Competition Authority authorises Montepio/Finibanco merger

​The Competition Authority (CA) has decided not to oppose the Montepio/Finibanco merger, which was notified by Montepio following the preliminary announcement of the launch of the general and voluntary public takeover bid for the shares representing Finibanco’s registered capital. The decision was taken on the grounds that the merger is not liable to create or reinforce a dominant position that may result in significant barriers to effective competition in the markets identified.

The merger consists of the planned acquisition of exclusive control of Finibanco Holding SGPS SA by Montepio Geral – Associação Mutualista, Instituição Particular de Solidariedade Social. The notification had effect on 1 September 2010.

The economic activities of the undertakings involved are as follows:

  • Montepio Geral – is a private institution with charity status, whose corporate purpose is to carry out activities for the social protection of its associates; it owns Caixa Económica Montepio Geral, a credit institution that carries out its banking activities with a special focus on commercial retail banking; it is also active in pension and investment fund management and the insurance sector;
  • Finibanco – a Finibanco holding company that is active in different aspects of the banking business, in particular commercial retail banking; it also operates in the area of asset management, especially that of investment portfolios and funds, and in the insurance sector.

 

The Competition Authority’s analysis:

The competition-law assessment of this merger focused on a set of 23 relevant markets relating to the different areas of business activity of the two institutions, in particular activities involving the supply of banking products and services to private individuals and small businesses, the supply of banking products and services to SMEs (small and medium-sized enterprises), payment cards and insurance.

For the activities involving the supply of banking products and services (both to private individuals/small businesses and SMEs) or the management of equity and property funds, the analysis of the positions held by the parties aroused no concerns of a competition-law nature.

This analysis took account of the fact that, in the universal banking world in Portugal, a group of credit institutions are larger than the participants in the merger.

Furthermore, in the relevant markets identified for the business area of payment cards, Montepio’s and Finibanco’s market shares do not provoke concerns on the competition-law front.

Finally, with regard to insurance, no competition-law problems were detected as a result of the merger in question, either with respect to the life insurance markets or the national market for brokerage services.

Within the scope of the operation, the opinions of Banco de Portugal, Instituto de Seguros de Portugal and CMVM (the Bank of Portugal, the Insurance Institute of Portugal and the Securities Market Commission) were requested. These regulators forwarded data for the CA’s analysis. Banco de Portugal and CMVM considered that, with regard to the markets under their supervision, the operation did not cause a significant change in the structure of the market.

In the light of the results of the analysis carried out, the Competition Authority decided not to oppose the operation, on the grounds that it is not liable to create or reinforce a dominant position that may result in significant barriers to effective competition in the markets identified.