COMMISSION DECISION of 02/06/1999 declaring a concentration to be compatible with the common market (Case No IV/M.1484 - ALSTOM/ABB) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic) Official Journal 231 , 13/08/1999 P. 0005 - 0005 COMMISSION DECISION of 02/06/1999 declaring a concentration to be compatible with the common market (Case No IV/M.1484 - ALSTOM / ABB) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic) Brussels, 02.06.1999 To the notifying parties Dear Sirs, Subject: Case No IV/M.1484 / ALSTOM - ABB On 27 April 1999, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EEC) No 4064/89, as amended by Council Regulation (EEC) No 1310/97, by which ABB Handels- und Verwaltungs AG ("ABB HV") and ALSTOM (France) create a joint venture on power generation equipment, ABB ALSTOM Power NV ("JV").
After examination of the notification, the Commission has concluded that the notified operation falls within the scope of Council Regulation No 4064/89 and does not raise serious doubts as to its compatibility with the common market and the functioning of the EEA agreement. I. The parties ALSTOM is a holding company with subsidiaries that are active in four sectors : energy, transmission and distribution, transport and industrial and marine. ABB HV belongs to the Swiss-Swedish ABB Asea Brown Boveri Ltd. Group ("ABB") which is, inter alia, active in the following sectors : power generation, transmission and distribution, automation and financial services.
II. The operation The notified operation concerns the creation of a JV in which ABB and ALSTOM will each hold 50% of the shares and to which they will contribute their world-wide businesses concerning power generation equipment, except for ALSTOM's large heavy duty gas turbine (LHDGT) business, which is being sold to General Electric Company ("GE") [1] and ABB's nuclear power and distributed power business. [1] Case IV/M.1404 - GE/ALSTOM, notified on 26/04/1999. The creation of the JV is conditional upon ALSTOM completing the sale of its LHDGT business to GE. The activities of the JV will include the design, manufacture, R&D, marketing, supply and servicing of turbines (gas, steam and hydro), generators, boilers, environmental control products and district heating systems.
III. CONCENTRATION JOINT CONTROL Each of ALSTOM and ABB will hold 50% of the shares in the JV and will appoint one half of the members of the supervisory board. The latter will approve annual budgets, business plans and long-term strategies of the JV and will appoint the management board. Therefore the JV will be jointly controlled by its parent companies. Autonomous full function undertaking The JV will have its own dedicated management and financial resources. Although the JV will make some purchases from its parents (or subsidiaries of its parents), such purchases [2] will be conducted on an arm's length basis and will account for a small proportion ([50%].
The market investigation has confirmed the fact that the gas turbine is the most important element of the CC plant and the decisive factor for choosing a supplier who will in general supply the gas turbine and the steam turbine. For this reason it would be likely that the increment of [