Background Acquisition by Deutsche Post AG of the shares of the US freight forwarding company Air Express International Corp. (AEI). AEI is one of the leading US-based international freight forwarders. It has a network covering some 135 countries.
Assessment The Commission authorised the operation. In delineating the relevant product market, the Commission found that the following distinctions were relevant: (i) between domestic and cross-border freight forwarding, (ii) between land air and sea freight forwarding, and (iii) between express freight forwarding and standard freight forwarding services. On the other hand, the Commission said it is not relevant to distinguish according to the weight or format of a consignment as regards freight forwarding. Because the present case concerns freight forwarding services, this distinction was not relevant. The Commission also considered that because freight forwarders are generally able to serve all types of customers without distinguishing them according to the type of goods transported, there is no need for a further segmentation of the market concerned. The parties’ activities overlap in international sea and air freight forwarding.
Deutsche Post will strengthen its freight forwarding services on a world-wide basis and will become the biggest European air freight forwarder in 10 countries (Belgium, Denmark, Finland, Ireland, Sweden, the UK, Spain, Italy, the Netherlands and Norway). It will not achieve a market share of 25% or more with the exception of Finland, where it is expected to achieve a market share of 30 to 40%. However in Finland, it faces significant competitors. For this reason, the merger will not give rise to the creation or strengthening of a dominant position. As regards sea freight forwarding, the Commission considered there was no competition concerns here again as a result of the presence of competitors and the fact that after the acquisition of AEI, Deutsche Post will not attain market shares beyond 15% in any Member State.
The Commission has also considered that in the past two years, Deutsche Post has been able to strengthen its position in all main segments of postal and transportation services. It announced that any further steps will be closely monitored. The Commission stated that issues regarding alleged cross-subsidisation and state-backing are fully taken into account in the State aid procedure opened in July 1999. (COMP/M.1794, Decision of 07/02/00, public version available February 2000)
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