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, 7.12.2018  
C(2018 ) 8649 final  
PUBLIC VERSION  
 
To the notifying party  
Subject : Case  M.8832 - Knauf /Armstrong  
Commission decision pursuant to Article 6(1)(b) in conjunction with 
Article 6(2)  of Council 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 Regulation '). With effect from 1 December 2009,  the Treaty on 
the Functioning of the European Union ( 'TFEU ') has introduced certain changes, such as the 
replacement of 'Community ' by 'Union ' and 'common market ' by 'internal market '. The terminology of 
the TFEU will be used throughout this decision.  
2  OJ L  1, 3.1.1994, p. 3 (the 'EEA Agreement').  
In the publi shed 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 poss ible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
2 TABLE OF CONTENTS  
1. THE PARTIES  ................................ ................................ ................................ ............  4 
2. THE OPERATION AND TH E CONCENTRATION  ................................ ................  4 
3. EU DIMENSION  ................................ ................................ ................................ ........  4 
4. PROCEDURE  ................................ ................................ ................................ .............  5 
5. RELEVANT MARKETS  ................................ ................................ ............................  5 
5.1. Introduction  ................................ ................................ ................................ ....... 5 
5.2. Product market definition  ................................ ................................ ..................  7 
5.2.1.  Fixed, modular and open suspende d ceilings  ................................ ...... 7 
5.2.2.  Tiles and grids for modular suspended ceilings  ................................ .. 9 
5.2.3.  Tiles for modular suspended ceilings made of different materials  .... 10 
5.3. Geographic market de finition  ................................ ................................ ..........  12 
5.3.1.  Parties’ view  ................................ ................................ ......................  12 
5.3.2.  The Commission’s assessment for suspended ceiling tiles  ...............  13 
5.3.3.  The Commission’s assessment for grids for suspended ceilings  ....... 21 
6. COMPETITIVE ASSESSME NT OF THE HORIZONTAL  OVERLAPS  ..............  27 
6.1. Analytical framework  ................................ ................................ ......................  27 
6.2. Horizontal non -coordinated effects  ................................ ................................ . 27 
6.3. Aspects common to the assessment of all five mineral fibre tiles markets 
under review  ................................ ................................ ................................ .... 28 
6.4. Aspects common to the assessment of all five grids markets under review  ... 31 
6.5. Competitive assessment of m ineral fibre tiles and grids by national 
market  ................................ ................................ ................................ ..............  32 
6.5.1.  Austria  ................................ ................................ ...............................  32 
6.5.2.  Lithuania  ................................ ................................ ............................  35 
6.5.3.  Spain  ................................ ................................ ................................ .. 39 
6.5.4.  UK ................................ ................................ ................................ ..... 41 
6.5.5.  Germany  ................................ ................................ ............................  44 
6.6. Competitive assessment of the overlaps in tiles made from other 
materials (metal, gypsum, wood)  ................................ ................................ .... 47 
7. COMPETITIVE ASSESSME NT OF THE VERTICAL L INKS  .............................  49 
7.1. Analytical framework – Vertical unilateral effects  ................................ .........  49 
7.2. Competitive Assessment  ................................ ................................ .................  50 
8. PROPOSED REMEDIES ................................ ................................ ..........................  50 
8.1. Legal framework  ................................ ................................ .............................  51 
 
3 8.2. Initial Commitments  ................................ ................................ ........................  52 
8.3. The Commission's market test  ................................ ................................ .........  54 
8.3.1.  Geographic footprint  ................................ ................................ .........  54 
8.3.2.  Product portfolio  ................................ ................................ ................  55 
8.3.3.  R&D capabilities  ................................ ................................ ...............  55 
8.3.4.  Potential purchasers  ................................ ................................ ...........  55 
8.4. Final Commitments submitted by Knauf  ................................ ........................  56 
8.4.1.  Description of the Final Commitments  ................................ .............  56 
8.4.2.  Assessment of the proposed remedies  ................................ ...............  57 
9. CONCLUSION  ................................ ................................ ................................ .........  58 
  
 
4 Dear Sir or Madam,  
(1) On 17 October 2018, the European  Commission received notification of a proposed 
concentration pursuant to Arti cle 4 of the Merger Regulation by which Knauf 
International GmbH ( 'Knauf ') would acquire within the meaning of Article  3(1)(b) of 
the Merger Regulation all of the shares in (i) the subsidiaries of Armstrong World 
Industries, Inc. in Europe, the Middle East  and Africa ( 'EMEA '), and Asia Pacific 
('APAC '), and (ii) certain  subsidiaries of Armstrong World Industries' 50/50 joint 
venture with Worthington Industries ('WAVE JV ') with operations in EMEA and 
APAC (together 'Armstrong ', or the 'Target ') (the 'Transac tion').3 Knauf  and 
Armstrong  are designated hereinafter as the 'Parties '. The Transaction was initially 
notified to the Commission on 20 June 2018 and subsequently withdrawn on 
24 July 2018.  
(2) The Transaction has been referred to the Commission by the Austr ian 
Bundeswettbewerbsbehörde  pursuant to Article 22(3) of the Merger Regulation  
(the 'Referral Request') . The Referral Request was subsequently joined by the 
national competition authorities of Germany, Lithuania, Spain , and the United 
Kingdom . 
1. THE PARTIES  
(3) Knauf  is a manufacturer of insulation materials, dry -lining systems, plasters, and 
other products . Knauf has approximately  27 500 employees worldwide.   
(4) Armstrong  designs and manufactures commercial and residential ceiling, wall and 
suspension system solut ions. Armstrong is the ceiling business of Armstrong World 
Industries, Inc. outside of the Americas  and has over 3  800 employees .  
2. THE OPERATI ON AND THE CONCENTRATION  
(5) The Parties entered into a binding Share Purchase Agreement (' SPA') on 
17 November 2017, amended and restated on 22 January 2018  and on 18 July 2018 , 
which set s out Knauf's intention to acquire all of the shares in and, therefore, sole 
control of Armstrong.  
(6) The Transaction  therefore constitutes a concentration within the meaning of  
Article  3(1)(b) of the Merger Regulation . 
3. EU DIMENSION  
(7) The undertakings concerned have a combined aggregate worldwi de turnover of 
ca. EUR […] (Knauf: EUR […]; Armstrong: EUR […]), but their turnover does not 
meet any of the other thresholds set out in Article 1 of  the Merger Regulation. As a 
result, the Transaction does not have an EU dimension within the meaning of Article 
1 of the Merger Regulation.  
                                                 
3  Publication in the Official Journal of the European Union No C 384, 24.10.2018, p. 10.  
 
5 (8) On 7 February 2018, the C ommission received the Referral Request  from the 
Austrian Bundeswettbewerbsbehörde on the bas is of Article 22 of the Merger 
Regulation . As mentioned, t he Referral R equest was joined by the national 
competition authorities of Germany, Lithuania, Spain , and the United Kingdom 
within the legal deadline. On 15 March 2018 , the Commission adopted five 
decisions p ursuant to Article 22(3) of the Merge r Regulation accepting the Referral 
Request.4 On this basis, the Commission acquired jurisdiction to examine the 
Transaction  with respect to the territories of Austria, Germany, Lithuania, Spain and 
the UK . 
4. PROCEDURE  
(9) Following the referral of the Transaction, t he Commission required Knauf to submit 
a notific ation pursuant to Article 4 of the Merger Regulation. On 20 June 2018,  the 
Commission received initial notification of the Transaction . Knauf  subsequently 
withdrew the notification on 24 July 2018 and then re-submitted it 
on 17 October  2018.  
(10) Following  a limited number of  initial phone calls  with market participants before 
notification of the Transaction  on 20 June 2018 , the Commission initiated a market 
investigation after that date . The Commission contact ed the Parties’ customers , 
distributors  and competitors  requesting information pursuant to Article  11 of the 
Merger Regulation through electronic questionnaires, telephone calls and written 
requests for info rmation.  The Commission also collected sales and capacity data 
from the Parties’ competitors. The Commission continued that market investigation 
after re -notification of the Transaction on 17 October 201 8. 
(11) In addition, the Commission also sent several writ ten requests for information to the 
Parties and reviewed internal documents of the Parties submitted during the phase I 
investigation.  
(12) Knauf submitted proposed remedies on 16 November 2018, formally revising them 
on 19  November  2018 and 23 November 2018. A fter the Commission gathered the 
views of market participants and informed Knauf of the outcome of its market test, 
Knauf submitted further rev ised commitments on 30  November  2018, and further 
amended those formally on 6 December 2018.  
5. RELEVANT MARKETS  
5.1. Introduction  
(13) The Transaction concerns the building materials sector  and in particular suspended 
ceilings.  The Transaction gives rise to  horizontally affected markets  in the 
production and sale of modular and open suspended ceilings . 
(14) The Transaction also gives  rise to vertical links regarding certain raw materials for 
suspended ceilings  (upstream) and suspended ceilings (downstream) . According to 
the Parties, these vertical links , while technically giving rise to vertically affected 
                                                 
4  C(2018) 1687 final, addressed to Austria; C(2018) 1684 final, addressed to Germany; C(2018) 1685 
final, addressed to Lith uania; C(2018) 1686 final addressed to Spain; C(2018) 1688 final, addressed to 
the United Kingdom.  
 
6 markets due to the Parties' combined market shares downstream,  are very limited in 
scope and entirely ancillary to their ceilings business . These vertical links  are further 
discussed in section 7 of this decision.  
(15) Suspended ceilings are systems  that are fixed to a framework or "grid" , which  is 
attached  to the main structure of a building  to create  a void between the  actual 
ceiling (the "soffit") and the suspended ceiling. This allows for  technical equipment  
such as cables and air -condition ing equipment  to be placed and concealed in 
between  the two layers .  
(16) There are three main types of s uspended ceilings: fixed, modular and open.  Modular 
and open suspended  ceilings , are predominantly installed in non -residential 
buildings , such as offices, schools, retail facilities, healthcare facilities, and leisure 
facilities, whereas fixed suspended ceilings are common in both the residential and 
the non -residential segments.  The main features of each type of suspended ceiling 
are described in Figure 1. 
Figure 1 – Examples of fixed, modular and open suspended ceilings  
FIXED  
 Fixed ceilings are comprised of plasterboards or other types of 
large tiles attached to a grid system using some form  of 
mechanical fixture  (e.g. clips,  screws  or nails ) or glue, with 
varying degrees of tile removability and grid visibility. Fixed 
suspended ceilings can provide access to the ceiling cavity by 
using either removable  tiles (e.g. tiles fixed with screws) or via 
access hatch es. Fixed ceilings are common in both residential 
and non -residential buildings . 
MODULAR  
 Modular ceilings are comprised of smaller tiles laid into a grid 
system from above and held up by the grid system without 
needing any permanent mechanical fixtures , therefore providing  
easy access to the technical equipment in the ceiling cavity by 
simply pushing up the tiles.  These ceilings are almost 
exclusively installed in non -residential buildings.  
OPEN  
 Open ceilings consist of a suspension and tiles, where t he soffit 
and any technical equipment  are only partially concealed by 
panels that are suspended within a grid system. These panels 
may have  many different forms and shapes, such as canopies, 
baffles and clouds.  
Source: Form CO , paras. 52 - 53, 59, 71  
(17) Wher eas all grids for suspended ceilings are made of metal, the t iles used for open 
and modular suspended ceilings are available in a variety of materials , mainly metal, 
mineral fibre , gypsum, and wood.   

 
7 (18) The end -customer, who is a building owner, typically doe s not decide which type of 
ceiling to install  and which material to choose. Instead , that decision is taken by a  
number of intermediate market participants who play a more or less decisive  role in 
the purchasing decision . For larger projects, where a tende r is typically organised, an 
architect  or a "specifier" will often identify the desired supplier and product  by 
naming a suspended ceiling manufacturer or even a specific  product  of a given 
manufacturer . The contractor, the distributor and the installer may also play a role  by 
advising to purchase ceilings  equivalent to those  specified . For smaller projects, 
standard products are usually purchased  off–the-shelf from a distributor  directly  by 
the contractor or the installer . 
5.2. Product market definition  
(19) In pre vious decisions,5 the Commission has considered a market for all ceiling 
solutions while leaving the precise product market definition open.  
(20) From a customer's perspective , distinctions can be drawn in the broader ceiling s 
market between (i) fixed, modular and open suspended ceiling s, (ii) tiles and grids 
for modular suspended ceilings, and (iii) tiles for modular suspended ceilings made 
of different materials. These are discussed separately in sections 5.2.1  to 5.2.3 . 
5.2.1.  Fixed, modular and open suspended ceilings  
5.2.1.1.  Parties’ view  
(21) The Parties are of the view that the relevant product market comprises at least  
modular suspended ceilings, including open suspended ceilings .6 The Parties 
consider that open suspended ceilings are a type of modular suspended ceilings , that 
suppliers can easily switch production between open and modular suspended ceilings 
and that the two  are highly substitutable in terms of end use  for customers . 
5.2.1.2.  Com mission’s assessment  
(22) The Commission finds  that, for the reasons outlined in paragraphs (23) to (27), 
modular and open suspended ceilings  do not belong to  the same  relevant product 
market as fixed suspended ceilings  while it can be left open whether modular 
suspended ceilings and open suspended ceilings belong to the same product market . 
(23) First, from a demand side perspective , the different types of ceiling s have different 
technical cha racteristics, performance, and price points.7 On average , and in terms of 
total costs of ownership , fixed suspended ceilings tend to be more expensive than 
modular suspended ceilings .8 As an example, Knauf estimates the price per m2 of a 
fixed suspended ce iling made of  plasterboard9 to be up to twice as high as the price 
per m2 of a standard modular suspended ceiling made of mineral fibre ,10 which is the 
predominantly  used material for modular suspended ceilings .11 Furthermore, tiles for 
                                                 
5  In particular Case M.3943 – Saint -Gobain/BPB , recital 37 et seq.  
6  Form CO, para. 75 et seq.  
7  Replies to questions 4.1 and 6 of Questionnaire 1 – Compe titors; Form CO, para. 70.  
8  Form CO, footnote 11.  
9 Plasterboard is the predominantly used material for fixed suspended ceilings, Form CO, para . 61. 
10  Form CO, footnote 11.  
11  Form CO,  M.8832, RFI#1 Confidential Annex 53 (updated) : In terms of volume, a pprox. 74% of all 
tiles for modular suspended ceilings (excluding open and fixed suspended ceilings) within the EEA 
 
 
8 fixed suspended ceilings, which are large board s, are produced in different 
production facilities than tiles for modular suspended ceilings, they offer a lower 
degree of flexibility of access to the ceiling cavity and have good acoustic 
performance even without any treatment .12 Moreover, if an open suspended ceiling 
in a given room were  to have the same acoustical performance as a modular 
suspended ceiling, it would on average be more expen sive by the factor of 
approx.  2-2.5.13 
(24) Second , while there appear to be some overlap s in te rms of the end use for the 
different type s of ceiling s; modular , fixed and open suspended ceilings  are more 
complements than alternative s to one another.14 Indeed, in the same construction 
project the different types of ceilings can be used to meet differen t needs  (e.g. in a 
hospital, the areas where patients are treated may require specific hygienic qualities, 
whereas acoustic qualities may be more important for the entrance hall) . In light of 
this, one distributor explained " [t]hese ceilings do not feature  on the same market 
and in general do not compete with each other ".15 [Strategic considerations  by 
Knauf in relation to open suspended ceilings] .16 
(25) Third , from a supply -side perspective, fixed suspended ceilings are produced 
through different processes than modular (or open) suspended ceilings. Moreover, 
the Parties submit  that it may be possible to switch production from modular 
suspended ceilings to open suspended ceilings. However, it is also submitted that  
open suspended ceilings  have higher manufacturing  costs .17 
(26) Fourth , Armstrong in  its internal documents [strategic considerations  by AWI in 
relation to open suspended ceilings] .18 In the same document, it is also stated that 
[strategic considerations  by AWI in relation to open suspended ceilings] .19  
(27) Fifth, with respect to open suspended ceilings, it can be left open whether this type 
of ceiling constitutes a separate relevant product market from modular suspended 
ceilings for the following reasons. First, the open suspended ceilings segment is 
much smaller t han that of modular suspended ceilings  representing around [5-10]% 
of demand for modular suspended ceilings  in the EEA .20 Second, its market structure 
is similar to that of modular suspended ceilings .21 Therefore, competition concerns 
arise irrespective of whether suspended modular ceilings and open suspended 
ceilings are assessed together or separately .  
                                                                                                                                                      
in 2017 are made of mineral fibre. In terms of value, mineral fibre tiles account for approx. 55% of all 
materials.  
12  Form CO, para. 61.  
13  Parties’ response to RFI 2.  
14  Minutes of  a conference call with a customer on 22 May 2018.  
15  Minutes of  a conference call with a customer on 22 May 2018.  
16  Knauf internal document [strategic considerations by Knauf in relation to open suspended ceilin gs]. 
17  Form CO, para. 70.  
18  Form CO, M.8832, Knauf Confidential Annex 5.4.26 , 26.  
19  Form CO, M.8832, Knauf Confidential Annex 5.4.26 , 32. 
20  Form CO,  M.8832, RFI#1 Confidential Annex 53 (updated) : The overall value of the market for 
suspended ceilings (including tiles and grids, but excluding fixed ceilings) in the EEA in 2017 was 
EUR […]. The value attributed to open suspended ceilings was EUR […], which corresponds to 
roughly [5-10]% of the overall value.  
21  Form CO, paras. 52 et seq, para. 237.  
 
