Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels,  17.03.2020  
C(2020 ) 1816 final  
PUBLIC VERSION  
 
To the notifying parties  
Subject : Case M. 9623 - AMG / Shell / JV  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 12 February 2020 , the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which  
AMG Advanced Metallurgi cal Group N.V. (“ AMG ”) and Shell Overseas 
Investments B.V. (“ SOI”), a wholly owned subsidiary of Royal Dutch Shell plc 
(“Shell ”), acquire within the meaning of Article s 3(1)(b) and 3(4) of the Merger 
Regulation  joint control of a newly created joint ventur e Shell & AMG Recycling 
B.V. (“S&AR”, or the “JV”, the Netherlands)3. Shell  and AMG  are designated 
hereinafter as the “Notifying Parties ”. 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation ”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( “TFEU ”) has introduced certain changes, such as the replacement of  
“Community ” by “Union ” and “common market ” by “internal market ”. The terminology of the TFE U will 
be used throughout this D ecision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C 56, 19.02.2020 , p. 9. 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 
concerning non -disclosure of business 
secrets and other  confidential 
information. The omissions are shown 
thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
 
2 1. THE PARTIES  
(2) AMG  is a global specialty metals and engineering group supplying products and 
solutions to the aviation, infrastructure, energy and chemical industries.  AMG 
Critical Materials , one of AMG’s operating segments, provides recycling services 
for oil refineries in  relation to the spent resid ue upgrading  catalysts  (“resid 
catalyst s”) generate d from crude oil processing.4 AMG is currently active in 
catalyst recycling only in North America and sells the metals extracted through 
the recycling process on worldwide tradi ng markets.  
(3) Shell  is the parent company of a global group of energy and petrochemical 
companies with businesses including: (i) oil and gas exploration, production and 
marketing; (ii) manufacturing, marketing and shipping of oil products and 
chemicals; and (iii) renewable energy product s. Via its wholly owned subsidiary 
Shell Catalyst & Technologies , Shell  supplies fresh resid catalyst (“FRC”)  to oil 
refineries as well as associated technology, technical advisory services and 
research and development expertise.  
(4) The JV  will be a greenfield entity with no pre -existing market presence  that will 
offer recycling services to oil refiners that use res id catalyst s. Pursuant to the joint 
venture agreement (“JVA”) of 7 October 2019 , the JV will be active in:  
(a) the sourcing, recycling and reclamation of SRC s outside North America .  The 
JV will do this [details on the JV's business strategy ] once  the proposed  
concentration has completed. [Details on the JV's business strategy ], it 
expects to construct a recycling plant using AMG’s technology and know -
how in the Middle East, which will have the ability to serve [details on the 
JV's business strategy ]; and  
(b) the w orldwide sale of extracted by -products from the catalyst s recycling 
process.  
2. THE OPERATION  AND CONCENTRATION  
(5) AMG and Shell, via SOI, agreed to the creation of the  full-function  JV by signing 
a JVA on 7 October 2019.5 Under the JVA, the JV  will be supervised and 
managed by the Board of Directors. AMG and Shell will each be entitled to 
appoint [an equal number of ] board directors.  [Information relating to the JV's 
governance structure ] . Therefore, the proposed  concentration  consists of an 
acquisition of joint control  of the JV by Shell and AMG . 
                                                 
4  Oil refiners can use various technologies to upgrade “bottom of the barrel” heavier “residue” crude oil into 
lighter, higher -value refined products (e.g. gasoline, diesel, or kerosene). One such technology is 
hydroprocessing which uses resid catalysts. When supplied to oil refiners, the resid catalysts are “fresh” 
(“FRCs”). Once u sed in the hydroprocessing process to upgrade the residue, the resid catalysts become 
“spent” (“SRCs”, “SRCs”).  
5  The JV’s implementation is subject to the prior receipt of necessary competition clearances, but is 
expected to complete shortly thereafter.  
 
 
3 (6) The JV will have sufficient own staff6 and dedicated management, as well as 
financial resources for its operation and for the management of its portfolio and 
business interests. The JV will have a n ind ependent  market presence . It will 
engage in advertising its recycling services to potential customers and developing 
commercial opportunities with  such customers . [Details on the JV's business 
strategy ] once the regulatory approval  for construction has been obtained, the JV 
will start construction of the first of its future recycling facilities […]. The JV will 
negotiate and enter into  contracts with both oil refiners for the recycling of SRC s 
and buyers of the extracted industrial metals and other by -products from the 
recycling process.7 […].  Finally, the JV is intended to operate on a lasting basis. 
Therefore, the JV is  a full-function  entity .  
(7) Therefore , it can be concluded that the  creation of a  JV by Shell and AMG  
constitutes a concentration  within the meaning of  articles 3(1)(b) and  3(4) of 
Council Regulation (EC) No 139/2004 (“ EUMR ”). 
3. EU DIMENSION  
(8) The undertakings concerned have a combined aggregate worldwide turnover of 
more than EUR 5 000 million  [AMG […], Shell […]].8 Each of them has a n EU-
wide  turnover in excess of EUR 250 million  [AMG […], Shell […]], but they do 
not achieve more than two -thirds of their aggregate EU-wide turnover within one 
and the same Member State. The notified operation therefore has an EU 
dimension.   
4. RELEVANT MARKETS [MAR KET DEFINITION ] 
(9) The concentration does not give rise to horizontally or vertically affected markets . 
There are no horizontal overlaps or vertical links between  the activities of the JV 
and Shell . As regards the activities of AMG and the JV, there is no horizontal 
overlap between the activities of the JV (which will be active outside of North 
America) and AMG ( […]) in respect of recycling of SRC s as the market is 
narrower than worldwide (see paragraphs 50 to 54) . Although both AMG and the 
JV will be active i n the sale of by-products retrieved from the ir respective 
recycling process es, AMG’s and the JV’s combined market share will remain 
below 20% on any plausible market.9 The sale of extracted by -products will 
therefore not be further discussed in this Decision.  
                                                 
6  Once established, the JV will be free to recruit its own staff and appoint its own independent management 
team. The Parents will provide the JV with initial funding of […].  
7  The JV will develop its own market presence as it will enter into contracts: (i) with refiners to procure 
SRC to be recycled; and (ii) with buyers of the extracted industrial metals and other by -products from the 
spent catalyst recycling process. These operations will be distinct from both Shell’s activities (as Shell is 
not active  in recycling and reclamation services) and AMG’s activities (as it will be active outside of 
North America […]).  
8  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
9  The Notifying Parties estimated AMG’s market shares as respectively (i) [0-5] % on the worldwide 
market for the supply of vanadium and [5-10]% excluding China , and in any event less than 20% on any 
plausible market (see case M.4494); (ii) less than [0 -5] %  on an EEA wide or  worldwide market for the 
supply of ferronickel molybdenum (see case M.4000); (iii) AMG […] sells calcium aluminate […], and an 
 
 
 
