EFIM/FINMECCANICA (Conclusion of the investigation)
PRESS RELEASE
The Italian Competition Authority has concluded its proceeding, initiated on August 21st 1995, against Finmeccanica, Ansaldo Trasporti, Breda Costruzioni Ferroviarie and Efim (which is currently in an administrative compulsory bankruptcy proceeding), and has found that the agreement between Efim and Finmeccanica stipulated on March 12th 1992, which Efim's bankruptcy trustee notified to the Authority on June 19th 1995, does not constitute violation of the Competition Act.
The agreement, which dealt with activities in the railway rolling stock construction, was the premise for a subsequent executory stage which provided for the constitution of a consortium between Efim and Finmeccanica; a consortium between Breda and Ansaldo Trasporti and, finally, a shareholding exchange between Breda and Ansaldo Trasporti. The agreement also provided a mutual pre-emption right between Efim and Finmeccanica in case of a sale of direct or indirect shareholding held in railway rolling stock companies by either party.
The agreement's competitive relevance would have been defined completely only by the content of subsequent executory agreements, which have never taken place, and will not they take place in the future, in the light of Efim's liquidation.
As such, the Authority deems that it is not possible to appraise the effective competitive relevance of the agreement in the originally defined terms.
Furthermore, the Authority considers that the pre-emption right has anti-competitive effects only if it is enjoyed by a firm holding a dominant position and if it creates a barrier to entry. This situation did not occur in this case, since, even though Finmeccanica holds a significant position in the relevant markets, other firms working in the same markets have the means and the know-how to present alternative purchase offers for Breda which could have made the exercise of the pre-emption right onerous. In fact, in the course of the investigation, the Authority found that the absence of alternative purchase offers was likely to have been derived from the perspective of having to assume the substantial managing commitments and employment guarantees that Breda's acquisition would have implied. In addition, this acquisition does not constitute for Ansaldo Trasporti's rivals the only way to compete on the different railway rolling stock markets. As a matter of fact, the allocation of contracts for the construction of railway stock via international tenders as well as the changes of Ferrovie dello Stato's purchasing policies have contributed to foster the progressive and gradual opening of the markets involved also to competition of foreigner firms.
In conclusion, eventual competitive restraints, which could take place in the railway rolling stock markets following Breda's acquisition on behalf of Ansaldo Trasporti, are not appraisable within the current investigation.
If and when Finmeccanica will exert the pre-emption right, a merger will occur and will have to be notified to the Authority which will appraise the competitive effects of the operation, in compliance with Section 6 of law no. 287/90.