9 (28) The Parties ’ activities do not overlap with respect to fixed ceilings except for de 
minimis  overlap in grids used in fixed ceilings  for which the Target hol ds an 
estimated share of less than [0-5]% in the UK, Spain, Lithuania and Austria and 
Germany .22 Therefore, this overlap will not be further  analysed in the present 
decision.  
5.2.1.3.  Conclusion  
(29) The Commission therefore considers that for the purposes of the present  decision , 
fixed suspended ceilings on the one hand and modular and open suspended ceilings  
on the other hand  constitute separate relevant product market s. 
(30) Further, for the purposes of the present decision , it is not necessary to conclude 
whether modular a nd open suspended ceilings fall into the same or separate relevant 
product markets , since the Transaction raises serious doubts under both of those 
plausible alternative market definitions.  
5.2.2.  Tiles and grids for modular suspended ceilings  
5.2.2.1.  Parties’ view  
(31) The P arties submit  that within modular suspended ceilings, tiles and grids  are part of 
the same relevant product market.23 From a supply -side perspective, the Parties 
submit that increased demand for sales of tiles together with grids of the same 
supplier (“syst em sales”)  has led almost all major suppliers to develop grid and tile 
production capabilities. In addition, the Parties consider that from a demand -side 
perspective customers often source ceiling solutions comprising grids and tiles from 
one supplier.24  
5.2.2.2.  Commission’s assessment  
(32) The Commission finds  that tiles and grids for modular suspended ceilings form two 
distinct product markets  for the following reasons . 
(33) First, as explained in paragraphs (15) to (17), tiles and grid s perform  very different  
functions  and are inherently different products . The majority of competitors that 
responded to the market investigation indicated that  in a significant  number of cases  
tiles and grids for modular suspended ceil ings are sourced from different suppliers . 
The Commission’s market investigation also provided indications that  the 
percentage of customers that seek separate quotes varies gr eatly depending on a 
particular  supplier. For example, the response of a competit or indicated that in 70% 
to 80% of instances  it supplies only grids or only tiles.25 This is also corroborated by 
the Parties ’ own data. Table 1 below demonstrates that  grids and tiles ar e often sold 
separately by the P arties themselves. Also, Table 1 shows that  the share of system 
sales  is very different  for Knauf and Armstrong.  
                                                 
22  Form CO, para. 66 . 
23  Form CO, para. 75 et seq.  
24  Form CO, paras. 77-91. 
25  Replies to question 8.1.3 of Questionnaire 1 – Competitors.  

 
11 characteristics can be achieved with different materials and that price differences do 
not justify the conclusion that tiles made of different materials belong to separate 
product markets.29 
5.2.3.2.  Commission’s assessment  
(39) The results of the Comm ission ’s market investigation demonstrate  that tiles made 
from different materials belong to different product markets, in particular that 
mineral fibre tiles , where the overlaps between the Parties’ activities are  most 
significant,  constitute a separate r elevant product market  for the reasons  set out in 
paragraphs (40) to (43). 
(40) First, there are differences between the materials in terms of technical  characteristics 
(such as acoustic qua lity, hygiene -related qualities and  fire resistance) , look and 
design . While technical characteristics can overlap among tiles made of different 
materials, as claimed by the Parties, the intrinsic qualities of each material make it 
more or less suited for specific appl ications. A majority of customers and 
competitors that participated in the market investigation indicated that the different 
materials are not perfect substitutes to one another.30 As one competitor explained 
"the performance of different materials are diff erent. For plasterboard it is mainly 
focused on sound insulation, the price is cheap.  For mineral fiber tile it is mainly 
focused on sound absorption e.g. acoustical performance ".31 Another competitor 
summarised as follows the differences among tiles made o f different materials 
"Mineral fibra: good absortion. bad higiene, medium Price. short live Metal: good 
absortion, good higiene, Medium Price, long live, easy to shape Wood: good 
absortins, needs treatments to be hygienic, high Price, for small surfaces ".32  
(41) Second , there are considerable price differences between tiles made from different 
materials, in particular  for the two largest material segments, i.e. mineral and metal,  
with some market participants indicating that metal tiles can be (significantly) mo re 
expensive than mineral fibre tiles.33 Moreover, the  majority of competitors that 
participated in the market investigation indicated that in case of 5 -10% price increase 
of modular ceiling tiles made from mineral fibre their customers would not change 
their purchasing prefere nces or would change them only partly.34 A majority of 
customers that participated in the market investigation confirmed the views 
expressed by competitors .35 Customers' preference for mineral fibre tiles appears to 
be mainly driven by t he fact that " acoustical performance of mineral fiber is much 
                                                 
29  Form CO, paras. 92 -115. 
30  Replies to  question 12 of Questionnaire 1 – Competitor s, replies to  question 1 4 of Questionnaire  2 – 
Customers (Germany and Austria), replies to question 14 of Questionnaire 3 – Customers (Baltics), 
replies to question 14 of Questionnaire 4 – Customers (Spain), repl ies to question 14 of Questionnaire 5 
– Customers (UK) and replies to question 14 of Questionnaire 6 – Customers other (EEA countries) .  
31  Repl ies to question 12.1 of Questionnaire 1 – Competitor s. 
32  Repl ies to question 12.1 of Questionnaire 1 – Competit ors. 
33  Minutes  of a conference call with a customer on 28 June 2018;   
Minutes of  a conference call with a competitor on 18 May 2018.  
34  Replies to question 14 of Questionnaire 1 – Competitor s. 
35  Replies to  question 16 of Questionnaire 2 – Customers (Ger many and Austria), replies to question  16 of 
Questionnaire 3 – Customers (Baltics), replies to question 16 of Questionnaire 4 – Customers (Spain), 
replies to question 16 of Questionnaire 5 – Customers (UK) and replies to question 16 of 
Questionnaire  6 – Customers other (EEA countries) .  
 
12 better than other materials " and " [b]ecause mineral fibre tiles are less expensive 
than the other materials ".36 
(42) Third , the Parties in their internal documents [information on how Knauf tracks the  
market] .37 For instance, when reporting on market developments  for its ceiling 
division , [information on how Knauf tracks the market] .38  
(43) Finally , the Commission's investigation showed  that mineral fibre tiles produced 
with the wet -felt and the soft -felt (also referred to as dry -felt) production methods 
compete with one another but that the products are differentiated and that wet -felt 
mineral fibre tiles may compete more closely with one another than with soft-felt 
mineral fibre tiles.39 As one competitor ex plained " [t]he dry -felt ceiling tile is closest 
to the wet -felt ceiling tile, although they are still used for rather different 
purposes ".40 The differences between the products and lack of perfect demand -side 
substitutability is also reflected in [strategi c considerations  by Knauf relating to wet -
felt and soft -felt mineral fibre tiles] .41 Moreover, Knauf discusses the differences 
between mineral fibre tiles produced by the wet -felt method and the soft -felt method 
in its internal documents and also points out  [strategic considerations  by Knauf 
relating to wet -felt and soft -felt mineral fibre tiles] .42 These aspects of  closeness of 
competition will be taken into account in the competitive assessment.  
5.2.3.3.  Conclusion  
(44) The Commission therefore considers that for the pur poses of the present decision , 
tiles for modular suspended ceilings made of different materials constitute separate 
relevant product markets . There are thus separate product markets f or (i)  tiles for 
modular suspended ceilings  made of mineral fibre  (assess ed in sections 6.3 and 6.5) , 
(ii) tiles for modular suspended ceilings made of gypsum (assessed in section 6.6), 
tiles for modular suspended ceilings made of metal (assessed in section 6.6) and tiles 
for modular suspended ceilings made of wood  (assessed in section 6.6). Within the 
product market of tiles for modular suspended ceilings made of mineral fibre, the 
differences between soft -felt an d wet -felt mineral fibre tiles , albeit not forming a 
separate  product market,  will be taken into account in assessing the closeness of 
competition between the products of the different mineral fibre competitors . 
5.3. Geographic market definition  
5.3.1.  Parties’ view  
(45) The Parties consider that the markets for suspended ceiling tiles and grids are 
national in scope  with the exception of two clusters  of countries, which  they claim 
                                                 
36  Replies to question 14.1 of Questionnaire 1 – Competitor s. 
37  Form CO, M.8832, Knauf Confidential Annex 5.4.26, p.12 (for Armstrong);   
Form CO, M.8832, Knauf Confidential Annex 5.4.16, p.1, (for Knauf).  
38  Knauf internal document [strategic considerations by Knauf relating to Central and Eastern Europe] . 
39  Replies to question 21 of Questionnaire 1 – Competitors.  
40  Minutes of  a conference call with a competitor on18  May 2018 . 
41  Knauf internal document "Business Report 30  Juni 2014" ( "Geschäftsbericht 30. Juni 2014"), page  24. 
42  Form CO, M.8832, Knauf Confidential Annex 5.4.19, p.16.   
Form CO, M.8832, Knauf Confidential Annex 5.4.9, p.30.  
 
13 constitute two regional markets  comprising of  (i) Austria and Germany , and 
(ii) Lithuania, La tvia and Estonia .43 
5.3.2.  The Commission’s assessment  for suspended ceiling tiles  
(46) The Commission’s market investigation and other evidence available to it suggests 
that the geographic market for tiles for modular suspended ceilings , and of mineral 
fibre tiles in particular which is the main tile market assessed in the present decision, 
is limited to each of the EEA countries for which the Commission has jurisdiction 
(Austria, Germany, Lithuania, Spain and the UK) for the reasons set out in 
paragraphs (47) to (76). 
(47) As regards supply -side considerations , the supply of tiles  in the EEA  is characterised 
by the producers having  a limited number of production plants in the EEA, from 
which they serve their customer s in the EEA. For instance, Knauf produces its 
mineral fibre tiles for the EEA in [Knauf’s mineral  fibre production plants in 
the EEA] . Armstrong has [AWI’s mineral fibre production plants in the  EEA] . The 
Parties’ competitors have a similarly centralized production in few EEA locations. 
Therefore, there may be a degree of supply -side substitution within the EEA, which , 
however, is limited by barriers to expand  the sale of tiles in the different EEA 
markets due to the significant differences in market struc ture from the demand side . 
Those differences from a demand -side perspective result in heterogeneous conditions 
of competition in each of the EEA countries under review, which can be 
distinguished from neighbouring EEA countries because the conditions of 
competition are appreciably different as,  set out in paragraphs (48) to (53).  
(48) First, the demand structure is fragmented and national with a large number of 
customers active in each of the EEA countri es that are generally not active in more 
than one or at most a few EEA countries .  
(49) Second , the average prices for tiles are generally different in different Member 
States.  For example, the Parties indicate that the  average  price  for mineral fibre tiles  
is EUR/m2 […] in Austria, EUR/m2 […] in Germany, EUR/m2 […] in Lithuania,  
EUR/m2 […] in Spain and EUR/m2 […] in the UK .44 The Commission’s market 
reconstruction indicates that the Parties appear to  have underestimated those price 
differences and that they are actually larger .45 Therefore,  significant price differences 
can be observed between the five EEA countries  under consideration.  Those 
different prices may be caused by different prices charged for similar products 
depending on the country in question or by different product mixes sold in  the 
different countries. Both suggest that diverging competitive conditions exist between 
the analysed EEA countries.  
                                                 
43  Form CO, paras. 122 -129. 
44  Form CO, M.8832, RFI#2 Confidential Annex 23.1.  
45  The Commission carried out a market reconstruction in order to verify the figures provided by the 
Notifying Party for the EEA countries for which the Commission has jurisdiction. In addition to 
capacity data, the Commission's market reconstruction collected  sales data in volume and value from 
the Parties and their largest mineral fibre tile competitors , allowing the Commission to calculate 
average sales prices per competitor and per EEA country . 
 
14 (50) Third , a local presence and  local  reputation are important for a suspended ceilings 
supplier to win sales  in a given EEA country .46 The reason is that different, and very 
often local, market participants decide about the manufacturer  of suspended ceilings 
to be installed in a building project, mainly architects, contractor s, distributor s and 
the installer s.47 One market participant explained its strong market position in one 
EEA country by its well-functioning  sales team that sufficiently covers all regions of 
this country. For another EEA country where this market participant  is less strong 
and employs only one  sales representative, this market participant explained that his 
sales representative "cannot address all relevant players in the same manner as 
his/her colleagues ".48 
(51) Fourth , brands play a role in the sale of tiles and grids for suspended ceilings and 
customers have different preferences for different brands across EEA countries. This 
is reflected in internal documents of Knauf, [strategic considerations  by Knauf 
relating to the Armstrong brand].49,50 Another example of brand importance is 
provided by one ma rket participant from Lithuania , who  explained that in Lithuania, 
the brand " Armstrong" is used as the generic name for suspended ceilings , albeit 
other suppliers are present in the market .51  
(52) Fifth , [information on how the Parties track the market, in part icular strategic 
considerations by Knauf on the markets in Germany and the UK] .52,53 
(53) Sixth , customers, who expressed their opinion  in the course of the Commission’s 
market investigation , would switch to alternative suppliers outside of their country 
only whe n the prices for mineral fibre tiles increase significantly.54  
(54) Seventh , the significant differences between the market shares of the Parties and 
their competitors  in the different EEA countries confirm the findings in 
paragraphs  (48) to (53). The business success of the same suppliers of mineral fibre 
tiles for modular suspended ceilings differ considerably across EEA countries , 
                                                 
46  Replies to question 27 of Questionnaire 1 – Competitors, acco rding to which the vast majority of the 
respondents (12 out of 14) consider an established presence and reputation in the customers'  country  as 
"very important" or "important". The customers provide a similar picture, where 25 out of 
37 respondents conside r a local representative as important for a supplier to be considered reliable, 
combined replies to question 27 of Questionnaires 2, 3, 4 and 5 – Customers (GER/AT, LT, ES, UK). 
In addition, the majority of customers considered an " established presence and  reputat ion in [their] 
country " as "important" or "very important" (replies to question 28 of Questionnaires 2, 3, 4 and 5 – 
Customers (GER/AT, LT, ES, UK): 11 out of 18 in GER/AT, 4 out of 5 in Lithuania, 6 out of 7 in 
Spain and 7 out of 7 in the UK.  
47  See section 5.1. 
48  Minutes of  a conference call with a competitor on 6 July 2018.  
49  For example in Form CO, M.8832, Knauf Confidential Annex 5.4.19 , page 37.  
50  For example Form CO, M.8832, Knauf Confidential A nnex 5.4.27 , page 23.  
51  Minutes of a conference call with a customer on 24 May 2018.  
52  For example: Form CO, M.8832, Knauf Confidential Annex 5.4.7 , p.11 (for Armstrong), Form CO, 
M.8832, Knauf Confidential Annex 5.4.12 , p.27 (for Knauf).  
53  Form CO, M.8 832, Knauf Confidential Annex 5.4.18, p. 6: convenience translation from German: 
[strategic considerations by Knauf on the German market]  and [strategic considerations by Knauf on 
the UK market] . 
54  For Germany and Austria, one respondent indicated 20 -30% (Replies to question 32 of Questionnaire 2 
– Customers (Germany and Austria )); for Lithuania, four respondnets indicated on average 12.5% 
(Replies to question 33 of Questionnaire 3  – Customers ( Lithuania)); for Spain two respondents 
indicated on average mo re than 10% ( Replies to question 32, of Questionnaire 4  – Customers ( Spain)); 
and for the UK, three respondents indicated on average 25% ( Replies to question 32, of Questionnaire 5  
– Customers ( UK)).  
 
15 indicating diverging competitive conditions: According to the Parties’ e stimates, 
Knauf's value -based market share in mineral fibre tiles in Austria is  [60-70]%, in 
Spain [40-50]%, in Lithuania [30-40]%, in Germany [20-30]%, and in the 
UK [5-10]%. Armstrong's value -based market share in mineral fibre tiles in the UK 
is [40-50]%, in Spain [30-40]%, in Lithuania [20-30]%, in Austria  [10-20]%, and in 
Germany [5-10]%. Such significant differences in market position between EEA 
countries persisted during the three year time period 2015 -2017.  
(55) Nevertheless, the Commission will also t ake into account certain EEA -wide 
considerations  linked to the supply side of the markets , such as production capacities 
and production output at the EEA level  in particular. As  explained further in 
paragraphs (107)  to (108) , the capacity utilization of the few EEA production plants  
influences the profitability of the businesses and therefore  has a direct influence on 
the competitive behaviour and aggressiveness of the  individual suppliers. Those 
EEA -wide considerations will therefore be taken into account in the competitive 
assessment.  
(56) The following sections 5.3.2.1  and 5.3.2.2  will address the Parties’ argument s 
specifically with respect to Austria and Germany on the one hand and with respect to 
the Baltic countries on the other hand.  
5.3.2.1.  Austria and Germany  constitute two disti nct geographic markets  
(57) The Commission considers  that Austria and Germany constitute two d istinct relevant 
geographic markets .  
(58) The Commission notes that the supply of mineral fibre tiles in Austria and Germany 
is characterised by supply from few production facilities across the  EEA.55 In 
contrast, as the Commission established in paragraph (47) et seq., any supply -side 
substitution within the EEA is, however, limited by barriers to expand the sale of 
tiles in the different EEA markets due to the significant differences in market 
structure from the demand side, which  result in heterogeneous conditions of 
competition . This reasoning applies equally to Austria and Germany for the reasons 
set out in paragraphs (59) to (65).  
(59) First, there are no specific trade flows  between Germany and Austria that would set 
the trade between those two countries apart from the trade flows of mineral fibre 
tiles between other EEA countries. The Parties ’ manufacturing network is  not 
organized on the basis of an Austria -Germany region.  The Parties operate  a number 
of plants  across the EEA and e ach of these plants typically supplies its products  to a 
large number of countries inside and sometimes even  outside of the EEA . The 
analysis of the suspended ceilings trade flows  from the Parties'  plants to Austria and 
Germany does not suggest that the Parties’ plants are focused specifically on 
producing for an Austria -Germany region. For example, Knauf’s plant in 
Grafenau/Germany delivers  [Knauf deli veries from its Grafenau plant] .56 
Armstrong’s  plant in Münster/Germany delivers  [AWI deliveries from  its Münster 
                                                 
55  See also paragraph (46).  
56  Form CO, M.8832, Knauf Confidential Annex 8.12 (a) . 
 
16 plant].57 Furthermore, neither Austria nor Germany can be singled out in this respect 
if compared to th e other  EEA countries .58  
(60) Second, there are differences in the average prices charged in  Austria and Germany 
as set out in paragraph (49), indicating either diverging price levels or diverging 
product mixes sold , both illustrating diverging competitive conditions .  
(61) Third , while  there are some customers that  purcha se suspended ceili ngs from the 
Parties both in Germany and in Austria, the market investigation also indicated that 
there are  a considerable number of customer s that operate only in either Austria or 
Germany . One market participant stated that it is  "a regional distributor in [country] 
with a catchment area of 100 kilometres ."59 Another market participant stated,  
"[Company] is active only on [country] market and its competitors are also all 
based in [ same country] ."60 
(62) Fourth , the existence of s eparate relevan t geographic markets for Austria and 
Germany is supported by the Parties’ own assessment of those markets as reflected 
in internal doc uments submitted by the Parties. [Information on how the Parties track 
the market in Germany and Austria] .61 [Information o n how the Parties track the 
market in Germany and Austria ]. 
(63) Fifth , the replies received from customers and competitors during the Commission’s  
market investigation  support the view that the geographic markets are separate for 
Germany and Austria. A large n umber of  respondents considered Germany  and 
Austria to be separate markets .62 Respondents to the market investigation stated, for 
instance, that "The market is specific to each country with often price / marketing / 
distribution deals and legislation creati ng barriers for cross border trade "63 Other 
market participants explained that "[i]n Austria there is a different business culture, 
partners like [to] know each other "64, or "that the markets are national or local. 
Even though the products are largely the sa me, the volumes are different, the 
building materials trade is partially organized in a different way and the way to 
market is the main reason for this view ").65 A customer took the stance that "[t]he  
                                                 
