DECISION no. 176/28.07.2006 regarding the economic concentration achieved by SC ROMELECTRO SA Bucuresti by taking over the sole control of SC INSTITUTUL DE STUDII SI PROIECTARI ENERGETICE I.S.P.E. SA Bucuresti The file case no.rs-52/09.05.2006 THE PRESIDENT OF THE COMPETITION COUNCIL, having regard to: 1. The Decree no.57/17.02.2004 regarding the appointment of the members of the COMPETITION COUNCIL Plenum; 2. The Decree no.838/13.06.2006 regarding the appointment of the COMPETITION COUNCIL Vice-President; 3. The Competition Law no.21/1996, republished; 4. The Regulation on organization, functioning and procedure of the COMPETITION COUNCIL, with subsequent amendments; 5. The Regulation concerning the authorization of economic concentrations; 6. The Guidelines on relevant market definition with a view to determining the significant market share; 7. The Guidelines on calculation of turnover in the cases of anti-competitive practices stipulated in art.5 of the Competition Law no. 21/1996 and in economic concentrations cases; 8. The Guidelines on application of the provisions of art.33 par.2 of the Competition Law no.21/1996 regarding calculation of the authorization fee for economic concentrations; 9. The notification of the economic concentration registered at the COMPETITION COUNCIL under no. RS-52/09.05.2006; 10. The acts and facts from the file case no.rs-52/09.05.2006; 11. The Note of Industry and Energy Directorate no.124/27.07.2006; taking into account the following: 1. The economic concentration was achieved, in conditions of art.11 (now art.10) par.2 let.b of the Competition Law no.21/1996 republished, in force at the moment of achieving the operation, by SC ROMELECTRO SA Bucuresti taking over the sole de facto control over SC INSTITUTUL DE STUDII SI PROIECTARI ENERGETICE I.S.P.E. SA Bucuresti (hereinafter SC I.S.P.E. SA Bucuresti ). 2. Initially, SC ROMELECTRO SA Bucuresti notified to the COMPETITION COUNCIL the taking over of a block of shares representing 52,62% from the share capital of SC I.S.P.E. SA Bucuresti (these shares were taken over as a result of some consecutive acquisitions). SC ROMELECTRO SA Bucuresti considered that, this block of shares conferred it the control over SC I.S.P.E. SA Bucuresti and, therefore, this operation was subject to control and had to be notified to the COMPETITION COUNCIL. 1
The analyze of the information included in the notify file finds out that, in fact, the tacking over the control over SC I.S.P.E. SA Bucuresti by SC ROMELECTRO SA Bucuresti was achieved previously to the purchase of 52,62% block of shares, respectively at the moment of the acquiring 31,35% block of shares from the SC I.S.P.E. SA Bucuresti share capital. 3. The analysed economic concentration was achieved on 07.08.1998, based on the Buying-selling agreement no. 6672/1998, by which SC ROMELECTRO SA Bucuresti (as buyer) achieved a number of 105.340 nominative shares from Mr. Gheorghiu Ioan Dan (as seller), representing 31,35% from the share capital of SC I.S.P.E. SA Bucuresti. 4. By the achievement of the economic concentration, the ownership structure of SC I.S.P.E. SA Bucuresti has become the following: SC ROMELECTRO SA Bucuresti 31,35%, 201.009 natural persons owned jointly 59,82% and Mr. Ioan Dan Gheorghiu 8,83%. At present, SC ROMELECTRO SA Bucuresti owns a block of shares that represents 52,62% from the share capital of SC I.S.P.E. SA Bucuresti. 5. The 31,35% block of shares conferred to SC ROMELECTRO SA Bucuresti the sole de facto control over SC I.S.P.E. SA Bucuresti, because the remained shares were spread between shareholders (Mr. Gheorghiu Ioan Dan 8,83% and other 201.009 natural persons 59,82%). The lists of participants in the A.G.E.A. meetings, taken place subsequently the acquiring of 31,35% of SC I.S.P.E. SA Bucuresti by SC ROMELECTRO SA Bucuresti, find out that SC ROMELECTRO SA Bucuresti exerted its control over SC I.S.P.E. SA Bucuresti in the same time with acquiring this block of shares. 6. The turnover afferent to the economic concentration exceeds the threshold provided in art.15 (now art.14) of the Competition Law nr.21/1996, in force at the moment of the operation achievement. Accordingly to the provisions of art.16 (now art.15) par.1 from the Competition Law nr.21/1996, this operation is subject to control and must be notified to the COMPETITION COUNCIL. 7. SC ROMELECTRO SA Bucuresti submitted the notification form, registered with no.rs-52/09.05.2006 to the COMPETITION COUNCIL. The notification became effective on 19.07.2006. 8. The SC ROMELECTRO SA Bucuresti main object of activity is intermediation in sale of machineries, industrial equipments, ships and air crafts (NACE cod 5114). The services provided by SC ROMELECTRO SA Bucuresti are addressed, in the main, to the power sector and consist in: rehabilitation and modernising of stations, key projects execution rehabilitation and modernising of aerial electric lines, thermal and hydro power station and power supply. 9. The ownership of SC ROMELECTRO SA Bucuresti, at the date of economic 2
