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, 16.12.2020  
C(2020 ) 9386 final  
PUBLIC VERSION  
 
Imabari Shipbuilding Co.,  Ltd.  
1 ‒ 4 ‒ 52 Kour a‒cho, Imabari,  
Ehime, 799 ‒ 2195  
Japan  
 
JFE Holdings, Inc.  
2 ‒ 2 ‒ 3 Uchisaiwaicho, Chiyoda‒ ku,  
Tokyo, 100 ‒ 0011  
Japan  
 
IHI Corporation,  
Toyosu IHI Bldg. 1 ‒ 1, Toyosu 3 ‒ chome, 
Koto‒ ku,  
Tokyo , 135 ‒ 8710  
Japan  
Subject : Case M. 9936  – Imabari Shipbuilding/JFE/IHI/Japan Marine United  
Corporation  
Commission decision pursuant to Article 6(1)(b) of Co uncil Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the ‘Merger Re gulation’). 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 TF EU will be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’).  
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possible the information omitted has been 
replaced by ranges of figures or a general 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 Dear Sir or Madam,  
(1) On 11 November 2020 , the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation , by which  
Imabari Shipbuilding Co., Ltd. (‘Imabari Shipbuilding’, Japan) acquires , within the 
meaning of Article 3(1)(b) and Article 3(4) of the Merger Regulation , joint control 
of Japan Marine United Corporation (‘JMU’, Japan)  together with JFE  Holdings Inc  
(‘JFE’, Japan)  and IHI  Corporation (‘IHI’, Japan) . The proposed acquisition takes 
place by way of purchase of shares (the ‘Transaction’).3 Imabari Shipbuilding, JFE, 
IHI and JMU are together referred to as the ‘Notifying Parties’.  Imabari Shipbuilding 
and JMU are together referred to as the ‘Parties’  or as the ‘Merged Entity’ . 
1. THE PARTIES  
(2) Imabari Shipbuilding is active in the development, design, construction, marketing, 
and repair of a wide range of commercial vessels, including b ulk carriers, container 
ships, car carriers, LNG carriers, tankers and ferries.  
(3) JMU is active in the development, design, construction, production and marketing of 
a wide range of commercial and military vessels, including bulk carriers, container 
ships, car carriers, LNG carriers, tankers, ferries and offshore support ships. JMU is 
currently jointly controlled by JFE Holdings Inc. (‘JFE’, Japan) and IHI Corporation 
(‘IHI’, Japan). Each of JFE and IHI currently holds 49.4% of JMU.  
(4) JFE is a holding company  with interests in steel, engineering and the trading of raw 
materials, machinery, electronics, real estate and food.  
(5) IHI is a heavy -industry manufacturer with activities in (i) resources, energy and 
environment; (ii) social infrastructure and offshore fa cilities; (iii) industrial systems 
and general -purpose machinery; and (iv) aero engine, space and defence.  
2. THE OPERATION AND THE CONCENTRATION  
(6) Pursuant to a Capital and Business Alliance Agreement executed on 27 March 2020, 
Imabari Shipbuilding will acquire 30% of the common shares in JMU. Post -closing 
the shareholding in JMU will be divided as follows among the three shareholders: 
JFE (35%), IHI  (35%) and Imabari Shipbuilding (30%).  
(7) According to the Notifying Parties’ governance arrangements, [Parties’ 
Arrangements] . However, the Notifying Parties submit that they will hold at least de 
facto  joint control over JMU as a result of the proposed conc entration.4  
(8) Joint control may be acquired on a de facto basis where ‘strong common interests 
exist between shareholders to the effect that they would not act against each other in 
exercising their rights in relation to the joint venture ’.5 In the present case, the 
Shareholders’ Agreement  entered into between the Notifying Parties  provides for a 
                                                 
3   Publication in the Official Journal of the European Union No C 398/15 , 23.11.2020 , pp. 19 ‒ 20 . 
4   Letter of the Notifying Parties’ counsel, 16 July 2020.  
5   Consolidated Jurisdictional Notice (‘CJN’), paragraph 76.  
 
 
3 [Parties’ Arrangements ]. Such a system is designed to enable the parent companies 
to exercise joint control ‘even in the absence of explicit agreements granting vet o 
rights ’.6 
(9) In addition , de facto joint control may arise as a result of  ‘a high degree of mutual 
dependency as between the parent companies to reach the strategic objectives of the 
joint venture ’, notably ‘ when each parent company provides a contribution to the 
joint venture which is vital for its operation ’.7 In the present case, each of JFE and 
IHI have committed to provide [Financial situation ]. This is particularly important in 
view of [Financial situation ]. Conversely, Imabari Shipbuilding  will contribute its 
technical and operational capabilities  to JMU , as well as its in -depth knowledge of 
the shipbuilding industry, where as JFE and IHI have not been engaged in the 
shipbuilding business for several years  on their own . Hence , in addition to  the 
relevant governance mechanisms, it can be reasonably expected that in practice  
JMU’s strategic matters will be determined in a cooperative manner among JFE , IHI 
and Imabari Shipbuilding , in view of the mutual dependence created by their 
respective con tribution to the joint venture . 
(10) The particular contribution of Imabari Shipbuilding and the strong common business 
interests  and related dependencies  between the Notifying Parties are specifically 
support ed in the present case by the creation of a joint venture (‘the Design and Sales 
JV’) between Imabari Shipbuilding  and JMU, pursuant to a JV agreement dated 27 
March 2020. Imabari Shipbuilding  and JMU will own 51% and 49%  of the Joint 
Venture ’s share capital , respectively. Since  Imabari Shipbuilding  and JMU  will have 
equal rights regarding the nomination of the representatives in the management 
bodies including the Board of Directors, which is to decide on the  budget, business 
plan and major investments , they will exercise joint control over the Design and 
Sales JV .  
(11) The Design and Sales JV will carry out the design of commercial ships, negotiate the 
terms including the ship prices with the customers, sell the ships to the customers 
and conduct all sale s activities as its own business. It  will have its own resources as 
IS and JMU will transfer their respective sales and design departments (including 
staff) to the Design and sales JV .  
(12) The acquisition of a 30% interest in JMU by Imabari Shipbuilding  and the creation 
of the Design and Sales JV are interdependent in such a way that one transaction 
would not be carried out without the other. They are linked by condition in the 
Capital and Business Alliance Agreement and therefore form  a single concentration. 
Moreover, a ccording to internal docu ments, [Transaction structure ]. Therefore , the 
current JMU shareholders appear to be in fact the undertakings concerned on JMU’s 
side behind the creation of the Design and Sales JV  between I mabari Shipbuilding  
and JMU , within the meaning  of paragraph 147 o f the CJN .  
(13) Consequently, JMU will be jointly cont rolled by Imabari Shipbuilding , JFE and IHI . 
JMU is and will continue to be a full -function joint venture within the meaning of 
Article 3 (4) of the EUMR . The operation thus constitutes a concentration with in the 
meaning of Article 3(1)(b) of the Merger Regulation.  
                                                 
6   Consolidated Jurisdictional Notice (‘CJN’), paragraph 77.  
7   Ibid.  
 
 
4 3. EU DIMENSION  
(14) The undertakings concerned have a combined aggregate worldwide turnover of more 
than EUR 5 000 million  (Imabari Shipbuilding: EUR [Turnover]  million; JMU: EUR 
[Turnover]  million; JFE: EUR 30  872 million; IHI: EUR 11  497 million).8 Two of 
them have  an EU -wide turnover in excess of EUR 250 million  (Imabari 
Shipbuilding: EUR [Turnover]  million; IHI: EUR [Turnover]  million) , but they do 
not achieve more than two -thirds of the ir aggregate EU -wide turnover within one 
and the same Member State. Therefore, the notified operation has an EU dimension 
within the meaning of Article 1(2) of the Merger Regulation.  
4. MARKET CHARACTERISTICS  
(15) This transaction pertains to the shipbuilding indu stry. The size and dimensions of 
commercial vessels are expressed in  a range of different metric s, such as deadweight 
tonnage (‘DWT’, a measure for how much weight a ship can carry), gross tonnage 
(‘GT’, a vessel’s total cargo carrying capacity ) and compen sated gross tonnage 
(‘CGT’, derived by multiplying the gross tonnage of a ship with a coefficient 
reflecting the work content of each type and size of ship  – therefore also an indicator 
of the relative output of merchant shipbuilding activity ).9 In the pre sent case, CGT 
represents the most appropriate metric for calculating market shares  as it enables a 
more accurate macro -economic evaluation of shipbuilding workload . 
(16) A number of additional metrics are used with respect to certain types of commercial 
vessels, such as container ships and PCTCs. Container ship capacity is customarily 
provided by reference to the maximum number of Twenty Feet Equivalent Units 
(‘TEU’ – a measure for one standard 6.1 meters long container) that a vessel can 
carry. PCTC capacity is also sometimes presented by reference to car equivalent 
units (‘CEU’).  
(17) In line with previous Commission decisions,10 the relevant time -period to calculate 
market shares  in the present case  has been considered to be  five years ( i.e., 2015 -
2019). Market shares  over a five -year period allow for a  more stable  overview of the 
competitive landscape in view of the lumpy demand characteristic of the industry 
and the resulting significant fluctuatio ns in yearly market shares.  Nonetheless, the 
Notifying Parties have also provided data  on the basis of shorter time periods (three 
years ), in addition to  yearly data.  
(18) While it would likely  be most appropriate to consider market shares by contracting  
dates  (as competition takes place in the market place right before customers place  
orders for new ships ), the Notifying  Parties were only able to provide complete  
market share data by delivery date of ships. This information is based on data from 
                                                 
8  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
9   The latest CGT system was adopted and promu lgated by the OECD Council Working Party on 
Shipbuilding. It came into force on 1 January 2007. See: 
https://www.oecd.org/industry/ind/37655301.pdf .  
10   See, in particular, Commission decision  of 5 May 2008 in case M.4956  – STX/AKER YARDS , 
paragraph 40.  
 
 
5 Clarksons Research (‘Clarksons’), a provider of intelligence for global shipping.11 
Among other metrics, Clarksons also tracks global ship orders, shipbuilding and 
fleet sizes.  Therefore , for the purposes of this decision,  the Commission will rely on 
2015 -2019 market  shares based on ship deliveries. Where available, information 
based on contracting date will be taken into account in the assessment.   
(19) The proposed Transaction takes place in a wider industry context characteri sed by 
the leading role of Asian shipbuilders  in commercial shipbuilding.12 The Japanese 
share of global deliveries grew after World War II while Europe’s share declined . 
Today , the global commercial shipbuilding industry is largely concentrated in three 
countries: China, Korea and Japan  (as shown in Figure 1). 
Figure 1 – Historical shipbuilding shares  
 
Source: Clarksons . 
(20) In recent years , measures have been adopted to make commercial ships more 
environmentally friendly. In 2013, the International Maritime Organization (‘IMO’ – 
a United Nations agency) adopted measures to reduce the emission of greenhouse 
gases from international shipping. Along with certain intermediary steps, the IMO 
set the goal to reduce the total annual greenhouse gas emissions by at least 50% by 
2050. The shipbuilding industry is therefore increasingly seeking new approaches to 
reduce emissions (such as design and tech nical measures, operational measures or 
the development of alternative fuel technologies such as LNG -powered vessels).  
5. MARKET DEFINITION  
(21) The Parties’ activities overlap horizontally  in commercial shipbuilding , specifically  
for container ships, bulk carriers , PCTCs  and Roll-on roll -off carriers (RORO), LNG 
                                                 
11   For RORO carriers, LNG carriers, ferries and tankers, the IHS Markit data was provided by the 
Notifying Parties.  
12   Excluding cruise ships in which European shipbuilders have a leading role . 