4 (10) However, Shell’s activities in the sale of FRC s can be considered as neighbouring 
activities to those of the JV (recycling of SRC s). Given Shell’s relatively stron g 
position in the sale of FRC s, the Commission investigated whether conglomerate 
concerns could arise.  
4.1. Market for the supply of FRC s 
(11) FRC s are used to treat refinery residue, i.e. the “bottom of the barrel” heavy oil 
remaining after distillates have been re moved from crude oil feedstock. By 
treating refinery residues with resid catalysts, refiners can “upgrade” the residue 
and convert it into lighter fuels, such as gasoline, diesel, or kerosene.10 In contrast 
to other types of catalysts, FRC s refers to a grou p of catalysts which (i) have 
“active sites” composed of nickel and molybdenum that promote the reactions; 
and (ii) are supported on a shaped “carrier” with a high surface area upon which 
the active sites are distributed. They are used specifically in a pr ocess called 
“hydroprocessing” (including fixed bed resid reactors and ebullated bed resid 
reactors).11 
4.1.1.  Product market definition  
4.1.1.1.  The Commission's decisional practice  
(12) The Commission has not previously analysed the market for FRC s. 
(13) In previous cases concerning other types of catalysts, the Commission has found 
that catalysts can be distinguished based on their specific application.12 
4.1.1.2.  The Notifying Parties’ view  
(14) The Notifying  Parties agree with the Commission’s practice to distinguish 
catalyst markets b ased on the specific application of the catalyst and submit that 
the relevant product market is the market for FRC s, with its specific application 
being hydroprocessing.13 
(15) FRC s are bespoke products, their composition differing to suit the nature of the 
residue feedstock they are seeking to upgrade (light, heavy etc.) and the desired 
output (specific by -products). However, all FRC s suppliers would be able to 
adapt the FRC s they produce to customer needs, according to the Notifying 
Parties.14 
                                                                                                                                                      
overlap with the JV activities would occur […] on a global market for the supply of calcium aluminate 
where A MG’s market share is less than [0-5] % (see case M.4157); and AMG […] sells calcium sulphate 
[…] and an overlap with the JV activities would occur […] on a global market for the supply of calcium 
sulphate where AMG’s market share is below [0 -5] % (see case  M.4898). The JV has no market activities 
yet, but the Notifying Parties confirm that no affected market is expected to arise in respect of any 
extracted by -product from the JV’s activities given AMG’s minor market shares.  
10  Form CO, paragraph 87.  
11  Form  CO, paragraph 166.  
12  Cases COMP/M.4102 – BASF / Engelhard , paragraph 9, and COMP/M.3125 Huntsman / Matlinpatterson 
/ Vaticano , paragraphs 10 -14. 
13  Form CO, paragraph 168.  
14  Form CO, paragraph 269.  
 
 
5 (16) The Notifying  Parties therefore argue that it is not necessary to look at potential 
sub-segments of FRC s as (i) the resid catalysts used in the two main types of 
refinery residue upgrading process reactors (“fixed bed” and “ebullated bed” 
reactors) are broadly similar15 and (ii) the recycling of SRC s does not differ 
depending on the manufacturer of the catalyst s, refinery specifications, type of 
reactor etc..16  
(17) Therefore, the Notifying  Parties submit that the relevant product market is that of 
FRC s and that no further se gmentation is justified.  
4.1.1.3.  The Commission’s assessment  
(18) There are different catalytic and non -catalytic options to upgrade heavy crude oil 
residue . However , the results of the market investigation confirmed  that these 
options should  not be part of the same p roduct market as the supply of FRC s. A 
large majority of respondents replied that at the point in time when refineries 
decide on the technology to upgrade heavy crude oil residue, catalytic and non -
catalytic solutions are not considered interchangeable/sub stitutable,17 as “process, 
product slate and equipment are very different ” and it “ depends on how well it fits 
within the existing refinery and synergies in the industrial complex. ”18 Further, 
there are different catalytic solutions which customers do not co nsider 
substitutable either.19 Once customers have adopted a certain technology to 
upgrade heavy crude oil residue, they cannot easily switch, neither between 
different catalytic  solutions nor between catalytic and non-catalytic solutions.20 
(19) Based on the rep lies to its market investigation, the Commission considers that 
the product market definition should not be broader than FRC s.  
(20) As for a potential sub -segmentation, t he majority of respondents to the market 
investigation consider  that no distinction is required between FRC s for f ixed bed 
and ebullated bed technologies. Both of these technologies are u sed in the EEA 
(about half of the refineries that participated in the market investigation use one  
or the other , some use both).21 Whilst from a demand -side perspective, each 
refinery customer requires a FRC s that fits the technology and type of oil it uses 
(and as such, requires a bespoke solution),  supply side substitutability is high: a 
majority of both competitors and customers conf irmed that most  competitors of 
                                                 
15  There are two main reactor types, “fixed bed” and “e bullated bed”. Fixed bed resid reactors tend to be 
used for relatively lighter residue feedstock. Such feedstock is reacted through catalyst that is fixed or held 
in a bed in the reactor. Once the catalyst is deactivated the unit is shut down and the catal yst is replaced. 
Ebullated resid reactors tend to be used for processing heavier residue feedstock. The ebullated bed 
reactor allows catalyst to be added and withdrawn in small portions several times per day, so no down 
time is required to replace the FRC.  (Form CO, paragraph 167, footnote 129).  
16  Form CO, paragraph 89.  
17  Replies to question 5 of questionnaire to customers. Replies to question 3 of questionnaire to competitors 
FRC.  
18  Replies to question 5.1 of questionnaire to customers.  
19  Replies to question 5.2 of questionnaire to customers.  Replies to question 3.3 of questionnaire to 
competitors FRC.  
20  Replies to question 5.3 of questionnaire to customers.  
21  Replies to question 6 of questionnaire to customers.  
 
 
6 FRC s are able to supply FRC s for refineries using any type of residue upgra ding 
process reactor, i.e. “fixed bed”, “ebullated bed” or any other technology .22 
(21) Based on its market investigation, the Commission therefore consider s that the 
relevant product market for the purposes of this case is that of the supply of 
FRC s.  No further sub -segmentation is necessary for the purposes of this case.  
4.1.2.  Geographic market definition  
(22) As explained in recital (12), the Commission has not previously analysed a 
market for FRC s. 
4.1.2.1.  The Notifying Parties’ view  
(23) According to the Notifying  Parties, the geographic market is worldwide, as 
suppliers of FRC s operate globally. Plant proximity to the customer location is a 
relevant consideration but not the determining factor. Rather, the decision will be 
based on […].23 All suppliers of FRC s (Axens, Sinopec, Nippon Ketjen and 
Albemarle) are active in the EEA, i n the sense that they are often invited to 
participate in tenders.24   
(24) Transport costs only make up 2 -3% of the total supply price, so FRC s suppliers 
can profitably supply customers around the world.25 Prices do not differ between 
regions, but are negotiated  individually with customers (notably, as FRC s are 
bespoke products).26  
4.1.2.2.  The Commission’s assessment  
(25) The results of the market investigation pointed towards a worldwide market for 
FRC s.  
(26) All suppliers of FRC s and a clear majority of customers consider  that the market 
for the supply of FRC s is global, as all operators are active at a global level, 
“trade flows are worldwide ” and there are “ no specific barriers at this moment ”.27  
(27) Suppliers of FRC s explained that customers are still supplied from the closest 
facility where the FRC  is produced  as long as that facility has sufficient 
capacity .28 
(28) The Commission notes that in […] Shell itself supplie d FRC s to the EEA [details 
in respect of supply ]29 .  
                                                 
22  Replies to question 4 of questionn aire to competitors FRC . 
23  Form CO, paragraph 72.  
24  Form CO, paragraph 177.  
25  Form CO, paragraph 177.  
26  Form CO, paragraph 167.  
27  Replies to question 5 of questionnaire to competitors FRC . Replies to question 10 of questionnaire to 
customers . 
28  Replies to question 7 of questionnaire to competitors FRC . 
29  Form CO, paragraph 287.  
 
