE WIND TURBINE SERVICE) / RIA BLADES Only the English text is available and authentic. REGULATION (EC) No 139/2004 MERGER PROCEDURE Article 6(1)(b) NON-OPPOSITION Date: 20/12/2019 In electronic form on the EUR-Lex website under document number 32019M9582 EUROPEAN COMMISSION Brussels, 20.12.2019 C(2019) 9497 final PUBLIC VERSION In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC) No 139/2004 concerning non-disclosure of business secrets and other confidential information. The omissions are shown thus […]. Where possible the information omitted has been replaced by ranges of figures or a general description. To the notifying party Subject: Case M.9582 – SIEMENS GAMESA RENEWABLE ENERGY / SENVION (EUROPEAN ONSHORE WIND TURBINE SERVICE) / RIA BLADES Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/20041 and Article 57 of the Agreement on the European Economic Area2 Dear Sir or Madam, (1) On 31 October 2019, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation. This notification concerns the following undertakings: Siemens Gamesa Renewable Energy, S.A. (“SGRE” or the “Notifying Party”, Spain), controlled by Siemens AG (“Siemens”, Germany), and Senvion GmbH’s (“Senvion”, Germany) European onshore servicing business for wind farms including all related assets; all of Senvion’s IP as well as Senvion’s wind turbine blades manufacturing facilities in Vagos (Portugal) and 1 OJ 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. 2 OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”). Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË Tel: +32 229-91111. Fax: +32 229-64301. E-mail: [email protected]. Oliveira de Frades (Portugal), owned and operated by Ria Blades S.A., a subsidiary of Senvion, (together “the Senvion Target Business”). (2) SGRE acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole control of the Senvion Target Business (the “proposed Transaction” or “Transaction”).3 SGRE and Senvion together are hereinafter referred to as the “Parties” or the “Parties to the proposed Transaction.” In order to facilitate the transfer of the Target Business, Senvion implemented a carve-out separating the Target Business from the remaining business of Senvion Group. As a result, and with the exception of Ria Blades, the Target Business was separated to and operated by Senvion Deutschland GmbH (“Senvion Deutschland”). Thus, in legal terms, the Transaction involves the acquisition of Ria Blades and Senvion Deutschland by SGRE. 1. THE PARTIES (3) SGRE is headquartered in Zamudio (Spain), listed on the Madrid, Barcelona, Valencia and Bilbao Stock Exchanges and member of the Ibex 35 index. SGRE is an engineering company in the renewable energy industry that manufactures wind turbines and offers onshore and offshore wind turbine services, such as installation and maintenance of wind turbines (both for its own fleet and wind turbines manufactured by other turbine manufacturers). It was created in April 2017 by the merger of Gamesa with the Wind Power Business of Siemens.4 SGRE’s controlling shareholder is Siemens. (4) Senvion is a wind turbine manufacturer headquartered in Germany. It develops, manufactures and sells onshore and offshore wind turbines and offers related services, such as the construction of a wind turbine’s foundation and maintenance for its wind turbine fleet. (5) Senvion is facing financial difficulties and Senvion and Senvion Deutschland filed for insolvency with the local court – insolvency court – of Hamburg, Germany on 9 April 2019. On the same day, the insolvency court of Hamburg ordered preliminary self-administration and the appointment of a preliminary custodian with regard to the assets of each of Senvion and Senvion Deutschland. On 1 July 2019, insolvency proceedings were opened by the competent insolvency court and self-administration was ordered for Senvion and Senvion Deutschland. On 11 September 2019, insolvency plans were adopted for Senvion and Senvion Deutschland, providing, inter alia, for the carve out of the European onshore wind turbine service business from Senvion and a transfer of the carved-out business to Senvion Deutschland. (6) At the State of Play meeting within the meaning of paragraph 33a) of DG Competition’s Best Practices,5 the Commission informed the Parties that it could not be excluded that the proposed transaction, as originally notified, might raise serious doubts as to its compatibility with the internal market in the market for operation and maintenance services for offshore wind turbines in the EEA. The Notifying Party 3 Publication in the Official Journal of the European Union No C 382, 11.11.2019, p. 28. 