 
 
6 carriers, ferries and tankers . Conversely, the horizontal overlap in the repair of 
commercial ships ,13 on the one hand, and vertical relationships  between the Parties ,14 
on the other hand, are extremely limited and do not warrant particular investigation.   
5.1. Product market definition  
(22) In pre vious decisions, the Commission identified separate markets  in the 
shipbuilding industry between merchant/commercial/civil ships and nav al/military 
ships. Such a distinction is warranted due to differences in characteristics, 
performance, use and prices, as well as distinct customer bases, naval vessels being 
ordered by national governments as opposed to private customers for commercial 
ships.15 This segmentation was also endorsed by a vast majority of respondents to 
the market investigation.16 
(23) Within commercial ships, the Commission considered further sub -delineation s 
according to the main categories of vessels including:  (i) bulk carriers ; (ii) container 
ships ; (iii) product carriers17; (iv) chemical and oil tankers ; (v) liquefied natural 
gases (‘LNG ’) carriers ; (vi) liquefied petroleum gas (‘LPG ’) tankers ; (vii) roll -on 
roll-off vessels ; (viii) ferries ; (ix) cruise ships ; and (x) offshore/specialised vessels.18 
The Notifying Parties also present the Parties ’ activities  based on this segmentation  
(as well as PCTCs) .19 
(24) A large majority of customers and competitors having responded to the market 
investigation agreed  that this segme ntation according to the different cargo profile of 
commercial ships remains appropriate.20 Accordingly, this Decision relies on such 
segmentation as the starting point of competitive assessments and focuses on the 
                                                 
13  Both Parties provide repair and minor conversion services for commercial ships such as hull works 
(painting of hulls, repair of damaged parts, maintenance of deck equipment, etc.), engine works 
(maintenance of main/auxiliary engines, propellers, etc.) , and electrical and piping works 
(maintenance of electrical equipment and wiring on board ships, exchange and maintenance of 
various piping, etc.). Both Parties had limited revenue from ship repair services, in particular with 
customers outside of Japan. In this regard, JMU generated EUR […] million  in fiscal year 2016 (of 
which only EUR […] with customers outside of Japan) and EUR […] million  in fiscal year 2017 (of 
which only EUR […]  with customers outside of Japan), while Imabari Shipbuilding generated EUR 
[…] million  in fiscal year 2016 and EUR […] million  in fiscal year 2017 and […] with non -Japanese 
customers (response to RFI 5, question 3). It can therefore be reasonably excluded that the 
Transaction could raise serious doubts as to its compatibilit y with the internal market in relation to the 
repair of commercial ships.  
14  Imabari Shipbuilding has occasionally outsourced the production of certain ship block parts to JMU. 
This only happened on an ad -hoc basis and generated limited sales (less than EUR […] million per 
year on average over the last five years). It can therefore  be reasonably excluded that the Transaction 
could raise serious doubts as to its compatibility with the internal market due to such occasional 
vertical links.  Further, a vertical relationship between JFE and JMU in relation to the supply of steel 
plates p re-existed to the Transaction. Since the Transaction had no impact on that relationship, it will 
not be discussed further in this decision.  
15  Commission decision of 11 May 2009 in case M.5473  – Fincantieri/ABB/JV , paragraph 21.  
16  Q1 – Questionnaire to customers, replies to question B.A.A.1. , and Q2 – Questionnaire to 
competitors, replies to question B.A.A.1.  
17  A product carrier is a tanker engaged in the trading of other oil than crude oil.  
18  Commission decision of 11 May 2009 in case M.5473  – Fincant ieri/ABB/JV , paragraph 22, 
Commission decision of 5 May 2008 in case M.4956  – STX/AKER YARDS , paragraph 12.  
19  Form CO, paragraphs 94 and 95.  
20  Q1 – Questionnaire to customers, replies to question B.A.A.2, and Q2 – Questionnaire to competitors, 
replies to  question B.A.A.2.  
 
 
7 three areas in which the Parties’ activiti es result in affected markets  (container ships, 
bulk carriers and PCTCs).  
(25) While the Parties’ activities also overlap in RORO carriers , LNG carriers, ferries and 
tankers, no plausible  affected markets arise with respect to these ship types  and it 
therefore can be reasonably excluded that the Transaction could raise serious doubts 
as to its compatibility with the internal market in relation to the construction  and 
supply of these ship types .  
(26) RORO  carriers : RORO carriers are ships designed to carry wheeled cargo, such as 
cars, trucks, semi -trailer trucks,  trailers, and railroad cars, etc. that are driven on and 
off the ship on their own wheels.  In light of the low combined market shares of the 
Parties in ROROs overall of [0-5]% (IHS data, 2015 -2019, by CGT) and the fact that 
JMU only built [Number of ships] and Imabari only [Number of ships]  RORO 
vessel s in the 2015 -2019 timeframe, no plausible affect ed market arises.  
(27) LNG carriers : the Notifying Parties submit that LNG carrier s are ships with a 
standard carg o capacity of 80  000 – 180 000 cubic metres that  exclusively transport  
liquefied natural gases . In light of the low combined market shares of the Parties in 
LNG carriers overall of [0-5]% (IHS data, 2015 -2019, by CGT) and the fact the 
Imabari Shipbuilding only built [Number of ships]  and JMU only [Number of ships]  
LNG carriers in the 2015 -2019 timeframe, no plausible affect market arises.  
(28) Ferries : the Commission has considered a distinction between (i) day ferries, (ii) 
night ferries, and (iii) cruise fer ries.21 In ferries overall, the Parties have a combined 
share of [0-5]% (IHS data, 2015 -2019, by CGT). The Parties only produce night 
ferries. The Notifying Parties submit that  considering only  night ferries , the 
combined market share of the Parties would b e very unlikely to exceed 20%, given 
that in the timeframe 2015 -2019 JMU only built [Number of ships]  and Imabari 
Shipbuilding only built [Number of ships]  night ferries.22 
(29) Tankers : the Commission has previously left open whether chemical/oil tankers and 
product tankers should be considered as forming one single product market noting 
that there was some dema nd side substitutability between  these two categories of 
tankers .23 In light of the low combined market shares of the Parties i n tankers overall 
of [0-5]% (IHS data, 2015 -2019, by CGT) and the fact that [Number of ships] of 
Imabari’s [Number of ships] tankers built in the timeframe 2015 -2019 had a capacity 
of 25 -54 999 kt, a size category of tankers in which the Parties’ combined share is 
only [0-5]%, no plausible affected market arises.  
5.1.1.  Construction and supply of c ontainer  ships  
(30) Container  ships are commercial vessels that carry cargo in containers. They are used 
for the shipping of non -bulk cargo like manufactured goods as the use  of containers 
allows for efficiency in loading and unloading the ship.  A container  ship’s capacity 
is measured in TEU , with the capacity of ships ranging  from 100 TEU to over 23  
000 TEU.  Figure 2 below illustrates a Neo -Panamax 12 -14 000 TEU container ship.  
                                                 
21   Commission decision of 27 March 2006 in case M.4104 – Aker Yards / Chantiers de l’Atlantique , 
paragraphs 24 ‒ 27.  
22   In any case, [ Parties ’ order book information ]. 
23   Commission decision of 5 May 2008 in case M.4956 – STX / Aker Y ards, paragraph 17.  
 
 
8 Figure 2 – Neo-Panamax 12 -14 000 TEU container ship from Imabari Shipbuilding  
 
Source: Imabari Shipbuild ing website.  
5.1.1.1.  Notifying Parties’ arguments  
(31) As the Commission has not in previous decisions distinguished between different 
sizes and cargo capacities of container ships, the Notifying Parties submit that the 
relevant market is the market for the constructio n, production and sale of container 
ships overall.24  
(32) The Notifying Parties state that container ships sh ould not be further segmented, 
notably according to categories used in Clarksons publications, in part because they 
submit that there is no common under standing as to how the various ship size 
categories should be defined.25 
(33) The Notifying Parties further submit  that from the  demand side perspective,  the 
container ship size depends on the number of containers to be transported and the 
routes and harbours to  be serviced. They explain that for example Neo -Panamax 
container ships are able to pass th e New Panama Canal whereas Post -Panamax ships 
are not able to pass it but have a higher loading capacity. Nevertheless, the Notifying 
Parties submit that many ship o wners order container ships of different sizes, in 
particular customers that provide the full range of services from intercontinental 
routes to intra -regional routes. Customers that only service intra -regional routes 
however only order smaller container sh ips.26 
(34) From a supply side perspective, the Notifying Parties argue that the range of the ship 
sizes that a manufacturer can built is determined by the physical constraints of its 
shipyard  (such as dock size) . In particular, with respect to Asian shipbuilder s, which 
the Parties regard as their significant competitors, the Notifying Parties submit that 
they are capable to produce the whole range of container ship sizes.27 
                                                 
24  Form CO, paragraph 103.  
25  Form CO, paragraphs 104 and 106.  
26  Form CO, paragraph 108.  
27  Form CO, paragraph 107.  

