EC greenlights American Express/Fortis card JV

Source: European Commission

The European Commission has cleared under the EC Merger Regulation the proposed transformation of the existing joint venture Alpha Card S.C.R.L./ C.V.B.A. into a full-function joint venture between American Express Company and Fortis Bank S.A. / N.V. of Belgium.

After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Fortis is an international provider of banking and insurance services to personal, business and institutional customers. American Express is active in payment card issuing and merchant acquiring, travel and insurance services worldwide ("Amex" business). Most of the Amex payment card issuing and merchant acquiring business in Belgium and Luxembourg was transferred to the initial Alpha Card joint venture, which issues American Express branded payment cards and provides merchant acquiring services in Belgium and Luxembourg.

On 29 August 2008, American Express and Fortis notified the Commission of their project to acquire joint control over Alpha Card.

The Commission's investigation focussed on the overlapping activities of the parties in the overall payment card issuing and merchant acquiring markets and in their potential segments in Belgium and Luxembourg.

As Alpha Card is only active in American Express branded cards, the Commission found that the proposed transaction would only marginally affect the combined market shares of Fortis, American Express and Alpha Card in the overall payment card issuing market and it did not find any competition concerns in any potential segments thereof in either Member State. American Express itself remains active in both markets only to a minor extent as it has transferred the bulk of its activities to Alpha Card.

In the merchant acquiring sector the Commission found that in any possible delineation of the market the transaction does not raise competition concerns as Fortis is anyhow not active in merchant acquiring. A number of payment card issuers and very large competitors active in merchant acquiring will keep competing with the joint venture and its parent companies in both Member States.

The Commission therefore concluded that the proposed transaction would not raise any competition concerns.

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