Bundeskartellamt clears joint venture between Giesecke & Devrient and Bundesdruckerei for the production of foreign identity documents

Following an in-depth examination the Bundeskartellamt has cleared the establishment of a joint venture for the production of foreign identity documents between Giesecke & Devrient GmbH, Munich (G&D) and Bundesdruckerei GmbH, Berlin.

Andreas Mundt, President of the Bundeskartellamt: "The project could ultimately be cleared although the companies involved have a strong market position in Germany. A large number of companies in Europe and worldwide compete for contracts for the production of identity documents. For security reasons, in Germany all contracts relating to passports, identity cards and electronic residence permits are awarded by the Federal Ministry of the Interior to Bundesdruckerei without a tender procedure. The investigations have shown that the supply of individual components by third companies is also subject to close coordination between Bundesdruckerei and the competent government agencies. This practice of awarding contracts is not likely to change in the short and medium term. The establishment of the joint venture is thus not expected to significantly impede effective competition."

G&D is an international technology group focusing on banknote printing, mobile security and secure ID documents (government solutions). G&D's sales revenue in 2013 amounted to about 1.75 billion euros of which 90% was achieved abroad.

Bundesdruckerei, which since 2009 has again been wholly owned by the state, produces documents and devices for secure identification and offers related services. In 2013 its worldwide sales revenue amounted to approx. 398 million euros of which more than 90 % was accounted for by sales in Germany.

G&D will take over 60% and Bundesdruckerei 40 % of the shares in the new joint venture. G&D will have sole control of the company under merger control law. G&D and Bundesdruckerei will bring their international activities into the joint venture. The joint venture will respond to invitations to tender issued by foreign public contracting authorities for ID documents, driving licences and health insurance cards.

The Bundeskartellamt's investigations have shown that both under a worldwide and Europe-wide market definition of its foreign business the joint venture will not achieve a critical size under competition law. Also in Germany, where contracts for ID documents are awarded in public procurement procedures, the merger is not expected to result in a significant impediment of competition.