 
 
9 5.1.1.2.  Commission’s assessment  
(35) Responses to the market investigation conf irm that container ships  likely are a type 
of vessel distinct from other merchant/commercial/civil sh ips and other cargo vessels 
in particular.28 
(36) Contrary to the submissions made by the Notifying Parties, the results of the market 
investigation also suggest that it is appropriate to further segment the market for 
container  ships, notably  by size.  
(A) Market participants have a common understanding of container ship 
categories  
(37) Contrary to the submission by the Notifying Parties, market participants appear to 
have a common understanding of different container ship categories based on size 
(delineated by TEU capacity in particular). This holds specifically for categories 
reported on by industry publication Clarkson s Research, namely: Feeder (<3  000 
TEU), Intermediate (3 -7 999 TEU), Neo -Panamax (8 -11 999 TEU), Neo -Panamax 
(12-14 999 TEU ), and Post-Panamax (15  000+ TEU). A majority  of customers and 
competitors expressing their opinion submit that these categories are regularly relied 
upon in interactions between shipbuilders and customers.29 While one customer 
states that ‘ [t]he size categories seem to be unrelated to the interactions between 
shipbuilders and customers ’,30 another customer explains that these ‘ categories 
refer[…] to the typical classification in the shipping industry when shipbu ilders 
interact with their customers ’.31 A further customer agrees and submits that these 
‘definitions are very common in the market recognized by most majority of the 
people involved in the industry ’.32 Yet another customer says that ‘ [s]ubject to vessel 
design and trade requirements, proposed category looks reasonable and 
corresponds to common industry practice ’.33 Competitors agree, with one stating 
that ‘ [t]hese categories are usually used in discussions with customers, classification 
societies, etc. ’34 and another one calling them ‘ [w]orld standard ’.35 
(38) Elaborating on which categories of container ships can be considered distinguishable 
from others due to factors such as price, performance, size and 
manufacturer/customer base, a customer submits that ‘ [a]ll categories of container 
vessels are distinguishable from each other due to factors such as capacity, price, 
performance etc. ’.36 Another customer states that ‘ [s]ize and TEU is the most ideal 
categorization of container vessels ’.37  
                                                 
28  Q1 – Questionnaire to customers, replies to questions B.A.C.1., B.A.C.1.1., B.A.C.2. and B.A.C.2.1., 
Q2 – Questionnaire to competitors, replies to questions B.A.C.1., B.A.C.1.1., B.A.C.2. and 
B.A.C.2.1.  
29  Q1 – Questionnaire to customers, replies to question B.A.C.3.1., and Q2 – Questionnaire to 
competitors, replies to question B.A.C.3.1.  
30  Q1 – Questionnaire  to customers, reply to question B.A.C.3.1.1.  
31  Q1 – Questionnaire to customers, reply to question B.A.C.3.1.1.  
32  Q1 – Questionnaire to customers, reply to question B.A.C.3.1.1.  
33  Q1 – Questionnaire to customers, reply to question B.A.C.3.1.1.  
34  Q2 – Questionnaire to competitors, reply to question B.A.C.3.1.  
35  Q2 – Questionnaire to competitors, reply to question B.A.C.3.1.  
36  Q1 – Questionnaire to customers, reply to question B.A.C.3.5.  
37  Q1 – Questionnaire to customers, reply to question B.A.C .3.5.  
 
 
10 (39) It therefore appears tha t the categorisation of container ship s according to size 
categories  based on TEU capacity  used by Clarkson s is widely recognised in the 
industry and relied upon in exchanges between market participants. In order to 
establish whether these categories could  form the basis for distinct container ship 
product markets, the extent of supply and demand side substitutability is assessed in 
the following  sections . 
(B) No demand side substitutability between different container  ship categories  
(40) Generally, it appears that  customers procure containerships of a specific size for 
different needs, and in particular for service on specific routes. Utilising other size 
container ships would in most cases not be cost -efficient for the shipping company . 
(41) A majority of customers and  competitors who expressed an  opinion  in response to 
the market investigation consider that shipping companies cannot use various 
categories of container ships to carry out the same types of services at competitive 
conditions.38 While one customer submits that ‘ [i]nstead of having bigger vessels 
with less frequency, customer may want more frequent service offered by the fleet of 
the smaller vessels ’,39 another customer in this context explains that ‘ [i]n order for a 
shipping line to design and utilize its ne twork, it must deploy the suitable vessels (in 
terms of size) on a given trade, corridor or string. Using smaller or larger vessels 
than set out in the network does generally not make sense for a shipping line, as it 
would not be cost efficient. Moreover, the deployment of vessels must take into 
account size restrictions in ports ’.40 Another customer states that ‘ [u]sually, 
shipping companies try as much as possible to use the same categories of container 
ships on the same service. For instance, using a feed er on larger trades will not be 
competitive enough ’.41 Another customer describes the distinct use of different sizes 
of container ships by stating that ‘ [b]igger ship goes back and forth bigger ports in 
fixed schedule, smaller ships go to smaller ports in a more flexible way ’.42 A 
competitor submits that shipping companies ‘ adapt the size of [the] vessel to the 
route to optimize costs ’.43 
(42) It therefore appears that different sizes of container ships address different (route) 
needs of shipping companies. This i s further confirmed by a customer stating that it 
‘uses different sizes of container vessels for different needs. Such needs will 
primarily be determined by global customer demand for shipping services, the 
structure of our global network, and vessel size restrictions etc. in ports ’.44 Another 
customer closely mirrors this assessment and submits that it ‘ uses different 
categories of container ships to address the specific needs of each trade. Different 
size and categories of vessels are used depending on the  trade so as to adapt to the 
port facility, to the market, and to keep competitiveness ’.45 This is further illustrated 
by another submission by a customer, that states that ‘ [f]or example, the feeder size 
                                                 
38  Q1 – Questionnaire to customers, replies to question B.A.C.3.3., and Q2 – Questionnaire to 
competitors, replies to question B.A.C.3.4.  
39  Q1 – Questionnaire to customers, reply to question B.A.C.3.3.1.  
40  Q1 – Questionnaire to customers, reply t o question B.A.C.3.3.1.  
41  Q1 – Questionnaire to customers, reply to question B.A.C.3.3.1.  
42  Q1 – Questionnaire to customers, reply to question B.A.C.3.3.1.  
43  Q1 – Questionnaire to customers, reply to question B.A.C.3.3.1.  
44  Q1 – Questionnaire to customers, reply to question B.A.C.3.3.2.  
45  Q1 – Questionnaire to customers, reply to question B.A.C.3.3.2.  
 
 
11 vessel would be placed in intra -Asia route as connec ting vessel. On the other hand, 
the Post -Panamax containerships can only be placed in Far East to Europe trade, 
not only because of trade volume but also because only terminals along this trade 
route have the ability to handle the Post -Panamax containershi p’.46 
(43) The circumstance that certain type s of container ship categories are used for specific 
routes by shipping companies appears to be most pronounced with respect to Post -
Panamax container ships, which are utilised for East Asia -Europe routes.  Post-
Panama x ships cannot pass through the Panama C anal and therefore cannot be 
utilised on rou tes leading through the Panama C anal.  Neo-Panamax container ships 
appear to be used on a greater number  of routes, such as Asia to America, but also 
Asia to Europe47. Neo -Panamax 12 -14 999 TEU ships are the largest category of 
container ship that can pass through the Panama Canal.  Shipping companies would 
generally not utilise smaller vessels than those capable to service the largest share of 
demand on a given route while adhering to the size limitations of ports and canals 
along the route.  
(44) It therefore appears that there is little demand side substitutability between container 
ships of different sizes.  
(C) Limited supply side substitutability between different container  ship 
categories  
(45) Based on the responses to the market investigation, it appears that most shipbuilders 
active in the m anufacture and supply of container ships are not active in the 
manufacture and supply of all size categories of container ships as identified by 
Clarkson s. It further appears that shipbuilders active in certain size categories of 
container ships could not readily shift into building also other (in particular larger) 
size categories and customers have reservations with respect to purchasing large 
ships from shipbuilders without a track record in such ships.  
(46) Considering whether shipbuilders active in containe r ships are typically able to build 
a wide range of container ship categories, a large majority of customers expressing 
their opinion does not consider all shipbuilders of container ships able to do so , but 
only some .48 Also , a majority of competitors expre ssing their opinion does not 
consider all shipbuilders of container ships able to build a wide range of container 
ship categories.49 With respect to their own activities in container ships, a majority 
of competitors states that they do not build all categor ies of container ships.50 In this 
context one competitor states that ‘ a 20,000TEU container ship has a length overall 
of 400 meters and c[a]nnot be built at the dock of [the Company’s] shipyard ’.51 
Another competitor explains that its ‘ shipyard [does not hav e] know how for large 
size container vessel[s] ’.52 Yet another competitor says that it ‘ could build all 
containerships of all categories mentioned above, but [it] would build specific 
                                                 
46  Q1 – Questionnaire to customers, reply to question B.A.C.3.3.2.  
47  Q1 – Questionnaire to customers, replies to question  B.A.C.6.  
48  Q1 – Questionnaire to customers, replies to question B.A.C.3.2.  
49  Q2 – Questionnaire to competitors, replies to question B.A.C.3.2.  
50  Q2 – Questionnaire to competitors, replies to question B.A.C.3.3.  
51  Q2 – Questionnaire to competitors, rep ly to question B.A.C.3.3.1.  
52  Q2 – Questionnaire to competitors, reply to question B.A.C.3.3.1.  
 
 
12 category of containerships considering facilities and manpower for price 
competitiveness ’.53 
(47) Overall , however, the size of a given container ship appears to be the main factor 
determining whether a shipbuilder active in container ships is capable of building it 
according to the quality standards expected by customers. Larger con tainer ships 
require larger docks and related infrastructure, but also different and more elaborate 
design and engineering capabilities.  
(48) A customer explains that ‘ to build big containers ships request shipbuilder investing 
on the building facilities as do ck, pier crane and so on. On the other hand, the 
experiences as design ability, qualified work labor availability also limit some 
container producer to build big container ships ’.54 Another customer states that 
‘larger container vessels (+10,000 TEU) requir e detailed technical design 
capabilities as well as drydocks of suitable sizes. Some container vessels are built 
with special features, such as waste heat recovery systems, complex electrical 
control systems and potentially use of alternative fuels, includ ing LNG – all require 
experience from the yard for quality installation and economic viability ’.55 An 
additional customer submits that the ability of a shipbuilder to construct a certain 
category of container ship depends ‘ on size and facility of [the] Ship yard [and on] 
design [and] technology ’.56 Another customer says that ‘ [a]ny shipbuilder of 
container ships has a specific equipment/infrastructure, know -how based on the past 
record, and facilities which enable to produce the specific size most efficiently.  The 
small -scale yard cannot produce the large size physically. Therefore, they basically 
produce specific size or particular range of container ships ’.57 
(49) The limited supply  side substitutability seems to be especially pronounced with 
respect to  large container ships. Market participants contend that only some  players 
active in the construction of container ships are capable of building  large container 
ships. This appears to be particularly the case for Post -Panamax, and to a lesser 
extent, for Ne o-Panamax container ships. A customer submits that ‘ [o]nly  a few of 
big shipbuilders can build 15,000+ TEU type container carrier ’.58 Another customer 
explains that shipbuilders tend to focus either on ships over 10 000 TEU capacity or 
under 5 000 TEU capac ity.59 Yet another customer ‘ differentiates shipyard that build 
small ships (up to 5000teus), shipyards that build medium size, and shipyards that 
can build Ultra Large Container Ships (ULCS) ’.60 
(50) Irrespective of the exact size and/or category that  distinguis hes the large container 
ships from smaller container ships, there appears to be  fewer  capable shipbuilders 
active in large container ships. This is also confirmed in the market shares provided 
by the Parties.  These suggest that at least 22 shipbuilders wer e active in container 
ships overall between 2015 and 2019, while only seven were active in the category 
                                                 
53  Q2 – Questionnaire to competitors, reply to question B.A.C.3.3.1.  
54  Q1 – Questionnaire to customers, reply to question B.A.C.3.2.1.  
55  Q1 – Questionnai re to customers, reply to question B.A.C.3.2.1.  
56  Q1 – Questionnaire to customers, reply to question B.A.C.3.2.1.  
57  Q1 – Questionnaire to customers, reply to question B.A.C.3.2.1.  
58  Q1 – Questionnaire to customers, reply to question B.A.C.3.2.1.  
59  Q1 – Questionnaire to customers, reply to question B.A.C.1.1.  
60  Q1 – Questionnaire to customers, reply to question B.A.C.3.2.1.  
 