57  Form CO, M.8832, AWI Confidential Annex 8.12 (b) . 
58  Form CO, M.8832, RFI#2 AWI Confidential Annex 43.1 (correct ed);  
Form CO, M.8832, RFI#2 Knauf Confidential Annex 43.2 . 
59  Conven ience translation from an e mail of a market participant dated  23 May 2018 (" als regionaler 
Händler in [Land]  mit einem Einzugsbereich von 100 km  "). 
60  Minutes  of a conference call with a customer on 13 June  2018 , convenience translation from German 
("[UNT RNEHMEN]  ist nur auf dem [LAND] Markt tätig, (…)  Konkurrenten kommen ebenfalls aus 
[LAND].").  
61  For e xample: [information on how the Parties track the market in Germany and Austria] for Knauf in 
Form CO, M.8832, Knauf Confidential Annex 5.4.18 , p.7.   
For Armstrong in Form CO, M.8832, RFI#1 AWI Confidential Annex 66.1 , p.11. Furthermore, in Form 
CO, M.8832, Knauf Confidential Annex 5.4.15 , [information on how Knauf tracks the market in 
Germany and Austria]. In Knauf's internal document [information on how K nauf tracks the market in 
Germany and Austria].  
62  Replies to question 29 of Questionnaire 1 – Competitor s; Replies to question 30 of Questionnaire 2 – 
Customers (Germany and Austria).  
63  Replies to question 24of Questionnaire 1 – Competitor s. 
64  Replies t o question 33 of Questionnaire 1 – Competitor s. 
65  Minutes  of a conference call with a customer on 25 May  2018 , convenience translation from German:  
"[…] ist der Ansicht, dass die Märkte national bis lokal sind. Auch wenn die Produkte weitestgehend 
gleich sind, sind die Volumina unterschiedlich, der Baustoffhandel ist teilweise anders organisiert und 
der Marktzugang ist hier der Hauptgrund für diese Sichtweise."  


 
19 (70) Third , the customer base differs significantly between the Baltic countries,  as the 
largest customers are not identical acro ss the Baltic countries.  
(71) Fourth , the existence of separate relevant geographic markets for each of the Baltic 
countries is supported by the Parties’ own assessment of those markets as reflected 
in internal documents submitted by the Parties. [Information on how the Parties track 
the market in the Baltics] .75,76 
(72) Fifth , the replies received from customers and competitors during the Commission’s 
market investigation support the view that the geographic markets are separate for 
each of the Baltic states. The maj ority of responses to the Commission's market 
investigation , which took a position,  indicate that markets are national in scope.77  
(73) Sixth , the Parties' own distribution networks and customer purchasing patterns 
(including the requirement to have a local pre sence) point to each of the Baltic 
Member States constituting separate national markets. The majority of respondents 
to the market investigation indicated that sales representatives are required in order 
to compete efficiently.78 The importance of local sal es representatives is underscored 
by the fact that they have to know local architects well in order to propose their 
ceilings in an early stage of a construction project. Also, it appears that language acts 
as a barrier to purchase abroad.79 That is also su pported by the fact that product 
catalogues are translated into each language.80 Customers also explained  "suspended 
modular ceilings is a technically difficult product, therefore, a consultation, training, 
project calculation are necessary to participate i n this market. Without local sales 
reps that would be very difficult ."81  
(74) Seventh , competition takes place at the national level. Distributors indicated that 
cross -border sales and purchases may occur in isolated cases but are not standard 
business practice .82 
(75) Eighth , a well -established presence, i.e. "good reputation", was considered as 
important.83 In Lithuania, "good reputation" typically means that a distributor can 
help to find a solution for specific spaces in a building, has not failed to deliver on 
time and has proven financial track record.84  
                                                 
75  For example, Form CO, M.8832, Knauf  Confidential Annexes 5.4.32, 5.4.34 , 5.4.35 and 5.4.36. In 
Knauf's interna l document [information on how the Parties track the market in the Baltics] . 
76  For example, Form CO, M.8832, Knauf  Confidential Annexes 5.4.15 or 5.4.26.  
77  Replies to question 30 of Questionnaire 3 Customers (Baltics).  
78  Replies to question 28 of Questi onnaire 3 Customers (Baltics);   
Minutes of a conference call with a distributor on 24 May 2018;   
Minutes of a conference call with a customer on 28 June;   
Minutes of a conference call with a distributor on 9 July 2018;   
Minutes of a conference call with a customer on 9 July 2018.  
79  Minutes of a conference call with a distributor on 9 July 2018.  
80  Replies to question 37.1 of Questionnaire 3 Customers (Baltics).  
81  Replies to question 27.1 of Questionnaire 3 Customers (Baltics).  
82  Minutes of a conference c all with a distributor on 24 May 2018;   
Minutes of a conference call with a distributor on 9 July 2018.  
83  Replies to question 28.1 of Questionnaire 3 Customers (Baltics); Non -confidential minutes of a 
conference call with a distributor on 24 May 2018.  
84  Non-confidential minutes of a conference call with a distributor on 9 July 2018.  


 
22 (81) Third , several arguments, which apply for mineral fibre tiles are valid also for grids:  
(a) A local presence and local reputation are important for a grid supplier to win  
sales in a given EEA country .89  
(b) Brands play a role in the sale of grids for suspended ceilings and customers 
have different preferences for different brands across EEA countries .90 
(c) [Information on how the Parties track the market in relation to grids ].91 
(d) Customers would switch to supplie rs outside of their country only when the 
prices for grids would increase significantly .92  
(82) Fourth , the significant differences between the market shares of the Parties and their 
competitors  in the different EEA countries confirm the findings in paragraphs (79) 
to (81). The business success of the same suppliers of grids for modular suspended 
ceilings differ considerably across EEA countries , indicating diverging competitive 
conditions: According to t he Parties’ estimates, Knauf's value -based market share in 
grids for modular suspended ceilings in Austria  is [50-60]%, in Germany [20-30]%, 
in Spain [10-20]%, in the UK  [10-20]% and in Lithuania [0-5]%. Armstrong's 
value -based market share in grids for mo dular suspended ceilings in Lithuania 
is [50-60]%, in the UK  [40-50]%, in Spain  [30-40]%, in Austria [10-20]% and in 
Germany  [5-10]%.93 
(83) Nevertheless, the Commission will also take into account EEA -wide considerations  
linked to the supply side of the markets , such as  production capacities and 
production output at the EEA level . As explained further in paragraphs (120)  
to (122) , the  capacity utilization of the few EEA production plants i nfluences the 
profitability of the businesses and therefore has a direct influence on the competitive 
behaviour and aggressiveness of the individual suppliers. Those EEA -wide 
considerations will therefore be taken into account in the competitive assessment . 
(84) The following sections 5.3.3.1  and 5.3.3.2  will address the Parties’ arguments 
specifically with respect  to Austria and Germany on the one hand and with respect to 
the Baltic countries on the other hand.  
5.3.3.1.  Austria and Germany constitute two distinct geographic markets  for grids  
(85) The Commission considers that Austria and Germany constitute two distinct relevant 
geographic markets .  
(86) The Commission notes that the supply of  grids in Austria and Germany is 
characterised by supply from few production facilities across the EEA. In contrast, 
as the Commission established in paragraph (78) et seq., any supply -side substitution 
within the EEA is, howev er, limited by barriers to expand the sale of grids in the 
different EEA markets due to the significant differences in market structure from the 
demand side, which  result in heterogeneous conditions of competition . This 
                                                 
89  See paragraph (50) The sales represent atives of one suppler sell both tiles and grids.  
90  See paragraph (51). 
91  See paragraph (52). 
92  See paragraph (53). 
93  Form CO, M.8832, RFI#2 Confidential Annex 23.1 . 
 
23 reasoning applies equally to Austria  and Germany for the reasons set out in 
paragraphs (87) to (89).  
(87) First, there are no specific trade flows between Germany and Austria that would set 
the trade betwee n those two countries apart from the trade flows of grids between 
other EEA countries. The Parties’ manufacturing network is not organized on the 
basis of an Austria -Germany region. The Parties operate  a number of  plants  across 
the EEA and each  of these pl ants typically supplies its products  to a large number of 
countries inside and sometimes even  outside of the EEA . The analysis of the 
suspended ceilings trade flows from the Parties' plants to Austria and Germany does 
not suggest that the Parties’ plants a re focused specifically on producing for an 
Austria -Germany region. For example, [Knauf deliveries from its Viersen plant] .94 
[AWI  deliveries from its Valenciennes  plant] .95 Furthermore, neither Austria nor 
Germany can be singled out in this respect if compa red to the other  EEA countries.96  
(88) Second, further arguments that apply for mineral fibre tiles apply also to grids:  
(a) The market investigation indicated that there are  a considerable number of 
customer s that operate only in either Austria or Germany .97 
(b) The ex istence of s eparate relevant geographic markets for Austria and 
Germany is supported by the Parties’ own assessment of those markets as 
reflected in internal doc uments submitted by the Parties .98 
(c) Customers and competitors replies during the Commission’s  market 
investigation  support the view that the geographic markets are separate for 
Germany and Austria .99  
(d) Finally, a local presence in either Austria or Germany  is very important to 
market participants .100 
(89) Third, the s ignificant differences between  the market s hares in grids of the Parties 
and their competitors  in Austria and Germany  confirm the findings in 
paragraphs  (87) and (88). Table 7 and Table 8 demonstrate that the business success 
and market position of the largest competitors in grids differ considerably in Austria 
and Germany.  This difference is particularly pronounced for  Knauf and OWA, and 
to some degree  also for Rockfon. Th ose differences al so persist over time  when 
analysing the 2015 -2017 period and have been largely  confirmed by the 
Commission's  market reconstruction . 
                                                 
94  Form CO, M.8832, Knauf Confidentieel Annex 8.12 (a).  
95  Form CO, M.8832, AWI Confidential Annex 8.12 (b).  
96  Form CO, M.8832, RFI#2 AWI Confidential Annex 43.1 (corrected);   
Form CO,M.8832, RFI#2 Knauf C onfidential Annex 43.2.  
97  See paragraph  (61).  
98  See paragraph (62). 
99  See paragraph (63). 
100  See paragraph (64). 

 
25 (92) First, there are no specific trade flows between the Baltic countries that would set the 
trade between those countries apart from the tra de flows of grids between other EEA 
countries. The Parties’ manufacturing network and trade flows are organised in a 
similar way across Europe  and the Baltic Member States alone  or as a region do not 
stand out as compared to other countries in the EEA. The  Parties operate  a number 
of plants  across the EEA and each  of these plants typically supplies its products  to a 
large number of countries inside and sometimes also outside of the EEA.103 
(93) Second, further arguments that apply for mineral fibre tiles apply als o to grids:  
(a) The customer base differs significantly between the Baltic countries as the 
largest customers are not identical across the Baltic countries .104  
(b) The existence of separate relevant geographic markets for each of the Baltic 
countries is supported b y the Parties’ own assessment of those markets as 
reflected in internal documents submitted by the Parties .105  
(c) Replies received from customers and competitors during the Commission’s 
market investigation support the view that the geographic markets are 
separate for each of the Baltic States .106 
(d) The P arties' own distribution networks and customer purchasing patterns 
(including the requirement to have a local presence) point to each of the 
Baltic Member States constituting separate national markets .107  
(e) Competitio n takes place at the national level .108  
(f) A well -established presence, i.e. "good reputation", was considered as 
important .109  
(94) Third, the s ignificant differences in the market shares in grids of the Parties and their 
competitors  between the Baltic countries  confirm the findings  in paragraphs  (92) 
and (93). Table 9, Table 10 and Table 11 show that the business success and market  
position of the largest competitors in grids differ considerably between the Baltic 
coun tries.  For instance, [information on AWI's strength in the Baltic countries ]. 
Also, [information on AWI's strength in the Baltic countries ]. These differences also 
persist over time when analysing the 2015 -2017 period and have been confirmed by 
the Commission's  market reconstruction .110 
                                                 
103  For both Parties, see paragraph (87).  
104  See paragraph (70). 
105  See paragraph (71). 
106  See paragraph (72). 
107  See paragraph (73). 
108  See paragraph (74). 
109  See paragraph (75). 
110  The Commission market reconstruction  confi rms the market strengths of the Parties and their 
competitors in the Baltic countries and largely also the market shares, with deviations from time to 
time.  

 
27 6. COMPETITIVE  ASSESSMENT OF THE HORIZONTAL OVERLAPS  
6.1. Analytical framework  
(95) Under Article 2(2) and 2(3) 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.  
(96) In this respect, a merger may entail horizontal an d/or non -horizontal effects. 
Horizontal effects are those deriving from a concentration where the undertakings 
concerned are actual or potential competitors of each other in one or more of the 
relevant markets concerned. Non -horizontal effects are those de riving from a 
concentration where the undertakings concerned are active in different relevant 
markets.  
(97) As regards non -horizontal mergers, two broad types of such mergers may be 
distinguished: vertical mergers and conglomerate mergers.111 Vertical mergers 
involve companies operating at different levels of the supply chain.112 Conglomerate 
mergers are mergers between firms that are in a relationship, which  is neither 
horizontal (as competitors in the same relevant market) nor vertical (as suppliers or 
customers).113 
(98) The Commission appraises horizontal effects in accordance with the guidance set out 
in the relevant notice, that is to say the Horizontal Merger Guidelines.114 
Additionally, the Commission appraises non -horizontal effects in accordance with 
the guidance se t out in the relevant notice, that is to say the Non -Horizontal Merger 
Guidelines.115 
6.2. Horizontal non-coordinated  effects  
(99) The Horizontal Merger Guidelines distinguish between two main ways in which 
mergers between actual or potential competitors on the same r elevant market may 
significantly impede effective competition, namely non -coordinated and coordinated 
effects.116 
(100)  Under the substantive test set out in Article 2(2) and 2(3) of the Merger Regulation, 
mergers that do not lead to the creation or the strengthen ing of the dominant position 
of a single firm may also be incompatible with the internal market. The Merger 
Regulation provides that " under certain circumstances, concentrations involving the 
                                                 
111  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the cont rol of 
concentrations between undertakings ("Non -Horizontal Merger Guidelines"), OJ C 265, 18.10.2008, 
paragraph 3.  
112  Non-Horizontal M erger Guidelines, paragraph 4.  
113  Non-Horizontal M erger Guidelines, paragraph 5.  
114  Guidelines on the assessment of horiz ontal mergers under the Council Regulation on the control of 
concentrations between undertakings ("Horizontal Merger Guid elines"), OJ C 31, 05.02.2004.  
115  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control of  
concentrations between undertakings ("Non -horizontal Merger Guidelines"), OJ C 265/6, 18.10.2008.  
116  In the present decision , the Commission has not found evidence that the Transaction would raise 
serious doubts as regards its compatibility with the inter nal market with respect to coordinated effects 
in any of the horizontally affected markets. During the market investigation, the Commission received 
no concerns about possible anti -competitive coordinated effects  arising from the Transaction.  
 
28 elimination of important competitive constraints that the mergin g parties had 
exerted upon each other, as well as a reduction of competitive pressure on the 
remaining competitors, may, even in the absence of a likelihood of coordination 
between the members of the oligopoly, result in a significant impediment to effecti ve 
competition ".117 
(101)  The Horizontal Merger Guidelines list a number of factors which may influence 
whether or not significant horizontal 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 possibilities for customers to switch 
suppliers, or the fact that the merger would eliminate an important competitive force. 
That list of factors applies equally,  regardless of whether a merger wou ld create or 
strengthen a dominant position, or would otherwise significantly impede effective 
competition due to non -coordinated effects. Furthermore, not all of these factors 
need to be present to make significant non -coordinated effects likely and it is  not an 
exhaustive list.118 
(102)  Finally, the Horizontal Merger Guidelines describe a number of factors, which  could 
counteract the harmful effects of the merger on competition, including the buyer 
power, entry and efficiencies.  
6.3. Aspects common to the assessment o f all five mineral fibre tiles markets  under 
review  
(103)  The Transaction will create or strengthen the market leader in four of the five 
national markets  under review, potentially leading to the creation or strengthening of 
a dominant position in several of tho se markets. As there are a number of aspects 
that are common to the assessment of each of the national markets for mineral fibre 
tiles in Austria, Germany, Lithuania, Spain and the UK , those aspects are  set out in 
paragraphs  (104)  to (116) .  
(104)  First, the supply of mineral fibre tiles is concentrated  in all five Member States for 
which the Commission has jurisdiction . There are only five suppliers of mineral 
fibre tiles  in each of those countries : the Parties, OWA, Rock wool (through its 
Rockfon branch) and Saint -Gobain  (through its Ecophon and Eurocoustic branches) . 
The Transaction therefore appears to be a 5 -to-4 merger in mineral fibre tiles  in each 
of those countries and, in fact,  in the EEA  as a whole , limiting the number of actual 
or potential suppliers in each of the national markets assessed in the present decision . 
(105)  Second, in the supply of wet -felt mineral fibre tiles , which are a sub segment  of 
mineral fibre tiles albeit not formi ng a separate  product market,  there are only three 
suppliers  of wet -felt mineral fibre tiles  in each of the five Member States in question : 
the Parties and OWA. The Transaction therefore appears  to be a 3-to-2 merger in 
wet-felt mineral fibre tiles in each of those countries and, in fact,  in the EEA  as a 
whole,  limiting the number of actual or potential suppliers in each of the markets 
assessed in the present decision .  
                                                 
117  Merger Reg ulation, recital 25. Similar wording is also found in paragraph 25 of the Horizontal Merger 
Guidelines.  
118  Horizontal Me rger Guidelines, paragraph 26.  
 
