30. 12. 89 Official Journal of the European Communities No L 394/9 COMMISSION DECISION y of 31 May 1989 concerning aid prowded by the Italian Government to Alfa Romeo, an undertaking in the motor vehicle sector - 2 (Only the Italian text is authentic) (89/661/EEC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in  particular the first subparagraph of Article 93 (2) thereof, . Having given notice in accordance with the abovementioned Article to interested parties to submit their comments, Whereas: I By letter dated 1 October 1986 the Commission requested from the Italian Government information concerning alleged aid in the form of new capital amounting to Lit 209 billion which, according to press information, the Italian Government provided in 1985 to Alfa Romeo. By letter dated 21 November 1986 from its Permanent Representation, the Italian Government confirmed that an amount of Lit 206,2 billion in the form of a capital contribution had been allocated to Alfa Romeo on the basis of a decision taken by its shareholders Finmeccanica and IRI during 1985 in order to cover losses incurred by the company in 1984 and during the first half of 1985. Furthermore, it was stated that the information concerning the coverage of the losses which occurred up to the end of 1986 could not yet be provided in view of the recent conclusion of negotiations for the acquisition of Alfa Romeo by Fiat. . By telex dated 18 December 1986, the Commission requested from the Italian Government information concerning any further aid, envisaged or already provided, in favour of Alfa Romeo or Fiat within the framework of the take-over of Alfa Romeo by Fiat. . By telex dated 30 January 1987 from the Italian Permanent Representation, the Italian Government informed the Commission that no public financial assistance was involved or .contemplated - within the framework of the take-over operation. The acquisition by Fiat took place on the basis of an evalution of two competing offers from Ford and- Fiat undertaken by independent consultants and was therefore consistent. with normal market practices. It was stated, finally, that the financial data requested by the Commission were not yet avallable, but would be forwarded in due course. Upon a request for further information by the Commission, the Italian Government, in its telex of 27 March 1987, stated that the outside experts had concluded that both offers were economically acceptable, but that the proposal of Fiat was preferable because it offered a speedier renewal of Alfa Romeo’s product range, it included Alfa Romeo’s Italian associates, it partly avoided further losses for Finmeccanica and it contained a clearer statement of employment goals. The reply also contained information regarding the price. offered by Fiat for the acquisition of Alfa Romeo, involving a. partial take-over of a maximum of Lit 700 billion (including the loans granted under Law No 675/77) of Alfa Romeo’s debts and a amount of Lit 1 050 billion to be paid by Fiat in five annual instalments starting from the sixth year after 1 January 1987, the date of the acquisition. As regards Alfa. Romeo’s debts, it was stated that the remaining debts af Alfa Romeo which were not taken over by Fiat were assumed by Finmeccanica (including the loan obtained under Law No 46/82). Although the Commission requested detailed information on the terms of the sale of Alfa Romeo to Fiat and on the competing offer from Ford on several occassions, the letter dated 2 July 1987 from the Italian Govemment did not contain any addmonal information. On 29 July 1987, the Commission decided to initiate the procedure provided for in Article 93 (2) of the EEC Treaty in respect of the injection of capital amounting to Lit 206,2 billion into Alfa Romeo in 1985 and in respect of an alleged subsidy included in the terms on which Fiat acquired Alfa Romeo. On the basis of the information available to it, the Commission was afraid that the Italian Government had aided Fiat in the sense that it might have given it a competitive advantage by charging it a lower price that could be obtained from the second bidder, i.e. Ford, for the assets of Alfa Romeo which “Fiat took over by the end of 1986. Furthermore, it was not able to assess to what extent the’ acquisition price took account of the capital provision of 1985. By letter dated 6 August 1987 the Commission therefore requested the Italian- Government to submit its comments and respond to the precise questions which were raised in the letter. In accordance with Article 93 (2), the other Member States and third parties were also requested to submit their comments: I Within the framework of. the procedure, the Italian Government submitted its observations By letter dated 7 October 1987, confirming its view that the terms of sale of Alfa Romeo to Fiat did not contain aid elements falling under Article 92 of the EEC Treaty. It also provided some data