 
7 (29) That being said, t he overview of all refineries worldwide purchasing FRC s shows 
that different suppliers are more present in certain parts of the world than others , 
suggesting that if there is a choice at closer proximity, this supplier may have an 
advantage . For instance, some suppliers of FRC s are only supplying refineries in 
Asia Pacific, in North America, Europe or the Middle East.30   
(30) In any case, the exact geographic market definition can be left open between the 
EEA and worldwide, as the  proposed concen tration  will not give rise to serious 
doubts as to its compatibility with the internal market or the functioning of the 
EEA Agreement on either  of the two plausible geographic market definition s. 
4.2. Market for the recycling of SRC s 
(31) After FRC s are used to upgrade oil residue, they become “spent” and cannot be 
used a second time. This waste product can be either landfilled or recycled by 
first roasting it and then melting the roasted catalyst in a primary and a secondary 
furnace. In these different steps, by -products can be recovered and resold on the 
market, namely: ferronickel molybdenum, calcium sulphate, calcium aluminate 
and vanadium.31 
4.2.1.  Product market definition  
4.2.1.1.  The Commission's decisional practice  
(32) The Commission has not previously analysed the market for recycling of SRC s. 
4.2.1.2.  The Notifying Parties’ view  
(33) The Notifying  Parties argue that the service of SRC s recycling should not be 
further segmented between  (i) different stages of the refining process, (ii) on the 
basis of recovered materials  and the technology  of the recycling process or (iii) 
between different types of SRC s.32 
(34) The different stages of the recycling process are the collection of SRC s, the 
roasting and melting in a primary and a secondary furnace and the extraction of 
various by -products during this process . The Notifying  Parties argue that a 
segmentation is not necessary as, from the perspective of customers, the 
individual procedural steps are not relevant for the selection of a recycling  service 
provider.33 
(35) While the type and amount of materials that can be reclaimed through SRC s 
recycling can vary, a further segmentation on the basis of recovered materials is 
not necessary . What and how much can be reclaimed  impact s the commercial 
conditi ons under which the recycling service is provided, but the recycling 
process  will remain  the same.34 
                                                 
30  Form CO, Annex 12.  
31  Form CO, paragraph 92.  
32  Form CO, paragraph 97 a.  
33  Form CO, paragraph 97 a.  
34  Form CO, paragraph 97 b.  
 
 
8 (36) The Notifying  Parties also consider that there are no differences between the 
recycling of different types of SRC s. Considering  other recycling providers 
already active in the market ( […]), these do not differentiate their price for 
recycling services  on the basis of catalyst type .35 So, there is no reason for a split 
on the basis of the fresh resid manufacturer , the refinery specifications or the type 
of reactor from which the SRC  originated.36   
(37) The Notifying  Parties conclude that the relevant market should be the market for 
SRC s recycling including all stages of the recycling process . The Notifying  
Parties howev er submit that the precise product market definition can be left 
open .37 
4.2.1.3.  The Commission’s assessment  
(38) Based on its  market investigation , the Commission considers that for the purposes 
of this case, the relevant market is that of recycling of SRC s. 
(39) As regards  the different stages of recycling, r eplies to the Commission’s market 
investigation  showed that r ecyclers are integrated to different extents. In respect 
of collection, according to the Notifying Parties, transportation  of the SRC s is 
typically a responsi bility of the refineries (although there can be specific instances 
where a recycler may agree with a refiner to take responsibility over the 
logistics).  This seems to be supported by the market investigation.38  In any event, 
transportation is carried out b y a (speciali sed) freight handler for the physical 
transportation of the SRC  to the facilities of the SRC  recycling services provider, 
since refineries (or recyclers) generally do not own special ised bins or rail cars for 
such transportation.  As regards th e stages of roasting, melting and by -product 
extraction, whilst the major competitors active in the recycling of SRC s are active 
across the value chain, there are some market participants who only offer 
roasting.39 AMG is […] active in the full value chain […]. The JV is intended 
[details concerning the JV’s services ]. For the purposes of this Decision, the 
Commission therefore considers that it is not necessary to sub -segment the 
relevant market by different stages of recycling.  
(40) As regards a sub -segmentatio n based on recovered materials  and the technology 
used in the recycling process , this does not appear warranted. In order to recycle 
SRC s, there are different technologies that fulfil the function to dispose of non -
hazardous waste and recover metals , in pa rticular pyro-40 and hydrometallical41 
processes are used. There were some indications in the market investigation  that 
some technologies are better for extracting certain types of metals than others 
                                                 
35  Prices are based on other factors such as: the metals content in the SRC , the hazardous content of the 
SRC , the volume of the SRC  as a whole, contract duration, condition of the spent catalyst, and value of 
the metals contained within the spent  catalyst . 
36  Form CO, paragraph 97 c.  
37  Form CO, paragraph 98.  
38  Minutes call with a competitor for recycling services, paragraph 2.  
39  Replies to question 5 and 5.1 of questionnaire to competitors recycling services.  
40   Pyro -metallurgical processes involve the use of heat (i.e. thermal treatment) to bring about physical and 
chemical transformations in the materials to enable recovery of valuable metals.  
41   Hydrometallurgy involves the use of aqueous chemical reactions (solvent) chemistry for the recovery of 
the metals.  
 
 
9 (e.g. where the vanadium content is high , a different technology is preferable than 
where the platinum content is high in order to recover as much of these metals as 
possible)42, but in general, the respondents to the market investigation considered 
that generally their customers would not focus on the technol ogy used by the 
recycler .43 In general, respondents indicated other factors determining whether 
recyclers could serve their refinery (e.g. proximity).44  
(41) The type and amount of materials that can be reclaimed through SRC  recycling 
can also vary between custo mers as products are bespoke and will normally 
impact the commercial conditions under which the recycling services are offered 
([…] is one of the elements that determines the overall pricing of the recycling 
service). In addition, fluctuating metal prices  determine the relative importance of 
reclaiming specific by -products, so the commercial needs of customers vary in 
terms of the recycling process. All suppliers of recycling services seem to be able 
to recycle SRC s with differing metal contents  (albeit som e are better and/or more 
focused than others with specific resid catalysts/types of metals) .45   
(42) As regards the recycling of different types of SRC s, respondents to the market 
investigation  were largely of the view that a segmentation based on the type of 
SRC to be recycled is not warranted. Recyclers offer recycling services for SRC s 
to a refinery using any type of residue upgrading process reactor i.e. “ fixed bed” 
and “ebullated bed”46. So a distinction between different sources of the SRC  is 
not required .  
(43) For the purpose of this Decision, the Commission consider s the relevant market to 
be that of recycling of SRC s without any further sub -segmentation.   
4.2.2.  Geographic market definition  
4.2.2.1.  The C ommission ’s decisional practice  
(44) As explained in  paragraph (32), the Commission has not previously analysed a 
market for the recycling of SRC s. 
4.2.2.2.  The Notifying Parties’ view  
(45) According to the Notifying  Parties, the geographic market for SRC s is EEA -wide, 
potentially including the Middle East and Asia as (i) transport costs for SRC s are 
significant , limit ing the profitability of transporting the waste product from a 
refinery to a recycling facility , and ( ii) as spent catalyst s are toxic/hazardous , the 
related regulatory costs mean that recyclers in a different region are at a 
competitive disadvantage .47  
(46) Given its hazardous nature and the relevant regulatory restrictions  (as further 
discussed in paragraph (51)), SRC  cannot be easily transported  due to the cost 
                                                 
