Affected market: Airport services
The OFT's decision on reference under section 33(1) given on 29
Airport Concessions and Development Limited (ACDL) is a newly
incorporated company set up for the purpose of making a public offer to
acquire TBI Plc. It is 90 per cent owned by Abertis Infraestructuras
S.A. (Abertis), a Spanish infrastructure company, with the remaining 10
per cent minority interest being owned by AENA Desarrollo Internacional
S.A. (AENA International), a subsidiary of AENA Aeropuertos Españoles y
Navegación Aerea (AENA). ACDL has not traded except for entering into
transactions relating to this anticipated acquisition.
TBI plc (TBI) owns and operates a number of airports including
London Luton International, Cardiff International, Belfast
International, Stockholm Svavsta and Orlando Sanford. In addition, it
currently manages three Bolivian airports under a concession agreement
and has a minority interest in the company which manages Juan Santa
María International airport in Costa Rica. It also owns a hotel in
Cardiff that is currently operated by the Hilton Group. The UK turnover
of TBI was approximately £131.3m in the financial year to 31 March 2004.
On 24 November 2004, ACDL announced its intention to make a recommended
public offer (the Offer) to acquire the entire issued and to be issued
ordinary share capital of TBI.
This transaction was notified on 1 December 2004 and the 20-working day
statutory deadline for consideration is 31 December 2004.
As a result of this transaction Abertis (through ACDL) and TBI will
cease to be distinct. The UK turnover of TBI exceeds £70 million, so
the turnover test in section 23(1)(b) of the Enterprise Act 2002 is
satisfied. The OFT therefore believes that it is or may be the case
that arrangements are in progress or in contemplation which, if carried
into effect, will result in the creation of a relevant merger
The parties are engaged in airport services. Airport services include
provision of airport facilities, operational management of passengers
and cargo and the provision of associated services.
The parties supply airport services to airlines to be able to offer air
transport services to consumers; and to other intermediaries to provide
services to passengers and others who use those air transport services.
TBI is active within the UK, Sweden, the US and Latin-America. Abertis
supplies airport services solely in Colombia. On the demand side,
airline services depend on the demand by their customers and, insofar as
the parties submit that passengers prefer to use an airport within a
reasonable distance of their departure or arrival point, the geographic
scope for competition would appear to be narrower than national. The
fact that the parties provide airport management services in a number of
different countries implies that, from the supply side perspective,
airport services providers may compete on a wider basis, possibly
globally. However, as any conclusion on this point does not impact on
the competition assessment, it is not necessary to delineate further the
THIRD PARTY VIEWS
No third parties expressed concerns.
The parties supply airport services. Considering the narrowest possible
geographic segmentation, the parties do not have any overlapping
activities in the UK. Given the apparent ease of entry from one country
to another, it is possible that airport groups constrain each other
internationally, even if there is no geographic overlap. In any case,
since Abertis and TBI only own and manage a small number of airports
worldwide, their combined global share of airport services provision is
negliglible. The transaction does not raise any vertical competition
Consequently, the OFT does not believe that it is or may be the case
that the merger may be expected to result in a substantial lessening of
competition within a market or markets in the United Kingdom.
This merger will therefore not be referred to the Competition Commission
under section 33(1) of the Act.