On September 7 2011 the Croatian Competition Agency (CCA) cleared the extraterritorial concentration between VW and MAN. The transaction creates a significant market share in the heavy-duty truck and passenger bus markets: following the merger, the parties will have a market share of between 40% and 50% on the heavy duty truck market, and between 20% and 30% on the passenger bus market.

The CCA based its clearance of such a "risky" concentration on the fact that the Croatian heavy duty truck and passenger bus markets have large customers with high-value purchasing power. This enables such customers to exercise significant influence on the structure of the market, making the abuse of dominance difficult, even for entities with a significant market share.

Another justification stems from a European Commission investigation which found that customers do not consider the heavy trucks made by MAN and SCANIA to be close substitutes, due to their characteristics and different customer groups. The same logic applies to buses - SCANIA's buses and MAN's buses are not considered to be close substitutes due to the distinct market strategies of the two companies.

Thus, the CCA recognised that although the merger has resulted in a new market leader, strong competition from competitors such as Daimler (Mercedes), Volvo/Renault and Ivec, combined with the high purchasing power of customers, will ensure a competitive market.

For further information on this topic please contact Gabriele Wahl Cesarec at Petres & Cvirn by telephone (+385 1 4813 244), fax (+385 1 4813 073) or email ([email protected]).

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.