MERGERS: AMO SR approved the merger of the undertakings BUDAMAR LOGISTICS, a.s., Optifin Invest, s.r.o., and TATRAVAGÓNKA, a.s.

29.06.2018
On 14 June 2018 the Antimonopoly Office of the Slovak Republic, the Division of Concentrations, (hereafter "the Office") approved a merger grounded in the acquisition of direct joint control of the undertakings BUDAMAR LOGISTICS, a.s., seated at Horárska 12, 821 09 Bratislava (hereafter "Budamar") and Optifin Invest, s.r.o., seated at Rusovská cesta 1, 851 01 Bratislava (hereafter "Optifin") (hereafter both as "notifiers") over the undertaking TATRAVAGÓNKA, a.s., seated at Štefánikova 887/53, 058 01 Poprad (hereafter "Tatravagónka").
 
In assessing the impacts of the merger, the Office focused on the activities of the undertakings belonging to the group BUDAMAR and the group Optifin, which relate to the activities of the parties to the merger in question, particularly from the point of view of their vertical links and potential coordination effects, and thus on the area of rail transport technology production with a more detailed concentration mainly on the production of rail freight wagons, the area of the provsion of maintenance, repair and the modernization of rolling stock, the area of ​​rolling stock rental, the area of rail freight transport and the area of the provision of forwarding; also including possible alternative definitions.
 
The company Optifin is the parent company of the business group Optifin and its only activity is the management of companies belonging to this economic group. It is owned and jointly controlled by Mr. Michal Lazar and Mr. Alexej Beljajev. The group Optifin manages and develops the portfolio of companies active in various areas, mainly in international and domestic transportation, engineering, waste management, metallurgy and information technology. In the area of forwarding, rail transport and rolling stock leasing, the Slovak Republic is active mainly through the companies Express Group, a.s., and EP Rail S.R.L.
 
According to the merger notification, the company BUDAMAR is the main company of the economic group BUDAMAR consisting of companies, the subject of which activity is mainly forwarding by rail, road, river and sea, multimodal and intermodal transport, customs declarations, warehousing and consultancy. From the point of view of transportation, forwarding or rolling stock renting, it is active both as the company BUDAMAR also as partly through other companies in the group. In the area of rolling stock production, the group Budamar acquired the company ŽOS Vrútky, a.s., in 2018.
 
The main business activity of the company Tatravagónka, which covers companies belonging to the group Tatravagónka, is the production of rail freight wagons and railway chassis. Marginally it also deals with the production of welded subassemblies and spare parts.
 
In assessing, the Office came out of the merger notification, publicly available information concerning the merging parties and its competitors, information and documentation submitted by the undertaking ŽOS Trnava, a.s., as well as the decision-making practice of the Office and the European Commission. At the same time, it took into account the fact that the group Tatravagónka belonged to the group Optifin group already before the merger.
 
With regard to the business activities carried out by the merging parties, from the point of view of horizontal impact the Office assessed particularly the existence of a horizontal overlap between the activities of the participants to the merger in the area of rolling stock production and their maintenance, repair and reconstructions.
 
In the area of rolling stock production, it found that there is no horizontal overlap, since the production of freight wagons (produced by Tatravagónka) and the production of passenger wagons (produced by ŽOS Vrútky belonging to the group Budamar) belong to separate relevant markets.
 
In the area of ​​maintenance, repairs and reconstructions of rolling stock, the Office did not find unambiguous conclusion, whether the provision of repair services and the provision of modernization services in relation to passenger railway wagons and in relation to rail freight wagons constitute the separate goods markets. Therefore, the Office  assessed a possible horizontal overlap in the alternative of the existence of a common market for freight/passenger wagons - further in the segmentation into the markets of maintenance, of repairs and of modernization; leaving the issue of an accurate definition of markets in this area open. Also in the case of such alternatives, the horizontal overlap between activities of the group Tatravagónka, group Optifin and ŽOS Vrútky (group Budamar) was minimal, e. g. also from the point of view of other spatial coverage of the provision of the given services.
 
Further, the Office focused, among other things, on the following vertical effects of the merger in question:
  • the production and the sale of rail freight wagons (group Tatravagónka) - the provision of services of rail freight transport, rental of rail freight wagons, forwarding (group Optifin, group Budamar),
  • the provision of services of repairs and modernization of rolling stock (group Tatravagónka) - the provision of services of rail freight transport, rental of rail freight wagons and forwarding (group Budamar and group Optifin).
In relation to the vertical relationship relating to the production of rail freight wagons and the demand for them, in the merger assessment the Office took into account on the one hand, the indicative shares achieved by the merging parties in the above-mentioned areas, the production capacity of the undertaking Tatravagónka, the information about the main customers of rail freight wagon producers, namely in the context of assessing the overall demand for new rail wagons by the side of the notifiers in relation to the production of the company Tatravagónka. In assessing the vertical relationship in question between the notifiers and the acquiring group Tatravagónka, the Office did not identify unilateral negative effects of the merger, which would consist of limiting access to inputs or restricting access to customers.
 
In relation to the vertical relationship relating to the maintenance, repairs and reconstructions of rolling stock, the Office did not identify unilateral negative effects of the merger in none of the alternatives of a spatial market definition.

In this case, the Office also assessed the coordinating non-horizontal effects of the merger in question, namely the assessment of the impact of the acquisition of the joint control of the notifiers over the group Tatravagónka on the establishment or strengthening the coordination of the group Optifin Group and the group Budamar in the relevant markets where both of these groups of undertakings operate. The Office did not find that as a result of the acquisition of joint control of the notifiers over the group Tatravagónka, the negative effects of the merger would occure in terms of coordination effects.

The decision came into force on 15 June 2018.
Last update:29.06.2018