42  Reply to question 3.1 of questionnaire to competitors recycling services.  
43  Replies to question 4 of questionnaire to competitors recycling services . 
44  Reply to question 8.1 of questionnaire to customers.  
45  Views of a purchaser of FRCs.  
46  Replies to qu estion 6 of questionnaire to competitors recycling services.  
47  Form CO, paragraph 99.  
 
 
10 involved .48 While regulatory hurdles can be overcome, in most circumstances 
spent catalysts are processed at regional level only, often in the vicinity of 
“clusters” of refineries, based on prevailing commercial conditions.49 
(47) In addition, b ased on AMG’s experience [details on AMG's business strategy ], 
transportation can account for up [details on AMG's business strategy ].50 
(48) The Notifying  Parties therefore consider that, from the supply perspective, 
companies active in the SRC  recycling business broadly operate on a regional, 
rather than a global , basis.51   
(49) Therefore, the  Notifying  Parties submit that the geographic market is likely EEA -
wide , potentially including the Middle East and Asia , but that the exact market 
definition can be left open between EEA -wide and worldwide.52  
4.2.2.3.  The Commission’s assessment  
(50) The replies to the market inve stigation  indicate that the relevant geographic 
market is likely to be EEA -wide or possibl y EMEA (Europe,  Middle East  and 
Asia) .53  
(51) A majority  of respondents confirmed that the distance between recyclers and 
refineries played a n important  role for the choice of recycler : “It is a benefit if the 
service provider is close by and long distance shipments can be avoided ”, 
because of transport costs and regulatory constraints, namely:  
 “European regulations on hazardous wastes;  
 National regulatio ns on hazardous wastes that can be even more constraining 
than EU regulations, such as the one implemented […];54 
 Where these regulations do not apply (e.g. in Switzerland, even if that country is 
unrelated to [the refinery] ’s activities in […]), the Basel Convention is relevant;  
 Transportation costs and logistics (transportation by trucks); and CO2 
emissions. ”55 
(52) Consideration about greenhouse gas emissions are an additional reason for 
refineries to prefer recyclers located at shorter distance.56 
(53) All competitors for recycling services considered the closeness of their 
customers’ plants and  the facility where the  spent resid catalyst is recycled  
                                                 
48  The spent catalyst is caked in toxic compounds and metals from the “bottom of the barrel” feedstock and 
becomes up to twice as heavier in weight as compared to when i t is fresh (Form CO, paragraph 99).  
49  Form CO, paragraph 101.  
50 Form CO, paragraph 102.  
51  Form CO, paragraph 104.  
52  Form CO, paragraph 104.  
53  Replies to question 14 of questionnaire to customers. Replies to question 7 of questionnaire to competitors 
recycling.  
54  Regulation (EC) No 1013/2006 of the European Parliament and of the Council of 14 June 2006 on 
shipments of  waste.  
55  Reply to question 14.1 of questionnaire to customers.  
56  Reply to question 16.1 of questionnaire to customers.  
 
 
11 somewhat or very important.57 Some  refineries replied to the market investigation 
that they have procured recy cling services from recycling plants that are located 
on average at a distance of around 1000 -1500 km and not more than 2500km from 
the refinery . Also this points to an EEA -wide market rather than one including the 
Middle East and Asia or a worldwide market .58 While  shipment s of SRC s do 
sometimes take place over longer distances depending on the amount of metals 
involved and the metal price , this appears rather exceptional .59 
(54) Based on its market investigation, the Commission therefore considers that for the 
purpose of this Decision the relevant geographic market can be EEA -wide or 
EMEA -wide . The exact  geographic market definition can be left open, as the 
proposed concentration will not give rise to serious doubts as to its compatibility 
with the internal market or the functioning of the EEA Agreement on either  of the 
two plausible geographic market definitions.  
5. COMPETITIVE ASSESSMEN T 
(55) The proposed concentration does not give rise  to horizontally affected markets, 
neither actually nor potentially.  
(56) Nor does the proposed concentration give rise to actual or potential vertically 
affected markets. Shell currently has [details in respect of Shell’s group activities ] 
and that is [details  in respect of the JV’s operations ].  
(57) However, as the customers who purchase FRC s (a market where Shell has a 
market share of [40-50]% in the EEA) increasingly also purchase recycling 
services for the SRC s, this Decision analyses the effects of the proposed 
concentration on these potentially neighbouring markets.  
5.1. Conglomerate non -coordinated effects  
5.1.1.  Legal framework  
(58) According to the Non -Horizontal Merger Guidelines, conglomerate mergers do 
not lea d to any competition problems  under most circumstances .60 However, 
foreclosure effects may arise whe re the merged entity offers a combination of 
products in related markets and has  the ability and incentive to leverage a strong 
market position from one market to another closely related market through tying, 
bundling or other exclusionary practices.61 
(59) Tying  refers to situations where customers that purchase one good (the tying 
good) are required also to purchase another good from the producer (the tied 
good). Tying can take place on a technical or contractual basis.62  
                                                 
57   Reply to q uestion 8 of questionnaire to competitors recycling services.  
58  Replies to question 15 of questionnaire to customers.  
59  Views of a purchaser of FRCs . 
60  Non-Horizontal Merger Guidelines, paragraph 92.   
61  Non-horizontal Merger Guidelines, paragraph 93.   
62  Non-horizontal Merger Guidelines, paragraph 97.   
 
