IP/08/1769

Brussels, 25^th November 2008

Mergers: Commission approves acquisition of MÁV Cargo by Rail Cargo Austria, subject to conditions

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of MÁV Cargo of Hungary by the Austrian company Rail Cargo Austria (RCA), both active in the provision of rail freight transport and freight forwarding services. The Commission's decision is conditional upon RCA's commitment to remove structural links and review contractual links to GySEV (Raaberbahn). The Commission concluded that the transaction, as modified by these commitments, would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

"I am aware that this deal is seen by the companies as important to improve their ability to develop these freight markets", said Competition Commissioner Neelie Kroes. "I welcome any positive developments for consumers, and I am very pleased that we have managed to address quickly the competition concerns that we had in this case."

RCA is a subsidiary of the state-owned Austrian ÖBB Holding AG railway company. RCA is engaged in rail freight transport and freight forwarding in Austria, Germany, Slovenia, Hungary and Slovakia.

MÁV Cargo is a subsidiary of the Hungarian state-owned MÁV railway company. MÁV Cargo is active in rail freight transport and freight forwarding, mainly in Hungary and to a lesser extent in other European countries.

The proposed transaction, as initially notified, concerns the acquisition of MÁV Cargo by RCA in a consortium together with GySEV, an integrated rail and infrastructure company with its own rail network located both in Austria and in Hungary. GySEV is active in rail passenger and freight transport in Austria and Hungary with a focus on rail freight cross-border transport.

Notwithstanding the full liberalisation of the markets for rail freight transport in 2007, these markets are still characterised by limited competition and strong incumbents co-operating for cross-border rail freight transport.

The Commission identified serious competition concerns that would have arisen from the implementation of the proposed transaction, as initially notified, because it would have resulted in removing the closest potential competitor for RCA on the Hungarian rail freight transport market and for MÁV Cargo on the Austrian one.

To remedy these concerns, RCA gave the commitment to cut all its structural links and review its contractual links to GySEV, thereby strengthening GySEV as an independent player and a competitor of the new entity created by the merger. The Austrian and Hungarian Governments, as the main shareholders of GySEV, will ensure that the structural links to the merged entity are cut and the influence of the Republic of Austria over GySEV's rail freight activities is limited.

After market testing the proposed commitments, the Commission concluded that they were viable measures, suitable to address the competition concerns identified in its investigation. Further information on the case will be available at:

http://ec.europa.eu/comm/competition/mergers/cases/index/m101.html#m_5096

European EC Rapid Press Release IP/08/1769, copyright European Commission.
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