On May 25, 2016 the Antimonopoly Office of the Slovak Republic, Division of Concentrations (hereafter „the Office“) approved the concentration through which the undertaking Diebold, Incorporated, seated at 5995 Mayfair Road, North Canton, Ohio, 44720, United States of America („Diebold“) acquired the exclusive control over the undertaking Wincor Nixdorf Aktiengesellschaft, seated at Heinz-Nixdorf-Ring 1, 33106 Paderborn, Germany („Wincor Nixdorf“).
Diebold is an American company acting in more than 90 countries. The core activities are the following two segments:
1. hardware and software supplies and services for so-called financial self-service solutions („FSS solutions“) for banks,
2. supplies of electronic and mechanical security equipment (including safes and devices for dispensing and counting money), supplies of software and integrated systems for financial institutions and other customers.
In the territory of Slovakia Diebold acts through its distributor, company Spherix, s. r. o., seated at Gessayova 17, 851 03 Bratislava („Spherix“) only in the area of supplies of FSS solutions for banks.
Company Wincor Nixdorf is a German company providing:
FSS solutions to bank clients,
so-called POS solutions (for example cash registers) and self-service solutions for retails customers.
In Slovakia Wincor Nixdorf, through its subsidiary Wincor Nixdorf, s.r.o., seated at Mokráň záhon 4, 821 04 Bratislava („Wincor Nixdorf Slovakia“) sells FSS hardware, software and provides relating services and support. It also provides solutions for retailers.
Since both Diebold and Wincor Nixdorf provides FSS solution for banks in Slovakia, as well as various components, and also relating services and supports and the scope of their activities in Slovakia is different, in the view of impacts of the merger on competition conditions the Office has been considering both horizontal and vertical aspects of merger concerned. The Office based its conclusions on information from undertakings concerned, information and documents from the survey in banks as consumers of the products and services concerned and also on information from competitors of undertakings concerned.
Within providing FSS solution the Office focused on supply of customer ATMs, related software and services and supports. The survey proved that FSS solutions are procured mainly through tenders. Generally the purchase of package of FSS solutions (hardware, software, service) is procured. The Office´s survey also proved that banks realize also the separate tenders for purchase of so-called advanced software on customer ATMs and purchase of services. Therefore the Office assessed the horizontal impacts of this merger at the national level both for markets of hardware supplies (customer ATMs) and also software and services. Within the horizontal assessment of merger the Office focused on assessment of unilateral and coordinating impacts of this merger.
Within the market of supplies of customer ATMs prior to merger in Slovakia there were four producers/suppliers of customer ATMs. Besides Diebold and Wincor Nixdorf there is an American producer NCR through its distributor PRINTEC and the Japanese producer OKI through the distributor ALBACON.
In the view of unilateral effects resulting from this merger the Office found that the merger will result in enhancing the number of ATMs´ installed base, but the elimination of effective competition has not been identified, mainly in the view of:
presence of at least one incumbent powerful player – company NCR, through its distributor PRINTEC, in the Slovak market(regarding both the global and the European position of the company NCR in supplies of FSS solutions),
entry of new significant player - company OKI through its distributor ALBACON,
existence of other competitors in procurements that the banks (or parent companies of the Slovak banks) realize at the supranational level,
expected entry of other competitors, as it comes out from the survey,
detected position of Diebold in Slovakia in the case of realized tenders where the customer ATMs Diebold are installed only in banks; in last five years the Diebold ATMs were successful in neither tender (neither purchased directly).
Assessing the coordinating effects the Office ascertained that in spite of the high market concentration there are significant factors that impede the coordination, mainly in:
in the vast majority of tenders the bank decides which companies are invited to tender; also there are direct purchases where the bank directly decides for one supplier without tender,
more limited position of producer OKI is still relative as since its entry it is invited to tenders just like other players and within the tenders in the view of criteria set by the banks it is an equivalent player and the banks decide based on submitted bid regarding its overall economic efficiency,
in the view of frequency the tenders or purchases are not realized very often,
it is an innovative market what is proved also by growing tendency to buy recycling ATMs.
Based on these factors the Office concluded that the concentration does not result in negative impacts to competition condition in the view of coordinating effects since in spite of the higher market concentration the market characteristics are not changed due to the merger.
Within the supplies of FSS software the Office has been assessing the purchases of advanced software for ATMs. Besides the aforementioned companies in this market there of more other suppliers of the advanced software only. In the market of providing services for customer ATMs in bank sector the full range of services provide ATMs producers or their distributors, in some cases only for that brand, the others are entitled to provide services for ATMs of other brands. Within assessment of horizontal impacts of merger in this view the Office came to the same conclusion as in the case of market of supplies of customer ATMs and in the case of advanced software and services it regarding the more limited position of Diebold in the Slovak Republic as in the case of ATMs supplies.
Regarding the fact that both Diebold and Wincor Nixdorf in Slovakia provide (may provide) advanced software independently and at the same time they supply hardware for banks, the Office has been dealing with the possible vertical impacts of the merger concerned. It also has been assessing the vertical impacts related to the supply of service and connected services to FSS solutions. Based on information stated in notification of concentration and facts ascertained by the Office´s survey, the Office did not identify and concerns from vertical effects of merger concerned.
Assessing all acquired documents and information the Office concluded that the assessed merger would not impede effective competition in the relevant market and thus the merger is in harmony with the article 12, par. 1 of the Act on Protection of Competition.
The decision came into force on May 25, 2016.