 
12 (60) Bundling can take the form of pure bundl ing, which is similar to contractual 
tying, or m ixed bundling . Mixed bundling  refers to situations where the products 
are also available separately, but the sum of the stand -alone prices is higher than 
the bundled prices.63 Tying and bundling as such are co mmon practices that often 
have no anticompetitive consequences. Nevertheless, in certain circumstances, 
these practices may lead to a reduction in actual or potential rivals’ ability or 
incentive to compete. Foreclosure may also take more subtle forms, suc h as the 
degradation of the quality of the standalone product.64 It may reduce the 
competitive pressure on the merged entity al lowing it to increase prices.65 
(61) Foreclosure can be a potential concern, if (i) there is a large common pool of 
customers, which is more likely when products are complementary ;66 (ii) a t least 
one of the merging parties’ products is viewed by many customers as particularly 
important and there are few relevant alternatives for that product ;67 and (iii) the 
merged entity must have a signif icant degree of market power, but not necessarily  
dominance, in one of the markets concerned.68 
(62) The incentive to foreclose rivals through bundling or tying depends on the degree 
to which this strategy is profitable .69 For instance , it is unlikely that the me rged 
entity would be willing to forego sales on one highly profitable market in order to 
gain market shares on another market where turnover is relatively small and 
profits are modest.70 The Commission will also take into account the ownership 
structure of the merged entity, type of strategies adopted on the market in the past 
or the content of internal strategic documents such as business plans.71 
(63) Finally, i t is only when a sufficiently large fraction of market output is affected by 
foreclosure resulting fro m the concentration that the concentration may 
significantly impede effective competition. If there remain effective single -
product players in either market, competition is unlikely to deteriorate following a 
conglomerate concentration.72 The effect on competition needs to be assessed in 
light of countervailing factors such as the presence of countervailing buyer power , 
the likelihood that entry would maintain effective competition in the close ly 
related markets concerned , or indeed the ab ility of single -product competitors to 
combine their offers .73  
                                                 
63  Non-horizontal Merger Guidelines, paragraph 96.  
64  Non-horizontal Merger Guidelines, paragraph 33.  
65  Non-horizontal Merger Guidelines, paragraph 93.   
66  Non-horizontal Merger Guidelines, paragraph 100.   
67  Non-horizontal Merger Guidelines, paragraph 99.   
68  Non-horizontal Merger Guidelines, paragraph 99.   
69  Non-horizontal Merger Guidelines, paragraph  105.   
70  Non-horizontal Merger Guidelines, paragraph 107.   
71  Non-horizontal Merger Guidelines, paragraph 109.   
72  Non-horizontal Merger Guidelines, paragraph 113.   
73  Non-horizontal Merger Guidelines, paragraphs 103 and 114.   
 
 
13 5.1.2.  Leveraging Shell’s position in FRC  into the recycling of SRC 
5.1.2.1.  Potential concern  
(64) Shell is active in the market for the supply of FRC s, whereas the JV will be active 
in the market for the recyclin g of spent catalysts. These two products/services are 
in principle purchased by the same customers, namely by refineries.  
(65) Two competitors active in the recycling of SRC s in the EEA expressed some 
concerns that refineries would opt for a bundled offer and lose the flexibility to 
select the most appropriate FRC  supplier and/or the most appropriate recycler, 
and that the large companies AMG and Shell will crowd out small er family 
owned recycling  businesses.74  
(66) The Commission has assessed a potential competitio n concern whereby Shell 
would leverage its relatively  strong position in the market for  the supply of  FRCs  
into the market for the recycling of SRC  where the JV will be  active and thereby 
foreclose recycling competitors, causing harm to consumers.   
(67) The Com mission has assessed in particular the ability and the incentive of Shell 
engaging in the following tying/bundling practices, together with the JV:  
 Technical tying: differentiating the degree of technical compatibil ity between 
FRC  and recycling of SRC ; 
 Contractual tying /pure bundling : imposing the purchase of recycling services 
for SRC  by the JV on Shell’s customers of FRC ; and/or  
 Mixed bundling: incentivising the joint purchase of FRC  by Shell and 
recycling services of SRC  by the JV by offering higher prices for mix -and-
match solutions involving only one of the products as compared to the 
bundle.  
5.1.2.2.  Shell’s position in the sale of FRC s 
(68) At the outset, the Commission notes that i n the EEA, only seven refineries out of 
around 90 currently use FRC s (and as such, are potential customers for SRC  
recycling services).  Shell is currently the […] supplier of FRC s to […] refineries. 
In addition, […]. However, […] as of 2020.75  
(69) Tables 1 and 2 below present the market shares  of Shell and it s competitors on an 
EEA -wide market for FRC . In 2018, Shell held a market share of [40-50]% both 
by volume and by value in the market for the supply of FRC .  
 
                                                 
74  Reply to question 26  of questionnaire to competitors recycling services.  
75  As of 2020, Shell […] in the EEA , […]. […] (Form CO, paragraph 176).  […] following tenders held 
annually (in 2017, 2018 and 2019).  


 
 
16 (73) Shell estimates that its market share on the global market for FRC s was at [30-
40]% in 2019 and will [details in respect of market share changes ] in 2020  
(volume) based on Shell’s actual sales for 2019, forecast sales for 2020, and 
Shell’s internal best estimates for total demand .78 
5.1.2.3.  Notifying Parties’ view  
(74) The Notifying Parties argue that Shell will not have the ability and incentive to 
leverage its potenti ally strong position in the market for FRC  into the market for 
recycling of SRC  where the JV will be  active. In any event, the Notifying Parties 
submit that any putative leverage could not lead to anticompetitive foreclosure of 
Shell’s or the JV’s competit ors. The reasons are the following.  
(A) As regards ability  
(75) The Notifying Parties argue that Shell will not have the ability to leverage its 
market position in the market for FRC , because it lacks market power.   
(76) First, the market shares of Shell are not indicative of sustained market power as 
they are prone to rapid change when refineries re -tender supply which occurs 
every 1 -3 years . Moreover,  currently only seven refineries in the EEA purchase 
FRC .79  
(77) Second, Shell faces strong competition both at global  and EEA level , notably 
from market leader ART (with [30-40]% at global level and [50-60]% in the 
EEA), as well as Sinopec, Nippon Ketjen and Axens.  Although at present Axens, 
Sinopec  and Nippon Ketjen do not have contracts in the EEA, they are often 
invited to participate in tenders. Generally,  all suppliers of FRC  operate globally, 
and could potentially become active in the EEA.80 
(78) Third, the Notifying Parties argue that the rising demand for FRC  will attract new 
entrants  while e xisting suppliers are likely  and able to increase capacity.81 For 
customers, there are no barriers to switching as contracts are relatively short (e.g. 
annual basis ).82 
(79) Fourth, technical tying is not a possibility as there are no specific characteristics 
that could create a technical d ependence or otherwise require compatibility 
between Shell’s supply of fresh resid and  the JV  recycling  business  (or vice 
versa)83.84 
(80) Fifth,  contractual tying will not take place, as Shell will continue to have refinery 
customers who are free to use other recycling providers (e .g. better 
                                                 
78  Form CO, Table 13.  
79  Form CO, paragraph 196.  
80  Form CO, paragraph 177.  
81  Form CO, paragraph 241.  
82  Form CO, paragraph 253.  
83  Although the JV’s business plans have not been finalised, its [details of the JV's strategy ] strategy is to 
construct a recyc ling plant using AMG’s technology and know -how in the Middle East (Form CO, 
paragraph 12).  
84  Form CO, paragraph 220(a)(i).  
 
