Brussels, 18 December 2013
Mergers: Commission approves acquisition of ground handling service provider Servisair by Swissport, subject to conditions
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the ground and cargo handling service provider Servisair by rival Swissport. The clearance is conditional upon the divestment of Swissport's ground handling activities at Birmingham airport and Servisair's ground handling activities at Helsinki, London Gatwick and Newcastle airports, where the merged entity would have faced insufficient competition to avoid price increases for ground handling services. The commitments offered by the parties address these concerns.
Swissport and Servisair are both active in the provision of ramp, passenger and baggage handling services, landside cargo handling services and offline cargo handling services at a number of airports in the European Economic Area (EEA). The Commission expressed concerns about the impact of the merger on competition with regard to the provision of ramp, passenger and baggage handling services at Birmingham airport, Helsinki airport, London Gatwick airport, and Newcastle airport.
The Commission's investigation showed that the proposed acquisition, as originally notified, would have resulted in a monopoly situation at Newcastle airport. It would also have eliminated an important competitor in the provision of ramp, passenger and baggage handling services at the airports of Birmingham, Helsinki and London Gatwick. The Commission was concerned that the remaining competitors would have been unable to exercise a sufficient constraint on the merged entity to avoid price increases for airline customers.
In order to address these concerns, Swissport offered to divest its ground handling activities at Birmingham airport and Servisair's ground handling activities at Helsinki airport, London Gatwick airport and Newcastle airport. These commitments cancel the market share increment that the merged entity would have otherwise obtained through the acquisition at the four airports where the Commission had raised concerns, thereby restoring a level playing field at each of these airports.
The Commission concluded that the proposed acquisition, as modified by the commitments, would not raise any competition concerns. This decision is conditional upon full compliance with the commitments.
The Commission found no competition concerns for the provision of landside cargo and offline cargo handling services, because of the merged entity's limited combined market share.
The transaction was notified to the Commission on 29 October 2013.
Companies and products
Swissport France Holding SAS is a provider of airport ground handling, cargo handling, and related services, to airlines in Europe and abroad. It is ultimately controlled by PAI Partners SAS, a French portfolio management company.
Servisair SAS is a French provider of airport ground handling, cargo handling, and related services, to airlines in Europe and abroad.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified 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).