 
13 of Neo -Panamax 12 -14 999 TEU container ships.  A customer summarises the reason 
for this by stating: ‘ Building mega ship requires high -end production, in frastructure, 
design capability and large scale capital. [The Company]  believes only limited 
shipbuilders are able to build ultra -large vessels ’.61  
(51) Market participants also generally describe shipbuilders as not able to shift easily 
from building only smal ler container ships to also building large container ships.62  
(52) While one competitor states that ‘ [i]f there are enough facilities and manpower, 
there’s no big barrier for shipbuilders to expand into building larger size 
containerships ’,63 another one describes the ‘ [c]apacity of facilities, such as dock 
size [and] crane capacity ’64 as barriers. Another competitor also points to ‘ workers’ 
quality ’ as an aspect to be ‘ prepared for larger construction works ’.65 
(53) A majority of customers expressing their opinion submit that they would not order 
large container ships from a shipbuilder with experience in building smaller 
container ships.66 A customer explains this by saying that ‘ [s]hipyards tend to 
specialize on certain vessel types/size an d therefore [the Company]  would not 
purchase a ULCS from a shipyard specialized in building small container ships ’.67 
Another customer submits that ‘ [t]here is [a] technical and infrastructure gap when 
the vessel size exceeds certain limit. Therefore, [the Company] will consider whether 
the technical and infrastructure capability of potential shipbuilders can match its 
requirement. Yet […] only limited supplier[s] can build mega ships in the market. 
Therefore, when [the Company] intends to order mega ships, it will only turn to 
certain suppliers ’.68 
(54) Based on the above feedback from market participants, it appears that generally 
supply  side substitutability is limited with respect to container ships. While 
shipbuilders may construct a number of different catego ries of container ships, most 
shipbuilders do not build all categories. In particular with respect to larger container 
ship categories , such Neo -Panamax  12-14 999 TEU  container ships , only few 
shipbuilders are capable to build these ships, and it would not  be easy for others to 
enter the production of these categories.  
(D) Conclusion  
(55) The results of the market investigation discussed above support the appropriateness 
of distinguishing between different categories of container ships, based on size – in 
particular  their TEU capacity . While some market participants referred to different 
dividing lines between container ship segments, the categorisation according to  
Clarkson s is widely used by industry participants . There appears  to be virtually no 
demand  side substitutability , while there does appear to be some limited level of 
                                                 
61  Q1 – Questionnaire to customers, reply to question B.A.C.3.2.1.  
62   Q1 – Questionnaire to customers, replies to question C.C.C.3.1., and Q2 – Questionnaire to 
competitors, replies to question C.C.C.3.  
63  Q2 – Questionnaire to competitors, reply to question C.C.C.3.  
64  Q2 – Questionnaire to competitors, reply to question C.C.C.3.  
65  Q2 – Questionnaire to competitors, reply to question C.C.C.3.  
66  Q1 – Questionnaire to customers, replies to question C.C.C.3.  
67  Q1 – Questionnaire to customers, reply  to question C.C.C.3.1.  
68  Q1 – Questionnaire to customers, repl y to question C.C.C.3.1.  
 
 
14 supply side substitutability when considering smaller categories of container ships or 
the intersection between the large Neo -Panamax 12-14 999 TEU ships and Post -
Panamax ships. Neverthe less, when considering large container ships, including 
Neo-Panamax 12 -14 999 TEU ships , only few shipbuilders are capable of producing 
them.   
(56) In any event , the exact scope of product market definition with respect to container 
ships can be left open since  the Transaction would not raise serious doubts as to its 
compatibility with the internal market under any plausible alternative product market 
definition  and irrespective of whether a separate market is defined according to the 
Clarksons categorisation for Neo -Panamax 12 -14 999 TEU container ships . 
5.1.2.  Construction and supply of b ulk carriers  
(57) Bulk carriers are commercial vessels that carry dry bulk cargo, such as iron ore, raw 
coal, thermal coal, grains, steel or cement. There are various sizes of bulk carrier s. 
Figure 3 below illustrate s a Newcastlemax bulk carrier from JMU.  
Figure 3 – Newcastlemax bulk carrier from JMU  
 
Source: JMU’s website.  
5.1.2.1.  Notifying Parties’ arguments  
(58) Since  the Commission has not distinguished between different sizes and cargo 
capacities of bulk carriers  in previous decisions , the Notifying Parties submit that the 
relevant market is the overall market for the construction, production and sale of 
bulk carriers.69 
(59) The Notifying Parties submit  that bulk carriers should not be further segmented by 
size or by region or port, namely into Small, (DWT <10 000), Handysize  (DWT 10 
000 - <40 000) , Handymax/Supramax  (DWT 40  000 – <65 000) , Panamax  (DWT 65 
000 - <80 000) , Capesize  (DWT >100 000) or additional categorizations of very 
large bulk carriers  such as  Kamsarmax  (DWT 80 000 – 90 000) , Dunkirkmax  (DWT 
170 000 – 180 000) , Newcastlemax (DWT 180 000 – 190 000)  or Setouchmax  
                                                 
69  Form CO, paragraph 96.  

 
 
15 (DWT 200 000 – 210 000) , given that there is no common understanding as to how 
the various ship size categories should be defined beyond a general understanding.70 
Moreover, the Notifying Parties submit that different ship classification soci eties 
have different definitions.71 
(60) From a supply -side perspective, the Notifying Parties argue that the range of the ship 
size that a manufacturer  can build  is determined by the physical constraints of its 
shipyard . In particular, the Notifying Parties sub mit that Asian shipbuilders  – which 
they regard as significant competitors  – are capable of producing  the whole range of 
bulk carrier sizes.72 
(61) The Notifying Parties further submit that , from a demand -side perspective, the  
choice of a  bulk carrier depends on  the goods to be transported and the routes and 
harbours to be serviced.73 In this regard, they explain that Capesize ships are ordered 
where the intended use does not involve the passage of the Suez and Panama Canals 
and where the capacity is needed; that larger bulk carriers typically transport iron ore 
or coal; or that Panamax bulk carriers often carry grain or coal. The Notifying Parties 
submit that many ship owners order bulk carriers of different sizes and, as a result, 
that there are no distinctive cu stomer groups for different bulk carrier sizes.74 
(62) Lastly, the Notifying Party submits that it is not necessary to regard Newcastlemax 
and Setouchmax as separate categories as it is widely recognised in the industry that 
they belong to the same category of N ewcastlemax.75 
5.1.2.2.  Commission’s assessment  
(A) Market participants have a common understanding of bulk carrier  categories  
(63) Clarksons defines different sizes of bulk carriers  according to their DWT into: Small 
(DWT <10 000), Handysize (DWT 10 000 - <40 000) , Handymax  (DWT 40 000 – 
<65 000) , Panamax (DWT 65 000 – <80 000) , Panamax (DWT 80 000 – <100 000)  
and (vi) Capesize (DWT >100 000).76 Moreover, additional categorisations are used 
in the industry to refer  to the specific regions or ports  that bulk carriers may servi ce, 
such as Kamsarmax  (DWT 80 000 – 90 000)77, Dunkirkmax  (DWT 170 000 – 180 
000)78, Newcastlemax  (often with a DWT 180 000 – 190 000)79 or Setouchmax  
(DWT 200 000 – 210 000)80. The Notifying Parties appear to rely in fact on these 
                                                 
70  Form CO,  paragraphs 97 and 99.  
71  Form CO, paragraph 99.  
72  Form CO, paragraph 100.  
73  Form CO, paragraph 101.  
74  Form CO, paragraph 101.  
75  Form CO, paragraph 102.  
76  The different reports from Clarksons rely on these categories, such as its World Shipyard Monito r 
(Form CO, Annex 7.1.2 -(3), World Shipyard Monitor Volume 27, No. 7  for July 2020).  
77  For Port Kamsar in Equatorial Guinea.  
78  For the eastern harbour lock at Dunkirk  in France . 
79  For the Australian port of Newcastle.  
80  For ports in the Setouchi Sea in  Japan.  
 
 
16 different categories. In thi s regard, JMU’s website includes entries for 
Newcastlemax, Dunkirkmax  or Panamax.81 
(64) Contrary to the Notifying Parties’ submission, market participants appear to have a 
common understanding of different bulk carriers’ categories based on (i) size (by 
DWT); a nd (ii) specific region or ports.  
(65) First, a vast majority of those customers and competitors that responded to the 
market investigation submitted that the Clarksons size categories by DWT  identified 
in paragraph (63) above  are regularly relied upon in interactions between 
shipbuilders and customers.82 In this regard, some customers expressed that ‘[t]hese 
categories are normally an important part of the  interaction between shipbuilders 
and shipowners’  or that this ‘category is very common for shipyard industry and all 
the people in the market’ . A competitor also expressed that ‘[t]hese categories are 
typically used in discussions with ship owners and dat a providers use the same 
categories’ . A number of market participants considered moreover that these 
categories are ‘world common in shipping industry’  or a ‘[w]orld standard’ . For all, 
a customer indicated that ‘the distinction Clarksons make is perfectly  rational and 
justifiable on the basis of size and deadweight. The bigger the vessel, the lower the 
building price per deadweight’ .83 
(66) A majority of both customers and competitors who responded to the market 
investigation moreover considered that , within thi s first general segmentation of size 
categories by DWT,  it is not appropriate to further sub -segment the category for 
Capesize bulk carriers (DWT >100 000) to assess the relevant competitive 
dynamics.84  
(67) Secondly, a vast  majority of those customers that responded to the market 
investigation submitted that a segmentation by regions or ports  into Kamsarmax 
(DWT 80  000 – 90 000), Dunkirkmax (DWT 170  000 – 180 000), Newcastlemax 
(DWT 180  000 – 190 000) and Setouchmax (DWT 200  000 – 210 000) are also 
regularly relied upon in interactions between shipbuilders and customers.85 The 
responses of competitors were however inconclusive on this point.86  
(68) In this regard, a customer submitted that these ‘categories are relied upon to define  
more precisely the type of bulk carrier to be contracted’ .87 Another customer 
explained that these categories are ‘[r]ather self -evidently [, as]  some ports have 
physical size restrictions which limit what ships can service them’ .88 A number of 
market parti cipants clarified that these categories are not limited to the particular 
ports of reference, but may also be used in ‘any other ports as far as their size fit 
                                                 
81  JMU’s website accessed on 8 December 2020 . 
82  Q1 – Questionnaire to customers, replies to question B.A.B.3.  
83  Q1 – Questionnaire to customers, reply to question B.A.B.3.5.  
84  Q1 – Questionnaire to customers, replies to question B.A.B.3.4, Q2 – Questionnaire to competitors, 
replies to question B.A.B.3.5.  Some customers nevertheless converged in referring to a potential 
segment for ‘baby Capesize’ or ‘mini -Capesize’, with a DWT of 100 000 to 120 000  (B.A.B.3.4.1 ). 
85  Q1 – Questionnaire to customer s, replies to question B.A.B.4.  
86  Q2 – Questionnaire to competitors, replies to question B.A.B.4.  
87  Q1 – Questionnaire to customers, reply  to question B.A.B.4.1.  
88   Q1 – Questionnaire to customers, reply  to question B.A.B.4.1.  
 
