FIATIMPRESIT-MANNESMANN-TECHINT/ITALIMPIANTI (Conclusion of the investigation)
PRESS RELEASE
The Italian Competition Authority has concluded its proceeding initiated last December against Mannesmann Demag AG (controlled by Mannesmann AG) and Italimpianti Spa (controlled by Fintecna Spa). In the course of the investigation, the Authority intended to verify if the acquisition by Mannesmann Demag AG of Italimpianti's operating division, of Italimpianti of America Inc., of Innocenti Santeustacchio Spa and of Innocenti Engineering Spa, given that the merger fell within the process of the privatisation of Italimpianti and its controlled companies, was likely to eliminate or reduce competition substantially and on a lasting basis in the market for the planning, construction and distribution of stainless steel plants producing seamless tube mills.
The proceeding's statutory deadline, which was initially set for by the end of last January, was postponed by thirty days. During the final hearing held on January 23rd 1996, Mannesmann Demag AG formally assumed certain commitments aimed at ensuring the elimination of any possible distortion to competition following the acquisition. In particular, Mannesmann Demag AG undertook (1) to supply, for the next ten years, at equitable and non-discriminatory conditions, the most advanced plants and technologies for the production of seamless tube mills (including the MPM system) to anybody requesting them within the European Union territory; (2) to renegotiate in good faith the two cooperation agreements currently binding Dalmine Spa, Italimpianti Spa and Innse Engineering Spa, which deal with seamless tube mills that make use of the MPM system, and with the expander technology. The effect of renegotiation will be to eliminate the presence of exclusive cooperation obligations among these firms; starting immediately as far as the first agreement is concerned, and starting from 1999 with regards to the second one; (3) to license for a period of seven years, at the usual terms and conditions, a qualified plant manufacturer for the use of the MPM technology in order to carry out projects within the European Union, so that the licensee can:
(i) present bids, if and when a demand for investments in MPM plants will occur, and (ii) plan and construct a MPM plant, if and when the licensee will obtain the contract.
This commitment also establishes that the licensee will have to pay Mannesmann Demag AG a royalty up to 5% of the contract, if the licensee wins the contract for the construction of a MPM plant.
The mentioned commitments will allow any company operating in the European Union, whose intention it is to acquire seamless tube mills, to maintain the possibility of choosing between Mannesmann Demag AG's offer and the one made by its licensee, which also will be able to collaborate with Dalmine. In this way, it will be possible to create a potential competitor that will regulate Mannesmann Demag AG's market policy. Considering these commitments, the Authority deems that the strengthening of Mannesmann Demag AG's market position, following the merger, does not reduce competition substantially and on a lasting basis in the Community market and, as a consequence, in the Italian one. As such, in the light of these conditions, the Authority has closed its investigation.