DECISION. No. 234 of

Transcription

1 Unofficial translation DECISION No. 234 of The Competition Council 1. Having regard to the Decree no. 57/ for the appointment of the members of the Competition Council Plenum, 2. Having regard to the Competition Law no.21/1996, republished in the Official Gazette of Romania, Part I, no.742 of August 16, 2005, 3. Having regard to the Regulation on organization, functioning and procedure of the Competition Council, published in the Official Gazette of Romania, Part I, no.288 of 01/04/2004, with the subsequent amendments and completions, 4. Having regard to the Regulation concerning the authorization of the economic concentrations, published in the Official Gazette of Romania, Part 1, no. 280 from , 5. Having regard to the Guidelines on the calculation of turnover in the cases of anticompetitive practices stipulated in art.5 par.(1) of the Competition Law no. 21/1996 and in economic concentrations cases, published in the Official Gazette of Romania, Part I, no.440 of 17/05/2004; 6. Having regard to the Guidelines on relevant market definition, with a view to the determining the market share, published in the Official Gazette of Romania, Part I, no.288 of 01/04/2004; 7. Having regard to the Guidelines on the application of the provisions of art.33 1 of the Competition Law no. 21/1996 regarding calculation of the authorization fee for economic concentrations, published in the Romanian Official Gazette of Romania, Part I, no.288 of 01/04/2004; 8. Having regard to the notification of the economic concentration submitted by The Procter & Gamble Company, through its legal representative Salans, Moore & Associates - Attorneys at Law, registered at the Competition Council under no. RS-154/ that became effective on ; 1 Art.33 became art.32 by republication of the Competition Law no.21/1996 1

2 9. Having regard to the Note of the Consumer Goods Directorate concerning the analysis of the notified economic concentration registered under no. GM/2032/ ; Where as 1.The undertakings Procter&Gamble Company Ohio SUA 2 and Procter&Gamble Management Germany GmbH 3 concluded on March, 17 th, 2003 a Share Selling-Purchasing Agreement with Ströher Verwaltungs und Beteiligungs GmbH & Co. KG, Mr. Erika Pohl, Mr. Rainald Pohl, Mr. Tilman Pohl, Mr. Bertram Pohl, Dr. Burkhard Pohl, Mr. Haidrun Hönig, Imladris GmbH, Mrs. Corinna Ströher, Mrs. Cordula Ströher, Mrs. Annika Ströher, Mr. Seven-Martin Ströher, Mr. Jan-Hendrik Ströher, Mrs. Claudia Ebert, Mrs. Jana Ebert, Mrs. Simon Ebert, Mrs. Gisela Sander, Mrs. Ulrike Crespo, Prof. Dr. Thomas Olbricht, Mrs. Sylvia Ströher and Mrs. Immo Ströher (called family shareholders ). As a result of this contract the undertaking Procter&Gamble Management Germany GmbH engaged to acquire from the shareholders mentioned above a package of common shares, meaning almost 77,57% of Wella AG 4 shares, representing 50,7% of the company Wella AG capital share, by which the company Procter&Gamble Management Germany GmbH took control over the company Wella AG, as defined in the European Commission Merger Regulation and in the Romanian Regulation concerning the authorization of the economic concentrations. On April, 28 th, 2003 the company Procter&Gamble Management Germany GmbH published the offer document regarding the public offer by voluntarily accepting the rest of shares held by the company Wella AG shareholders. The period of closing of the offer ended on May, 28 th, 2003, being prolongued with a supplementary period of 2 weeks, until June, 20 th, The conclusion of the contract has accomplished on September, 10 th, On December, 31 st, 2004, Procter&Gamble Management Germany GmbH held cca 81,3% of the company Wella AG capital share, representing 99,6% of common shares and 45,7% of the Wella AG preferential shares. Taking sole control over the company Wella AG Germany by Procter&Gamble Management Germany GmbH has resulted in taking sole control over two affiliated companies in Romania: S.C. Wella Romania S.R.L. and S.C. Londa Cosmetics S.R.L.; 2. Procter & Gamble is an international group of companies engaged in the production and distribution of a range of consumer products, such as baby, health and family care products, household care products, beauty care products. This group was active on the Romanian territory at the moment of acquisition through: S.C. Procter & Gamble Marketing Romania S.R.L. 5, which is active in the wholesale of non-food products - CAEN Code 5147, such as toothpaste, laundry detergents, dish care, shampoos, etc.; S.C. Procter & Gamble Materials Management Romania S.R.L. 6, which imports from Procter & Gamble International Operations SA toothpaste, laundry 2 Headquarter: One Procter & Gamble Plaza, Cincinnati, Ohio, Postal code 45202, USA, registered at the Ohio State Secretariat under no: 20677, Fiscal code (IRS): Headquarter: Sulzbacher Strasse 40, D-65823, Schwalbach am Taunus, Germany, registered at the Local Court in Konigstein im Taunus under no: HRB 5939, Fiscal code (IRS): Headquarter: Berliner Allee 65, D Darmstadt, Germany, registered at the Local Court Darmstadt under no: HRB Headquarter: Str. Dimitrie Pompeiu nr. 9-9A, sector 2, Bucharest, Postal code , Romania, Registering Number of National Trade Register Office: J40/26617/1992, Unique Registering Code:

3 detergents, dish care, shampoos, diapers, feminine care products, etc., and then resells them to S.C. Procter & Gamble Marketing Romania S.R.L.; S.C. Detergenti S.A. Timisoara 7, which is active mainly in the manufacture of soaps, laundry detergents and household care products CAEN Code 2451, and achieves turnover only from the services provided for S.C. Procter & Gamble Marketing Romania S.R.L.; Procter&Gamble group is also active on the Romanian territory as the result of the sales of salty desserts and cold remedies manufactured by a subsidiary from Switzerland, Procter&Gamble International Operations Sa (Genex), through S.C. Interbrands Marketing & Distribution S.R.L.; 3. Wella is an internationally active manufacturer of cosmetics focusing on hair care products for consumers and hair salons, hair salon furniture and equipment, training programs for hair salons, cosmetics and fragrances. This group is active on the Romanian territory through: S.C. Wella Romania S.R.L. 8, which is active in the retail sale of toiletries and cosmetics CAEN Code 5145; S.C. Londa Cosmetics S.R.L. 9, which is active in the retail sale of toiletries and cosmetics CAEN Code 5145; 4. The economic concentration operation mentioned above constitutes an economic concentration realized at international level, having effects on the Romanian market, due to the fact that both Procter&Gamble Management Germany GmbH and Wella AG Germany were present on the Romanian territory in 2003 through S.C. Procter & Gamble Marketing România S.R.L., S.C. Procter & Gamble Materials Management Romania S.R.L. and S.C. Detergenti S.A., respectively through S.C. Wella Romania S.R.L. and S.C. Londa Cosmetics S.R.L., and which, exceeding the threshold provided for in art. 14 of law had to have been notified to the Competition Law, according to the provisions of art.15 of the law; 5. The economic concentration operation has been carried out on the Romanian hair care distribution market, respectively on the shampoos, conditioners and treatments, styling products and hair colourants distribution market. In the year 2002, prior to the economic concentration operation, S.C. Procter & Gamble Marketing Romania S.R.L., S.C. Wella Romania S.R.L. and S.C. Londa Cosmetics S.R.L. activities created overlaps in the distribution market of hair care products. According to the AC Nielsen market study, the market share of S.C. Wella Romania S.R.L./S.C. Londa Cosmetics S.R.L. in 2002 realized on the shampoos, conditioners and treatments distribution markets was cca... %, and that of S.C. Procter & Gamble Marketing Romania S.R.L., on the same market, was cca... %. The market share of S.C. Wella Romania S.R.L./S.C. Londa Cosmetics S.R.L. on the styling products market was 6 Headquarter: Timisoara, Str. Stan Vidrighin no. 5, Judetul Timis, Registering Number of National Trade Register Office Timis: J35/1069/2003, Unique Registering Code : Headquarter: Str. Stan Vidrighin nr. 5, Timisoara, Judetul Timis, Registering Number of National Trade Register Office: J35/1023/1995, Unique Registering Code : Headquarter: Blvd. D. Pompei nr. 9-9A, Postal code , sector 2, Bucharest, Registering Number of National Trade Register Office Bucharest : J40/4859/ 1993, Unique Registering Code: Headquarter: Blvd. D. Pompei nr. 9-9A, Postal code , sector 2, Bucharest, Registering Number of National Trade Register Office: J40/16462/1992, Unique Registering Code:

4 cca... %, and that of S.C. Procter & Gamble Marketing Romania S.R.L., on the same market, was cca... %. As a result of the economic concentration operation, the market shares of the new economic entity realized on the shampoos, conditioners and treatments, styling products national distribution markets insignificantly increased, respectively: from ( ) to ( ) on the shampoos, conditioners and treatments distribution markets from ( ) to ( ) on the styling products distribution market, these markets continuing to be competitive. On the hair colourants distribution market, the market share of S.C. Wella Romania S.R.L./S.C. Londa Cosmetics S.R.L. was in 2002 cca... %, this market remaining unchanged, because S.C. Procter & Gamble Marketing Romania S.R.L. does not activate on this market. S.C. Wella Romania S.R.L. and S.C. Londa Cosmetics S.R.L. activate on the perm products distribution market (Wellaperm, Wellastrate), on personal care products and on the promotional aids distribution market; professional products (personal care products, promotional aids, equipment, furniture, professional scissors Tondeo). 6. The parties stated at point 6.2. from notification that In 2002, activities of P&G and Wella created overlaps only on certain sectors of the hair care market. According to the notifying parties, the market should be divided, based on different end-use, into the folowing sectors: (i) Shampoos; (ii) Conditioners and Treatments; (iii) Styling products; (iv) Hair colourants. With respect to different distribution channels, a further distinction should be drawn between the hairdresser channel and the general retail channel. Such a distinction is appropriate for all hair care products taking into account the fact that to a great extent brands, products and package designs are different and prices of products in hair salons are considerably higher. Wella is active in the professional and retail channel, whereas P&G is only active in the retail channel. Therefore, the proposed transaction does not result in overlaps in the markets for professional hair care products. Sales in hair salons were not analyzed as the activities of the parties. We must underline that the P&G group was not present in Romania on hair colorants sector, not having such products. Thus, P&G is present in Romania only with under the trade mark Pantene and only on the first three sectors of the hair care markets mentioned above, respectively on shampoos, conditioners and treatments and on styling products. With respect to shampoos and conditioners, suplementary to products under trade mark Pantene, Procter & Gamble sold conditioners and treatments under trade marks such as Wash&Go, Head & Shoulders and, since 2003, Herbal Essences. 7. Taking into account that, according to the Guidelines on the relevant market definition, with a view to the determining the market share, the relevant market of the product comprises all those products considered as interchangeable or substitutable by the consumers in terms of characteristics, prices and intended use and the fact that the parties took into consideration only the relevant market considered by the above mentioned Guidelines as the affected market over which the economic concentration will take some effects, respectively where two or more of the parties involved in the economic concentration operate on the same product market and as a result of concentration their 4

5 market share exceeds 15% (horizontal relations), it cannot be defined the relevant market as only the distribution market of shampoos, conditioners and treatments, but the market which has horizontal effects and conglomerate effects, as the relevant market was defined at point 5 above; 8. The economic concentration operation does not have as effect the creation or strengthening of a dominant position on the national market of shampoos, conditioners and treatments, styling products and hair colorants, being compatible with a normal competitive environment. D E C I D ES Art.1. On the ground of the provisions of article 46 (1)(b) of the Competition Law no.21/1996 it is authorised the economic concentration consisting in the acquiring of sole control by the undertaking Procter&Gamble Management Germany GmbH over the company Wella AG Germany and its affiliates, pursuant to the Share Selling-Purchasing Agreement as dated of March 17, Although this economic concentration operation falls within the scope of the Competition Law no. 21/1996, there are no serious doubts as to its compatibility with a normal competitive environment on the relevant markets concerned. Art.2. Procter&Gamble Management Germany GmbH is, according to the provisions of art.32 par.(1) of the Competition Law no. 21/1996, in charge with the payment of the authorization fee for the notified economic concentration. Art.3. The authorization fee amounts [...] RON and is calculated on the basis of the turnovers provided by Procter&Gamble Management Germany GmbH, by notification and by letter registered at the Competition Council under no. CC/DBC/1134/ , according to the provisions of the Guidelines on the application of the provisions of art.33 of the Competition Law no.21/1996, regarding the calculation of the authorization fee for economic concentrations. Art.4. The amount representing the authorization fee shall be transferred by The Procter&Gamble Management Germany GmbH, through S.C. Procter & Gamble Marketing Romania S.R.L., as stated in the letter of its legal representative registered at the Competition Council under no. RG-4348/ , to the state budget, through payment order, mentioning,,the authorization fee for the economic concentration according to the Competition Law no.21/1996, within 30 days from the date of the communication of this Decision. A copy of the payment order shall be sent without delay to the Competition Council. Art.5. This Decision shall be applicable as of the date it is communicated. Art.6. According to the provisions of article 47(4) of the Competition Law no.21/1996, with the subsequent amendments and completions, this Decision may be appealed before the Court of Appeal Bucharest, Administrative Contentious Section, within 30 days of the date of its communication. Art.7. The Consumer Goods Directorate and the General Secretariat within the Competition Council shall pursue the fulfilment of this Decision. 5

6 Art.8. This Decision shall be communicated by the General Secretariat within the Competition Council to the legal representative, respectively Salans, Moore & Associates, whose headquarters are: General Budisteanu 28-C Street, Sector 1, Bucharest, Tel/Fax: ; , which will send it to S.C. Procter & Gamble Marketing Romania S.R.L., S.C. Wella Romania S.R.L. and S.C. Londa Cosmetics S.R.L. Mihai Berinde President 6