 
17 to’.89 In this regard, a competitor explained that ‘a bulk carrier named ‘Dunkirkmax’ 
can and do serve various ports which have a similar size to Dunkirk. In other words, 
the reference relates to the size rather than a specific geographic region’ .90 
(69) Based on the above, it therefore appears that market participants do have a common 
understanding of the various categories of bulk carriers, which are in turn relied 
upon in exchanges between market participants. In order to establish whether these 
categories could form the basis for distinct container ship product markets, the extent 
of supply and demand si de substitutability is assessed in the following  sections . 
(B) Demand -side substitutability  between different bulk carrier categories  
(70) A majority of those customers and competitors that responded to the market 
investigation submitted that shipping companies typ ically use different categories of 
bulk carriers to carry out the same types of services at competitive conditions.91  
(71) In this regard, t here appears to be at least in theory some overlaps  in the use that 
shipping companies may make  between different adjacen t categories of bulk carriers. 
A customer explained that ‘if the (large) Capesize market is very strong (expensive 
for cargo owners) then they might decide to break down their cargo into two or 
more vessels of smaller size (say Panamax or Handymax)’ .92 Anot her customer 
indicated that ‘Panamax type of tonnage can carry the similar cargo of Cape size’  
and that ‘Handymax can do the same as Panamax type’ .93 In this same direction, a 
competitor explained that shipping companies ‘may use larger bulk carriers for 
international routes and smaller carriers for short -distance routes’ , but that 
‘adjacent vessel classes are frequently substitutable (e.g. Panamax and Capesize)’ .94 
A customer however submitted that ‘[v]essel size and specification is crucial to most 
routes. Some overlapping can happen but depends primarily on whether it is 
possible and whether the vessel rates can justify it’ .95 
(72) In practical terms, however, several customers pointed to limitations when asked 
whether a bulk carrier of any category could  be used for any  of the bulk transport 
services that their company provides or whether their company used  different 
categories of bulk carriers to address different  needs .96 First, several customers 
indicated that  ‘specific port restrictions in terms of the  vessels’ dimensions such as 
its draft and length’  or the ‘sizing restrictions to dock and offload’  represent an 
important factor when deciding for a category of bulk carrier . For instance, a 
customer explained that Handysize and Supramax are self -sufficie nt, as they have 
their own cranes on board and can on -load and off -load the cargo by themselves, 
while Panamax vessels and above are without cargo gear on board and are therefore 
dependent on the existing equipment of the port of loading and discharge.97 
                                                 
89   Q1 – Questionnaire to customers, reply  to question B.A.B.4.1.  
90   Q2 – Questionnaire to competitors, repl y to question B.A.B.4 .1. 
91  Q1 – Questionnaire to customers, replies to question B.A.B.3.3, and Q2 – Questionnaire to 
competitors, replies to question B.A.B.3.4.  
92  Q1 – Questionnaire to customers, repl y to question B.A.B.3.3.1.  
93  Q1 – Questionnaire to customers, replies to questions B.A.B.3.3.1 and B.A.B.3.3.2.  
94  Q1 – Questionnaire to customers, repl y to question B.A.B.3.3.1.  
95  Q1 – Questionnaire to customers, repl y to question B.A.B.3.3.1.  
96  Q1 – Questionnaire to customers, replies to question B.A.B.3.3.2.  
97   Non-confidential minutes of a conference call with a customer of 29 October 2020, paragraph 22.  
 
 
18 Secondly, commercial viability is another important factor that determines the use of 
particular types of bulk carriers. In this regard, a customer pointed out that  ‘a bulk 
carrier can theoretically carry almost all bulk commodities, but it might not be 
econ omical ’, while another one highlighted restrictions  ‘due to the commercial 
viability as the freight can be cheaper by using bigger vessels’ . Thirdly, some types 
of bulk carriers appear to be better suited to transport particular types of dry cargo. 
In this  sense, a customer indicated that  ‘iron ore is moved primarily on capesizes, 
coal on capesizes and panam axes, grain on panamaxes and handymaxes and so 
called minor bulks in handysizes (and smaller)’ . For all these reasons, a customer 
explains that while ‘[i]n theory a bulk carrier of any category, subject to physical 
limitations, may be used for the services [its] company provides’ , ‘[i]n reality, the 
services [it] provides is mainly carried out by one specific vessel type and size’ . 
(C) Supply -side substitutability  between different bulk carrier categories  
(73) Several responde nts indicated that the size of the dry docks and the equipment 
restrictions of the shipyards (such as crane capacity) are decisive factors for the size 
of the bulk carriers that a s hipbuilder can construct. While large bulk carriers cannot 
be constructed in smaller -sized docks, shipbuilders with large docks can construct 
bulk carriers of smaller sizes. Customer s indicated  in this sense  that ‘[a]s long as the 
drydock capacity is large  enough, the shipyard can build any type of bulk carriers’  
and that ‘[f]or those shipyards which can build a Capesize should also be able to 
build a smaller Handysize’ .98 A customer moreover indicated that ‘[b]arriers to 
entry  […] are not great as subcontra ctors are available in most markets’ .99 
Moreover, a competitor further indicated that, provided the docks are sufficiently 
large, ‘the construction method is basically the same for any bulk carrier category’  
as ‘[d]ifferent classes of bulk carriers are not distinguishable in terms of the 
construction process’ .100  
(74) A majority of those competitors that responded to the market investigation submitted 
that they do not build bulk carriers of all different categories referred to in paragraph 
(63) above.101 In this regard, several competitors indicate that this is d ue to their 
‘lack of infrastructure’ or to their  ‘corporate strategy’.102 
(75) A majority of those customers and competitors that re sponded to the market 
investigation nevertheless submitted that some producers of bulk carriers are 
typically able to build a wide range of bulk carrier categories.103 
(D) Conclusion  
(76) The results of the market investigation discussed above indicate that it may be  
appropriate to distinguish between different categories of bulk carriers based on size 
(by DWT) and on type of port or region. However, t he exact categories according to 
which distinction should be made for the purpose of market definition  are not clear. 
                                                 
98  Q1 – Questionnaire to customers, replies to question B.A.B.3.2.1.  
99  Q1 – Questionnaire to customers, reply to question B.A.B.3.2.1.  
100  Q2 – Questionnaire to competitors, repl y to question s B.A.B.3.2.1 and B.A.B.3.3.1.  
101  Q2 – Questionnaire to competitors, replies to question B.A.B.3.3.  
102  Q2 – Questionnaire  to competitors, replies to question B.A.B.3.3.1.  
103  Q1 – Questionnaire to customers, replies to question B.A.B.3.2, and Q2 – Questionnaire to 
competitors, replies to question B.A.B.3.2 .  
 
 
19 While these categories appear to be widely used by industry participants, there 
appears to be some level of demand - and supply -side substitutability when 
considering adjacent categories of bulk carriers.  
(77) In any event , since the Transaction does not raise s erious doubts as to its 
compatibility with the internal market under any plausible product market definition, 
it can be left open whether all types of bulk carriers belong to a single product  
market or whether di stinct markets should be identified for vari ous bulk carriers 
segments (i.e. into (i) Small (DWT <10 000); (ii) Handysize (DWT 10 000 - <40 
000); (iii) Handymax (DWT 40 000 – <65 000); (iv) Panamax (DWT 65 000 - <80 
000); (v) Panamax (DWT 80 000 - <100 000);  and (vi) Capesize (DWT >100 000)) 
or acco rding to specific ports or regions (i.e. into (i) Kamsarmax (DWT 80 000 – 90 
000); (ii) Dunkirkmax (DWT 170 000 – 180 000); (iii) Newcastlemax (DWT 180 
000 – 190 000); and (iv) Setouchmax (DWT 200 000 – 210 000 ). The competitive 
assessment in Section 7.3 take into consideration all these potential sub -
segmentations.  
5.1.3.  Construction and supply of PCTCs  
5.1.3.1.  Notifying Parties’ arguments  
(78) PCTCs are commercial ships designed f or shipping cars and trucks only.104 The 
Parties submit that the relevant market is that for the construction, production and 
sale of PCTCs.  Figure 4 below illustrates a PCTC.  
Figure 4 – PCTC from Imabari  
 
Source: Imabari Shipbuilding website.  
                                                 
104   In contrast, RORO carriers are ships designed to carry wheeled c argo, such as cars, trucks, semi -
trailer trucks,  trailers, and railroad cars, etc. that are driven on and off the ship on their own wheels . 

 
 
20 5.1.3.2.  Commission’s assessment  
(A) Potential sub -segmentations within the market for PCTCs  
(79) In the course of the market investigation, the Commission has sought to verify 
whether it would be appropriate to further  segment  the market for PCTCs, notably in 
relation to the size of the ships or the number of cars they carry.105  
(80) In that regard, while t he majority of customers indicated they were unable to answer 
the question as they are not active in the PCTC segment, responses were mixed 
among those who expressed an opinion as to whether a distinction according to size 
would be necessary in relation to  PCTC s. In general, respondents indicated  that the 
right size vessel is always chosen and deployed by charterer for each assigned 
journey in consideration of cargo volume, required frequency, and port 
characteristics.106 When asked about the potential segmen tations for the PCTC 
market, some respondents suggested a segmentation by number of vehicles (less than 
2 000, between 2  000 and 3  999, between 4  000 and 5  999 and above 6  000)107. As 
regards this potential narrower segmentation, t he activities of the Partie s only 
overlap in relation to PCTC with a number of cars above 6  000 units.  
(B) Demand -side substitutability  between different PCTC categories  
(81) A majority of customers that responded to the market investigation and expressed an 
opinion submitted that shipping c ompanies cannot use different categories of PCTCs 
to car ry out the same type of service  at similar competitive conditions. Conversely , a 
majority of competitors that responded to the market investigation and express ed an 
opinion said that they can.108  
 
(82) In any event, those customers that expressed an opinion when responding to this 
specific asp ect of the market investigation submitted that , when deciding which  type 
of vessel to operate for a  particular service , they take into consider ation  a large 
number of aspects such as , cargo volume,109 required frequency,110 route,111 or port 
characteristics112. 
(C) Supply -side substitutability  between different PCTC categories  
(83) A majority of the customers that expressed an opinion in the market investigation 
submi tted that ‘some ’ producers of PCTCs are typically able of building a wide 
range of PCTC categories, while a majority of competitors indicated that ‘all’ PCTC 
                                                 
105  Contrary to containerships or bulk carriers, there is no widely -recognised industry segmentation for 
PCTCs .  
106  Q1 – Questionnaire to customers, reply to question B.A.D.3.2.  
107  Q1 – Questionnaire to customers, reply to question B.A.D.3.1.  
108   Q1 – Questionnaire to customers, replies to question B.A.D.3.3 ., and Q2 – Questionnaire to 
competitors, replies to question B.A.D.3.4.  
109  Q1 – Questionnaire to customers, replies to question B.A.D.3.3. 2.  
110  Q1 – Questionnaire to customers, reply to question B.A.D.3.3. 2.  
111  Q2 – Questionnaire to competitors, reply to question B.A.D. 3.4.1.  
112  Q1 – Questionnaire to customers , replies to question B.A.D.3.1.3.  
 