 
17 geographically located), Shell and the JV will operate at arm’s length, and as 
Shell and the JV will be accountable to their own shareholders they will not 
sacrifice potential margin or opportunity to support the other  (unless collectively  
the most attractive competitive proposition ).85 
(81) Sixth, refinery customers enjoy a wide choice of other recycling services 
suppliers – with at least five providers active in the EEA . Moreover, as  ten 
providers of recycling services are activ e globally, refinery customers could also 
seek interest from alternative suppliers.  AMG (and the JV) have no current EEA 
presence.  Refineries also have an interest in maintaining a choice of suppliers and 
may multi -source SRC  recycling services.86 
(82) Seventh, refineries are large and sophisticated customers who carry out 
procurement processes to secure optimal supply options, both in respect of fresh 
resid supply and spent resid recycling services. 87 
(83) Eight, the competitive dynamics in FRC  supply and SRC  recycli ng differ, with a 
local presence far more significant in the choice of recycling provider given the 
transportation challenges involved.88 
(B) As regards incentives  
(84) According to the Notifying Parties, Shell does not have the incentive to engage in 
a bundling str ategy of the two products it offers to refineries .  
(85) First, t he value of fresh catalyst contracts is significantly larger than that for 
recycling services. In 2018, the value of the overall fresh resid supply sales 
worldwide represented an estimated [550 – 600] million EUR compared to the 
market for recycling of SRC  worth approximately [150 – 200] million EUR.89 
(86) The Notifying Parties further argue  that [information about the Parties' profit 
margins ] stable margins are found in the bu siness of supplying FRC  to refineries, 
as compared with the supply of spent catalyst recycling services  ([information 
about the Parties' profit margins ]).   
(87) Shell’s net sales of FRC  in 2018 were EUR […] (2019 EUR […]) with a gross 
profit of EUR […] (2019 EUR […]). The gross margin amounted to  […]% (2019 
[…]%). For 2020 Shell expects the net sales to go [details in respect of Shell’s 
sales, customers and margins ]. Based on AMG’s SRC  recycling activities […], in 
2018 revenues were  EUR […], with  gross profits of EUR […] and a gross profit 
margin of […]. The Parties emphasize that the result was driven by […] and 
submitted that for 2019 […]. If taken over a two -year period (2018 – 2019), 
AMG's gross pro fit margin of below […]. 
(88) Therefore, according to the Notifying  Parties , the JV's future business model 
([details of the JV’s business model ]) means Shell will have no incentive to put at 
                                                 
85  Form CO, paragraph 220 (a)(ii).  
86  Form CO, paragraph 220 (a)(iii).  
87  Form CO, paragraph 220 (a)(iii).  
88  Form CO, paragraph 220  (a)(iii).  
89  Form CO, paragraph 220 (b)(i).  
 
 
18 risk a business yielding consistent gross profits and margins to pursue a bundling 
strategy outside of North America through the JV.90  
(89) Second,  in many cases, the JV would not be an attractive solution for Shell’s FRC  
customers, either because they do not recycle or because the transport to the 
location of the recycling facilities of the JV makes recycling too expensive. Thus 
Shell will be carefu l not to lose customers who are not interested in recycling 
services, or who do not consider the JV an attractive solution given its geographic 
location.91 
(90) Third, refineries often purchase recycling services from more than one company, 
in particular if they  generate large amounts of SRC , to manage any supply side 
risks.92  
(91) Fourth, as explained in paragraph (78), switching costs  for fresh catalyst are low, 
so Shell would risk losing contracts if it tried to leverage its market position and 
force refinery customers to acquire recycling services from the JV. Barriers to 
switching are also low for recycling services of SRC ,93 so refineries could react 
timely to any attempts to  bundle.  
(92) Fifth , Shell’s competitors have the ability to increase production of FRC  to react 
to changes in demand , by reallocating existing production capacity from other 
catalyst types to resid catalyst, as well as by adding additional capacity .94  
(93) Sixth , as for the JV’s competitors in the EEA market for recycling of SRC , the 
Parties estimate that Treibacher is the market leader in the EEA with 50 -70% 
market share, followed by Moxba (20 -30%) and Eramet, Nickelhuette and Aura 
Technologie. Transport costs mea n that recyclers located close to refineries have 
a stronger position.95  
(94) Therefore, refinery customers will remain free to choose to use other FRC  
providers as well as recycling providers, while Shell and the JV will each operate 
to maximise their own financial performance and will therefore not sacrifice 
potential margin or opportunity to support the other.  
(C) As regards effects  
(95) According to the Notifying Parties, it should also be noted that not all refineries 
that purchase FRC  also cho ose to recycle the spent catalyst after use. An 
estimated [20-30]% of SRC  is disposed of in  landfill s, particularly in the Middle 
East.96 This is d ue to the current recycling capacity constraints in the industry.  
(96) The Notifying Parties argue that the JV’s entry into the market for recycling 
services will enhance competition because it will add capacity to the market of 
                                                 
90  Response of 24 February 2020 to RFI dated 20 February 2020.  
91  Form CO, paragraph 220 (b)(ii).  
92  Form CO, paragraph 236.  
93  Form CO, paragraph 236. 
94  Form CO, paragraph 249.  
95  Form CO, paragraph 209.  
96  Form CO, paragraph 17.  
 
 
19 recycling services for SRC  and provide an alternative to landfill. The JV will also 
provide an alternative choice and increase availability of metal by -products which 
would otherwise be lost if they were landfilled.97 
5.1.2.4.  The Commission ’s assessment  
(A) Ability  
(97) The Commission considers that Shel l and the JV will not have the ability to 
engage in tying or bundling for the following reasons.   
(98) First, despite Shell ’s relatively strong market position in 2018 ( [40-50]% in the 
EEA and [30-40]% worldwide), Shell does not have a significant degree of 
market power .  
(99) In the EEA in particular, its market shares […]. There are currently only seven 
refineries in the EEA using hydroprocessing and Shell’s market share can 
decrease rapidly. In 2019, Shell […].98 
(100)  The lack of market power is also supporte d by the replies  to the market 
investigation  where respondents indicated that (i) it is easy to switch suppliers; 
(ii) a choice of suppliers exists; and (iii) competitors are expected to expand and 
increase capacity .  
(101)  Buyers  of FRC  are able to switch and do so regu larly. A majority of customers 
that responded to  the market investigation procure FRC  by tender.99 Tenders  for 
procuring FRC  are concluded for different durations, ranging from one to five 
years.100 Around half of the buyers  of FRC  have switched supplier in t he last five 
years.101 One other  respondent to the market investigation observed  that switching  
of FRC  provider  had not taken place, as they never faced problems .102  In 
consequence, there are no obstacles for customers to choose and change their 
supplier of FRC  on a regular basis.  
(102)  In terms of choice of suppliers  of FRC , respondents to the market investigation 
indicated t hat several alternative suppliers compet e in the supply of FRC  both at 
EEA -wide and worldwide level .103 Whereas customers identified ART and Sh ell 
as those most active in the EEA, one competitor also name d the following 
companies as competitors: Albemarle, Axens, JGC  Holdings  and Haldor Topsoe  
on a worldwide basis .104 Other players  active  on a worldwide market  are for 
                                                 
97  Form CO, paragraph 5.  
98  Form CO, paragraph 264.  
99  Replies to question 19 of questionnaire to customers.  
100  Replies to question 20 of questionnaire to customers.  
101  Replies to question 21 of questionnaire to customers.  
102  Reply t o question 21 of questionnaire to customers.  
103 Replies to question 18 of questionnaire to customers and replies to question 9 of questionnaire to 
competitors FRC . 
104  Replies to question 18 of questionnaire to customers, and replies to question 9 of questionnaire to 
competitors  FRC . 
 
