Brussels, 17 April 2008
The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Vedior by Randstad, both Dutch employment services providers. The Commission's decision is conditional upon Randstad's commitment to divest its entire business activities in Portugal. The Commission has concluded that the transaction, as modified by this commitment, would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Randstad is an international provider of temporary employment services, permanent placement services and other human resources related services. It is active in several European countries as well as in the US, Canada and Asia.
Vedior is an international provider of temporary employment services, permanent placement services and other human resources related services with a focus on professionals, executives and specialists in the information technology, healthcare, accounting, engineering and educational sectors. Vedior is active in numerous European countries under different brands as well as in the US, Canada, Australia, Asia, Latin America and Africa.
The Commission's initial market investigation found that the proposed transaction might raise competition concerns in the Dutch, Belgian and Portuguese markets for temporary employment services. Further investigation showed that on the Dutch and Belgian markets the parties had relatively modest combined market shares, credible alternative competitors existed, and the switching costs and barriers to market entry were low.
However, the Commission came to a different conclusion with respect to the Portuguese market where the transaction, as initially notified, would give rise to serious doubts. The proposed concentration would have combined a market leader and one of two credible competitors remaining on the market. Moreover, it would have created a market structure consisting of a clear market leader with substantial market share, one substantially smaller competitor and numerous very small competitors. Taking account of the significant gap between the market leader and other very fragmented competitors, this market structure could potentially give rise to a certain degree of market power for the merged entity, leading to less choice and higher fees for customers.
To remove the Commission's concerns, Randstad offered to divest its entire
business activities in Portugal, including a licence of its brands, all tangible
and intangible assets and all personnel. After market testing the proposed
remedies the Commission concluded that they were suitable to address the
competition concerns initially identified in its market investigation.