DECISION No 4 of

Transcription

1 DECISION No 4 of regarding the economic concentration realized through the acquisition of sole control by SC ARMEDICA TRADING SRL, part of the Hungarian Group Richter Gedeon, over SC DITA IMPORT EXPORT SRL, SC DITA SUD FARM SRL and SC DITAFARM IMPEX SRL THE COMPETITION COUNCIL Having regard to: 1. The Competition Law No 21/1996, republished in the Official Journal, Part I, No 742 from ; 2. The Decree No 57/ regarding the appointment of the members of the Competition Council s Plenum, published in the Official Journal, Part I, No 143 from ; 3. The Decree No 1089/ regarding the appointment of one vice president of the Competition Council; 4. The Decree No 1087/ regarding the appointment of one member of the Competition Council s Plenum; 5. The Regulation on organization, functioning and procedure of the Competition Council, published in the Official Journal, Part I, No 288 of , with the subsequent amendments and completions; 6. The Regulation concerning the authorization of economic concentrations, published in the Official Journal, Part I, No 280 from , with the subsequent amendments and completions; 7. The Guidelines on calculation of turnover in the cases of anticompetitive practices stipulated in Article 5 (1) of the Competition Law No 21/1996, and in the economic concentration cases, published in the Official Journal, Part I, No 440 from ; 8. The Guidelines on relevant market definition with a view to determining the significant market share, published in the Official Journal, Part I, No 288 from ; 9. The Guidelines on application of the provisions of Article 33 of the Competition Law No 21/1996 regarding calculation of the authorization fee for economic concentrations, published in the Official Journal, Part I, No 288 from ; 1

2 10. The Notification of the economic concentration registered at the Competition Council under No RS-120/ and became effective on ; 11. The documents from the case file No RS-120/ ; 12. The Note of the Consumer Goods Directorate No AG-185/ regarding the analysis of the notified economic concentration, Whereas: 1. The economic concentration realized through the acquisition of sole control by SC Armedica Trading SRL, part of the Hungarian Group Richter Gedeon, over SC Dita Import Export SRL, SC Dita Sud Farm SRL and SC Ditafarm Impex SRL, in the basis of a transfer contract signed on The acquiring of control by SC Armedica Trading SRL 1 realized as following: a) Regarding SC Dita Import Export SRL 2 : - SC Armedica Trading SRL acquired sole control over SC Dita Import Export SRL through purchasing a number of 7098 shares, representing 99.99% of the company s share capital, from the natural person Tarus Adrian Roland; - the natural person Szabo Istvan purchased one share of SC Dita Import Export SRL s share capital, representing 0.01%, from the seller Tarus Adrian Roland. b) Regarding SC Dita Sud Farm SRL 3 : - SC Dita Import Export SRL holds 10 shares representing 50% of SC Dita Sud Farm SRL share capital; thus, SC Armedica Trading SRL inherited the control over this percent; - SC Armedica Trading SRL acquired the control over the remaining 50% of SC Dita Sud Farm SRL s share capital through purchasing a number of 10 shares, representing 50% of the share capital, form the natural person Unguritu Gheorghe Eugen. c) Regarding SC Ditafarm Impex SRL 4 : - SC Armedica Trading SRL acquired the control over SC Ditafarm Impex SRL through purchasing a number of 1661 shares, representing 99.93% of its share capital: 831 shares (50% of the share capital) from the natural person Pitea Michaela, and 830 shares from the natural person Tarus Valentin Norbert (49.93% of the share capital); 1 Registered Office: Targu Mures, Cuza Voda Street; CUI ; Registered at The Trade Register Office under: J/26/148/ Registered Office: Bucharest, 42 Octavian Street; Registered at The Trade Register Office under: J40/1759/1991; C.U.I Registered Office: Bucharest, 2 Rusetu Street, 2 nd floor, apartment 72; Registered at The Trade Register Office under: J40/15219/1993; C.U.I Registered Office: Cluj Napoca, 11 Marinescu Street, apartment 1; Registered at The Trade Register Office under: J12/511/1994; C.U.I

