European Commission - Press release
Mergers: Commission clears CVC's purchase of a controlling stake in fitness centre operator Virgin Active Group
Brussels, 14 October 2011 - The European Commission has cleared under the EU Merger Regulation the proposed acquisition of a controlling stake in Virgin Active Group, a UK-based operator of health and fitness centres, by investment group CVC of Luxembourg. The company is currently controlled by Virgin Group Holdings, which will share control with CVC once the operation is concluded.
The proposed transaction does not give rise to competition concerns, given the absence of horizontal overlaps between the parties' activities and only limited vertical links on mainly national markets, where the parties have low market shares.
The Commission examined in particular the links between the services offered by CVC through Autobar and Virgin Active Group's use of vending services in its health and fitness centres at local level in Spain and the UK. Aubobar is a vending machine company controlled by CVC. It also looked at the supply, of cosmetics products by CVC through its subsidiary Colomer in Virgin Active Group's fitness centres at local level in Italy and the UK.
The Commission found that Autobar and Colomer have limited market shares on their respective markets concerned and their products are not key drivers of consumer demand in health and fitness centres. Furthermore, Virgin Active Group already sources its needs from various other suppliers and there is a range of routes for the distribution of vending services and cosmetics products apart from health and fitness centres. Last but not least, the sourcing of Autobar and Colomer products occurs on a national level, where Virgin Active Group has limited market shares.
The Commission therefore concluded that the proposed concentration would not significantly impede effective competition in the European Economic Area (EEA) 1 or any substantial part of it.
The transaction was notified to the Commission for clearance on 9 September 2011.
CVC Capital Partners SICAV-FIS S.A. is a private equity firm advising and managing investment funds in various industry sectors including chemicals, utilities, manufacturing, retailing and distribution, primarily in Europe, North America and the Asia-Pacific region.
Virgin Group Holdings Limited is a venture capital firm active in air travel, tourism, mobile communications, financial services, and health & wellness. Virgin Active Group Limited operates health and fitness clubs in Italy, Portugal, Spain, the UK, Namibia and South Africa.
Merger control rules and procedures
The Commission, in 1989, was given the power to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation). Its duty is to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
A non-confidential version of today's decision will be available at:
The EU plus Iceland, Liechtenstein and Norway.