KAUTRA AUTHORISED TO ACQUIRE A HOLDING IN TOKS

The Competition Council examined the notification of 06-06-2006 submitted by UAB Kautra to effect a concentration deal by acquiring a 100 percent holding in UAB Tolimojo keleivinio transporto kompanija (TOKS) and passed a decision to permit the implementation of the transaction in accordance with the submitted notification.

Having examined all circumstances related to the intended concentration deal the Competition Council assessed it as a horizontal concentration in the relevant markets for the passenger carriage on regular local, far-distance and international routes by bus. The in-depth examination of the situation in the relevant markets allowed a conclusion by the competition authority that the intended concentration will not result in a creation or strengthening of a dominant position or any significant lessening of competition in the markets concerned. While passing the decision account was taken of the regulatory situation whereby the carriage of passengers by buses on regular, local and international routes in Lithuania is regulated by the Lithuanian public authorities, – the Ministry of Transport and Communications and the State Price and Energy Control Commission, and the international carriage operations are carried out in accordance with the regulations of the Council of the EU and the regulations approved by the Ministry of Transport and Communications of the Republic of Lithuania.

The competition authority established that following the acquisition by UAB Kautra of shares of UAB Tolimojo keleivinio transporto kompanija the degree of concentration in the passenger carriage on the local, long-distance and international regular routes will to an extent increase although in the local passenger carriage market the concentration will remain quite low not exceeding 5 percent. On the international and long-distance communications markets the concentration degree is likewise likely to increase, nevertheless, maintaining a satisfactory degree of competition. The competitiveness in the latter markets will be ensured both by virtue of free market entry possibilities for new entities, and the affect of the parallel markets on certain routes (rail, maritime transport, low-rates flight, charter flights). However, the markets for long-distance regular passenger carriage by bus ensure the competition only in the profitable section, whereby loss-making routes are being terminated. When establishing the routes the State Road Transport Inspectorate under the Ministry of Transport and Communications announces public tenders for servicing of such routes. The unprofitable communication routes operated to meet the public needs should be funded from public resources, as private companies normally choose not to participate in such servicing tenders.