4 This transaction was authorised by the Commission on 13 March 2017, Case COMP/M.8134 – Siemens/Gamesa. 5 DG COMPETITION Best Practices on the conduct of EC merger control proceedings https://ec.europa.eu/competition/mergers/legislation/proceedings.pdf 2 subsequently submitted, and the Commission market tested, commitments on 29 November 2019 designed to eliminate the potential serious doubts identified by the Commission in accordance with Article 6(2) of the Merger Regulation. After further investigation, and for the reasons stated in Section 5.3.1.2, the Commission considers that no serious doubts arise on the market for the operation and maintenance services for offshore wind turbines in the EEA. The commitments submitted by the Notifying Party are therefore not necessary and the Transaction can be cleared unconditionally. 2. THE OPERATION (7) The proposed Transaction is accomplished by way of a hive-down and asset deals, followed by the purchase of shares. Specifically, as indicated in paragraph (2) above, the assets relevant to the onshore servicing business were transferred from Senvion to Senvion Deutschland, the new entity created for the proposed Transaction. Following this carve-out, the Parties entered into binding transaction agreements on 21 October 2019 by which SGRE would acquire the shares of Senvion Deutschland and Ria Blades S.A. The consummation of the Transaction is subject to merger clearance by the Commission. (8) The Senvion Target Business comprises the following assets: i.) A large part of Senvion's European onshore wind farm servicing business in the EEA. Servicing refers to the maintenance works related to wind farms with the aim of keeping the wind farms operational. The Senvion Target Business includes approximately 81% of Senvion’s onshore wind turbine service contracts in the EEA, i.e. SGRE is not acquiring all of Senvion’s EEA onshore servicing business. The remaining 19% of EEA onshore service contracts, the EEA offshore servicing contracts and all servicing contracts outside the EEA are outside of the scope of the proposed Transaction. ii.) All of Senvion's IP. The IP acquired relates to the onshore OMS business, to the offshore OMS business, but also to other businesses of Senvion, most notably to the technology related to the wind turbines that Senvion manufactured prior to insolvency. iii.) Linited volumes of inventory including spare parts and some tools and equipment related to Senvion’s offshore services business. iv.) Ria Blades S.A, which comprises Senvion’s wind turbine blades manufacturing facilities in Vagos (Portugal) and Oliveira de Frades (Portugal), currently operated by Ria Blades S.A. The Transaction involves the acquisition of these two manufacturing facilities only. The rest of Senvion’s blade manufacturing business and all the rest of Senvion’s manufacturing business (most notably the manufacturing of wind turbines) are outside the scope of the Transaction. 3 3. THE CONCENTRATION (9) As a result of the proposed Transaction SGRE will acquire sole control within the meaning of Article 3(1)(b) the Merger Regulation over the Senvion Target Business. 4. EU DIMENSION (10) The undertakings concerned have a combined aggregate worldwide turnover of more than EUR 2 500 million6 (SGRE: EUR […] million; Target Business: EUR […] million)7 and the aggregate EU-wide turnover of each of them is more than EUR 100 million (SGRE: EUR […] million; Target Business: EUR […] million). In each of Germany, France and the UK their combined aggregate turnover is more than EUR 100 million, and each of their aggregate turnover is more than EUR 25 million (Germany – SGRE: EUR […] million, Target Business: EUR […]million; France – SGRE: EUR […] million, Target Business: EUR […] million; the UK – SGRE: EUR […] million, Target Business: EUR […] 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 an EU dimension. 5. RELEVANT MARKETS AND COMPETITIVE ASSESSMENT (11) The proposed Transaction can plausibly affect four activities. (12) First, both Parties are active in onshore wind turbine servicing (horizontal relationship). The proposed Transaction will primarily affect this