3 - the natural person Szabo Istvan purchased one share of SC Ditafarm Impex SRL s share capital, representing 0.07%, from the natural person Tarus Valentin Norbert. 3. The parties involved in the economic concentration are: a) SC Armedica Trading SRL s main declared activity object is the wholesale of pharmaceutical products (CAEN 5146). The undertaking was not active on the market from its setting up until present. SC Gedeon Richter Romania SA 5 controls SC Armedica Trading SRL. Richter Gedeon Vegyeszeti Gyar Nyrt. Hungary 6 controls SC Gedeon Richter Romania SA, both undertakings being active on the manufacturing and commercialisation of human medicines market. SC Armedica Trading SRL holds the control over several pharmacies through SC Gedeon Richter Farmacia SA 7. SC Armedica Trading SRL also controls 8 SC Sibofarm SA 9, which is active, mainly, on the wholesale of pharmaceutical products market and, in subsidiary, on the retail of pharmaceutical products market. SC Sibofarm SA directly controls SC Activpharma SRL, 10 SC Trade Medical Trust SRL 11 and SC ABC Farm SRL 12, all active in the wholesale of pharmaceutical products. b) The acquired entities, SC Dita Import Export SRL, SC Dita Sud Farm SRL and SC Ditafarm Impex SRL are active in the wholesale of pharmaceutical products. 4. The following resulted from the data and documents provided in the notification, including the shares transfer contract, and from subsequent information submitted by the notifying party to the case file and registered at the Competition Council under no RG-8619/ and RG- 8773/ : - the sellers Tarus Adrian Roland and Tarus Valentin Norbert were brothers, and Mrs. Pitea Michaela was the mother in law of Mr. Tarus Adrian Roland; - SC Dita Import Export SRL was established in the year 1991 Mr. Tarus Adrian Roland; SC Ditafarm Impex SRL was set up in the year 1994 by 5 Registered Office: Targu Mures, Cuza Voda Street; CUI: ; resistered under no J26/15/ Registered Office: H-1103, Budapesta, Gyomroi Street, Hungary; registered under no Registered Office: Targu Mures, Cuza Voda Street, Mureş; CUI: ; resistered under no J26/578/ The control was acquired on March 2006 and authorized by the Competition Council by Decision no 121/ Registered Office: Sibiu, 51 Alba-Iulia Street, building no 3, Sibiu; resistered under no J32/204/1992; C.U.I Registered Office: Bucuresti, 2A Vasile Goldis Street, 3-rd District; CUI: ; resistered under no J40/10697/ Registered Office: Targu Mures, 4 Stefan cel Mare Street; CUI ; resistered under no J26/655/ Registered Office: Cluj-Napoca, 6 Mehedinţi Street, apartment 24, Cluj; resistered under no J12/546/1999; C.U.I

4 Mrs. Pitea Michaela; SC Dita Sud Farm SRL was established in the year 1998 by Mr. Unguritu Gheorghe Eugen and SC Dita Import Export SRL; - Mr. Tarus Adrian Roland was SC Dita Import Export SRL s administrator; - the contact data (i.e. telephone and fax numbers) from the shares transfer contract were identical for Mrs. Pitea Michaela and Mr. Tarus Adrian Roland, her son in law; - before the transactions, both Tarus Adrian Roland and Tarus Valentin Norbert personally underwrote SC Dita Import Export SRL credit accounts at the bank, even if SC Dita Import Export SRL was solely controlled by Mr. Tarus Adrian Roland (information excerpted from the shares transfer contract); - an allocation of the selling territory operated between the three Dita acquired companies (no existing overlaps); 13 - On , Gedeon Richter Hungary published on its website a press release through which it underlined the fact that at the time of the transaction the three Dita companies were part of the same group. 5. Thus, before the acquiring of sole control by SC Armedica Trading SRL over the three companies belonging Dita Group, Mr. Tarus Adrian Roland held: - directly, 14 the sole control over SC Dita Import Export SRL and, trough Dita Import Export SRL, joint control over SC Dita Sud Farm SRL, together with Mr. Unguritu Gheorghe Eugen; - indirectly, 15 joint control over SC Ditafarm Impex SRL, together with his brother, Tarus Valentin Norbert. In this case, the legal owner of control, Mrs. Pitea Michaela, the mother in law of Mr. Tarus Adrian Roland, is different from the de facto owner of control. 6. Taking into account the above arguments, the acquired companies - Dita Import Export SRL, Dita Sud Farm SRL and Ditafarm Impex SRL - were part of the same group at the time of the notified transactions. 13 In the notification form submitted by the parties, the phrase allocated districts is used, and according to the company s strategy stated in InfoMemo-Dita Group from the point of view of national coverage, the development is based on strategic partnerships between Dita Bucharest and other group s companies, thus territorial overlaps to be avoided. 14 According to point 10 of the Regulation concerning the authorization of economic concentrations, direct control is exerted by natural persons or undertakings and it is officially obtained. 15 According to point 11 of the same regulation, indirect control is achieved in special cases, when the official owner of the control right is different from the natural persons or undertakings which hold the real power to exert the decisive influence. This kind of situations appear when a natural person or an undertaking situated behind the operation uses another person or another undertaking (the official owner of the control right) in order to exert de facto the control (the decisive influence). The exercise of indirect control may be established analysing, for example, the origin of financing, the existence of family relationships etc. 4