 
21 producers were able to do so.113 Several respondents indicated in this regard that the 
dockyard size  and the equipment and infrastructure are the main constraints to 
produce PCTCs of different size categories.114 In this regard, one competitor 
submitted that ‘[p]rocedures and know -how are the same with regardless the size of 
the vessel. The only limiting r equirement is the size of the dry dock’ .115 
(84) A majority of competitors active in the construction of PCTCs that expressed an 
opinion in the market investigation submitted that they do not build PCTCs of all 
sizes.116 In this regard, a competitor indicated that while it ‘could build all PTCTs of 
all categories […] [it]  would build specific category of PCTCs considering facilities 
and manpower for price competitiveness’ .117 
(D) Conclusion  
(85) The results  of the market investigation discussed above indicate that it may be 
appropriate  to distinguish between different categories of PCTCs based on the 
number of vehicles they can carry.  
(86) However , the exact scope of product market definition with respect to  PCTCs can be 
left open since the Transaction does not raise serious doubt s as to its compatibility 
with the internal market under any plausible alternative product market definition 
and irrespective of whether all types of PCTCs belong to a single  product market or 
whether different segmentations of PCTCs can be identified for (i) less than 2 000 
cars; (ii) between 2 000 and 3 999 cars; (iii) between 4 000 and 5 999 cars; and (iv) 
above 6 000 cars . 
5.2. Geographic market definition  
(87) In previous decisions, the Commission defined the relevant geographic market for 
the construction and s ale of commercial ships as worldwide in scope.118 The 
Notifying Parties agree with this definition  and do not propose an alternative .119 
(88) A vast majority of the customers and competitors that responded to the market 
investigation agreed that the relevant geogra phic market for the assessment of the 
relevant competitive dynamics in shipbuilding is global in scope.120 
(89) In light of these considerations, as well as all evidence available to it, the 
Commission considers that the markets for the construction  and supply  of (i) 
container ships; (ii) bulk carriers; and (iii) PCTCs , including possible segmentations 
thereof,  are worldwide in scope.  
                                                 
113  Q1 – Questionnaire to customers, replies to question B.A.D.3.2, and Q2 – Questionnaire to 
competitors, repl ies to question B.A.D.3.2.  
114  Q1 – Questionnaire to customers, replies to question B.A.D.3.2.1, and Q2 – Ques tionnaire to 
competitors, repl ies to question B.A.D.3.2.1.  
115  Q2 – Questionnaire to competitors, reply to question B.A.D.3.2.1.  
116  Q2 – Questionnaire to competitors, replies to question B.A.D.3.3.  
117  Q2 – Questionnaire to competitors, reply to question B. A.D.3.3.1.  
118  Case M.4956 – STX/Aker Yards , paragraph 36; Case M.5473 – Fincantieri/ABB/JV , paragraph 28.  
119  Form CO, paragraph 91.  
120  Q1 – Questionnaire to customers, repl ies to question B.B.1, and Q2 – Questionnaire to competitors, 
replies to question B.B.1.  
 
 
22 6. COMPETITIVE ASSESSMEN T: LEGAL F RAMEWORK  
(90) Under paragraphs 2 and 3 of Article 2 of the Merger Regulation, the Commission 
must assess whether a proposed concentration would significantly impede effective 
competition in the internal market or in a substantial part of it, in particular through 
the creation or strengthening of a dominant position. In this respect, a merger may 
entail  horizontal and/or vertical and/or conglomerate effects.  For the purposes of the 
competitive analysis of the Transaction, only horizontal effects may potentially arise.  
(91) Horizontal effects arise when the parties to a concentration are actual or potential 
competitors in one or more of the relevant markets concerned. The Commission 
appraises horizontal effects in accordance with the guidance set out in the Horizontal 
Merger Guidelines.121 
(92) In horizontal mergers, non -coordinated effects may significantly impede e ffective 
competition by eliminating the competitive constraint imposed by each merger party 
on the other, as a result of which the merged entity would have increased market 
power, without resorting to coordinated behaviour. In that regard, the Horizontal 
Merger Guidelines consider not only the direct loss of competition between the 
merging firms, but also the reduction in competitive pressure on non -merging firms 
in the same market that could be brought about by the merger.122 
(93) The Horizontal Merger Guidelines  list a number of factors which may influence 
whether or not significant non -coordinated effects are likely to result from a merger, 
such as the large market shares of the merging firms, the fact that the merging firms 
are close competitors, the limited po ssibilities for customers to switch suppliers or 
the fact that the merger would eliminate an important competitive force.123 
Furthermore, in accordance with the Horizontal Merger Guidelines, a merger with a 
potential competitor can also have horizontal anti -competitive effects where the 
potential competitor constrains the behaviour of firms active in the market.124 Not all 
these factors need to be present for significant non -coordinated effects to be likely. 
The list of factors is also not an exhaustive list.  
7. COMPETITIVE ASSESSMEN T: HORIZONTAL  NON-COORDINATED EFFECTS  
(94) The Transaction has been notified to the Commission on 11 November 2020. At the 
time of notification of the Transaction, another transaction partially affecting the 
same markets had already been no tified to the Commission.  
(95) The Commission notes, in that regard, that in assessing the competitive effects of a 
proposed transaction under the Merger Regulation, it needs to compare the 
competitive conditions that would result from the notified concentrati on with those 
that would have prevailed in the absence of the concentration. As a general rule, the 
competitive conditions prevailing at the time of notification constitute the relevant 
framework for evaluating the effects of a transaction. In some circums tances, 
                                                 
121  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings (‘ Horizontal Merger Guidelines ’), OJ C 31, 05.02, 2014.    
122  Horizontal Merger Guidelines, paragrap h 24.  
123  Horizontal Merger Guidelines, paragraph s 26 ‒ 38. 
124  Horizontal Merger Guidelines, paragraph 59.  
 
 
23 however, the Commission may take into account future changes to the market that 
can be reasonably predicted.125  
(96) Based on those principles, the principle of equal treatment and the provisions of the 
Merger Regulation, notably Article 6(1) thereof, th e Commission has consistently 
taken the view126 that, in cases of parallel investigations into concentrations affecting 
the same relevant markets, the first transaction to be notified (‘the first transaction ’) 
should be assessed on its own merits and on the basis of the market structure 
prevailing at the time of that notification. The second transaction to be notified (‘the 
second transaction’) should, conversely, be assessed on the basis of the market 
structure resulting from the likely implementation of the  first transaction.  
(97) On 12 November 2019, that is before the notification of the Transaction, Hyundai 
Heavy Industries Holding (‘ HHI’) notified the Commission of its intention to 
acquire within the meaning of Article 3(1)(b) of the Merger Regulation a major ity 
interest in Daewoo Shipbuilding & Marine Engineering Co., Ltd. ( ‘DSME ’) (Case 
M.9343 ).127 The HHI/DSME  transaction partially affects the same markets as the 
Transaction assessed in the present decision, notably as regards container ships .  
(98) Therefore, given the circumstances in this case, the Transaction (which is thus ‘the 
second transaction’) should be assessed taking into account the HHI/DMSE  
transaction notified on 4 June 2018  (which is ‘the first transaction’) . The starting 
point for the  Commission's assessment of the Transaction is therefore a likely market 
structure where the Parties ’ competitors HHI and DMSE  would be treated as a single 
entity . 
7.1. Notifying Parties’ arguments  
(99) The Notifying Parties submit that the Transaction does not sign ificantly impede 
effective competition in any shipbuilding markets.128 In particular, the Notifying 
Parties argue that the Transaction does not eliminate important competitive 
constraints and does not confer  market power to Imabari Shipbuilding  and JMU  
enabl ing them in particular to increase price s.129 
(100)  The Notifying Parties submit that the Parties’ combined shares are below 20% in all 
main ship categories worldwide in the period 2015 -2019. In addition, the Notifying 
Parties submit that there are many competitor s remaining in each category. 
According to the Notifying Parties, the ir combined market shares only exceed 30% if 
two sub -categories are considered, namely (i) the bulk carrier sub-category 
Newcastlemax (DWC 180 -190kt); and (ii) the container ship sub -category Neo 
Panamax (TEU 12 -14 999). However, the Notifying Parties submit that these 
segments do not constitute separate markets.  
                                                 
125   Horizontal  Merger Guidelines, paragraph 9.  
126   See for example, Case M. 6214 ‒ Seagate/HDD Business of Samsung,  and Case M. 6203 ‒ Western 
Digital/Viviti Technologies ; Case M. 4942 ‒ Nokia/Navteq , and Case  M. 4854 ‒ TomTom/Tele Atlas ; 
Case M. 4601  ‒ Karstadtquelle/My Travel , and Case M. 4600 ‒ TUI/First Choice . 
127   OJ C 392, 19.11.2019, p. 11 .  
128  Form CO, paragraph 130.  
129  Form CO, paragraph  131. 
 
