Denmark: Volvo Transaction Not In Need Of Repairs Despite High Market Shares

The Danish Competition Council ('DCC') has, following an in-depth investigation, approved Volvo Danmark A/S' ('Volvo Danmark') acquisition of Titan Lastvogne A/S ('Titan') in spite of post-transaction market shares exceeding 50%.

Volvo Danmark is the Danish importer of Volvo and Renault trucks and is active within both retail and wholesale of these trucks, as well as sale of Volvo and Renault branded spare parts to authorised resellers.

Prior to the acquisition four separate authorised resellers were active in Denmark. These resellers were respectively Volvo Danmark's own vertically integrated reseller and three independent resellers, including Titan.

Only Volvo Danmark's own vertically integrated reseller and Titan were active in the Eastern region of Denmark, including the island Zealand.

With its decision, the DCC approved the acquisition without remedies, even though this transaction will, in certain relevant markets including the market for reparation and maintenance of Volvo- and Renault trucks, strengthen Volvo Danmark's market share from levels already exceeding 50%.

Of special relevance for the assessment by the DCC was that the relevant counterfactual scenario for this transaction was not an assessment of the status quo absent the transaction. Instead, the DCC noted that Volvo Danmark had already prior to the acquisition terminated Titan's authorisation as a reseller and repairer of Volvo and Renault trucks, and that this decision to terminate the authorisation was not dependent on the closing of the acquisition.

Consequently, the relevant counterfactual scenario on which the assessment should be based was a scenario, where Titan would only continue to function as an independent repairer of trucks, and not as an authorised reseller and repairer.

The DCC therefore concluded that while the post-transaction market shares held by Volvo Danmark entailed a risk of price increases for repairs of Volvo and Renault trucks, this risk was not increased as a direct result of the acquisition. Instead, Volvo Danmark's market shares would have been increased to such levels regardless of the transaction.

The press release concerning the clearance decision by the DCC is accessible here.

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