ALD / LeasePlan merger inquiry
| Case Outcome | Mergers - phase 1 clearance |
| Decision Date | 05 September 2022 |
| Date | 05 September 2022 |
| Subject Matter | Mergers |
| Court | Competition and Markets Authority (EW) |
Anticipated acquisition by ALD S.A. of
LP Group B.V. (the holding company of
LeasePlan Corporation N.V.)
Decision on relevant merger situation and substantial
lessening of competition
ME/6998/22
The CMA’s decision on reference under section 33(1)of the Enterprise Act 2002 given on
8 November 2022. Full text of the decision published on 5 December 2022.
Please note that [] indicates figures or text which have been deleted or replaced in
ranges at the request of the parties or third parties for reasons of commercial
confidentiality.
SUMMARY
1. On 22 April 2022, ALD S.A (ALD), solely controlled by Société Générale, agreed to
acquire LP Group B.V., the holding company of LeasePlan Corporation N.V.
(LeasePlan) (the Merger). ALD, Société Générale and LeasePlan are together
referred to as the Parties. For statements referring to the market position following
the Merger, ALD and LeasePlan are together referred to as the Merged Entity. The
Competition and Markets Authority (CMA) believes that it is or may be the case that
each of Société Générale, ALD and LeasePlan is an enterprise; that these
enterprises will cease to be distinct as a result of the Merger; and that the turnover
test is met. Accordingly, arrangements are in progress or in contemplation which, if
carried into effect, will result in the creation of a relevant merger situation.
2. The Parties overlap in the provision of vehicle leasing and fleet management
services for passenger cars and light commercial vehicles up to 3.5 tons, to private
individuals, small to medium enterprise (SME) and corporate customers in the UK.
Operational and financial leases are the most commonly offered vehicle leasing
products in the UK and allow the customer to rent the vehicle for a set period, with
the option to retain the ownership of the vehicle, in the case of a financial lease, and
Page 2 of 27
returning the vehicle to the lessor at the end of the lease period, in the case of an
operational lease. In particular, for corporate customers, vehicle leasing services are
frequently acquired alongside fleet management services, which encompass a
number of ancillary services used by customers to organise, track, maintain and
outsource the administration of their vehicles.
3. The CMA has not concluded on the specific frame of reference. For the purposes of
its assessment, however, the CMA has considered the impact of the Merger on the
provision of vehicle leasing and fleet management services for passenger cars and
light commercial vehicles up to 3.5 tons in the UK (vehicle leasing services in the
UK), without distinguishing between different customer or lease types. In the
competition assessment the CMA considered whether the Parties may compete
more closely or face fewer constraints in narrower segments for specific customer
and lease types.
4. The CMA believes that the Parties are both material suppliers of vehicle leasing and
fleet management services in the UK. The Merged Entity would be the largest
supplier of these services, with a share of around [10-20]% (by volume) for all lease
and customer types, and has a higher share in some segments, in particular the
supply of financial leasing to corporate and SME customers.
5. The CMA has received evidence that the Parties, being two of the larger lease
providers in the UK, are considered by third parties to be relatively close
competitors. The CMA’s analysis of win and loss data and internal documents
suggest that the Parties are not each other’s closest competitors and are subject to
multiple competitive constraints.
6. The CMA believes the Merged Entity will continue to be constrained by a number of
large competitors (such as Arval, Lex Autolease and VWFS) and a tail of medium
and smaller lease providers in the provision of vehicle leasing services in the UK.
The CMA also considers that the relatively higher shares of supply for financial
leasing to corporate and SME customers are not of significant concern because,
among other reasons, the volatility of shares of supply, depending on who wins a
particular contract, and given the relatively small size of the market. As such, these
shares may not be fully indicative of the competitive pressures exerted by each
provider and also do not take into account the constraint on the Parties by the threat
of operational leasing providers starting to offer financial leasing services.
7. The CMA notes that, given the high degree of concentration in the supply of certain
types of vehicle leasing services in the UK to certain customer segments, there will
continue to be a risk of horizontal unilateral effects in the event of any further
consolidation in the industry. The CMA will therefore continue to review carefully any
potential future relevant merger situations.
To continue reading
Request your trial