Decision Nº M/11/030 from Competition and Consumer Protection Commission, 2011-09-20

• Jurisdiction: Ireland
• Parties: IBM Corporation,Fitch Risk Management Inc.
• Date: 20 September 2011
• Decision Date: 20 September 2011
• Decision Number: M/11/030
• Court: Commissioner for Environmental Information

Merger Notification No. M/11/030 IBM Corporation/Fitch Risk

DETERMINATION OF MERGER NOTIFICATION M/11/030 -

IBM/Fitch Risk Management Inc

Section 21 of the Competition Act 2002

Proposed acquisition by IBM Corporation of Fitch Risk Management

Inc and its subsidiaries

Dated 20 September 2011

Introduction

1. On 7 September 2011, in accordance w ith section 18 of the

Competition Act 2002 (“the Act”), the Competition Authority (“the

Authority”) received a notification of a proposed transaction whereby

IBM Corporation (“IBM”) would acquire sole control of Fitch Risk

Management Inc and its subsidiaries (“Fit ch Risk”) through the

acquisition of the entire shareholding of Fitch Risk.

The Undertakings Involved

The Acquirer

2. IBM is a public company incorporated in the United States of America

and listed on the New Yor k Stock Exchange. It is active worldwide in

the development, p roduction and m arketing of I nformation Technology

(“IT”) solutions. These IT solutions include softwa re, systems

(servers, storage systems, softwa re) and serv ices (business consulting

and IT infrastructure s ervices). IBM currently has a minimal presence

in financial risk management and c ompliance software. In particu lar, it

provided a lim ited amount of Service Ope rations Management (“SOM”)

software, in the form of its Cognos banking risk software, which it

withdrew from the market in July-August 2011.

1

IBM states that its

acquisition of Fitch Risk will enable it to expand its presence in the

financial risk management and compliance sof tware business.

3. In the State, IBM’s activities are carried out through a sub sidiary, IBM

Ireland Limited (“IBM Ireland”). IBM Ireland has sales and marketing

businesses, manufacturing businesses, a software group and software

development laboratory, a telesales and marketing centre, an

international banking software services unit and a corporate treasury

centre.

4. For the financial year ending 31 December 2010, IBM had worldwide

turnover of €75.3 billion of which €[ ] was g enerated in the State.

1

IDC market research has developed a typology which divides the activities of IT firms into a

number of categories. IDC data have been used by the Authority in a previous merger decision

(M/09/017). SOM software is one of three sub-sectors within the Operations and Manufacturing

Applications category. SOM applications support the services supply chain and are unique to

particular industries. They cover a broad range of activities such as automating insurance claim

processes, automating admissions/discharges and transfers of patients in healthcare, or

automating energy trading (as applied to energy and utility functions).