 
24 (101)  The Notifying Parties submit that the Parties’ ships are not closer substitutes than the 
ships of other competitors. In this reg ard, the Parties argue that the ships of Imabari 
Shipbuilding, JMU and its competitors are basically similar, with their differences 
arising from specific customer demands . 
(102)  The Notifying Parties submit that switching costs are very low and do not play an 
important role for customers when changing from one shipbuilder to another. Each 
ship is a single project and when new ships are needed , the customer requests quotes 
from several shipbuilders, defining the specifications for each project. The customer 
then compares the prices, performance, and delivery dates offered by each 
shipbuilder to select the shipbuilder who offers the best deal. Thus, customers can 
easily switch to another shipbuilder without spending much time or expense. The 
customers’ fleets usual ly include ships built by multiple shipyards.  
(103)  The Notifying Parties state that competitors are able to increase supply if prices 
increase, as competitors have sufficient capacity. The Notifying Parties explain that 
shipbuilders generally  build various type s of vessels and switch between the 
production of these categories  regularly. Once a ship -builder possesses the 
technology and necessary know -how to build  a specific type of ship and there are no 
physical limitat ions regarding its yards for the building of  ships of certain sizes, it 
can quite easily adjust its production according to market  need.  
(104)  The Notifying Parties submit that Imabari Shipbuilding and JMU will not be able to 
hinder expansion by competitors . There are no indications that Imabari Shipbuil ding 
and JMU will be able to or have the incentive to make the expansion of smaller firms 
and potential competitors more difficult or otherwise restrict the ability of 
competitors to compete. IS and JMU do not have particular influence on the supply 
of inp uts or distribution possibilities. The shipbuilding markets are also no t markets 
where interoperability between different infrastructures or platforms is important.  
(105)  Lastly, the Notifying Parties submit that the Transaction will not entail the 
elimination o f an important competitive force. In this regard, the Notifying Parties 
explain that neither  Imabari Shipbuilding nor JMU have more influence on the 
competitive process than their market shares would suggest. None of both recently 
entered the market nor ar e IS and JMU particularly important innovators. All 
shipbuilding companies are currently conducting research and development on 
environmentally friendly ships to more or less the same degree . 
7.2. Construction and supply of c ontainer  ships  
(106)  Both Parties are active in the construction and supply  of container ships. While 
Imabari Shipbuilding is active in a number of categories of containerships, JMU’s 
activities in recent years have been almost exclusively focused on Neo -Panamax 12 -
14 999 TEU ships.  
(107)  The Notifying Parties submit that in relation to container ships, potential  affected  
market s only arise with respect to the category of Neo -Panama x 12 -14 999 TEU 
container ships and with respect to container ships >7  999 TEU. The la tter would 
howeve r only be affected if considering 2017 -2019 market shares ( [20-30]% 
combined share in CGT and [20-30]% combined share in number of ships).  


 
 
27 7.2.3.  Sufficient alternatives for customers  
(113)  It appears that pos t-Transaction, customers will continue to have access to a number 
of alternative suppliers of container ships, including Neo -Panamax 12 -14 999 TEU 
ships. Considering the 2015 -2019 market shares in Neo -Panamax 12 -14 999 TEU 
container ships, i n particular Hyundai Heavy Industries, CSSC , Samsung Heavy 
Industries and CSBC Corporation will remain as  established shipbuilding companies 
with track records also in constructing large container ships  including Neo -Panamax 
12-14 999 TEU ships .  
(114)  Information on the current order books  by shipbuilders submitted by the Notifying 
Parties and based on Clarkson s data further shows that customers are also likely to 
have access to alternatives in the future.135 The Clarksons data show that JMU 
currently [...] Neo-Panamax 12 -14 999 TEU ship under construction. While Imabari 
Shipbuilding has [...]  such container ships on its order books , Hyundai ( [...]), 
Samsung ( [...]) and Yangzijiang Shipbuilding ( [...]) all have more currently on their 
order books . It wo uld thus appear that the Merged Entity’s market share based on 
delivery dates is likely to decrease in coming years . 
(115)  Customers responding to the market investigation confirm that they would still have 
access to sufficient alternative shipbuilders to turn t o for ordering container ships 
(including Neo -Panamax 12 -14 999 TEU ships) after the Transaction. Specifically 
asked whether if faced with a 5 -10% price increase by the Merged Entity post -
Transaction they would have sufficient alternatives, a large majorit y of customers 
expressing their opinion submit that both for container ships overall and for Neo -
Panamax 12 -14 999 container ships this would be the case.136 
(116)  This is further confirmed by the circumstance that no responding customer considers 
that their likely reaction to a 5 -10% price increase by the Merged Entity would be to 
absorb that price increase. A majority of customers providing substantive answers 
submit that their likely reaction to such a price increase by the Merged Entity would 
be to switch to another supplier of container ships.137 A customer in this context 
explains that a ‘ 5-10% price increase is important and might create an overcost for 
the shipowner and, in the end, the containership price will not be competitive 
enough compared to other shipyards ’.138 Another customer submits that it is ‘ able to 
find other good container builder in not only Japan but also in Korea/China ’.139 Yet 
another customer ponders ‘ why need to place an order with the higher price ? we 
have Korean/Chinese yards instead ’.140 This further confirms that customers have 
effective access to alternative shipbuilders of container ships.  
(117)  Customers who in the past may have bought Neo -Panamax 12 -14 999 TEU 
container ships from either of the Parties will in the future likely not face a ny 
significant barriers to ordering Neo -Panamax 12 -14 999 TEU container ships from a 
competing shipbuilder instead. The project -driven demand characteristic for the 
industry means that customers can easily and without any significant costs opt for 
                                                 
135  Form CO, Annex 7.1.2  ‒ (30).  
136  Q1 – Questionnaire to customers, replies to question C.C.A.4.  
137  Q1 – Questionnaire to customers, replies to question C.C.B.3.  
138  Q1 – Questionnaire to customers, reply to questi on C.C.B.3.1.  
139  Q1 – Questionnaire to customers, reply to question C.C.B.3.1.  
140  Q1 – Questionnaire to customers, reply to question C.C.B.3.1.  
 
 
28 any of t he shipbuilders which responds to a tender for a new Neo -Panamax 12 -14 
999 TEU container ship that meet the criteria of the customer (e.g. price, delivery 
time).  
(118)  Large majorities of customers and competitors expressing their opinion submit that 
no new ship builders not previously active in container ships have entered since 
2015.141   
(119)  Barriers to entry appear to be particularly pronounced with respect to large container 
ships, such as Neo -Panamax (including 12 -14 999 TEU) and Post -Panamax ships.142 
Customers confirm this : a large majority of customers expressing their opinion state 
that they would not order large container ships from a shipbuilder with experience in 
building only smaller container ships.143 As described in 5.1.1.2(C) , the main 
limitations hindering certain container shipbuilders to manufacture and supply large 
container ships , such as Neo -Panamax and Post -Panamax ships, are dock size, 
experie nce and know -how. 
(120)  Fewer barriers however likely exist between large container ship categories. This is 
evidenced by almost all shipbuilders active in Neo -Panamax 12 -14 999 TEU ships144 
also being considered capable to manufacture Post -Panamax ships , at least  in the 
opinion of some customers.145 Additionally , shipbuilders currently active in Post -
Panamax ships , but not in Neo -Panamax 12 -14 999 TEU ships , are likely also 
capable to enter the construction and supply of Neo -Panamax 12 -14 999 TEU ships 
relatively ea sily and without the need for any significant investments.  The fact that 
market participants describe a number of shipbuilders as capable to build the largest 
type of container ships currently available on the market (i.e. the largest versions of 
Post-Pana max ships), underlines that a number of strong competitors with 
capabilities for the construction of very large container ships will remain post -
Transaction. These competitors would likely also be able to construct the category of 
container ship below in s ize to Post -Panamax, i.e. Neo -Panamax 12 -14 999 TEU. 
The shipbuilders listed most often as capable to construct the largest container ships 
available on the market include CSSC, CSIC, COSCO, Hyundai - Daewoo, Samsung, 
Imabari Shipbuilding and JMU. Some resp ondents also deem Hanjin Heavy 
Industries or Kawasaki Heavy Industries as capable.146 Therefore, a larger number of 
shipbuilders is likely capable of constructing Neo -Panamax 12 -14 999 TEU ships 
(and to participate in tenders) than evidenced by the 2015 -2019 market shares.  These 
shipbuilders often also have a track record in Neo -Panamax 12 -14 999 TEU ships, 
but simply have not built any  ships of this category  over the last five years (as is for 
example the case for Daewoo and COSCO ).147 In case the Merged Entity were to 
increase its prices for Neo -Panamax 12 -14 999 TEU ships post -Transaction,  these 
shipbuilders may find it economically attractive to (re-)enter the manufacturing of 
this category of container ships.  
                                                 
141  Q1 – Questionnaire to customers, replies to question C.C.C.1., and Q2 – Questionnaire to 
competitors, repl ies to question C.C.C.4.  
142  Q2 – Questionnaire to competitors, replies to question C.C.C.3.  
143  Q1 – Questionnaire to customers, replies to question C.C.C.3.  
144  Form CO, Annex 7.1.2  ‒ (1). 
145  Q1 – Questionnaire to customers, replies to question B.A.C.5.  
146  Q1 – Questionnaire to customers, replies to question B.A.C.4., and Q2 – Questionnaire to 
competitors, replies to question B.A.C.4.  
147   See Form CO, Annex 7.1.2 ‒ (26).  
 
 
29 (121)  Therefore, while barriers are likely significant when considering entry into the 
construction and supply of container ships overall , as well as when considering a 
potentia l diversification of builder s of smaller container ships into larger container 
ships, barriers are less relevant when considering a distinction between different 
large categories of container ships, e.g. Neo -Panamax 12-14 999 TEU and Post -
Panamax ships. This further suggests that customers of Neo -Panamax 12 -14 999 
TEU ships have access to a number of capable alternative shipbuilders.  
(122)  Overall, t herefore, customers of container ships in general and of Neo-Panamax 12 -
14 999 TEU container ships in particular , will continue to have effective access to a 
number of established alternative shipbuilders  post-Transaction .   
7.2.4.  Overall impact  
(123)  Large m ajorities of customers and competitors responding to the market 
investigation do not expect the Transaction to have a negative  effect on price, 
quality, capacity , the availability of slots at shipyards , and innovation .148  
(124)  Four customers responding to the ma rket investigation indicate that they have in the 
past bought Neo -Panamax 12 -14 999 TEU container ships from either of the Parties.  
Neither of them expects a negative development as a consequence of the Transaction 
with respect to the parameters of price, innovation, quality and availability of slots at 
shipyards , while only one expects a decrease in capacity.149 It therefore appears that 
with respect to the affected potential market of Neo -Panamax 1 2-14 999 TEU 
container ships, customers with a record of ord ering such ships with the Parties do 
not expect the Transaction to have a negative impact on them or on competition.  
7.2.5.  Conclusion  
(125)  In light of the considerations in this Section 7.2, the Commission concludes that in 
the potential worldwide market for  the construction and supply of  container ships, as 
well as in all possible segments, in particular the Neo-Panamax 12 -14 999 TEU 
container ships , the Transaction does not raise serious doubts as to its compatibility 
with the internal market due to horizontal non -coordinated effects . This is because (i) 
the Parties ’ market shares are moderate; (ii) they  are not particularly clo se 
competitors ; (iii) customers have effective access to a number of established  
alternative shipbuilders ; and ( iv) a large majority of market participants has indicated 
that the Transaction would have no negative impact on price, quality , capacity, and 
innovation.  
7.3. Construction and supply of b ulk carriers  
(126)  The Transaction gives rise to horizontally affected markets in the overall market for 
bulk carriers, as well as in several potential sub -segments , namely in Handysize, 
Handymax, Capesize ,150 Newcastlemax and Setouchmax.  
                                                 
148  Q1 – Questionnaire to customers, replies to question D.3., and Q2 – Questionnaire to competitors, 
replies to question D.3.  
149  Q1 – Questionnaire to customers, replies to questions A.2.1., A.2.2., B.A.C.5. and D.3.  
150  The Notifying Parties submit that there is no overlap between Imabari Shipbuilding and JMU in ‘mini 
Cape bulk carriers’ wit h a DW T 100 000 -120 000 (Response to Post -Notification RFI 1, question 2). 
 