5 7. Having regard to the following: - according to article 10(2)(b) of the Competition law no 21/1996, republished, an operation of economic concentration occurs when one or more persons that already control at least one undertaking, or one or more undertakings, directly or indirectly, acquire control over one or more undertakings or parts of undertakings, either by acquisition of shares or assets, by contract or by other means ; - article 10(2) of the Competition law no 21/1996, republished, provides the general definition of an economic concentration, according to which the result is the acquiring of control over one or more undertakings. This definition does not make any difference between the control acquired through one or several legal transactions, if the outcome of the transactions constitutes a single economic concentration; - two or more transactions can be qualified as a single economic concentration under the meaning of article 10(2) of the Competition law no 21/1996, republished, if they are unitary in nature; - recital 20 of the Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings 20 explains that it is expedient to define the concept of concentration in such a manner as to cover operations bringing about a lasting change in the control of the undertakings concerned and therefore in the structure of the market. And it is moreover appropriate to treat as a single concentration transactions that are closely connected in that they are linked by condition [ ], in this respect existing European Commission jurisprudence 16 ; - in the circumstances where the transactions are interdependent and their result is acquiring control over one or several undertakings, two or more transactions constitute a single economic concentration within the meaning of article 10(2) of the Competition law no 21/1996, republished; - in the present case, the three transactions realized simultaneously, by the Transfer Contract of shares signed on ; - the three transactions are interdependent, linked by conditionality. According to the transfer contract, the condition that links the three transaction is that, from the viewpoint of the parties, none of the transactions would take place without the others; - the result of the three transactions is acquiring sole control by the same undertaking (SC Armedica Trading SRL) over the activity of SC Dita Import Export SRL, SC Dita Sud Farm SRL and SC Ditafarm Impex SRL; - by realising the three transactions, the buyer s single economic goal is to take over the pharmaceutical wholesale business of SC Dita Import Export SRL, SC Dita Sud Farm SRL and SC Ditafarm Impex SRL; 16 The Court of First Instance set out, relating to Cementbouw v Commission (T-282/02), the Commission s competence to treat several transactions as a single concentration under article 3 of the Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings. The Commission found that the respective transactions are interdependent and that they are unitary from the economic point of view. 5

6 - the acquired companies, Dita Import Export SRL, Dita Sud Farm SRL and Ditafarm Impex SRL, were part of the same group at the time of the concentration; - before the concentration, both Tarus Adrian Roland and Tarus Valentin Norbert personally underwrote SC Dita Import Export SRL credit accounts at the bank, even if SC Dita Import Export SRL was solely controlled by Mr. Tarus Adrian Roland (information excerpted from the shares transfer contract); - an allocation of the selling territory operated between the three Dita acquired companies (no existing overlaps), it results that the three interdependent transactions through which SC Armedica Trading SRL directly acquired sole control over SC Dita Import Export SRL, SC Dita Sud Farm SRL and SC Ditafarm Impex SRL, being linked by conditionality, constitute a single economic concentration operation within the meaning of article 10(2)(b) of the Competition law no 21/1996, republished. In these circumstances, all three transactions taken together determined the change in market structure. 8. The notified operation falls under the provisions of the Competition Law No 21/1996, republished, stipulated at article 10(2)(b) and at article 14, regarding the turnover threshold. 9. The relevant market: With regard to the demand side, the pharmaceutical wholesaling is characterised by three main categories of customers: pharmacies (retailing), hospitals (including centralised public procurement), and other distributors. With regard to the supply side for pharmaceutical wholesaling, both Richter Gedeon Group (through Sibofarm) and Dita Group are active as full-line, national wholesalers. Their distribution networks cover all the Romanian territory. Although each depot from Sibofarm network (part of Richter Gedeon Group), as well as from Dita network, supplies customers on a regional basis, the geographic scope of the relevant market is national, since the conditions of competition are sufficiently homogeneous, and customers have the possibility to choice between the offer of several national competitors. The relevant market defined for the purposes of the notified economic concentration is the wholesaling of pharmaceutical products on the Romanian territory. 10. The notified concentration leads to a horizontal overlap in pharmaceutical wholesaling (distribution). 11. The market share of Richter Gedeon Group, in the year 2005, on the Romanian pharmaceutical wholesaling market was of [...] %. 12. The market share of Dita Group, in the year 2005, on the Romanian pharmaceutical wholesaling market was of [...] %. 6

