The Spanish National Commission on Markets and Competition (CNMC) has opened an in-depth, second-phase investigation into Baleària’s acquisition of certain assets of its competitor Armas in the Alboran Sea, the Strait of Gibraltar, and Canary Islands markets. The decision follows the identification of potential competition concerns during the authority’s initial review.
Both Baleària and Armas are active in the market for regular maritime transport of roll-on/roll-off cargo and passengers in the geographic areas of Southern Mainland Spain–Alboran, Southern Mainland Spain–Strait of Gibraltar, and Mainland Spain–Canary Islands. In October, Baleària notified the CNMC of its intention to acquire exclusive control over Armas’ assets in these areas.
During the first phase of the assessment, the CNMC detected risks to effective competition in all three markets, primarily due to the high levels of concentration that would result from the transactions. According to the authority, completion of the acquisitions could leave Baleària as the sole operator on several routes, effectively creating monopolies.
Alboran Sea and Canary Islands
In the Alboran Sea area, the CNMC found that the transaction would significantly strengthen Baleària’s position as the leading operator, leaving it subject to limited competitive pressure and, in most affected routes, as the only service provider. Similarly, in the Mainland Spain–Canary Islands routes, the operation would consolidate Baleària as the sole shipping company active in those markets.
Strait of Gibraltar
In the Strait of Gibraltar, the CNMC noted that another notified transaction—DFDS’s acquisition, currently under review—affects the same geographic market as Baleària’s proposed operation in the Southern Mainland Spain–Strait area. On the Algeciras–Tangier Med route, the two transactions overlap. If both were authorised, Armas would exit the route and the number of active shipping companies would fall from four to three.
Identified Competition Risks
The CNMC identified risks of price increases, deterioration in service quality, and/or reductions in service frequency, particularly on the Southern Mainland Spain–Alboran routes (including Southern Mainland Spain–Melilla and Almería–Nador) and on the Mainland Spain–Canary Islands routes.
These concerns are especially pronounced on routes not subject to Public Service Obligations (PSOs), where no maximum fares apply. However, the CNMC also highlighted risks on routes that are subject to PSOs, including certain Mainland Spain–Canary Islands routes and the Southern Mainland Spain–Melilla route. In these PSO markets, the authority noted additional risks for public tenders, as the number of operators participating in recent public procurement processes could be reduced from two to one.
Commitments Deemed Insufficient
Baleària has submitted commitments relating to the Mainland Spain–Canary Islands routes, as well as a commitment to renounce its licence on the Nador–Almería route. However, the CNMC considers that the identified competition risks prevent the transactions from being authorised without remedies, and that the proposed commitments require more detailed assessment in a second-phase investigation.
With respect to the Strait of Gibraltar, the CNMC considers it necessary to assess the full impact of the combined effect of Baleària’s transaction and the DFDS operation on the market structure.
The opening of the second-phase investigation does not prejudge the final outcome. The CNMC may request additional information from the parties, and both the notifying party and interested third parties will have the opportunity to submit observations. The final decision may authorise the transactions, accept commitments, impose conditions, or prohibit the concentration altogether.