29 (106)  Third, b esides the Parties, there are only two other suspended ceiling manufacturers 
who are equally  active across Europe  and thus in Austria, Germany, Lithuania, Spain 
and the UK , i.e. Rockw ool and Saint -Gobain. In contrast, OWA is a smaller supplier 
and is particularly focussed on Germany, where OWA is the current market leader in 
mineral f ibre tiles.119 In addition , even the European -wide players focus  more  on 
certain regions or certain countries  within the EEA as has already become apparent 
from the differences in market shares of the Parties in different EEA countries as set 
out in paragrap h (54).  
(107)  Fourth, the Parties would become the clear EEA -wide leader in terms of production 
capacity for mineral fibre tiles after the Transaction. Knauf has a n EEA -wide  
capacity share of [20-30]% and Armstrong of [30-40]% in th e EEA ,120 leading to a 
combined capacity share of [50-60]% in mineral fibre tiles, according to the Parties' 
estimates.  The Commission market reconstruction roughly confirmed these shares .121 
That share is indicative of dominance  also in the five Member States  in question , in 
particular since the capacity is used in the EEA as a whole and therefore equally in 
each of the five Member States in question and the share of the next competitor 
OWA is estimated at [10-20]%, that is to say at less than a third the size  of the 
merged entity.  
(108)  Fifth , [strategic considerations  by the Parties  in relation to capacity utilisation ].122,123 
(109)  Sixth , the phase I investigation has resulted in evidence from the Parties' internal 
documents that Knauf and Armstrong were competing head -to-head in in the 
Member States under review prior to the Transaction. For instance, Armstrong 
characterised Knauf in 2016 as [strategic assessment of Knauf by AWI]  and 
[strategic assessment of Knauf by AWI]124 while Knauf commented in a document 
dated 16 Septe mber 2016 on Armstrong that Armstrong is [strategic assessment of 
AWI by Knauf] .125 
(110)  Seventh , in contrast  to the close competition between the Parties , and in line with the 
fact that the market for mineral fibre tiles is differentiated , not all three remainin g 
competitors appear to be competing equally head -to-head with the Parties . In 
particular,  competitor Saint -Gobain's mineral fibre companies either do not compete 
closely with the Parties or have certain shortcomings . 
(a) Saint  Gobain’s Ecophon products focus on higher value products and thus 
compet e less closely with the Parties . As set out in Armstrong’s internal 
                                                 
119  In its phase I investigation the Commission has performed a market reconstruction. The results of thi s 
preliminary exercise have largely confirmed the Parties' view with respect to market structure and 
competitors active in mineral fibre tiles and grids.  
120  Each of the suppliers has a limited number of production plants for mineral fibre tiles from which it 
serves the different national markets in the EEA, making it impossible to assign capacity to specific 
national markets within the EEA.  
121  According to the Commission market reconstruction the combined capacity share of the Parties in 
mineral fibre tiles  is above 60%.  
122  Knauf internal document "Business Report 30 Juni 2016" (" Geschäftsbericht 30. Juni 2016 ") page 7 
(convenience translation from German): [strategic assessment of  AWI by Knauf] . 
123  Form CO, M.8832, Knauf  Confidential Annex  5.4.18, slide 4 7. 
124  Form CO, M.8832, RFI#1 AWI Confidential Annex 66.1, p.37, see also Armstrong internal document 
[strategic assessment of Knauf by AWI] . 
125  Form CO, M.8832, Knauf Confidential Annex 5.4.19, p.3; see also Knauf internal document [strategic 
assessment of  AWI by Knauf] . 
 
30 documents, Ecophon [strategic assessment of Ecophon by AWI]  and has a 
[strategic assessment of Ecophon by AWI] .126 Knauf has a similar 
perspective on Ecophon calling them a [strategic assessment of Ecophon by 
Knauf]127 and [strategic assessment of Ecophon by Knauf] .128 
(b) Saint Gobain’s Eurocoustic products appear to have limitations in terms of 
product portfolio.129  
(111)  Eighth , on the basis of the findings of the Phase I market  investigation, the 
Commission considers it unlikely that the remaining competitors would have the 
ability and incentives to react sufficiently aggressively to counter -act any negative 
effects of the transaction, f or instance by expanding output, for the reasons set out in 
paragraphs (112)  to (117) . 
(112)  In the first pl ace, the product market is not homogeneous as there are differences in 
brand appeal and in product characteristics.  That is to say  in particular  that 
customers may view the other competitors as less good alternatives due to lesser 
brand appeal with end customers ,130 due to differences in product characteristics (in 
particular for Rockfon and Saint -Gobain which sell soft -felt mine ral fibre tiles )131 
and due to differences in product positioning (in particular for Saint -Gobain 
Ecophon which focuses on high quality and high price) or in product portfolio (in 
particular for Saint -Gobain Eurocoustic).  
(113)  In the second place , there are indi cations that the capacity utilization of competitors 
is higher than that of Knauf and Armstrong. This is indicated by the Commission's 
collection of capacity data from the three main competitors but also by the Parties' 
views as reflected in their internal  documents: [strategic considerations  in relation to 
capacity utilisation ]132 and [strategic considerations  in relation to capacity 
utilisation ].133  
(114)  In the third place , the available spare capacity of competitors would not be used 
exclusively for sales in Aus tria, Germany, Lithuania, Spain and the UK, but all over 
the EEA and possibly also outside of the EEA .134 The Commission notes in that 
context that the Parties' combined market shares in mineral fibre tiles in other EEA 
countries than the five countries unde r review are very high at more than [50-60]% 
and up to [90-100]% all across substantial parts of Eastern Europe (Czech Republic, 
Slovenia, Hungary, Croatia, Slovakia, Romania, Bulgaria ,) but also at more 
than [60-70]% in Ireland and Greece and around [40-50]% in Poland and Portugal.135 
                                                 
126  Form CO, Annex 66.1.  
127  Form CO, Annex 5.4.19, slide 2.  
128  Annex 5.4.27, slide 33.  
129  According to an internal Knauf document, Form CO, A nnex 5.4.27, slide 33 .  
130  The relevance of brands is acknowledged for instance in Form CO, Annex 5. 4.26.  
131  Some respondents consider that two distinct product markets exist for wet -felt mineral fibre products 
and soft -felt mineral fibre products, and the Transaction would, therefore, decrease the number of 
competitors with respect to wet -felt products  from three to two (n on-confidential minutes of a call with 
a customer on 18 May 2018).  
132  Annex 66.2 to the Form CO.  
133  Annex 66.1 of the Form CO.  
134  Both Knauf and Armstrong export a part of their production outside of the EEA, for instance to  former 
CIS states or the Middle East . This is also acknowledged in an Armstrong internal document where 
Armstrong comments in its analysis of capacity utilization of its competitors: [strategic considerations 
in relation to capacity utilisation]  , Annex 66.2 of the Form CO.  
135  Parties' replies to question 1 of RFI #2 dated 22 February 2018.  
 
31 Therefore , if the merged entity were to increase its prices  in countries where its 
market shares are high , competitors may have the same incentive to use their 
capacity for sales in those other EEA countries , limiting the spare  capacity available 
for additional sales in Austria,  Germany, Lithuania, Spain and the UK .  
(115)  In the fourth place , as regards incentives to expand output, the competitors would be 
faced with additional demand if the merged entity raise d price or otherwise 
deteriorate d supply conditions and customers tr ied to switch away  after the 
Transaction . It could therefore be profitable for them to raise their prices in turn. 
This is particularly relevant against the background that the Parties [strategic 
considerations  by the Parties in relation to capacity utilisation ]. 
(116)  In the fifth place , there are indications  that in countries where the market structure is 
already strongly  concentrated, prevailing prices may be higher, and they are not 
offset by the existence  of spare  capacities of competitors. This is for instance the 
situation in the United Kingdom as further detailed in paragraph (176) . This may 
also be indicative of likely effects of the transactions in other markets, where the 
Transact ion would bring about a significant increase in market concentration.  
(117)  Ninth , market entry in mineral fibre tiles in the five Member States under review that 
would constrain the merged entity after the Transaction is not likely. The majority of 
respondents in the market investigation providing a meaningful answer hold the 
view that a market entry of a suspended ceilings supplier within the next five years is 
rather unlikely or very unlikely.136 This is echoed in the internal documents of the 
Parties that do no t appear to mention any significant market entry  in mineral fibre 
tiles to be expected in the next five years.  
6.4. Aspects common to the assessment of all five grids markets  under review  
(118)  The Transaction will create or strengthen the market leader in three of the five 
national markets for grids under review, potentially leading to the creation or 
strengthening of a dominant position in Austria, Spain and the UK . As there are a 
number of aspects that are common to the assessment of each of the national markets 
for grids  in Austria, Germany, Lithuania, Spain and the UK , those aspects are  set out 
in paragraphs (119)  to (122) . 
(119)  First, the supply of grids is concentrated. There are only five main suppliers of gr ids: 
the Parties, Rockwool, Saint -Gobain and OWA .137 The Transaction therefore 
appears to be a five-to-four merger  of main suppliers of grids . 
(120)  Second , the Parties would become the EEA -wide leader  in terms of production 
capacity for grids after the Transactio n. Knauf has a [10-20]% capacity share and 
Armstrong has a [10-20]% capacity share, leading to a combined capacity share 
of [30-40]% in the EEA .138 They would be well ahead of the next two competitors 
Rockfon ( [10-20]%) and Saint Gobain ( [10-20]%). The remai ning market is highly 
fragmented.  
                                                 
136  Replies to questions on entry in the customer questionnaire. For instance, to question 53 of 
Questionnaire 2 – Customers (Germany  and Austria).  
137  Considering the five national  markets, OWA is not present in Spain and Lithuania.  
138  RFI#2 Confidential Annex 32 (corrected).  The Commission market reconstruction roughly confirms 
these figures.  
 
32 (121)  Third , the Parties would become the leading supplier of grids for suspended ceilings 
in the EEA with a combined sales share of around [40-50]% in grids  in the  EEA .139 
(122)  Fourth , [strategic considerations  by the Parties in rela tion to capacity utilisation ].140 
This would impact equally all five national markets for girds in the Member States 
under review.  
6.5. Competitive assessment of mineral fibre tiles and grids by national market  
6.5.1.  Austria  
6.5.1.1.  The Parties' view  
(123)  The Parties maintain that the relevant geographic market is wider than only Austria 
and comprises Austria and Germany. Furthermore, the Parties consider that the 
relevant product market for suspended ceilings comprises grids as well as tiles made 
from all types of materials .  
(124)  Based  on this, the Parties claim that the combined market shares of the Parties are 
moderate ( [20-30]% on a value basis and [20-30]% on a volume basis) and hence 
below any presumption of a dominant market position.141 Moreover, the Parties 
stress the exertion of strong competitive pressure in particular by OWA, Rockfon 
and Saint -Gobain, not leaving aside a " large number of smaller but highly renowned 
players present in the DA  [Commission clarification: Germany -Austria]  region ".142 
6.5.1.2.  Commission's assessment  
(125)  Certain asp ects of the competitive assessment apply across all of the national 
markets for mineral fibre tiles and grids under review as explained in sectio ns 6.3143 
and 6.4.144 Those aspects apply fully to the Austrian markets and therefore argue in  
favour of raising serious doubts  for Austria . The remainder of this section will only 
set out arguments specific to Austria that apply in addition to those cross -cutting 
aspects  already set out in sections 6.3 and 6.4.  
                                                 
139  Form CO, M.8832, RFI#1 Confidential Annex 53 (updated) :EEA -wide combined market share  in value 
[40-50]% and in volume [40-50]%. The Commission market reconstruction indicates lower figures both 
in value and volume, but also according to the market reconstruction the merged entity would remain 
market leader EEA -wide.  
140  Form CO, M.8832, Knauf Confidential Annex  5.4.18, slide 47.  
141  Form CO, para. 154.  
142  Form CO, para. 154. 
143  (1) The supply of mineral fibre tiles is concentrated; (2) The supply of wet -felt mineral fibre tiles; 
which are a subsegment of mineral fibre tiles albeit not formin g a separate product market, is even more 
concentrated; (3) The Parties would become the clear EEA -wide leader in terms of production capacity 
for mineral fibre tiles after the Transaction; (4) The Parties would become the leading supplier of 
mineral fibre  tiles in the EEA (5) [Strategic considerations by the Parties in relation to capacity 
utilisation]; (6) Parties' internal documents show that Knauf and Armstrong were competing head -to-
head prior to the Transaction; (7) Not all three remaining competitors  appear to be competing equally 
head -to-head with the Parties, this applies in particular to Saint -Gobain; (8) The Commission considers 
it unlikely that the remaining competitors would have the ability and incentives to react sufficiently 
aggressively to c ounter -act any negative effects of the Transaction; (9) Market entry in mineral fibre 
tiles that would constrain the merged entity after the Transaction is not likely.  
144  (1) Supply of grids in the EEA is concentrated; (2) The Parties would become the EEA -wide leader  in 
terms of production capacity for grids after the Transaction; (3) The Parties would become the leading 
supplier of grids for suspended ceilings in the EEA; (4) [Strategic considerations by the Parties in 
relation to capacity utilisation].  

 
34 according to the Commission market reconstruction , the value -based market shares 
are in excess of 50% in mineral fibre tiles.  
(b) Closeness of competition  
(129)  As regards mine ral fibre tiles  and grids , the market feedback point s to existing close  
competition  between Knauf and Armstrong  in Austria . Respondents from Austria 
name Armstrong as an alternative to Knauf, and vice versa , even though other 
suppliers are being named as w ell.145 In particular, when mineral fibre is considered 
the most suitable material for certain type of characteristics (standard, sound, fire 
reaction), both Parties are very often named as potential suppliers  by Austrian 
market participants .146 
(130)  In other regar ds (such as the specific manufacturing method of wet -felt tiles, high -
end or low -end products, etc.), the majority of the respondents maintain that the 
Parties are close competitors.147 In particular as regards the differentiation between 
the production meth ods of mineral fibre tiles – wet-felt and soft -felt - one market 
participant explained that if a particular wet -felt product is named in the 
specifications for a project, it is practically not possible, mainly because of the price, 
to switch to soft -felt m ineral fibre suppliers , that is to say to  Rockfon or Saint 
Gobain .148 
(c) Replies from the market investigation on the i mpact of the Transaction  
(131)  Most respondents are neutral as regards the impact of the transaction on their 
company. A  minority expects a negative  impact but no one  a positive. Similarly, the 
majority  of respondents  assume  that the prices will remain the same but a 
considerable number of market participants expect a price increase.149 
(132)  Considering mineral fibre tiles only, there is a slight shift towar ds the opinion that in 
this product area, prices may increase as consequence of the Transaction .150 For 
grids, the opinions that prices will increase or that the prices will remain the same, 
are rather balanced.151 
(133)  Overall, the Commission observes that whilst many respondents did not express any 
view on the impact of the transaction or remain neutral, there are more participants 
expecting a negative impact of the Transaction than those who do not, in particular 
because of increasing prices.  
(134)  The available market  feedback  thus suggests that the Transaction could reinforce 
Knauf's  very strong, if not dominant , position in Austria, regarding both tiles and 
grids . 
                                                 
145  Replies to questions 40 and 41  of Questionnaire 2 – Customers (Germany  and Austria).  
146  Replies to question 44 of Questionnaire 2 – Customers (Germany  and Austria).  
147  Replies to question 50.1, 52.1 of Questionnaire 2 – Customers (Germany  and Austria).  
148  Minutes of  a call with a customer on 13 June 2018.  
149  Replies to questions 57 of Questionnaire 2 – Customers (Germany  and Austria): Out of 14  respondents, 
4 are of the opinion that the prices will increase, 6 expressed the view that the prices will remain  the 
same and 4 stated "other", most of which did not provide any further explanation.  
150  Replies to questions 58 of Questionnaire 2 – Customers (Germany  and Austria).  
151  Replies to questions 59 of Questionnaire 2 – Customers (Germany  and Austria).  
 
35 6.5.1.3.  Conclusion  
(135)  In view of the reasons  set out in paragraphs (125) to (134) , the Commission finds 
that the Transactions raises serious doubts about its compatibility with the internal 
market as regards the Austrian markets for mineral fibre tiles and grids for modular 
suspending ceilings.   
6.5.2.  Lithuania  
6.5.2.1.  Parti es' views  
(136)  The Parties consider that all Baltic Member States fall under one geographic market 
and, therefore, no competition concerns arise. Further, the Parties submit that all 
materials of modular suspended ceilings fall under single relevant product mar ket 
definition. As a result, the Transaction would not result in the significant impediment 
of effective competition primarily because the Parties market share would be 
moderate and there would be  other international competitors that would continue to 
exert sufficient competitive pressure on the Parties.  
6.5.2.2.  Commission's assessment  
(137)  Certain aspects of the competitive assessment apply across all of the national 
markets for mineral fibre tiles and grids under review as explained in sectio ns 6.3152 
and 6.4.153 Those aspects apply fully to the Lithuanian markets and therefore argue 
in favour of raising serious doubts for Lithuania. The remainder of this section will 
only set out arg uments specific to Lithuania that apply in addition to those cross -
cutting aspects already set out in sections 6.3 and 6.4. 
                                                 
152   (1) The supply of mineral fibre tiles is concentrated; (2) The supply of wet -felt mineral fibre tiles; 
which are a subsegment of mineral fibre tiles albeit not forming a separate product market, is even more 
concentrated; (3) The Parties would become the clear  EEA -wide leader in terms of production capacity 
for mineral fibre tiles after the Transaction; (4) The Parties would become the leading supplier of 
mineral fibre tiles in the EEA (5) [Strategic considerations by the Parties in relation to capacity 
utilisa tion]; (6) Parties' internal documents show that Knauf and Armstrong were competing head -to-
head prior to the Transaction; (7) Not all three remaining competitors appear to be competing equally 
head -to-head with the Parties, this applies in particular to S aint-Gobain; (8) The Commission considers 
it unlikely that the remaining competitors would have the ability and incentives to react sufficiently 
aggressively to counter -act any negative effects of the Transaction; (9) Market entry in mineral fibre 
tiles th at would constrain the merged entity after the Transaction is not likely.  
153  (1) Supply of grids in the EEA is concentrated; (2) The Parties would become the EEA -wide leader  in 
terms of production capacity for grids after the Transaction; (3) The Parties w ould become the leading 
supplier of grids for suspended ceilings in the EEA; (4) [Strategic considerations by the Parties in 
relation to capacity utilisation].  