concentration achievement, was the following: 131 natural persons (70,043%) and SC ROMELECTRO SA (29,957%). In present, the ownership of this undertaking is changed thus: Mr.Gafita Viorel 24,7971%, Mr.Georgescu Octavian 24,677%, Mr. Radulescu Virgiliu 24,6729%, Mrs. Vasilescu Alexandrina 8,1884% and SC ROMELECTRO SA Bucuresti 9,9992%. 10. At the moment of the operation achievement, SC ROMELECTRO SA Bucuresti was controlling over the following undertakings: SC ROELCO INVEST SA, SC ROMELECTRO CONSTRUCT SA, SC MANAGEMENT ROEL SA, SC ROMELECTRO ENGINEERING SA, SC ENIMVEST SA si SC GEOROM INTERNATIONAL SA. On 29.03.2006, SC ROMELECTRO SA Bucuresti was controlling the following undertakings: SC ISPE SA, SC ELECTROMONTAJ CARPATI SIBIU SA, SC CELPI SA, SC ENERGOPROIECT SA and SC ROMELECTRO CONSTRUCT SA. 11. At the moment of the economic concentration achievement, the SC I.S.P.E. SA Bucuresti main object of activity, provided by the Constitutive Act, consists in: research, technological development, engineering, consulting, technical assistance in the fields: energy, industry, constructions, transportations, telecommunication, agriculture and forestry, tourism, public works, hydro technical improvements and municipal services (main group of activity: Research Development Engineering, NACE cod 73. The Constitutive Act of this undertaking was reedited, the main object of activity being: engineering, urbanism and other technical services (NACE cod 7420). ISPE is offering mainly the following services: financial and technical consulting, studies, basic and detailed engineering, digital systems configuring and commissioning, on site supervision and commissioning, other engineering services, in the following fields: power and heat generation, including renewable energy, power transmission and distribution, environmental protection, infrastructure systems/ municipal services, civil and industrial works, industry. 12. SC I.S.P.E. SA Bucuresti was not controlling other undertakings at the moment of the economic concentration achievement and nor in present. 13. The relevant markets afferent to the economic concentration were defined as: a) the market of base and detailed engineering services for the power generation market; b) the market of base and detailed engineering services for the power transmission and distribution market; c) the market of base and detailed engineering services for other markets (infrastructure, municipal services, environmental protection, civil works); 3
d) the market of consulting services and studies for the power generation market; e) the market of consulting services and studies for the power transmission and distribution market; f) the market of consulting services and studies for other markets (infrastructure, municipal services, environmental protection, civil works); g) the market of other services for the power generation market; for the power transmission and distribution market; for other markets (infrastructure, municipal services, environmental protection, civil works); all over the Romanian territory. 14. Previously of the economic concentration achievement SC ROMELECTRO SA Bucuresti was present, through SC ROMELECTRO ENGINEERING SA, on a very limited segment of the defined relevant markets, respectively in the power transmission sector, high power electric lines. On 2003, SC ROMELECTRO SA Bucuresti has stopped being shareholder of SC ROMELECTRO ENGINEERING SA. As result, during the time when both SC I.S.P.E. SA Bucuresti and SC ROMELECTRO ENGINEERING SA were controlled by SC ROMELECTRO SA Bucuresti, the intersection area of their activities on the relevant market was much reduced. 15. The main competitors of SC I.S.P.E. SA Bucuresti on the defined relevant markets and the estimated share markets by the notifying parties are: a) on the market of base and detailed engineering services for the power generation market: SC I.S.P.E. SA Bucuresti [...]