(20) In fossil power plant equipment, VA Tech supplies combined-cycle power plants as a turnkey integrator using mainly components supplied by third parties, notably gas turbines made by GE, together with turbo generators from its own in-house production. In the turnkey contracting market, several competitors remain after the transaction (mainly the turbine manufacturers Siemens, GE, Alstom and Mitsubishi, but also general contractors such as Bechtel and the boiler manufacturer Foster & Wheeler). VA Tech’s EEA-market share for turnkey contracts is below 15 % […](1). The notified transaction will thus deprive GE of one sales channel for its turbines and a supplier of generators designed to work with its turbines. However, given the strategic role of gas turbines in combined-cycle plants and GE’s market-leading position in that area, the Decision concludes that GE will be able to replace VA Tech as a distribution channel for its turbines. GE has its own in-house generator manufacturing capacity. It has itself not raised any concerns about the transaction. The Decision, therefore, concludes that no competition concerns arise in this area.
B. TRANSMISSION AND DISTRIBUTION (T&D) EQUIPMENT
(21) Like power generation equipment, the T&D market comprises a wide range of different components that are supplied to customers (mainly national grid operators and local/regional electricity distributors) at a certain level of aggregation. Based on Siemens/VA Tech's horizontal overlap, Siemens proposes to define relevant markets at the level of the product groups listed under a.-e. below.
a.
HIGH-VOLTAGE PRODUCTS (FOR TRANSMISSION NETWORKS OPERATING AT VOLTAGES BETWEEN 52 KV AND 800 KV)
(i) air-insulated switchgear
(ii) gas-insulated switchgear
(iii) circuit breakers
(iv) disconnectors
(v) instrument transformers
(vi) coils
b.
TRANSFORMERS
(i) power transformers
(ii) distribution transformers
c.
ENERGY AUTOMATION AND INFORMATION SYSTEMS
(i) power system management
(ii) protective relays
d.
TURNKEY PROJECTS
(i) high-voltage projects
(ii) medium-voltage projects
e.
T&D SERVICES
(i) asset services
(ii) network planning.
(22) On product markets, the market investigation provided some indications that, contrary to Siemens's view, at least some of the components identified under (i), (ii), … in each section may by themselves constitute separate relevant product markets. However, the exact product market definition can be left open for purposes of this Decision as no SIEC will arise under any possible market definition.
(23) On geographic market definition, the Decision concludes that the T&D markets are EEA-wide. Technical standards no longer pose an obstacle for grid operators to source products from abroad, especially in the high-voltage markets, where products are significantly customised. The main suppliers participate successfully in tenders for T&D equipment throughout the EEA.
(24) The following market share estimates provided by Siemens in the notification as well as the identity of the competitors in each market were largely confirmed by the market investigation. The exception is the market for high-voltage turnkey projects, where no other market participant estimated Siemens’s market share as high as [50-60](1) %. However, the turnkey market comprises a range of products and components and allocating sales to turnkey services, as opposed to underlying components, may be handled differently by respondents to the market investigation.
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