 
37 (140)  The only  other credible competitor is Saint -Gobain  with [30-40]% market share 
value -based and  [10-20]% volume -based . However, its market position under any 
segmentation will be much smaller if compared to the Parties post -merger.  The other 
major players  (Rockfon and OWA)  have limited market shares in Lithuania  – 
Rockfon [5-10]% value -based and [0-5]% volume -based, OWA [0-5]% value -based 
and [0-5]% volume -based – and are u nlikely to constrain the parties sufficiently 
post-merger.  
(141)  As regards grids, t he Parties submit that Knauf's position is minor in Lithuania 
([0-5]% market share by both value and v olume). The Parties further submit that 
Knauf entered the Lithuanian market later, which , according to them, explains 
Knauf's limited presence  in grids .155 Moreover, the parties take the view that while 
the merger would result in a strong market position of the merged entity with market  
shares above [50-60]%, over the past three years, however, the combined market 
shares decreased  from above [60-70]% in 2015 to above  [50-60]% in 2018. The 
Commission notes that the increment added by Knauf decreased from [10-20]% 
in 2015 to [0-5]% in 2017. The Commission  market reconstruction confirms the 
market shares as well as the decrease of both the combined market shares and the 
increment.  This indicates that the Transaction is unlikely to change the competitive 
landscape  in grids in Lithuania.  
(b) Closeness of competition  
(142)  The market investigation provided evidence that the Parties are close, if not the 
closest, competitors  in Lithuania  in mineral fibre tiles . 
(143)  First, the majority of customers and distributors respondi ng to th e Commission’s 
market investigation indicated that Armstrong is the closest alternative to Knauf and 
vice versa.156 Only one distributor considered Saint -Gobain to be a close alternative 
to the Parties' mineral fibre tiles . 
(144)  Second , the Parties’ mineral fibre  tiles and product portfolio  are very similar and 
sometimes even professionals have difficulty  to tell them apart.157 
(145)  Third , historically, Armstrong used to be the market leader  in Lithuania holding 
around 50% market share around 8 -10 years ago.158 The "Armstr ong" brand was 
used as a generic term for suspended ceilings irrespective of the actual manufacturer.  
However, in recent years Knauf has gained  market share at the expense of 
Armstrong.159 
(146)  Fourth, the Parties are each other's close competitors  when looking a t specific price 
bands.  The market investigation indicated  that while Knauf is also active in the entry 
level DIY sales channel with economic (low -range) mineral ceilings  in Lithuania , 
                                                 
155 Parties' response to question 24 RFI#4.  
156  Replies to questions 41 and 42 of Questionnaire 3 – Customers (Baltics).  
157  Minutes of a conference call with a distributor on 9 July 2018.  
158  Minutes of a conference c all with a distributor on 9 July 2018.  
159  Minutes of a conference call with a distributor on 9 July 2018.  
 
38 both Parties compete closely for mid - to high -segment which are meant f or project 
sales .160  
(147)  Fifth , the head -to-head competition between Armstrong and Knauf in Lithuania is 
reflected in Knauf’s internal documents: [strategic assessment of AWI  by Knauf in 
relation to Lithuania ].161 
(148)  In contrast, the market investigation did not pro vide evidence that the Parties are 
close competitors in Lithuania in grids due to Knauf's  limited market position in 
grids in Lithuania.  
(c) Architect and other specifiers  specification acts as a barrier for non -specified 
manufacturers  
(149)  Reputation of the manuf acturer/distributor is very important in Lithuania and 
architects and other specifiers are unlikely to specify manufacturers that they do not 
know  or have not worked with before . In effect, this acts as a barrier  for new players 
to enter the market  for the  following reasons.  
(150)  First, the majority of market participants indicated that in the vast majority of cases 
(around 75%) suspended ceiling specifications from an architect makes a reference 
to a particular manufacturer.162  
(151)  Second , once a particular manufact urer is specified, ceilings of such a manufacturer 
are likely to be bought.163 
(152)  Finally, construction companies are unlikely to buy from distributors that they have 
no experience with.164 
(153)  In conclusion, in contrast to competitors , the Parties' products are well known  to 
architects  and other specifiers . Hence, they are more likely to be referenced than 
those of competitors.  
(d) Replies from the market investigation on the i mpact of the Transaction   
(154)  The majority of customers responding to the market investigation  considered  that the 
Transaction would have negative effects on  competition.  For example, a customer 
indicated,  "Theoretically European market is open. Practically it is still segmented 
geographically per country basis. Merging of two leading suppliers of ceil ings is 
probably not causing any competition problems in a big country. But such a merging 
can have crucial consequences in a small country like Lithuania, limiting 
competition almost to zero. "165  
                                                 
160  Minutes of a conference call with a distributor on 9 July 2018;   
Response by  a distributor to question 52.2 of Questionnaire 3 – Customers (Baltics ). 
161  Form CO, M.8832, Knauf Confidential Annex 5.4.32, p.7;    
Form CO, M.8832, Knauf Confidential Annex 5.4.34, p.7.  
162  Replies to question 48 of Questionnaire 3 – Customers (Baltics). This applies equally to other 
specifiers.  
163  Replies to question 48.2  of Questionnaire 3 – Customers (Baltics).  
164  Minutes of a conference call with a distributor on 24 May 2018.  
165  Replies to question 61 of Questionnaire 3 – Customers (Baltics).  
 
39 6.5.2.3.  Conclusion  
(155)  In view of the reasons  set out in paragraphs (137)  to (154) , the Commission finds 
that the transactions raises serious doubts about its compatibility with the internal 
market as regards the Lithuanian  market for mineral fibre tiles.  
(156)  In contrast, in light of the limited increment brought about  by the transaction in grids 
and the fact that Knauf's market position in grids has declined constantly over recent 
years as set out in paragraph (141) , no serious doubts arise in regards of grids with 
respect to grids for modular suspend ed ceilings . 
6.5.3.  Spain  
6.5.3.1.  The Parties' view  
(157)  As regards  Spain, t he Parties submit that all materials of modular suspended ceilings 
fall under a single relevant product market definition. As a result, the Tr ansaction 
would not result in the significant impediment of effective competition primarily 
because the Parties market share would be moderate and there would be other 
international and local competitors that would continue to exert sufficient 
competitive pressure on the Parties.  
6.5.3.2.  Commission's assessment  
(158)  Certain aspects of the competitive assessment apply across all of the national 
markets for mineral fibre tiles and grids under review as explained in sectio ns 6.3166 
and 6.4.167 Those aspects apply fully to the Spanish markets and therefore argue in 
favour of raising serious doubts for Spain. The remainder of this section will only set 
out arguments specific to Spain that ap ply in addition to those cross -cutting aspects 
already set out in sections 6.3 and 6.4. 
                                                 
166  (1) The supply of mineral fibre tiles is concentrated; (2) The supply of we t-felt mineral fibre tiles; 
which are a subsegment of mineral fibre tiles albeit not forming a separate product market, is even more 
concentrated; (3) The Parties would become the clear EEA -wide leader in terms of production capacity 
for mineral fibre tile s after the Transaction; (4) The Parties would become the leading supplier of 
mineral fibre tiles in the EEA (5) [Strategic considerations by the Parties in relation to capacity 
utilisation] ; (6) Parties' internal documents show that Knauf and Armstrong we re competing head -to-
head prior to the Transaction; (7) Not all three remaining competitors appear to be competing equally 
head -to-head with the Parties, this applies in particular to Saint -Gobain; (8) The Commission considers 
it unlikely that the remainin g competitors would have the ability and incentives to react sufficiently 
aggressively to counter -act any negative effects of the Transaction; (9) Market entry in mineral fibre 
tiles that would constrain the merged entity after the Transaction is not likel y.  
167  (1) Supply of grids in the EEA is concentrated; (2) The Parties would become the EEA -wide leader  in 
terms of production capacity for grids after the Transaction; (3) The Parties would become the leading 
supplier of grids for suspended ceilings in th e EEA; (4) [Strategic considerations by the Parties in 
relation to capacity utilisation] . 

 
41 Knauf is instead the first or the second alternative to Armstrong.172 Finally, Knauf 
and Armst rong are practically the only two significant suppliers in the sub segment  
of mineral fibre tiles produced with the "wet" production method, as OWA has very 
limited presence in Spain with a [5-10]% market share  in wet -felt mineral fibre tiles . 
(162)  As show n below, in its internal documents Armstrong identifies Knauf as a close 
competitor in Spain.173 
Figure 2 – Closeness of competition in Spain  
[Strategic considerations by AWI regarding the Spanish market and close competitor ] 
Source: RFI# 1 AWI Confidential Annex 66.2  
(c) Replies from the market investigation on the i mpact of the Transaction   
(163)  Finally, the  majority of Spanish customers e xpect the T ransaction to have a negative 
impact and, in particular, believe that it will lead to price increas es.174 
6.5.3.3.  Conclusion  
(164)  In view of the reasons  set out in paragraphs (158)  to (163) , the Commission finds 
that the Transaction raises serious doubts about its compatibility with the internal 
market as regar ds the Spanish  markets for mineral fibre tiles and grids for modular 
suspending ceilings.  
6.5.4.  UK 
6.5.4.1.  Parties' view  
(165)  In the UK, the Parties submit that all materials of modular suspended ceilings fall 
under a single relevant product market definition. As a result, t he Transaction would 
not result in a significant impediment of effective competition primarily because the 
Parties' combined market share and the increment brought by Knauf would be 
moderate. The Parties also take the view that there are other competitors that will 
continue to exert sufficient competitive pressure on the Parties.  
6.5.4.2.  Commission's assessment  
(166)  Certain aspects of the competitive assessment apply across all of the national 
markets for mineral fibre tiles and grids under review as explained in sectio ns 6.3175 
and 6.4.176 Those aspects apply fully to the UK markets and therefore argue in 
favour of raising serious doubts for the UK. The remainder of this section will o nly 
set out arguments specific to the UK that apply in addition to those cross -cutting 
aspects already set out in sections 6.3 and 6.4. 
                                                 
172  Replies to  question 39 of Questionnaire 4 – Customers (Spain).  
173  See also Form CO, M.8832, Knauf Confidential Annex 5.4.7 , p. 47, [strategic considerations by AWI 
regarding closeness of competition, including in Spain].  
174  Replies to questions 56 and 57 of Questio nnaire 4 – Customers (Spain).  
175  (1) The supply of mineral fibre tiles is concentrated; (2) The supply of wet -felt mineral fibre tiles; 
which are a subsegment of mineral fibre tiles albeit not forming a separate product market, is even more 
concentrated; ( 3) The Parties would become the clear EEA -wide leader in terms of production capacity 
for mineral fibre tiles after the Transaction; (4) The Parties would become the leading supplier of 
 

 
43 shows that the Parties' actual market shares in the UK may be even higher than the 
estimates proposed by the Parties suggest.177  
(169)  With respect to  mineral fibre  tiles, the Transaction will in any case give rise to very 
high combined market shares  around [50-60]%. The remaining competitors will 
remain well behind the merged entity, both in terms of value and volume : The 
strongest competitor in terms of market shares is Saint -Gobain with market shares 
around [20-30]% both  value and volum e based.  The merged entity's position and the 
distance between it and remaining competitors would be even more significant in the 
wet mineral fibre segment, where the merged entity would have a market share in 
excess of 70%.  
(170)  The same applies for grids, wh ere the merged entity's market share would be in 
excess of [50-60]% in value and in excess of [40-50]% in volume , whereas  the 
remaining competitors would  have a market share of ca.  [10-20]% or less .  
(171)  Although the Target's market share has been declining bo th for mineral fibre tiles 
and for girds over the past 3 years, its position on the UK market is still very 
significant. In addition, because of the market share increment brought about by the 
Transaction, the merged entity's market share would be higher  than was the Target's 
in 2015.  
(b) Closeness of competition  
(172)  The Parties are close competitors in  mineral fibre  tiles in the UK.  
(173)  First, the Parties are two of only three  wet felt tile manufacturers.  
(174)  Second,  internal documents show that the Parties' product portf olios in the UK 
overlap to a very significant extent (up to [degree of portfolio overlap] %).178  
(175)  Third, independent research suggests that both Armstrong and Knauf are two of the 
five remaining mineral fibre tile manufacturers and the two main competitors in  
grids in the UK .179 
(c) Price levels are already higher in the UK than in other EEA Member States  
(176)  The existing price levels in mineral fibre tiles in the UK indicate that, already before 
the Transaction, the remaining competitors did not expand aggressively to capture 
additional margins. This indicates that their reaction may be similar after the 
Transaction. The UK market could thus serve as an example of potential future 
effects of the Transaction on price levels in mineral fibre tiles . Indeed,  internal 
docume nts indicate that price levels are higher in the UK than in other countries of 
the EEA .180 Thus, the UK could be an example of a country where price levels are 
higher than elsewhere (indicating that there is additional margin to be captured) but 
the reaction  from competitors has not been aggressive enough to bring prices down.  
                                                 
177  The Commission market reconstruction shows combined mark et shares in excess of 60% both value 
and volume based.  
178  Annex 5.4.18 to the Form CO, page 45.  
179  Annex 29.1 to the Form CO, AMA report, Table  18. 
180  See, for example, Annex 5.4.18 to the Form CO, page 5.  
 
44 (d) Replies from the market investigation on the i mpact of the Transaction   
(177)  The market participants in the UK expressed negative sentiment with respect to this 
Transaction. R educed product choice and increased prices  were cited as the main 
concerns. For instance, one contractor stated "[t] here will be less choice and more 
control from fewer parties. Historically (5 years) in this sector the fewer the 
manufacturers the higher the price points ".181 Another said, "[p]rices are likely to 
rise as production capacity and product ranges are rationalised and specification 
share is high ".182 
(178)  A majority of respondents to the Commission's market investigation expects the 
Transaction to have negative effects  for customers.  More specifically, half of the 
responding customers expects the Transaction to result in a price increase for both 
mineral fibre tiles183 and grids184 for modular suspended ceilings.  
6.5.4.3.  Conclusion  
(179)  In view of the reasons  set out in paragraphs (166)  to (178) , the Commission finds 
that the Transactions raises serious doubts about its compatibility with the internal 
market as regards the UK markets for mineral fibre tiles and for grids for modu lar 
suspending ceilings.  
6.5.5.  Germany  
6.5.5.1.  The Parties' view  
(180)  The Parties are of the opinion that Germany and Austria belong to one market for 
suspended ceilings. Therefore, reference is made to the Parties' view with respect to 
Austria already set out in paragraphs (123)  and (124) . 
6.5.5.2.  Commission's assessment  
(181)  Certain aspects of the competitive assessment apply across all of the national 
markets for mineral fibre tiles and grids under review as explained in sectio ns 6.3185 
and 6.4.186 Those aspects apply in principle  to the German markets. However, the 
specific market structure and competitive conditions in Germany override those 
                                                 
181  Replies to question 56.2 of Questionnaire 5 – Customers (UK) . 
182  Replies to question 56.2 of Questionnaire 5 – Customers (UK).  
183  Replies to question 56.1 of Questionnaire 5 – Customers (UK).  
184  Replies to question 57.1 of Questionnaire 5 – Customers (UK).  
185  (1) The supply of mineral fibre tiles i s concentrated; (2) The supply of wet -felt mineral fibre tiles; 
which are a subsegment of mineral fibre tiles albeit not forming a separate product market, is even more 
concentrated; (3) The Parties would become the clear EEA -wide leader in terms of produc tion capacity 
for mineral fibre tiles after the Transaction; (4) The Parties would become the leading supplier of 
mineral fibre tiles in the EEA (5) [Strategic considerations by the Parties in relation to capacity 
utilisation]; (6) Parties' internal docume nts show that Knauf and Armstrong were competing head -to-
head prior to the Transaction; (7) Not all three remaining competitors appear to be competing equally 
head -to-head with the Parties, this applies in particular to Saint -Gobain; (8) The Commission con siders 
it unlikely that the remaining competitors would have the ability and incentives to react sufficiently 
aggressively to counter -act any negative effects of the Transaction; (9) Market entry in mineral fibre 
tiles that would constrain the merged entit y after the Transaction is not likely.  
186  (1) Supply of grids in the EEA is concentrated; (2) The Parties would become the EEA -wide leader  in 
terms of production capacity for grids after the Transaction; (3) The Parties would become the leading 
supplier of  grids for suspended ceilings in the EEA; (4) [Strategic considerations by the Parties in 
relation to capacity utilisation].  

 
46 (183)  Both the current market leader OWA and Rockfon will remain active in mineral 
fibre tiles with sign ificant positions around 20 -30%, OWA will remain market leader 
with a share even beyond 30% . Moreover, Rockfon has been growing in market 
shares during the last five years, whereas OWA's and the Parties' shares are slightly 
on the decline and Saint -Gobain remains stable.  Armstrong's market shares in 
German declined continuously throughout the last years .187 
(184)  Regarding grids, the Commission notes that Rockfon and OWA each have sizeable 
market shares [of 20-30]% and will thus be in a position to exercise signifi cant 
competitive constraints on the merged entity post transaction.  
(185)  The Commission market reconstruction broadly confirmed the parties' market share 
estimates and thus supports this analysis.  
(b) Market strategy Knauf  
(186)  The Commission observes that according to  the assessment of Armstrong from  2016, 
Knauf follows a strategy [assessment of Knauf  strategy  by AWI]188 However, so far 
Knauf's market shares 2015 -2017 did not show any result of the strategy .189 
(c) Closeness of competition  
(187)  As regards mineral fibre tiles, the m arket feedback indicates an existing competition 
between the Parties  as respondents from Germany name Armstrong as an alternative 
to Knauf, and vice versa . However,  the respondents name other suppliers at least as 
frequently as the Parties and overall conf irm OWA's leading market position in 
Germany .190 A significant amount of the respondents from Germany are of the 
opinion that the Parties do not compete closely with each other.191 
(188)  When mineral fibre is considered the most suitable material for certain type of  
characteristics (standard, sound, fire reaction), both Parties are often named as 
potential suppliers. The respondents, however, name OWA regularly as the most 
preferred supplier and also Rockfon and Saint -Gobain as alternatives from time to 
time.192 
(189)  In oth er regards (such as the specific manufacturing method of wet -felt tiles, high -
end or low -end products, etc.), the replies from market participants  are overall not 
conclusive with respect of closeness of competition of the Parties.193  
                                                 
187  Internal document of Armstrong: M8832_2015 01 Opportunity Model Germany 
report_CONFIDENTIAL, p. 9: [development of AWI sales in Germany between 2003 and 2014] .  
 Minutes  of a conference call with a customer in Germany on 30 May 2018: Armstrong's market shares 
declined between 2012 and 2018.   
Minutes of a condense call with a competitor on 8 June 2018: As a general statement for all  markets, it 
is perceived that Armstrong has been declining in the past 10 years.  
188  Form CO, M.8832, RFI#1 AWI Confidential Annex 66.1 , p.37.  
189  Form CO RFI#1 Confidential Annex 53 (updated): In 2015, 2016 and 2017 Knauf's market shares in 
mineral fibre tiles in Germany it at [10-20]%, which is largely confirmed by the Commission market 
reconstruction.  
190  Replies to questions 40 and 41  of Questionnaire 2 – Customers (Germany  and Austria).  
191  Replies to question 39 of Questionnaire 2 – Customers (Germany  and Austria).  
192  Replies to question 44 of Questionnaire 2 – Customers (Germany  and Austria).  
193  Replies to question 50.1, 52.1 of Questionnaire 2 – Customers (Germany  and Austria).  
 