7 13. The parties combined share of the pharmaceutical wholesaling activities is [ ] %, and the concentration degree on the relevant market does not change significantly as a result of the notified concentration. 14. There are many important pharmaceutical wholesalers at national level, capable to exert competitive constraints over Richter Gedeon s activity. 15. The notified concentration involves vertical issues, since the Richter Gedeon Group, active in production and imports of human medicines, as well as in pharmaceutical wholesaling and retailing, acquires control over a network of pharmaceutical depots. 16. Taking into account that Richter Gedeon was already vertically integrated, by acquiring sole control over SC Dita Import Export SRL, SC Dita Sud Farm SRL and SC Ditafarm Impex SRL, the Richter Gedeon Group will strengthen its position the Romanian pharmaceutical wholesaling market. The notified concentration will not create such a market power that could lead to a significant restriction or distortion of competition on the relevant market. 17. The notified operation does not raise concerns regarding a foreclosure effect at the wholesale level, since on the Romanian market there are important pharmaceutical players, with higher market shares. 18. Both Sibofarm and Dita Group are full-line wholesalers and, in the future, they will not have incentives to distribute exclusively Richter Gedeon s products, thus maintaining their full range offer of products. 19. Important players are present on the relevant market, also vertically integrated, which are capable to exert significant competitive pressure over the new entity created following the concentration. 20. The notified economic concentration does not create or strengthen a dominant position, which could lead to a significant restriction, prevention or distortion of competition on the relevant market. DECIDES Art.1. The economic concentration realized through the acquisition of sole control by SC Armedica Trading SRL, part of the Hungarian Group Richter Gedeon, over SC Dita Import Export SRL, SC Dita Sud Farm SRL and SC Ditafarm Impex SRL, in the basis of a transfer contract signed on According to the provisions of Article 46 paragraph (1) letter b) of the Competition Law No 21/1996, republished, and to the provisions of the Regulation regarding the authorization of economic concentrations, the notified economic concentration is authorised. Although the notified economic concentration operation falls within the scope of the Competition Law No 21/1996, republished, there are no serious doubts as regards the compatibility with normal competitive environment. 7

8 Art.2. The authorisation fee is established based on the provisional turnovers submitted by the parties, through the law representative, by the address registered at the Competition Council under No CC/DBC/34/ The authorisation fee is calculated according to the provisions of Article 32 paragraph (2) of the Competition Law no 21/1996, republished, and the Guidelines on calculation of the authorization fee for economic concentrations, is in amount of [...] RON. Art.3. Within maximum 5 days after submitting, to the local offices of the Ministry of Public Finances, of the annual financial statements as of of the companies SC Armedica Trading SRL, SC Sibofarm SA, SC Activpharma SRL, SC Trade Medical Trust SRL, SC ABC FARM SRL, SC Dita Import Export SRL, SC Dita Sud Farm SRL and SC Ditafarm Impex SRL, SC Armedica Trading SRL shall submit a copy of the statements to the Competition Council. The Competition Council s right to recalculate the amount of the authorization fee is reserved, if the turnovers calculated based on the final data significantly differ from the provisional values taken into account in determining the fee stipulated at Article 2 of the present Decision. Art.4. The amount representing the authorization fee shall be paid, within maximum 30 days from the communication s date of the present Decision, to the State budget through a treasury payment order, with the mention: Authorisation fee for economic concentration according to the Competition Law No 21/1996. A copy of the payment order shall be submitted immediately to the Competition Council. Art.5. The present decision shall enter into force on the date of its communication to the parties involved. Art.6. Pursuant Article 47 paragraph (4) of the Competition Law no 21/1996, republished, the present decision may be appealed before the Bucharest Court of Appeal, Section Contentious Administrative within 30 days from its communication. Art.7. The General Secretariat and the Consumer Goods Directorate within the Competition Council shall monitor the enforcement of the present Decision Art.8. The General Secretariat of the Competition Council will communicate the present decision to: SC ARMEDICA TRADING SRL Cuza Voda Street, Targu Mures Registered at The Trade Register Office under No J/26/148/2000 CUI: Through empowered: Cabinet individual de avocat BARTHA BARNA Mihai Berinde President 8