On 3 April 2020 the Commission has approved, under the EU Merger Regulation, the proposed acquisition of the European business of Lufthansa Service Group (“LSG”) by Gategroup, notified on 14 February 2020, subject to the latter satisfying certain conditions.

Gategroup, headquartered in Switzerland, LSG EU, headquartered in Germany, are both active in the in-flight catering servicesmarket. Specifically, Gategroup provides airline catering, retail on-board and other related services in around 60 countries, while LSG EU operates through its brand “LSG Sky Chefs”.

The Commission was afraid that the transaction, as originally notified, would have significantly reduced competition on the market and led to a quasi-monopoly in several airports such as, among the others, Brussels, Frankfurt, Paris Charles de Gaulle and Rome Fiumicino. The in-flight catering services market, indeed, has relatively high barriers to entry and makes it hard for airlines to switch between suppliers.

Therefore, in order to address the Commission’s competition concerns, Gategroup offered to divest the overlap businesses with LSG EU, allowing the entry of alternative competitors in the market. Provided that these conditions are met, the Commission approved the transaction, since it would no longer raise effective competition concerns in the relevant market.

Marco Stillo