Vj-193/2000/9

ACQUISITION OF CONTROL OVER IMAG KFT. BY RÁBA MAGYAR VAGON- ÉS GÉPGYÁR RT.

The Competition Council cleared the acquisition of the RÁBA Magyar Vagon- és Gépgyár Rt. over IMAG IKARUS Móri Alkatrészgyártó Kft. The acquisition affected the vehicle industry.

The parties concluded an agreement in 1995 in which it was agreed that RÁBA would acquire an option over IMAG IKARUS if the debt of the IKARUS company exceeded a certain amount.

In 1998 due to the appearance of the circumstances laid down in the contract, the RÁBA notified the planned concentration to the competition authority. As a litigation was still in process, the Competition Office refused to initiate proceedings.

RÁBA and IKARUS finally reached a common position in the litigations and agreed on the sale of the IMAG IKARUS Kft.

As an ancillary restraint IKARUS agreed for 3 years to refrain from continuing in any other undertaking the activities of the IMAG Kft.

The Parties Position on the Market

The RÁBA Group is active in the manufacturing of vehicles, especially on the market of carriages and trucks.

In 1999 on the Hungarian market its market share was:

under-carriages

70,0%

motors

50,5%

trucks

2,4%

bus-under-carriages

46,6%

buses

8,2%

The main activity of the IMAG Kft. is the manufacturing of seats for buses, carriages and cars (91.5% of its sales in Hungary).

Its competitors in Hungary are the Vogel Sitze Hungária Kft. and several other foreign undertakings as the import of such seats are not charged by custom tariffs or other administrative burdens.

IMAG`s market share was 83 per cent in 1999.

As the parties annual turnover exceeded the threshold laid down in the Competition Act, the concentration to be effected needed the authorisation of the Competition Office.

The Assessment of the Competition Council

The Competition Council found that the parties are not present on the same relevant market. Therefore their concentration would not create or strengthen a dominant position, so the Council may not refuse to approve the concentration because of its horizontal effects.

The danger of the restriction of competition because of the vertical integration is not serious as RÁBA`s market share on the bus market is low and therefore it is not able to consume the whole production of the IMAG. On the other hand as it was already mentioned, it is easy to find alternative products in Hungary.

In relation with the ancillary restraints the Council referring to its previous decisions stated that the restriction was justifiable. Therefore the authorisation extends to the ancillary restraints as well.

February 20, 2001. Budapest

dr. Bodócsi András sk. előadó
Fógel Jánosné dr. sk.
dr. Sólyom Eszter sk.
Szabó Györgyi