Vj-95/2001/

VJ-95/2001

THE ACQUISITION OF CONTROL OF KBC BANK N.V. OVER THE COMPANY ESTABLISHED THROUGH THE MERGING OF ABN AMRO MAGYAR BANK RT INTO KERESKEDELMI ÉS HITELBANK RT

(Concentration)

Summary

The Competition Council cleared the acquisition of control of KBC Bank N.V. over the company established through the merging of ABN AMRO Magyar Bank Rt (hereinafter AAM) into Kereskedelmi és Hitelbank Rt. (hereinafter K&H).
AAM and K&H were both under the joint control of KBC and ABN AMRO Bank N.V. In 27 of April 2001 a contract was signed on the merging of AAM into K&H and under the contract KBC acquired the 60 per cent of the shares of the new company.

K&H and AAM were both present on the market of retail banking. Their annual turnover was 619 and 469 billion HUF in 2000. Their combined share was 10-15 per cent on the retail banking sector of Hungary.

The KBC Holding the 100 per cent owner of KBC had a share of 95.4 in the insurance company ARGOSZ Biztosító Rt that had a country-wide share in non-life insurance of 5 per cent.

Under the Competition Act a concentration has to be notified to the OEC if e.g. two independent companies merge. Companies are not independent if they are controlled by the same undertaking or undertakings. In this sense the merger of AAM and K&H would not qualify as a concentration and therefore would not be subject to authorisation. But the Competition Act defines other categories as well e.g. when an undertaking acquires control over an independent company. The Competition Council in a line of previous decisions has already elaborated that this category is applicable to cases where one of the companies having joint control over an undertaking acquires sole control.

Taking into account the fact that AAM and K&H had already been under joint control, their merger itself did not raise competition concerns. It was examined as well whether KBC had control over other companies with similar market activities as this could have led to horizontal or vertical concentration. This possibility existed only in relation with the ARGOSZ insurance company but as the investigation found no coverage among the activities of AAM, K&H and ARGOSZ the concentration did not raise competition concerns.