Estrella Blanca / Pullman

MEXICO, 2003

The merger notified by Autobuses Estrella Blanca, SA de CV (Estrella Blanca) and Pullman, SA de CV (Pullman) consisted of an association between these enterprises to create Unebus, SA de CV (Unebus) which would render passenger road transportation services in direct routes.

The merging parties argued that the transaction would produce efficiency gains because it would enable passengers to satisfy their demand for long routes with reduced transfer costs. The relevant market was defined as federal passenger road transportation services within the country, and each route connecting a pair of cities was considered a geographical market in itself. The FCC carried out an assessment of the merger effects in Unebus routes, as well as in other related markets and found that the merging parties: i) were the two leading passenger road transportation firms, ii) were vertically integrated into the upstream market for bus terminal services, and iii) rendered services in routes that are parallel to those which Unebus intended to serve, furthermore, they were the only competitors in several of these routes. Thus, even if Unebus were to create new routes, its lack of independence from the merging parties would probably result in a lack of competition among them.

Therefore, the FCC decided that the notified merger would very likely damage competition in the relevant markets and decided not to authorize the transaction.