On July 25, 2023, the French Competition Authority (“FCA”) approved, subject to remedies, the acquisition by the Areas Group (“Areas”) of sole control of its French competitor, Sirestco Group (“Sirestco”, together, “the Parties”) in the sector for the provision of highway catering services.
Areas and Sirestco are both active in the concession catering sector in highway service stations. In France, they operate in multiple restaurants and shops in more than a hundred highway service stations under a broad range of brands (e.g., “L’ArcheCafétéria” and “A Table” for Areas and “Léo Bistrot” for Sirestco), as well as with brand licenses and franchises (e.g., “Paul”, “Starbucks”, and “Subway” for Areas; “La Mie Câline”, “Steak N’Shake”, and “Carrefour Express” for Sirestco).
The Parties’ activities overlap in the upstream market for the allocation of highway catering concessions, and the downstream markets for the provision of highway catering services to end-consumers (segmented between markets for the provision of catering services stricto sensu, for the provision of light refreshments, and for the sale of food products in shops and vending machines). They also overlap in the market for the retail of highway tobacco and as purchasers in the upstream market for the sourcing of food products.
On May 15, 2023, Areas notified the FCA of its intent to acquire sole control of Sirestco.
Potential risks to competition
Following its assessment, the FCA considered that the transaction raised anticompetitive concerns in some markets for the provision of highway catering services to end-consumers. As highways are one-way roads and because drivers typically make stops in service station along their route, the FCA assessed the impact of the transaction on competition for each highway separately, in both directions of traffic. It identified the following concerns:
- On the A5 highway, the Parties’ combined share would exceed 50% in both directions of traffic on the downstream market for the provision of catering services stricto sensu, as well as on the market for the provision of light refreshments.
- On the A19 highway, the combined entity would also command more than half of the market for the sale of food product in both directions of traffic, while having a monopoly on the market for the retail of highway tobacco.
Therefore, the FCA was concerned that the transaction would result in higher prices and lower quality of services provided to end-consumers on these two highways, especially given the lack of credible alternative suppliers post-transaction.
Remedies offered by Areas
To address the FCA’s concerns, Areas committed to (i) divest the sub-concession contract for the catering and food retail activities of the Troyes-Fresnoy service station’s shop on the A5 highway and (ii) transfer the lease management contract for the operation of the “Casino Everyday” shop, as well as entering into a third-party operating contract for catering services at the Loiret service station on the A19 highway. The remedy package would entirely alleviate the FCA’s concerns on these highways as the Troyes-Fresnoy and Loiret service stations are accessible from both directions of traffic.
An independent monitoring trustee approved by the FCA oversee the implementation of these remedies, and the FCA will have to approve the buyers.
 FCA Decision 23-DCC-151 of July 25, 2023 on the acquisition of sole control of the Sirestco Group by the Areas Group.