 
20 instance Sinopec , Nippon Ketje n, Kuwait Catalyst Company (KCC) , Cosmo 
Chemical .105 
(103)  Finally,  a clear majority of refineries expects the market for FRC  to grow, with 
increasing demand from new hydroprocessing units all over the world.  
Competitors do not see capacity constraints in the market for FRC . In particular, 
several respondents noted that “there is plant capacity available in the Middle 
East.”  In addition to existing production capacity that is not yet fully used, one 
respondent  noted that “New resid capacity is coming online in 2020 that will 
address additional demand. ”106  One customer also expects the entry of “one or 
two new players in the market in 10 years”  for both economic and regulatory 
reasons107   
(104)  Second , technical tying i s very unlikely. N one of the respondents to  the market 
investigation mentioned technical tying as a possibility. One responde nt to the 
market investigation noted with regard to the supply of fresh catalysts and 
recycling services for SRC s that “ from a tech nical perspective, the two activities 
have nothing in common: they follow two different processing steps and there 
would be no possibility for the JV to technically link the two activities ”.108 
(105)  Third, c ontractual tying/bundling or mixed bundling is unlikely because  in the 
first place,  refineries ’ choice of the supplier of FRC  is not subject to offering 
recycling services  but largely based on the performance of the catalyst . None of 
the respondents to the market investigation would refuse to  consider a suppli er 
for FRC s that does not offer recycling services.109 As one potential customer 
stated “ FRC s, as any other catalysts, are a specialty materials that are selected 
based on performance/price ratio. Other factors are not so determining. ”110 The 
offering of recycling service may be a nice add on, but will not determine the 
outcome of selecting the FRC  provider.111 
(106)  Where the offers for FRC  differed,  it would be easy to switch to a different 
supplier.112 When assessing a bundled offer including recy cling, customers would 
carefully consider “[t]he whole picture […] the amount of discount reasonable 
and favourable, where is the recycling facility located, the amount of paperwork 
(different regulations) needed, etc .”113 
                                                 
105  Form CO, tables 2 and 3.  
106  Replies to question 17 of questionnaire to competitors FRC.  
107  Replies to question 22 of questionnaire to customers ; “The non -catalytic route (e.g. solvent deasphalting, 
delayed coking) should not increase much because of difficulties in finding markets for asphalt and 
petroleu m coke products. The catalytic upgrading of resid has also better economics at current oil prices 
and above.  Besides the conversion economic incentive, there are also fiscal policies in some countries 
(e.g. Russia) stimulating resid upgrading by taxing black oil products exports. These are also supported 
by regulatory changes, such as the recent IMO shift from 3 .5 to 0.5% sulfur fuel oil on international 
waters. This has led to a major change in crude oil selection for refiners not equipped with resid 
upgrading, with an economic impact.”  
108  Minutes of a call with a competitor of recycling services, paragraph 11.  
109  Replies to question 29 of questionnaire to customers.  
110  Replies to question 29.1 of questionnaire to customers.  
111  Views of a purchaser of FRCs . 
112  Minutes of a call with a potential customer, paragraph 10.  
113  Replies to question 30.1 of questionnaire  to customers.  
 
 
21 (107)  The refineries that responded to the market investigation overall underlined that 
the supply of FRC  is relatively more important than recycling services for the 
choice of a FRC  supplier .114 Even if some respondents considered that offering a 
recycling service may give an advantage, act a s a differentiator for refiners who 
need a “cradle to grave”  catalyst solution, or indeed provide efficiencies for 
customers,115 the majority of customers buying FRCs clearly considered that they 
would procure FRC s from suppliers who do not offer recycling s ervices. Only in 
a case where all FRC  suppliers participating in a tender could provide the same 
quality and margins, could an offer for recycling services potentially make a 
difference.116 
(108)  In the second place, refineries are sophisticated buyers that typica lly use tenders, 
both for the procurement of FRC  and for the procurement of  recycling services 
for SRC .117 These buyers have in the past been selecting and changing suppliers 
of FRC  in tender procedures. They have also experience in selecting suppliers of 
recycling services . They will choose those suppliers for each service that provide 
the best performance and margins for the refinery.  
(109)  In the third place , even if refineries procure both the supply of FRC  and recycling 
services of SRC , all buyers of FRC that responded  to the market investigation 
stated that they procure recycling services for SRC  separately from the 
procurement of FRC .118 The duration of the contracts for respectively the supply 
of FRC  and the recycling of FRC  can differ  (see paragraph  (101)  and footnote 
117). This difference in timing negatively impacts on the po ssibility of 
tying/bundling.  
(110)  Finally, as explained in paragraph 103 of the non -horizontal merger guidelines, 
ability to foreclose is unlikely to exist if counterstrategies by rivals exist. One 
example cited is when single -product companies combine their o ffers so as to 
make them more attractive to customers. In this context, the Commission notes 
that, while the driver of FRC demand remains technical performance,  there is 
demand for bundling on the market. Respondents to the market investigation 
confirmed t hat refineries have been asking their suppliers of fresh catalyst to also 
supply recycling services for the spent catalyst. As a competitor stated, “[t] here is 
a high demand in the industry to offer closed loop services and to keep the 
valuable metals invo lved in a circle. This is protecting the environment and 
reduces the mining activities for metals .”119  
(111)  In consequence, some of Shell’s competitors offer to put their customers in 
contact with providers of recycling services, where requested by customers. 
Market leader ART stated: “ We primarily sell FRC s. However, we have business 
                                                 
114  Replies to question 29 and 30 of questionnaire to customers.  
115  Replies to question 29.1 of questionnaire to customers, replies to question 16 of questionnaire to 
competitors.  
116  Views of a purchaser of FRCs.  
117  The average duration of co ntracts is 2 to 5 years. Replies to question 25 of questionnaire to customers.  
118  Replies to question 24 of questionnaire to customers.  
119  Reply to question 19.1 of questionnaire to competitors recycling services.  
 
 
22 arrangements with metals reclaiming companies. ”120As such, counterstrategies 
between competing FRC  suppliers and SRC  recyclers already exist.  
(112)  Therefore, the Commission considers tha t the JV will not have the ability to 
engage in foreclosure through tying or bundling . 
(B) Incentives  
(113)  The Commission considers that even if there were to exist an ability to foreclose 
through tying or bundling, Shell and the JV have no incentives to do so for the 
following reasons.  
(114)  First, the margins […] on the sale of FRC  are [details concerning Shell’s and 
AMG's margins ], based on AMG’s experience […] (see paragraph (87).  
(115)  Second, Shell’s likely incentives to foreclose recycling rivals is further reduced 
by the fact that Shell is only a 50% shareholder in the JV. It is therefore unlikely 
that Shell w ould sacrifice […] margins on its sale of FRC  for […] offered by the 
JV.  
(116)  Third, t here is no evidence of past  tying and bundling in the industry .121   
(117)  Therefore, the Commission considers that Shell is unlikely to  have the incentive  
to engage in foreclosure  through a tying or bundling strategy . 
(C) Effects  
(118)  Any foreclos ure strategy would be very unlikely to result in significant 
anticompetitive effects.  
(119)  First, t he envisaged activities of the JV would likely only affect competitors to a 
limited extent.  Both the market for FRC  and the  market for the recycling of SRC s 
is expected to grow in the future. Refineries generally expect “ demand for 
recycling servicing will increase tremendously in the next 10 years as more and 
more resid hydroprocessing units are coming up all over the world ”. Overall, 
“[r]ecycling services for SRCs should increase for three reasons:  
a) it should shadow the market for FRC s, which is expected to increase over the 
next 10 years […]  
b) regulatory requirements will enforce reuse of waste materials;  
c) economic incentive to reclaim base metals from SRCs helps offsetting the cost 
of recycling. ”122 
(120)  About half of the refineries that responded to the market investigation consider 
that there are not enough suppliers/capacity for recycling of SRC s.123 “There ar e 
more and more resid hydroprocessing unit s coming up all over world. Though 
                                                 
120  Reply to question 14.1 of questionnaire  to competitors FRC.  
121 [Details about the future commercial strategy of the JV] , nor did anyone in the market investigation 
suggest that such behaviour or attempts at such behaviour has taken place in the past.  
122  Replies to question 28 of questionnaire to  customers.  
123  Replies to question 27 of questionnaire to customers.  
 
