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Brussels, 14th October 2005

Mergers: Commission approves acquisition of control of Züblin by Strabag; refers review of regional asphalt markets to Germany’s Federal Cartel Office

Acting under the EU Merger Regulation, the European Commission has given FIMAG Finanz Industrie Management AG (“FIMAG”), the Austrian holding company of the Strabag Group, the go-ahead to acquire control of the German construction company Ed. Züblin AG (“Züblin”). The Commission concluded that the planned operation will not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it, as the parties' combined market shares on the relevant markets in Germany will be limited and there will be only a slight increase of market share on the relevant markets in Austria. At the same time, the Commission has referred the assessment of the impact of the operation on the regional asphalt markets in Berlin, Chemnitz, Leipzig/Halle, Rostock and Munich to Germany’s Federal Cartel Office.

The Strabag Group (“Strabag”) is an Austrian-based construction group which operates in all areas of the industry, especially in building construction and civil engineering. Furthermore, it produces and distributes building materials. Züblin is a German construction company and also operates in building construction and civil engineering as well as in construction related services. Through its subsidiary ROBA Baustoff GmbH (“Roba”), it is also active in the production and distribution of building materials.

By acquiring the share package of the insolvent Walter Bau, Strabag’s Austrian holding company FIMAG will gain control of Züblin.

Although Strabag and Züblin are among the largest construction companies in Germany, the planned operation does not raise any competition concerns. The parties' combined shares of the construction and civil engineering markets will remain well under 15% even if these markets were further divided. While Strabag is the largest construction company in Austria, the parties’ shares in the Austrian market do not reach a level giving raise to competition concerns. Furthermore, Züblin only has small-scale operations in Austria, so that by taking them over, Strabag will increase its market share only slightly in most market segments.

Referral request

On 20 September 2005, Germany’s Federal Cartel Office pointed out that the planned merger would affect competition on the regional markets for asphalt in Berlin, Chemnitz, Leipzig/Halle, Rostock and Munich, each of which present all the characteristics of a distinct market and do not constitute a substantial part of the EU’s Single Market.

The Bundeskartellamt considers that, because of the structural relationship between Strabag and the Wehrhahn group as joint shareholders of Deutag, Strabag’s takeover of Roba, one of the last remaining independent competitors for producing asphalt mix, would further restrict competition on the relevant regional markets. The Federal Cartel Office has therefore applied for a referral of the case inasmuch as these markets are affected. As the conditions are met, the Commission has agreed to the referral request and the Federal Cartel Office will now examine whether the merger complies with national competition law.

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