47 (d) Impact of the transacti on 
(190)  The majority of the respondents are neutral as regards the impact of the transaction 
on their company. A  small minority expects a negative impact and none  of the 
respondents a positive  one.194 
(191)  No respondent expects the prices of tiles (across all material s) to decrease, some 
respondents expect a price increase but half of the German respondents assume that 
the prices will remain the same .195 
(192)  Considering mineral fibre tiles only, there is a slight shift towards the opinion that in 
this product area, prices ma y increase as consequence of the Transaction .196 For 
grids, the opinions that prices will increase or that the prices will remain the same, 
are rather balanced.197 
(193)  Overall, the Commission observes that many respondents did not express any view 
on the impact of  the transaction or remain neutral. This is roughly in balance with 
those  participants expecting a negative impact of the Transaction, in particular 
because of increasing prices.  
(e) Commission's conclusion  
(194)  Combined market shares in mineral fibre tiles of the  Parties are moderate in 
Germany compared to other countries with OWA remaining the market leader post -
transaction capturing a market share of about [40-50]%. As regards grids, the 
merged entity would assume market leadership in regards of the market share s. 
However , OWA and Rockfon remain strong competitors with their market shares 
almost equalling the Parties' combined market shares and thus exerting competitive 
pressure. Market participants perceive the Parties from time to time as close 
competitors  but do not identify any particular closeness of competition between the 
Parties as opposed to the other competitors OWA, Rockfon and Saint -Gobain. None 
of the Parties is acting particularly  aggressive on the German market and 
Armstrong's market shares are on t he decline considering the last 10 years.   
(195)  In view of the above reasons, the Commission concludes that the evidence does not 
support serious doubts about the Transaction's  compatibility with the internal market 
as regards the German markets for mineral fib re tiles and grids for modular 
suspending ceilings.   
6.6. Competitive assessment of the overlaps in tiles  made from other materials 
(metal, gypsum, wood)  
(196)  For the reasons set out in paragraphs (197)  to (200) , the Transaction does not raise 
serious doubts as to its compatibility with the internal market with respect to the 
national markets for tiles made from other materials  than mineral fibre , namely from 
                                                 
194  Replies to question 55 of Questionnaire 2 – Customers (Germany  and Austr ia).  
195  Replies to question 57.2 of Questionnaire 2 – Customers (Germany  and Austria): Out of 8 respondents 
3 except the prices to increase, 4 the prices remain the same, 0 the prices to decrease and 1 indicated 
"other".  
196  Replies to question 58.2 of Que stionnaire 2 – Customers (Germany  and Austria): Out of 8  respondents 
4 except the prices to increase, 3 the prices remain the same, 0 the prices to decrease and 1 indicated 
"other".  
197  Replies to questions 59, 59.1 and 59.2  of Questionnaire 2 – Customers ( Germany and Austria).  

 
49 any concerns with respect t o the overlap between the Parties' activities in the sale of 
wood tiles in any of Germany, Lithuania, Spain or the United Kingdom.  
7. COMPETITIVE  ASSESSMENT OF THE VERTICAL LINKS  
7.1. Analytical framework – Vertical unilateral effects  
(201)  Vertical mergers involve com panies operating at different levels of the same supply 
chain. For instance, a vertical merger occurs when a manufacturer of a certain 
product merges with one of its distributors.  
(202)  Pursuant to the Commission Guidelines on the assessment of non -horizontal me rgers 
under the Council Regulation on the control of concentrations between undertakings 
(the “Non -Horizontal Merger Guidelines”)200, vertical mergers do not entail the loss 
of direct competition between merging firms in the same relevant market and 
provide scope for efficiencies.  
(203)  However, there are circumstances in which vertical mergers may significantly 
impede effective competition. This is in particular the case if they give rise to 
foreclosure .201 
(204)  The Non -Horizontal Merger Guidelines distinguish between tw o forms of 
foreclosure: input foreclosure, where the merger is likely to raise costs of 
downstream rivals by restricting their access to an important input, and customer 
foreclosure, where the merger is likely to foreclose upstream rivals by restricting 
their access to a sufficient customer base .202  
(205)  Pursuant to the Non -Horizontal Merger Guidelines, i nput foreclosure arises where, 
post-merger, the new entity would be likely to restrict access to the products or 
services that it would have otherwise supplied a bsent the merger, thereby raising its 
downstream rivals' costs by making it harder for them to obtain supplies of the input 
under similar prices and conditions as absent the merger .203 
(206)  For input foreclosure to be a concern, the Merged Entity should have a si gnificant 
degree of market power in the upstream market. Only when the Merged Entity has 
such a significant degree of market power, can it be expected that it will significantly 
influence the conditions of competition in the upstream market and thus, possi bly, 
the prices and supply conditions in the downstream market .204 
(207)  Pursuant to  the Non -Horizontal Merger Guidelines, customer foreclosure may occur 
when a supplier integrates with an important customer in the downstream market and 
because of this downstream presence, the Merged Entity  may foreclose access to a 
sufficient customer base to its actual or potential rivals in the upstream market (the 
input market) and reduce their ability or incentive to compete which in turn, may 
raise downstream rivals' costs by  making it harder for them to obtain supplies of the 
                                                 
200 OJ C 265, 18.10.2008, p. 6.  
201 Non-Horizontal Merger Guidelines, par a 18.  
202 Non-Horizontal Merger Guidelines, para 30.  
203 Non-Horizontal Merger Guidelines, para 31.  
204 Non-Horizontal Merger Guidelines, para 35.  
 
50 input under similar prices and conditions as absent the merger. This may allow the 
Merged Entity  profitably to establish higher prices on the downstream market .205 
(208)  For customer foreclosure to be a concern,  a vertical merger must involve a company, 
which  is an important customer with a significant degree of market power in the 
downstream market. If, on the contrary, there is a sufficiently large customer base, at 
present or in the future, that is likely to t urn to independent suppliers, the 
Commission is unlikely to raise competition concerns on that ground .206 
7.2. Competitive Assessment  
(209)  The Transaction leads to only limited vertical links as regards certain input materials 
sold by Knauf in markets that are upstre am to the sale of mineral fibre tiles by Knauf 
and Armstrong  in the EEA ; namely secondary glass mineral fibre and secondary 
stone wool fibre , both of which are used for the production of mineral fibre tiles . In 
light of  the merged entity's very limited sal es to third parties and the presence of 
multiple alternative suppliers  and the absence of any concerns raised in the 
Commission's market investigation , the Commission concludes that the Transaction 
does not give rise to input foreclosure concerns. Furtherm ore, considering that the 
upstream products are used for a number of applications other than modular 
suspended ceilings  (e.g. for insulation applications)  and the absence of any concerns 
raised in the Commission's market investigation , the Commission concl udes that the 
Transaction does not give rise to customer foreclosure concerns either.  
(210)  Therefore, the Commission considers that the Transaction does not raise serious 
doubts regarding its compatibility with the internal market as regards the vertical 
link that is created between the supply of certain raw material from Knauf to 
Armstrong . 
8. PROPOSED REMEDIES  
(211)  In order to render the concentration compatible with the internal  market, Knauf has 
modified the notified concentration by submitting commitments to the C ommission. 
The legal framework applicable to the assessment of proposed commitments is set 
out below in Section 8.1. 
(212)  Knauf submitted two main sets of commitments. Notably, Knauf formally submitted 
commitments on  16 November 2018, which it formally revised on 
19 November  2018 and 23 November 2018 (the 'Initial Commitments'). The Initial 
Commitments are described below in Section 8.2. 
(213)  The Commission subsequently gathered  the views of market participants on the 
Initial Commitments (the 'market test') and informed Knauf of the results thereof. 
The outcome of the market test is discussed below in Section 8.3. 
(214)  The Notifying Party t hen submitted further revised commitments on 
30 Novem ber 2018, and further amended those formally on 6 December 2018 (the 
'Final Commitments'). The Commission considers that the Final Commitments are 
sufficient to ensure that, if implemented, the Transacti on no longer raises serious 
                                                 
205 Non-Horizontal Merger Guidelines, para 58.  
206 Non-Horizontal Merger Guidelines, para 61.  
 
51 doubts as to its compatibility with the internal market. The Final Commitments are 
annexed to this Decision and form an integral part of the Decision. They are 
described and assessed below in Section 8.4. 
8.1. Legal framework  
(215)  The following principles from the Remedies Notice207 apply where parties to a 
merger choose to offer commitments in order to restore effective competition.  
(216)  Where a concentration raises competition concerns in the sense t hat it could 
significantly impede effective competition, in particular as a result of the creation or 
strengthening of a dominant position, the parties may seek to modify the 
concentration in order to resolve the competition concerns and thereby gain 
clear ance of their merger.208 
(217)  The Commission only has power to accept commitments that are capable of 
rendering the concentration compatible with the internal market in that they will 
prevent a significant impediment to effective competition in all relevant marke ts 
where competition concerns were identified.209 To that end, the commitments have 
to eliminate the competition concerns entirely210 and have to be comprehensive and 
effective from all points of view.211 
(218)  In assessing whether proposed commitments are likely to e liminate its competition 
concerns, the Commission considers all relevant factors, including inter alia the 
type, scale and scope of the commitments, judged by reference to the structure and 
particular characteristics of the market in which those concerns a rise, including the 
position of the parties and other participants on the market.212 Moreover, 
commitments must be capable of being implemented effectively within a short 
period of time.213 
(219)  Where a proposed concentration threatens to significantly impede effec tive 
competition, the most effective way to maintain effective competition, apart from 
prohibition, is to create the conditions for the emergence of a new competitive entity 
or for the strengthening of existing competitors via divestiture by the merging 
parties.214 
                                                 
207  Commission's Notice on  Remedies acceptable under Council Regulation (EC) No 139/2004 and under 
Commission Regulation (EC) No 802/2004 ("Remedies Notice"), OJ C 267, 22.10.2008, p. 1.  
208  Remedies Notice, paragraph 5.  
209  Remedies Notice, paragraph 9.  
210  Case C -202/06 P Cementbouw  Handel & Industrie v Commission  [2007] ECR 2007 I -12129, 
paragraph  54: “it is necessary, when reviewing the proportionality of conditions or obligations which  
the Commission may, by virtue of Article 8(2) of Regulation No 4064/89, impose on the parties to  a 
concentration, not to determine whether the concentration still has a Community dimension after those  
conditions or obligations have been complied with, but to be satisfied that those conditions and those  
obligations are proportionate to and would entir ely eliminate the competition problem that has been 
identified ”. 
211  Remedies Notice, paragraph 9 and 61.  
212  Remedies Notice, paragraph 12.  
213 Remedies Notice, paragraph 9.  
214  Remedies Notice, paragraph 22.  
 
52 (220)  The divested activities must consist of a viable business that, if operated by a 
suitable purchaser (hereinafter referred to as 'Purchaser'), can compete effectively 
with the merged entity on a lasting basis and that is divested as a going concern.  The 
business must include all the assets which contribute to its current operation or 
which are necessary to ensure its viability and competitiveness and all personnel 
which are currently employed or which are necessary to ensure the business' viability 
and competitiveness.215 
(221)  Normally, a viable business is a business that can operate on a stand -alone -basis, 
which means independently of the merging parties as regards the supply of input 
materials or other forms of cooperation other than during a transitory p eriod.216 
(222)  Even though normally the divestiture of an existing viable stand -alone business is 
required, the Commission, taking into account the principle of proportionality, may 
also consider the divestiture of businesses which have existing strong links or a re 
partially integrated with businesses retained by the parties and therefore need to be 
‘carved out’ in those respects.217 The Commission will only be able to accept 
commitments which require the carve -out of a business if it can be certain that, at 
least a t the time when the business is transferred to the purchaser, a viable business 
on a stand -alone basis will be divested and the risks for the viability and 
competitiveness caused by the carve -out will thereby be reduced to a minimum. The 
parties therefore have to ensure that the carve -out is started in the i nterim period, 
i.e. the period between the adoption of the Commission decision up to the 
completion of the divestiture (meaning the legal and factual transfer of the business 
to the purchaser). Consequen tly, at the end of this period, a viable business on a 
stand -alone basis will be divested. If this should not be possible or if the carve -out 
should be particularly difficult, parties may provide the requisite degree of certainty 
for the Commission by prop osing an up -front buyer solution.218 
8.2. Initial Commitments  
(223)  The Initial Commitments, as revised on 19219 and 23 November 2018 ,220 were aimed 
at transferring Knauf’s operations in Austria, Lithuania, Spain, the United Kingdom, 
as well as in Estonia, Latvia, Portugal , Ireland, Italy and Turkey ("the Initially 
Proposed Divestment Business") and consisted of:  
(a) Armstrong's production facility for mineral fibre tiles in Team Valley, UK .; 
(b) Armstrong's production facility for grids in Team Valley, UK .; 
                                                 
215  Remedies Notice, paragraph 23 -25. 
216  Remedies No tice, paragraph 32.  
217  Remedies Notice, paragraph 35.  
218  Remedies Notice, paragraph 36.  
219  The most important changes consisted of: i) including a commitment that Knauf will finance the 
upgrade of the Team Valley facilities up to a maximum budget of EUR […] for the tiles plant and 
EUR  […] for the grids plant; and ii) providing that Knauf will hire necessary personnel for some 
functions and bear the one -off cost of hiring a number of additional employees for some other 
functions.  
220  The most important change s consisted of: i) adding Italy, Estonia, Latvia, Ireland and Portugal to the 
list of Relevant Countries; ii) extending the scope of the IP arrangements both in terms of products 
covered and duration; iii) raising the maximum budget for the upgrades (from EUR […] to […] for the 
tiles plant and from EUR […] to […] for the grids plant); and iv)  extending the duration of the possible 
transitional agreements from […] to […] years.  
 
53 (c) Armstrong's sales opera tions, i.e. the sales teams together with the relevant 
customer bases in Austria, Lithuania, Spain, the United Kingdom, Estonia, 
Ireland, Italy, Latvia, Portugal and Turkey (the 'Relevant Countries');  
(d) Certain (tangible and intangible) assets and staff that  contribute to the current 
operations of the Initially Proposed Divestment Business , including all 
licences, permits and authorisations issued by any governmental organisation 
for the benefit of the Initially Proposed Divestment Business ; all contracts, 
leases, commitments and customer orders of the Initially Proposed 
Divestment Business ; all customer, credit and other records of the Initially 
Proposed Divestment Business;  
(e) Exclusive and royalty -free licenses for the company brand Armstrong , as 
well as for t he relevant product trademarks (for mineral fibre tiles and grids) 
for exclusive use in the Relevant Countries for a term of […] years after 
Closing, with the option for the Initially Proposed Divestment Business  to 
terminate the license at any time, follo wed by a black -out period of […] 
years. The Purchaser would also be offered non -exclusive licences for a term 
of […] years for the relevant product trademarks, with the option for the 
Initially Proposed Divestment Business  to terminate the license at any t ime, 
provided that, outside the Relevant Countries, the product trademarks may 
only be used in conjunction with a brand name ; moreover, the Purchaser 
would also be offered non -exclusive licenses for all relevant production 
related IP ; 
(f) At the option of the Purchaser, the benefit of a supply agreement under which 
the Purchaser would  be able to source certain mineral fibre tiles and grids 
currently sold by Armstrong in the Relevant Countries, but not produced at 
the Team Valley mineral fibre tile facility and the Team Valley grid facility 
for a transitional period until the production of these tiles/grids has been 
insourced by the Purchaser and – in any event – no longer than for a term of 
[…] years after Closing on terms and conditions to be agreed upon betwee n 
the Notifying Party and the Purchaser ; 
(g) To fund the investments necessary to enable the Team Valley mineral fibre 
facility to manufacture Armstrong's [list of products]  mineral fibre tile 
products, undertaken by the Purchaser, up to a sum of EUR […]; 
(h) To fund the investments necessary to enable the Team Valley grid facility to 
manufacture the Armstrong's [list of products]  grid products, undertaken by 
the Purchaser, up to a sum of EUR […]; 
(i) To the extent not already with the Initially Proposed Divestment Bus iness  
and unless not required by the Purchaser, to hire, at Knauf's sole cost, 
adequate personnel (total of […] Full Time Equivalent s ("FTE" )) to carry out 
the functions  of procurement, R&D, marketi ng, technical sales and finance, 
as reasonably necessary t o ensure the viability of the Initially Proposed 
Divestment Business;  
(j) To bear the one -off costs for the hiring of […] additional engineering FTEs, 
[…] additional customers service FTEs, and […] additional IT FTEs, to the 
extent not already with the Initial ly Proposed Divestment Business  and 
reasonably required by the Purchaser ; 
 
54 (k) To bear the costs for the acquisition of the following R&D equipment by the 
Initially Proposed Divestment Business : [list of R&D equipment] ; 
(l) At the option of the Purchaser, for a tra nsitional period of up to […] years 
after Closing, certain transitional services, such as IT systems and processes, 
etc., to be provided by Knauf in order to facilitate a smooth transfer  of the 
Initially Proposed Divestment Business;  
(m) All current arrangemen ts under which Knauf and Armstrong or their 
affiliated undertakings supply products or services to the Initially Proposed 
Divestment Business , unless otherwise agreed with the Purchaser for a 
transitional period of up to  […] years after Closing and on term s and 
conditions equivalent to those at present afforded to the Initially Proposed 
Divestment Business .  
(224)  In addition, the Initial Commitments include d related commitments, inter alia 
regarding the separation of the Initially Proposed Divestment Business  from the 
retained businesses, the preservation of the viability, marketability and 
competitiveness of the Initially Proposed Divestment Business , including the 
appointment of a monitoring trustee and, if necessary, a divestiture trustee.  
8.3. The Commission's mar ket test  
(225)  In view of assessing the appropriateness of the Initial Commitments, the 
Commission  carried out a market test, which was launched on 23 November  2018.  
(226)  In general, the view of the market test respondents was that the Initial Commitments 
could in pr inciple remedy the serious doubts identified by the Commission, but 
subject to modification of the Initial Commitments so as to address a number of 
specific issues described below in paragraphs (227)  et seq . 
8.3.1.   Geographic footpri nt 
(227)  Whereas a number of respondents considered that the geographic footprint of the 
Initially Proposed Divestment Business would be sufficient, some respondents to the 
market test raised substantiated concerns in this regard, explaining why they 
considered the Initially Proposed Divestment Business' geographic footprint to be 
insufficiently homogeneous.221 In this context, some market participants argued that 
transporting the relatively lower -value product mix currently produced in the Team 
Valley plants from the UK would give rise to relatively high shipping costs, 
increasing with the distance to be crossed.222 In line with these considerations, 
several responding competitors considered that the geographic footprint envisaged in 
the Initial Commitments would put  the Initially Proposed Divestment Business at a 
disadvantage compared to its competitors.223 Additional concerns expressed related 
to possible upcoming difficulties for a business producing in the UK to access 
markets in the European Union .224 
                                                 
221  Replies to questions 5.1 a nd 6 of the Questionnaire to Competitors on the Comm itments offered by 
Knauf.  
222  Replies to question 7.1 of the Questionnaire to Competitors on the Commitments offered by Knauf.  
223  Replies to question 6 of the Questionnaire to Competitors on the Commitments offered by Knauf.  
224  Replies to question 4 of the  Questionnaire to Competitors on the Commitments offered by Knauf.  
 