 
23 many spent catalyst recycling facilities are planning for revamp, there could be 
shortage of spent catalyst recycling capacity in the near future .”124  
(121)  Furthermore, the respondents to the market investigation indicated that r efineries 
no longer landfill their SRC  in the EEA .125 A customer also noted that landfill 
will likely be banned worldwide in the future.126 
(122)  Second, t he market investigation further confirmed that several alternative 
suppliers of recycling services are present in the EEA and EMEA  Customers  or 
potential customers in the EEA  listed the following companies as potential 
suppliers: Treibacher, Moxba, Sadaci, , whereas , for an EMEA -wide market,  a 
Middle East located refinery also mentioned GS Ecometals, Rubamin and 
Gladiuex Metal Recycling .127 These  companies will continue to offer alternative 
solutions to refineries and form a competitive constraint to the JV. Recyclers of 
SRC s list as their comp etitors  also Eurecat and SPT Czech, in addition to those 
mentioned by refineries.128 
(123)  Third, t he JV will in fact increase competition and choice in the market. As one of 
the respondents to  the market investigation con sider ed “I hope this transaction 
brings go od competition to the market” .129 
(124)  This is despite the fact that replies to the market investigation indicated plans 
exist to increase recycling  capacity in the future  even if increasing capacity for 
recycling of SRCs is (very) difficult .130 The fact that recyc lers have nevertheless 
plans to increase capacity  shows that demand for hydroprocessing is expected to 
increase significantly.   
(125)  The activities of the JV could p revent  a future capacity shortage. A majority of 
respondents in the market investigation see an increasing demand for recycling 
services in the coming years: “[t] he volume of spent catalyst generated from 
hydroprocessing units is increasing due to the trend in higher capacity refinery 
units. Also, the environmental regulations for the disposal of haz ardous waste or 
dangerous goods – in Europe and elsewhere - are becoming more stringent. 
Refiners are looking for more economic solutions to dispose of this material, 
which in some cases are recycling .”131 
(126)  Fourth, the JV is likely to [details as to the JV’s strategy and plans]  serve 
customers in the Middle East , as [details as to the JV’s strategy and plans]  
recycling facility of the JV is [details as to the JV’s strategy and plans]  envisaged 
to be built in Saudi Arabia . The respondents to the market investig ation indicated  
                                                 
124  Reply to question 27.1 of questionnaire to customers.  
125  Replies to question 9 of questionnaire to customers. Non -confidential replies to question 24.1 of 
questionnaire to competitors recycling services.  
126  Replies to question 28 of questionnaire to customers.  
127  Replies to question 23 of questionnaire to customers.  However, one refinery also noted that “ [the refinery]  
currently […] and is not in a position to list other potential suppliers because it has opted for a particular 
technical choice for unloading catalysts limiting the number of potential suppliers - hydro -jetting ”. 
128  Replies to question 12 of questionnaire  to competitors recycling services.  
129  Reply to question 33 of questionnaire to customers.  
130  Reply to question 21.2 of questionnaire to competitors recycling services.  
131  Reply to question 16.2 of questionnaire to competitors FRC.  
 
 
24 that there are not enough recycling facilities in this region, whereas demand is 
growing  and whereas there are already a number of alternative recycling services 
suppliers for SRC  in the EEA.  
(127)  Competitors for recycling services recognised t hat “ In Europe the volume of spent 
resid units is more or less in line with the current recycling capacity. In the 
Middle -East there is not enough capacity. ”132 “In the Middle -east the number of 
resid units is growing ”, so in consequence, demand for the recy cling of SRC  is 
high, but few recycling service suppliers are based in the region. Therefore , 
“[a]vailable capacities for recycling metal containing wastes are limited while the 
generation of these wastes is constantly increasing .”133  
(128)  Therefore,  the JV is likely to [details as to the JV’s strategy and plans]  recycle 
SRC s from the Middle East, where demand is greatest  and where the Notifying 
Parties are carrying out plants feasibility studies . In consequence, it would not 
closely compete with recy clers of SRC  located in the EEA , on either  an EEA or 
EMEA -wide market . It follows that the creation of the JV would have a limited 
impact on competition in the EEA if the market for recycling of SRC  were to be 
defined as EEA -wide.  
(129)  If the market for recycli ng of SRC  were to be defined as EMEA -wide , the JV 
would compete with providers of recycling services for SRC  listed in paragraph 
(122) . 
(130)  Therefore, even in case the J V would in the future establish recycling facilities in 
the EEA, this would have the positive effect of adding an alternative supplier to 
the market.  
(131)  The market results of the market investigation also pointed to the ability of the JV 
to increase the avai lability of metals extracted via the recycling process: “Europe 
has no primary metal deposits for vanadium, nickel or molybdenum - so recycling 
(secondary raw materials) becomes increasingly important .”134 
(132)  Finally, i t is also unlikely the JV could leverage its future position in the market 
for the recycling of SRC  to increase Shell’s sales of  FRC . First, as set out above, 
refineries chose their supplier of FRC  on the basis of the technical performance 
and consider the recycling service as an ad d-on. It is also unlikely that AMG 
would agree to leveraging the recycling service as only Shell would have the 
benefit of selling more FRC . In any event, it is unlikely that any offer for 
recycling services can determine the outcome of the selection proce ss for the FRC  
supplier which is driven by the technical performance of the FRC . 
5.1.3.  Conclusio n on conglomerate non -coordinated effects  
(133)  Based on the analysis set out above, t he Commission conclude s that it is unli kely 
that the JV or Shell could, through tying and bundling the supply of FRC  with the  
recycling of SRC , foreclose competitors in the EEA -wide or worldwide market 
                                                 
132  Replies to question 2 0 of questionnaire to competitors recycling services.  
133  Reply to question 19.1 of questionnaire to competitors recycling services.  
134  Reply to question 19.2 of questionnaire to competitors recycling services.  
 
 
25 for the supply of FRC  or in the EEA -wide or EMEA -wide market  for recycling of 
SRC .  
6. CONCLUSION  
(134)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with 
the EEA Agreement. This Decision is adopted in application of Article 6(1)(b) of 
the Merger Regulation and Article 57 of the EEA Agre ement .  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President