%; Tahal Romania - [...]%; engineering divisions of the big systems developers that had contracts in Romania: ABB, Siemens, Alstom, Emerson, Honeywell, Hitachi Power Europe none of them exceed [...]; b) on the market of base and detailed engineering services for the power transmission and distribution market: SC I.S.P.E. SA Bucuresti [...]%; Tahal Romania [...]%; engineering divisions of the big systems developers that had contracts in Romania: Areva, General Electric, ABB, Siemens, Alstom, Emerson, Honeywell, Toshiba, VATech et al. none of them exceed [...]; c) on the market of base and detailed engineering services for other markets (infrastructure, municipal services, environmental protection, civil works): SC I.S.P.E. SA Bucuresti not exceed [...]; d) on the market of consulting services and studies for the power generation market: SC I.S.P.E. SA Bucuresti [...]%; Tahal Romania [...]%; ISCE [...]%; ATH Energ not exceed [...]%; et al.; e) on the market of consulting services and studies for the power transmission and distribution market: SC I.S.P.E. SA Bucuresti [...]%; Tahal Romania [...]%; Fichtner Engineering [...]%; ESBI Ireland, Edf France, Kema Netherlands, Fichtner Germany, Lahmeyer Germany et al. none of them exceed [...]%; 4
f) on the market of consulting services and studies for other markets (infrastructure, municipal services, environmental protection, civil works): SC I.S.P.E. SA Bucuresti not exceed [...]%; g) on the market of other services for the power generation market; for the power transmission and distribution market; for other markets (infrastructure, municipal services, environmental protection, civil works): ): SC I.S.P.E. SA Bucuresti very small market share. The representatives of SC I.S.P.E. SA Bucuresti appreciate that, for this undertaking, the market shares maintained relatively constant after the achievement of the economic concentration until now. 16. SC I.S.P.E. SA Bucuresti is developing its specific activities also on the external markets. 17. By taking the control over SC I.S.P.E. SA Bucuresti by SC ROMELECTRO SA Bucuresti has been accomplished a vertical integration of SC I.S.P.E. SA Bucuresti activities inside the acquiring group. DECIDES Art.1 Issues the present clearance for the economic concentration achieved by SC ROMELECTRO SA Bucuresti by acquiring the sole de facto control over SC INSTITUTUL DE STUDII SI PROIECTARI ENERGETICE I.S.P.E. SA Bucuresti, according to the provisions of art. 46, par.1, let.b of the Competition Law no.21/1996, republished, being stated that, although the notified operation falls under the incidence of the law, there are no serious doubts regarding the compatibility with the normal competitive environment. Art.2. The authorization fee provided under art.32 of the Competition Law no.21/1996, republished is in amount of [ ] RON and shall be paid within maximum 30 days from the date when this Decision is communicated, with a payment order of treasury type, to the state budget, with the endorsement Charges and fees for the issue of operation licenses and authorizations. One copy of the payment order shall be sent with no delay to the COMPETITION COUNCIL. Art.3 This Decision enters into force on the date when it is communicated to the parties. Art.4 The Decision of the COMPETITION COUNCIL can be appealed within 30 days from the date when it is communicated, at the Bucharest Court of Appeal, the Contentious - Administrative and Fiscal Division, according to the provisions of art.47, par.4 of the Competition Law no. 21/1996, republished. Art.5. According to the provisions of art.57 par.1 of the Competition Law no.21/1996, republished, this Decision shall be published on the COMPETITION COUNCIL website. 5
Art.6.The Industry and Energy Directorate and the General Secretariat shall observe the fulfilment of this Decision. Art.7. The Secretariat General of the COMPETITION COUNCIL shall communicate this Decision to: THE ACQUIRING UNDERTAKING: SC ROMELECTRO SA Registered in the Commerce Registry with no.j40/187/1991 CUI 1557850 Calea Dorobantilor Street no.60, sect.1, Bucuresti, postal code 11421 Phone: 210 03 65, 211 80 82 Fax 210 44 41 By proxi, [ ] THE ACQUIRED UNDERTAKING: SC INSTITUTUL DE STUDII SI PROIECTARI ENERGETICE I.S.P.E. SA Registered in Commerce Registry with no.j40/5731/1996 CUI 8630885 Lacul Tei Avenue, no.1-3, sect.2, Bucuresti Phone: 210 70 80 Fax 210 36 20 Mihai Berinde President 6