55 8.3.2.  Product portfol io 
(228)  The Initial Commitments included a proposed upgrade of the Team Valley plants, in 
view of enabling this plant to produce a product range comparable to the one 
currently produced and sold by Armstrong in the Relevant Countries. Several 
respondents to the  market test clearly took the view that such an upgrade was indeed 
needed, stressing that the Team Valley facilities currently produce a limited range of 
relatively low -value products.225 In this context, the Commission also notes that the 
commercial terms o f the transitional supply agreement for products not currently 
produced at the Team Valley facilities were , according to the Initial Commitments , 
to be negotiated between Knauf and the Purchaser, which may put the Initially 
Proposed Divestment Business at a competitive disadvantage vis -à-vis the merged 
entity and other competitors.  
(229)  In addition, while a number of respondents to the Commission's market test 
confirmed that carrying out the envisaged upgrade is technically possible ,226 several 
respondents indica ted that the envisaged industrial upgrade s would be complex to 
carry out .227 More specifically, it was suggested that these upgrade s would have a 
more significant cost than the Initial Commitments allowed for (i.e.  a maximum 
budget of EUR  […] in total for bo th plants ).  
8.3.3.  R&D capabilities  
(230)  In their responses to the Commission's market test, respondents stressed the 
importance of sufficient product development capabilities in order for a modular 
ceilings producer to remain successful.228 In this regard, while some market 
respondents considered the R&D arrangements of the Initial Commitments to be 
sufficient, others explicitly questioned the sufficiency of the R&D capabilities 
foreseen in the Initial Commitments, both in terms of the budget made available for 
the pur chasing of additional equipment and of personnel to be hired.229 In addition, 
several market respondents pointed out that it may prove challenging to hire 
adequate R&D personnel.230 
8.3.4.  Potential purchasers  
(231)  In light of the results of the market test, the Commissio n considers that it may prove 
challenging to find a suitable purchaser for the Initially Proposed Divestment 
Business.  
(232)  While most market respondents indicated that the Initial Commitments were 
sufficient to attract a suitable purchaser ,231 most also stresse d the need for a 
purchaser with relevant experience in the business of developing and manufacturing 
                                                 
225  Replies to questions 10.1 and 10.2 of t he Questionnaire to Competitors on the Commitments offered by 
Knauf.  
226  Replies to question 9 of the Questionnaire to Competitors on the Commitments offered by Knauf.  
227  Replies to questions 9.1 and 10.1of the Questionnaire to Competitors on the Commitments offered by 
Knauf.  
228  Replies to question 13 of the Questionnaire to  Competitors on the Commitments offered by Knauf.  
229  Replies to question 14 of the Questionnaire to Competitors on the Commitments offered by Knauf.  
230  Replies to question 14.1 of the Questionnaire to Competitors on the Commitments offered by Knauf.  
231 Repl ies to question 26 of the Questionnaire to Competitors on the Commitments offered by Knauf; and 
replies to question 10 of the Questionnaire to Customers on the Commitments offered by Knauf.  
 
56 mineral fibre tiles and grids for modular suspended ceilings ,232 in particular due to 
the complexities of the carve -out divestment to be achieved, the require d plant 
upgrade and the need to retain Armstrong's customer relationships.  
(233)  However, [information on divestment process] . 
(234)  Furthermore, according to some market respondents, an additional obstacle to 
finding an adequate Purchaser may arise in light of possi ble future restrictions on 
exports from the UK into the European Union  following the date that the UK is 
scheduled to leave the European Union on 29 March 2019.233 
8.4. Final Commitments submitted by Knau f 
8.4.1.  Description of the Final Commitments  
(235)  In response to the C ommission's feedback regarding the outcome of the market test 
and its preliminary assessment, Knauf submitted the Final Commitments on 30 
December 2018, as revised on 6 December 2018. The divested business as provided 
for in the Final Commitments is referr ed to as the "Divestment Business".  
(236)  The Final Commitments feature the following improvements and additions 
compared to the Initial Commitments, while preserving the remainder of the 
elements constituting the Initial Commitments and described above in 
parag raph (223) : 
(a) the scope of the Relevant Countries was extended  to include not only Austria, 
Lithuania, Estonia, Latvia, Spain, Portugal, the UK, Ireland, Italy and 
Turkey, but also Germany  (together the "Final Relevant Countries" ); 
(b) regarding the required investments in view of the industrial upgrade of the 
Team Valley production facilities:  
i. the maximum budget made available for these upgrades was raised to 
EUR […] (for the mineral fibre tiles plant) and EUR  […] (for the 
grids plan t); 
ii. the Final Commitments provide that the Hold Separate Manager will, 
to the extent feasible and reasonable, at his own discretion, prepare 
these investments;  
(c) the Final Commitments provide that the possible transitional supply 
agreements  between the merge d entity and the Divestment Business:  
i. could cover not only the products whose production would be 
insourced as a result of the plant upgrade but also the "specials" not 
covered by the upgrade;  
ii. would be concluded [terms of the transitional supply agreements ]; 
                                                 
232 Replies to question 28 of the Questionnaire to Competitors on t he Commitments offered by Knauf; and 
to question 4 of the Questionnaire to Customers on the Commitments offered by Knauf.  
.233  Replies to question 10.1 of the Q uestionnaire to Customers on the Commitments offered by Knauf.  
 
57 (d) in terms of additional R&D Personnel , the Final Commitments provide that:  
i. Knauf will bear the capped one -off costs of hiring up to […] 
additional FTEs for R&D, to the extent not already with the 
Divestment Business and reasonably required by the Purchas er; 
ii. Knauf will purchase the required R&D equipment for the Purchaser, 
in coordination with the Hold Separate Manager and the Monitoring 
Trustee;  
(e) as for other additional Personnel , the Final Commitments provide that:  
i. Knauf will hire […] FTEs for technical s ales and […] FTEs for 
finance will be hired, whereas the Initial Commitments provided for 
the hiring of only […] FTEs for each of these functions;  
ii. the number of FTEs for whose hiring Knauf will bear the one -off 
costs (as well as the corresponding caps) are  raised for customer 
service personnel (to […] FTEs) and IT (to […] FTEs).  
(f) the Final Commitments give the Divestment Business the possibility, under 
certain conditions, to source from Knauf also those products currently 
produced in the Team Valley facilit ies, in case of difficulties of access to the 
single market after 30 March 2019;  
(g) the Final Commitments provide that the Transaction shall not be 
implemented before Knauf or the Divestiture Trustee has entered into a final 
binding sale and purchase agreemen t for the sale of the Divestment Business  
and the Commission has approved the Purchaser and the terms of sale .  
8.4.2.  Assessment of the proposed remedies  
(237)  For the reasons outlined in Sections 8.4.2.1  through 8.4.2.3  below , the Commission 
deems the Final C ommitments entered into by the undertakings concerned sufficient 
to eliminate its  serious doubts as to the compatibility of the Transaction with the 
internal  market.   
(238)  As such, t he commitments in section  B of the Annex constitute conditions attached 
to this decision, as only through full compliance therewith can the structural changes 
in the relevant markets be achieved. The other commitments set out in the Annex 
constitute obligations, as they concern the im plementing steps, which  are necessary 
to achieve the modifications sought in a manner compatible with the internal  market.  
8.4.2.1.  Removal of competition concerns  
(239)  The Final Commitments will remove the entire overlap between the Parties' 
activities in each of the n ational markets for which the Commission had concerns  
(i.e. the markets for mineral fibre tiles and  for grids for modular suspended ceilings 
in Austria, Spain and the UK and the market for mineral fibre tiles for modular 
suspended ceilings in Lithuania) , and with respect to the UK for the markets for 
mineral fibre tiles and for grids for modular suspended ceilings markets even more 
than the increment , since the business of the stronger of the two Parties will be 
divested. As such, the commitments will remov e all competition concerns.  
 
58 8.4.2.2.  Viability and competitiveness of the divested business  
(240)  The Commission is satisfied that the  Divestment Business  will be viable and 
competitive, in particular in light of the following considerations.  
(241)  First, the Commission takes  the view that in its Final Commitments, Knauf has 
adequately addressed the concerns that had become apparent in the context of the 
market test and discussed above in paragraphs (227)  through (234) . 
(242)  Second, the Commission also assessed whether the expected sales of the Divestment 
Business would enable it to achieve a sufficient capacity utilization rate at the Team 
Valley facilities in order to develop into a viable competitor. Based on information 
provided by the Parties regarding the current output of these facilities and the sales, 
which  the Divestment Business can be expected to achieve in the 11 Final Relevant 
Countries, the Commission concluded that this should indeed be the case. The sales 
in the Final Relevant Countries are likely to exceed the sales currently achieved by 
the Team Valley plants and are therefore likely to preserve at least the existing 
capacity utilization rates.  
(243)  Third, the Commission considers that the commitments regarding th e separation of 
the Divestment Business  from the retained businesses, the preservation of the 
viability, marketability and competitiveness of the divested businesses  in 
combination with the transitional service and supply agreements provide for 
sufficient safeguards to protect the Divestment Business during the interim period 
and allow for a smooth transition to the Purchaser.  
8.4.2.3.  Purchaser criteria  
(244)  The Commission takes the view that the commitment taken by Knauf in paragraph 3 
of the Final Commitments adequate ly addresses the Commission's concerns 
regarding the finding of a suitable Purchaser, inasmuch as Knauf will effectively be 
prevented from closing the Transaction until a binding agreement is entered into for 
the sale of the Divestment Business , with both the Purchaser and the sales terms 
being subject to the Commission's approval.  
9. CONCLUSION  
(245)  For the above reasons, the Commission has decided not to oppose the notified 
operation as modified by the commitments and to declare it compatible with the 
internal m arket and with the functioning of the EEA Agreement, subject to full 
compliance with the conditions in section B  of the commitments annexed to the 
present decision and with the obligations contained in the other sections of the said 
commitments. This decis ion is adopted in application of Article 6(1)(b) in 
conjunction with Article 6(2) of the Merger Regulation  and Article 57 of the EEA 
Agreement . 
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission  
  
  
   6 December 2018  
 
 
Case M.8832 – Knauf/Armstrong  
 
COMMITMENTS TO THE EUROPEAN COMMISSION  
 
Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “ Merger Regulation ”), 
Knauf International GmbH ( “Knauf ” and the “ Notifying Party ”) hereby enters into the 
following Commitments (th e “Commitments ”) vis -à-vis the European Commission (the 
“Commission ”) with a view to rendering the proposed acquisition by Knauf of 100% of the 
shares in (i) the subsidiaries of Armstrong World Industries, Inc. (“ AWI ”) in Europe, the 
Middle East and Africa  (“EMEA ”) and Asia -Pacific (“ APAC ”) and (ii) designated 
subsidiaries of AWI’s 50/50 joint venture with Worthington Industries (“ WAVE ”) with 
operations in EMEA and APAC  (the “ Concentration ”) compatible with the internal market 
and the functioning of the EEA  Agreement.   
 
This text shall be interpreted in light of the Commission’s decision pursuant to Article 6(1)(b) 
of the Merger Regulation to declare the Concentration compatible with the internal market 
and the functioning of the EEA Agreement (the “ Decision ”), in the general framework of 
European Union law, in particular in light of the Merger Regulation, and by reference to  the 
Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and 
under Commission Regulation (EC) No 802/2004  (the “ Remedies Notice ”). 
 
Section A.  Definitions  
 
1. For the purpose of the Commitments, the following terms shall have the following 
meaning:  
 
Affiliated Undertakings : undertakings controlled by the Parties and/or by the ultimate 
parents of the Parties, whe reby the notion of control shall be interpreted pursuant to 
Article 3 of the Merger Regulation and in light of the Commission Consolidated 
Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of 
concentrations between undertakings  (the " Consolidated Jurisdictional Notice ").  
 
Assets: the assets that contribute to the current operation or are necessary to ensure the 
viability and competitiveness of the Divestment Business as indicated in Section B, 
paragraph 7 and described more in detail in the Schedule.   
 
AWI: Armstrong World Industries, incorporated under the laws of Pennsylvania, with its 
registered office at 25 Columbia Avenue, Lancaster, Pennsylvania and registered with the 
Commercial Register of Pennsylvania under number 18304 .  
 
Closing : the transfer of the legal title to the Divestment Business to the Purchaser.  
 
2   
Closing Period : the period of […] from the approval of the Purchaser and the terms of 
sale by the Commission.  
 
Concentration: the notified transaction.  
 
Confidentia l Information : any business secrets, know -how, commercial information, or 
any other information of a proprietary nature that is not in the public domain.  
 
Conflict of Interest : any conflict of interest that impairs the Trustee's objectivity and 
independen ce in discharging its duties under the Commitments.  
 
Divestment Business : the business as defined in Section B and in the Schedule which the 
Notifying Party commits to divest.  
 
Divestiture Trustee : one or more natural or legal person(s) who is/are approv ed by the 
Commission and appointed by Knauf and who has/have received from Knauf the 
exclusive Trustee Mandate to sell the Divestment Business to a Purchaser at no minimum 
price.  
  
Effective Date : the date of adoption of the Decision.  
 
First Divestiture P eriod : the period of […] from the Effective Date.  
 
FTE : Full Time Equivalent.  
 
Hold Separate Manager : the person appointed by Knauf for the Divestment Business to 
manage the day -to-day business under the supervision of the Monitoring Trustee.  
 
Key Functi ons: Procurement, R&D, marketing, technical sales and finance.  
 
Key Personnel : all personnel necessary to maintain the viability and competitiveness of 
the Divestment Business, as listed in the Schedule, including the Hold Separate Manager.  
 
Knauf: Knauf International GmbH, incorporated under the laws of Germany, with its 
registered office at Am Bahnhof 7, 97346 Iphofen, Germany and registered with the local 
court of Würzburg under number HRB 5956.  
 
Monitoring Trustee : one or more natural or legal person( s) who is/are approved by the 
Commission and appointed by Knauf, and who has/have the duty to monitor Knauf’s 
compliance with the conditions and obligations attached to the Decision.  
 
Notifying Party : Knauf.  
 
Parties:  Knauf and AWI.  
 
 
3  Personnel : all staff c urrently employed by the Divestment Business, including staff 
seconded to the Divestment Business, shared personnel as well as the additional personnel 
listed in the Schedule.  
 
Purchaser : the entity approved by the Commission as acquirer of the Divestment 
Business in accordance with the criteria set out in Section D.  
 
Purchaser Criteria : the criteria laid down in paragraph 19 of these Commitments that the 
Purchaser must fulfil in order to be approved by the Commi ssion.  
 
Relevant Countries : Austria, Estonia, Germany, Ireland, Italy, Latvia, Lithuania, 
Portugal, Spain, Turkey and the UK (each a “ Relevant Country ”).  
 
Relevant Products : Mineral fibre tiles and grids for modular suspended ceilings currently 
produced b y the Target for sale in the EEA and Turkey, with the exception of Specials.   
 
Schedule : the schedule to these Commitments describing more in detail the Divestment 
Business.  
 
SPA : The Share Purchase Agreement entered into between Knauf and AWI signed on 1 7 
November 2017, as amended and restated on 22 January 2018 and on 18 July 2018.  
 
Specials : The small remainder products not producible in the Team Valley MF Facility 
after the insourcing funded by the Notifying Party, but sold by the Divestment Business i n 
2017 and still in the Target’s product portfolio. See AWI Confidential Annex 14  for an 
exhaustive list.  
 
Target : AWI’s business acquired by Knauf.  
 
Target Sales Team : The Target’s sales teams for the sale of modular suspended ceilings 
in Austria, Estoni a, Germany, Ireland, Italy, Latvia Lithuania, Portugal, Spain, Turkey and 
the UK  (each a “ Target Sales Team ”). 
 
Team Valley Grid Facility : The Target’s production facility for grids in Team Valley, 
UK. 
 