 
 
33 Imabari for bulk carriers in terms of quality , innovation and shipyard capabilities.153 
The response s from competitors in this regard were  inconclusive.154 
(134)  A clear majority of the c ustomers  that responded to the market investigation  
moreover indicated that Imabari is the overall closest competitor to JMU with 
respect to bulk carriers, followed by Tsuneishi and Oshima.155 When asked to rank 
the closest competitors to JM U based on a number of parameters, a clear majority of 
customers indicated that Imabari is the closest competitor to JMU for bulk carriers in 
terms of innovation and shipyard capabilities.156 In terms of price and quality, the 
responses of customers were mix ed between those who indicated Imabari and those 
who indicated Oshima.157 The responses from competitors in this regard were 
inconclusive.158 
7.3.3.  Sufficient alternatives for customers  
(135)  At the outset, it appears that the bulk carriers industry is characterised by ce rtain 
barriers to entry. In this sense, a majority of those customers and competitors that 
responded in the market investigation indicated that no shipbuilders not previously 
active in bulk carriers had entered the supply of bulk carriers since 2015.159 As o ne 
customer points out, the general trend instead appears to be ‘to exit the shipbuilding 
business due to substantial decrease of new vessel ordering’ .160 Moreover, a 
majority of customers also indicated that they would not order large bulk carriers 
from a s hipbuilder with experience in building only smaller bulk carriers.161 Several 
of these customers submitted in this regard that experience and a track -record in 
building large bulk carriers are important factors.162 
(136)  Information on the current order  books  of shipbuilders submitted by the Notifying 
Parties and based on Clarkson s data nevertheless indicates  that customers are likely 
to have access to sufficient alternative shipbuilders  in the future  across all potential 
sub-segments of bulk carriers .163 In partic ular for Newcastlemax bulk carriers, the 
order  books show that Imabari has […] vessels of this size under construction, while 
JMU has […].164 In comparison, CSSC (under Shanghai Waigaoqiao), CSI (under 
Beihai Shipyard) and Hyundai Heavy Industries  + Daewoo  have each […] 
Newcastlemax bulk carriers under construction, while Namura Shipbuilding and 
Yangzijiang Shipbuilding have […] each.165 In the case of Setouchmax bulk carriers, 
the order books show that Imabari has […] vessels of this size under construction , 
                                                 
153  Q1 – Questionnaire to customers, replies to question C.B.A.1.  
154  Q2 – Questionnaire to competitors, replies to question C.B.A.1.  
155  Q1 – Questionnaire to customer s, replies to question C.B.A.2.  
156  Q1 – Questionnaire to customers, replies to question C.B.A.2.  
157  Q1 – Questionnaire to customers, replies to question C.B.A.2.  
158  Q2 – Questionnaire to competitors, replies to question C.B.A.2.  
159  Q1 – Questionnaire to customers, replies to question C.B.C.1 , and Q2 – Questionnaire to competitors, 
replies to question C.B.C.4.  
160  Q1 – Questionnaire to customers, reply to question C.B.C.1.1.  
161   Q1 – Questionnaire to customers, replies to question C.B.C.3.  
162   Q1 – Question naire to customers, replies to question C.B.C.3.1.  
163  Form CO, Annexes 7.1.2  ‒ (9) for overall bulk carriers, 7.1.2  ‒ (19) for Capesize, 7.1.2  ‒ (20) for 
Panamax, 7.1.2  ‒ (21) for Handymax and 7.1.2  ‒ (22) for Handysize.  
164  Form CO, Annex 7.1.2 -(19).  
165  Form CO, Annex 7.1.2 -(19).  
 
 
34 while JMU has […]. In comparison, CSSC ( under Shangai Waigaoqiao) has […], 
Jiangsu  Hantong has […], COSCO has […], CSIC (under Beihai  and Bohai  
shipyard s) has […], and New Times Shipbuilding has […].166 
(137)  The information derived from the order  books  of shipbuilders is consistent with the 
feedback that market participants have expressed in the market investigation. An 
overwhelming majority of those customers who responded to the market 
investigation indicated that, in case of a 5 -10% price increase by Imabari and JMU 
after the Transaction, they would have sufficient alternative shipbuilders to turn into 
for all possible sub -segments of bulk carriers  and specifically  for small, Handysize, 
Handymax, Panamax (DWT 65 000 - <80 000) , Panamax (DWT 80 000 - <100 
000), Capesize, Newcastlemax and Setouchmax.167 In particular , several customers 
indicated that there would remain sufficient alternative Japanese shipbuilders 
following the Transaction for all these different categories of bulk carriers.168 In this 
regard,  some customers indicated that ‘[t]here are multiple alternative Japanese 
shipbuilders for each categories above even after the combination of Imabari and 
JMU’  or that customers currently ‘have many choice [s] for shipyard, not only Japan, 
but also other countries’ .169 In particular, s ome respondents indicated that Namura, 
Oshima, Tsuneishi, Kawasaki or Mitsui have shipyards in Japan that can build bulk 
carriers from  each category.170 Another customer expressed the re is no a particular 
type of bulk carrier that only Japanese shipbuilders are able to build.171 For all, a 
customer indicated ‘absolutely YES. [N]umerous builders in the same segments’ . 
(138)  This perception of sufficient alternative shipbuilders may also be obse rved by the 
fact that a  majority of those customers that responded to the market investigation 
indicated that, in a scenario where the price of bulk carriers would increase by 5-
10%, their likely reaction would be to switch to another supplier.172 In this re gard, 
several customers indicated that they would have alternative shipbuilders from 
Japan, China or Korea. A  customer  indicated in this sense that ‘[s]ince there are 
multiple shipyards, including China, that can build vessel that do not differ 
significant ly in performance, we will select other shipyard with a low price’ .173 
7.3.4.  Overall impact  
(139)  A large majority of the customers and competitors that responded to the market 
investigation expect that the Transaction will not change price, quality , capacity , 
innovatio n or the availability of slots at shipyards in the bulk carrier industry.174 A 
number of these respondents also indicated that the Transaction could potentially  
                                                 
166  Form CO, Annex 7.1.2 -(19).  
167  Q1 – Questionnaire to customers, replies to question C.B.A.4.  
168  Q1 – Questionnaire to customers, replies to question C.B.A.4.2.  
169  Q1 – Questionnaire to customers, replies to question s C.B.A.4.1 an d C.B.A.4.2.  
170  Q1 – Questionnaire to customers, replies to question C.B.A.4.2.  
171   Non-confidential minutes of a conference call with a customer of 29 October 2020, paragraph 24.  
172  Q1 – Questionnaire to customers, replies to question C.B.B.3.  
173  Q1 – Questionnaire to customers, reply to question C.B.B.3.1.  
174  Q1 – Questionnaire to customers, replies to question D.2 , and Q2 – Questionnaire to competitors, 
replies to question D.2.  
 
 
35 bring a positive change in these parameters of competition, i.e., a reduction in price 
and an increase in both quality and capacity ,175 as well as innovation.176  
7.3.5.  Conclusion  
(140)  In light of the considerations in paragraphs (127)  to (139)  above, the Commission 
concludes that in the worldwide market for bulk carriers  overall , as well as in the 
potential sub -segments for Handysize, Handymax, Capesize, Newcastlemax a nd 
Setouchmax  bulk carriers , the Transaction does not raise serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement due 
to horizontal non -coordinated effects given that (i) the combined entity would only 
have  modest market shares and would continue facing  competition from several 
shipbuilders; (ii) customers have overwhelmingly confirmed that they would have 
sufficient alternative suppliers for all potential sub -segments of bulk carriers; and 
(iii) a large maj ority of market participants has indicated that the Transaction would 
have no impact on price, quality or capacity.  
7.4. Construction and supply of PCTCs  
7.4.1.  Market shares  
(141)  The market for the construction and supply of PCTCs would be affected only if a 
separate product market for PCTCs above 6  000 cars is considered.  
(142)  According to dat a provided by the Notifying Parties , as set out in Table 7 below, the 
combined share of the Merged Entity in the potential market for PCTCs above 6  000 
cars would remain modest at [20-30]% based on number of ships delivered or CGT 
over the 2015 -2019 period.177 Hyundai would remain market leader based on both 
number of ships and CGT wit h [30-40]%. The Merged Entity would also continue to 
face competition by Shin Kurushima ( [10-20]% on both number of ships and CGT), 
China Merchants (between [5-10]%  and [10-20]%) and Fujian Shipbuilding ( [5-
10]% on both number of ships and CGT).  
                                                 
175  Q1 – Questionnaire to customers, replies to question D.2 , and Q2 – Questi onnaire to competitors, 
replies to question D.2.  
176  Q1 – Questionnaire to customers, replies to question D.2 , and Q2 – Questionnaire to competitors, 
replies to question D.2.  
177  Reply to post -notification request for information RFI 1, [Annex 1, question 1] .  

 
 
37 7.4.4.  Overall impact  
(146)  A large majority of market participants  that responded to the market investigation do 
not expect the Transaction to have a negative effect  (in terms of price, innovation, 
quality, capacity and availability of slots at shipyards)  on the market for PC TCs.185 
Moreover , the outcome of the market investigation revealed that there  will remain at 
least two other players in Japan active in large PCTCs, including one (Shin 
Kurushima) that is twice as big as JMU in the construction and supply of  PCTC 
above 6 000  cars.  
7.4.5.  Conclusion  
(147)  In light of the considerations in this Section 7.4, the Commission concludes that in 
the potential worldwide market for the construction and supply of PCTCs , including 
the possible segment of PCTCs above 6 000 cars , the Transaction does not raise 
serious doubts as to its compatibility with the internal market due to horizontal non -
coordinated effects. This is because (i) the Parties ’ market shares are moderate; (ii) 
they are not particularly close competitors; (i ii) customers have effecti ve access to a 
number of established  alternative shipbuilders ; and (i v) a large majority of market 
participants has indicated that the Transaction would have no negative impact on 
price, quality, capacity and innovation . 
8. CONCLUSION  
(148)  For the above reasons, t he 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 Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President  
                                                 
185  Q1 – Questionnaire to customers, replies to question D.4 , and Q2 – Questionnaire to competitors, 
replies to question D.4.