Team Valley MF Facility: The Target’s production faci lity for mineral fibre tiles in 
Team Valley, UK.  
 
Trustee(s) : the Monitoring Trustee and/or the Divestiture Trustee as the case may be.  
 
Trustee Divestiture Period : the period of […] from the end of the First Divestiture 
Period.  
 
 
 
4  Section B.  The commitment  to divest and the Divestment Business  
 
 Commitment to divest  
 
2. In order to maintain effective competition, the Notifying Party commits to divest, or 
procure the divestiture of the Divestment Business by the end of the Trustee 
Divestiture Period as a going concern to a purchaser and on terms of sale approved by 
the Commission in accordance with the procedure described in paragraph 20 of these 
Commitments. To carry out the divestiture, the Notifying Party commits to  find a 
purchaser and to enter into a final binding sale and purchase agreement for the sale of 
the Divestment Business within the First Divestiture Period. If the Notifying Party has 
not entered into such an agreement at the end of the First Divestiture P eriod, the 
Notifying Party shall grant the Divestiture Trustee an exclusive mandate to sell the 
Divestment Business in accordance with the procedure described in paragraph 32 in 
the Trustee Divestiture Period.  
 
3. The proposed concentration shall not be implemented before the Notifying Party or 
the Divestiture Trustee has entered into a final binding sale and purchase agreement 
for the sale of the Divestment Business and the Commission has approved the 
purchaser and  the terms of sale in accordance with paragraph 20.  
 
4. The Notifying Party shall be deemed to have complied with this commitment if:  
 
 (a) by the end of the Trustee Divestiture Period, the Notifying Party or the 
Divestiture Trustee has entered into a final binding sale and purchase 
agreement and the Commission approves the proposed purchaser and the terms 
of sale as being consistent with the Commitments in accordance with the 
procedure described in paragraph 20; and  
 
 (b) the Closing of the sale of the Divestment Business to the Purchaser takes place 
within the Closing Period.  
 
5. In order to maintain the structural effect of the Commitments, the Notifying Party 
shall, for a period of 10 years after Closing, not acquire, whether directly or indirectly, 
the possibility of exercising influence (as defined in paragraph 43 of the Remedies 
Notice, footnote 3) over the whole or part of the Divestment Business, unless, 
following th e submission of a reasoned request from the Notifying Party showing 
good cause and accompanied by a report from the Monitoring Trustee (as provided in 
paragraph 46 of these Commitments), the Commission finds tha t the structure of the 
market has changed to such an extent that the absence of influence over the 
Divestment Business is no longer necessary to render the proposed concentration 
compatible with the internal market.  
  
Structure and definition of the Divest ment Business  
 
6. The Divestment Business comprises the Target’s mineral fibre tiles and grids business 
in the Relevant Countries, in particular (i) the Target’s sales operations in the Relevant 
Countries, including the Target Sales Teams together with their entire relevant 
 
5  customer base; (ii) the Team Valley MF Facility, and (iii) the Team Valley Grid 
Facility.  
 
7. The Divestment Business, described in more detail in the Schedule, includes certain 
assets and staff that contribute to the current operation or are  necessary to ensure the 
viability and competitiveness of the Divestment Business, in particular:  
 
(a) all tangible and intangible assets;  
 
(b) all licences, permits and authorisations issued by any governmental 
organisation for the benefit of the Divestment Busin ess;  
 
(c) all contracts, leases, commitments and customer orders of the Divestment 
Business; all customer, credit and other records of the Divestment Business; 
and 
 
(d) the Personnel.  
 
8. In addition, the Divestment Business includes,  
(a) exclusive and royalty -free li censes for the company brand Armstrong as well 
as for the relevant product trademarks (for mineral fibre tiles, including 
Specials, and grids) for exclusive use for the Relevant Products in the Relevant 
Countries for a term of […] years after Closing (whic h may be used in parallel 
to different existing brands by the Divestment Business)1, with the option for 
the Divestment Business to terminate the license at any time, followed by a 
black -out period of […] years; non -exclusive licences for a term of […] years 
for the relevant product trademarks, with the option for the Divestment 
Business to terminate the license at any time,  will also be offered on an 
EEA -wide basis, provided that, outside the Relevant Countries, the product 
trademarks may only be used in c onjunction with a brand name; moreover, the 
Purchaser will also be offered non -exclusive licenses for all relevant 
production related IP as set out in greater detail in the Schedule;  
 
(b) at the option of the Purchaser, the benefit of a supply agreement under  which 
the Purchaser will be able to source, sold by the Notifying Party [terms of the 
supply agreements] , certain mineral fibre tiles and grids currently sold by the 
Target but not produced at the Team Valley MF Facility2 and the Team Valley 
Grid Facility3 for a transitional period until the production of these tiles/grids 
has been insourced by the Purchaser and – in any event – no longer than for a 
term of […] years from Closing;  
 
                                                 
1  Note that the license would n ot bar the Notifying Party from manufacturing products under the brand(s) and 
product trademarks in the Relevant Countries.  
2  This relates to the Target’s [list of products] , as well as [list of products] , the Target’s [list of products] .  
3  This relates  to the following grid products manufactured by the Target:  [list of products] .  
 
6  (c) in case of difficulties of access to the single market after 30 March 2019,  at the 
request of the Purchaser and approved by the European Commission based on a 
reasoned submission of the Monitoring Trustee, the benefit of a supply 
agreement under which the Purchaser will be able to source the Relevant 
Products and Specials from th e Notifying Party (i.e., those Relevant Products 
and Specials which the Notifying Party produces in its plants) irrespective of 
the insourcing for a period of […], which may be extended on a yearly basis up 
to a total of […] years from Closing, […] that al lows the Divestment Business 
to be competitive;  
 
(d) a commitment of the Notifying Party to fund the investments necessary to 
enable the Team Valley MF Facility to manufacture the Target’s [list of 
products]  mineral fibre tile products, undertaken by the Purch aser and, to the 
extent feasible and reasonable, prepared by the Hold Separate Manager at his 
own discretion, up to a sum of EUR […], whereas the question whether the 
investments are necessary, feasible and reasonable shall be established taking 
into consi deration AWI Confidential Annex IV and will be  subject to review 
by the Monitoring Trustee;  
 
(e) a commitment of the Notifying Party to fund the investments necessary to 
enable the Team Valley Grid Facility to manufacture the Target’s following 
grid products: [list of products] , undertaken by the Purchaser and, to the extent 
feasible and reasonable, prepared by the Hold Separate Manager at his own 
discretion, up to a sum of EUR […]; 
 
(f) to the extent not already with the Divestment Business and unless not required  
by the Purchaser, a commitment of the Notifying Party to hire, in coordination 
with the Hold Separate Manager and the Purchaser, at its sole cost, adequate 
personnel to carry out the Key Functions as reasonably necessary to ensure the 
viability of the Div estment Business – i.e. […]FTEs in procurement, […]FTE 
in R&D, […]FTEs in marketing, […]FTEs in technical sales and […]FTEs in 
finance; this personnel shall be available to the Purchaser at the day of Closing;  
 
(g) the benefit of the Notifying Party bearing t he one -off costs of up to EUR […] 
for the hiring of up to […] additional R&D FTEs, to the extent not already with 
the Divestment Business and reasonably required by the Purchaser;  
(h) the benefit of the Notifying Party bearing the one -off costs of up to EUR […] 
for the hiring of […] additional engineering FTEs, to the extent not already 
with the Divestment Business and reasonably required by the Purchaser;  
(i) the benefit of the Notifying Party bearing the one -off costs of up to EUR […] 
for the hiring of […] additi onal customer service FTEs, to the extent not 
already with the Divestment Business and reasonably required by the 
Purchaser;  
(j) the benefit of the Notifying Party bearing the one -off costs of up to EUR […] 
for the hiring of […] additional IT FTEs, to the ext ent not already with the 
Divestment Business and reasonably required by the Purchaser;  
 
7  (k) the benefit of the Notifying Party purchasing, in coordination with the Hold 
Separate Manager and the Monitoring Trustee, the following R&D equipment 
for the Divestment Business, to the extent not already with the Divestment 
Business and reasonably required by the Purchaser, to be available to the 
Divestment Business at the day of Closing: [list of R&D equipment ];4  
 
(l) at the option of the Purchaser, for a transitional peri od of up to […] years after 
Closing, the benefit of certain transitional services, such as IT systems and 
processes, etc., to be provided by the Notifying Party [terms of transitional 
services  agreements]  in order to facilitate a smooth transfer of the Div estment 
Business;  
 
(m) all current arrangements under which the Parties or their Affiliated 
Undertakings supply products or services to the Divestment Business, as 
detailed in the Schedule, unless otherwise agreed with the Purchaser for a 
transitional period of up to […] years after Closing and on terms and 
conditions equivalent to those at present afforded to the Divestment Business.  
 
9. Strict firewall procedures will be adopted so as to ensure that any competitively 
sensitive information related to, or arisin g from such supply arrangements (for 
example, product roadmaps) will not be shared with, or passed on to, anyone outside 
the relevant operations.  
 
 Section C.   Related commitments  
 
 Preservation of viability, marketability and competitiveness  
 
10. From the Ef fective Date until Closing, the Notifying Party shall preserve or procure 
the preservation of the economic viability, marketability and competitiveness of the 
Divestment Business, in accordance with good business practice, and shall minimise 
as far as poss ible any risk of loss of competitive potential of the Divestment Business. 
In particular Knauf undertakes:  
(a) not to carry out any action that might have a significant adverse impact on the 
value, management or competitiveness of the Divestment Business or that 
might alter the nature and scope of activity, or the industrial or commercial 
strategy or the investment policy of the Divestment Business;  
(b) to make available, or procure to make available, sufficient resources for the 
development of the Divest ment Business, on the basis and continuation of the 
existing business plans;  
(c) to take all reasonable steps, or procure that all reasonable steps are being taken, 
including appropriate incentive schemes (based on industry practice), to 
encourage all Key Personnel to remain with the Divestment Business, and not 
                                                 
4  Note that, already today, the Divestment Business has the following R&D equipment: [list of R&D 
equipment ].  
 
8  to solicit or move any Personnel to the Notifying Party’s remaining businesses. 
Where, nevertheless, individual members of the Key Personnel exceptionally 
leave the Divestment Business, the Notifyin g Party shall provide a reasoned 
proposal to replace the person or persons concerned to the Commission and the 
Monitoring Trustee. The Notifying Party must be able to demonstrate to the 
Commission that the replacement is well suited to carry out the functi ons 
exercised by those individual members of the Key Personnel. The replacement 
shall take place under the supervision of the Monitoring Trustee, who shall 
report to the Commission.  
 
 Hold -separate obligations  
 
11. The Notifying Party commits, from the Effect ive Date until Closing, to procure that 
the Divestment Business is kept separate from the business that the Notifying Party 
will be retaining and, after closing of the notified transaction to keep the Divestment 
Business separate from the business that the  Notifying Party is retaining  and to ensure 
that unless explicitly permitted under these Commitments: (i) management and staff of 
the businesses retained by the Notifying Party have no involvement in the Divestment 
Business; (ii) the Key Personnel and Pers onnel of the Divestment Business have no 
involvement in any business retained by the Notifying Party and do not report to any 
individual outside the Divestment Business.  
 
12. Until Closing, the Notifying Party shall assist the Monitoring Trustee in ensuring th at 
the Divestment Business is managed as a distinct and saleable business separate from 
the businesses which the Notifying Party is retaining. Immediately after the adoption 
of the Decision, the Notifying Party shall appoint a Hold Separate Manager. The Ho ld 
Separate Manager, who shall be part of the Key Personnel, shall manage the 
Divestment Business independently and in the best interest of the business with a view 
to ensuring its continued economic viability, marketability and competitiveness and its 
independence from the businesses retained by the Notifying Party . The Hold Separate 
Manager shall closely cooperate with and report to the Monitoring Trustee and, if 
applicable, the Divestiture Trustee. Any replacement of the Hold Separate Manager 
shall be su bject to the procedure laid down in paragraph 10(c) of these Commitments. 
The Commission may, after having heard the Notifying Party, require the Notifying 
Party to replace the Hold Separate Manager.  
 
13. To ensure  that the Divestment Business is held and managed as a separate entity the 
Monitoring Trustee shall exercise the Notifying Party’s rights as shareholder in the 
legal entities that form part of the Divestment Business (except for its rights in respect 
of di vidends that are due before Closing and except for any rights relating to carving 
out assets and relating to complying with the commitments of the Notifying Party to 
prepare for the sale of the Divestment Business), with the aim of acting in the best 
interest of the business, which shall be determined on a stand -alone basis, as an 
independent financial investor, and with a view to fulfilling the Notifying Party’s 
obligations under the Commitments. Furthermore, the Monitoring Trustee shall have 
the power to replace members of the supervisory board or non -executive directors of 
the board of directors, who have been appointed on behalf of the Notifying Party. 
 
9  Upon request of the Monitoring Trustee, the Notifying Party shall resign as a member 
of the boards or s hall cause such members of the boards to resign.  
 
 Ring -fencing  
 
14. The Notifying Party shall implement, or procure to implement, all necessary measures 
to ensure that it does not, after the Effective Date, obtain any Confidential Information 
relating to the Divestment Business and that any such Confidential Information 
obtained by the Notifying Party before the Effective Date will be eliminated and not 
be used by the Notifying Party. This includes measures vis -à-vis any appointees on the 
supervisory board and /or board of directors of the Divestment Business.  In particular, 
the participation of the Divestment Business in any central information technology 
network shall be severed to the extent possible, without compromising the viability of 
the Divestment Busin ess. The Notifying Party may obtain or keep information relating 
to the Divestment Business which is reasonably necessary for the divestiture of the 
Divestment Business, the carrying out of their obligations under these Commitments 
or the disclosure of whi ch to the Notifying Party is required by law.  
 
 Non-solicitation clause  
 
15. The Parties undertake, subject to customary limitations, not to solicit, and to procure 
that Affiliated Undertakings do not solicit, the Key Personnel transferred with the 
Divestment  Business for a period of three years after Closing.  
 
 Due diligence  
 
16. In order to enable potential purchasers to carry out a reasonable due diligence of the 
Divestment Business, the Notifying Party shall, subject to customary confidentiality 
assurances an d dependent on the stage of the divestiture process:  
(a) provide to potential purchasers sufficient information as regards the 
Divestment Business;  
(b)  provide to potential purchasers sufficient information relating to the Personnel 
and allow them reaso nable access to the Personnel.  
 
 Reporting  
 
17. The Notifying Party shall submit written reports in English on potential purchasers of 
the Divestment Business and developments in the negotiations with such potential 
purchasers to the Commission and the Monito ring Trustee no later than 10 days after 
the end of every month following the Effective Date (or otherwise at the 
Commission’s request). The Notifying Party shall submit a list of all potential 
purchasers having expressed interest in acquiring the Divestme nt Business to the 
Commission at each and every stage of the divestiture process, as well as a copy of all 
the offers made by potential purchasers within five days of their receipt.  
 
18. The Notifying Party shall inform the Commission and the Monitoring Truste e on the 
preparation of the data room documentation and the due diligence procedure and shall 
 
10  submit a copy of any information memorandum to the Commission and the 
Monitoring Trustee before sending the memorandum out to potential purchasers.  
 
Section D.  The Purchaser  
 
19. In order to be approved by the Commission, the Purchaser must fulfil the following 
criteria:  
(a)  The Purchaser shall be independent of and unconnected to the Notifying Party 
and its Affiliated Undertakings (this being assessed having regard to the 
situation following the divestiture).  
(b)  The Purchaser shall have the financial resources, proven expertise and 
incentive to maintain and develop the Divestment Business as a viable and 
active competitive force in competition with the Parties and  other competitors;  
(c)  The acquisition of the Divestment Business by the Purchaser must neither be 
likely to create, in light of the information available to the Commission, prima 
facie competition concerns nor give rise to a risk that the implementatio n of the 
Commitments will be delayed. In particular, the Purchaser must reasonably be 
expected to obtain all necessary approvals from the relevant regulatory 
authorities for the acquisition of the Divestment Business.  
 
20. The final binding sale and purchase a greement (as well as ancillary agreements) 
relating to the divestment of the Divestment Business shall be conditional on the 
Commission’s approval. When the Notifying Party has reached an agreement with a 
purchaser, it shall submit a fully documented and r easoned proposal, including a copy 
of the final agreement(s), within one week to the Commission and the Monitoring 
Trustee. The Notifying Party must be able to demonstrate to the Commission that the 
purchaser fulfils the Purchaser Criteria and that the Div estment Business is being sold 
in a manner consistent with the Commission's Decision and the Commitments. For the 
approval, the Commission shall verify that the purchaser fulfils the Purchaser Criteria 
and that the Divestment Business is being sold in a ma nner consistent with the 
Commitments including their objective to bring about a lasting structural change in the 
market. The Commission may approve the sale of the Divestment Business without 
one or more Assets or parts of the Personnel, or by substituting  one or more Assets or 
parts of the Personnel with one or more different assets or different personnel, if this 
does not affect the viability and competitiveness of the Divestment Business after the 
sale, taking account of the proposed purchaser.  
 
Section  E. Trustee  
 
 I. Appointment procedure  
 
21. The Notifying Party shall appoint a Monitoring Trustee to carry out the functions 
specified in these Commitments for a Monitoring Trustee. The Notifying Party 
commits not to close the Concentration before the appoint ment of a Monitoring 
Trustee.  
 
11   
22. If the Notifying Party has not entered into a binding sale and purchase agreement 
regarding the Divestment Business one month before the end of the First Divestiture 
Period or if the Commission has rejected a purchaser propo sed by the Notifying Party 
at that time or thereafter, the Notifying Party shall appoint a Divestiture Trustee. The 
appointment of the Divestiture Trustee shall take effect upon the commencement of 
the Trustee Divestiture Period.  
 
23. The Trustee shall:  
(i) at the time of appointment, be independent of the Notifying Party and their 
Affiliated Undertakings;  
(ii) possess the necessary qualifications to carry out its mandate, for example have 
sufficient relevant experience as an investment banker or consultant or auditor; and  
(iii) neither have nor become exposed to a Conflict of Interest.  
 
24. The Trustee shall be remunerated by the Notifying Party in a way that does not impede 
the independent and effective fulfilment of its mandate. In particular, where the 
remu neration package of a Divestiture Trustee includes a success premium linked to 
the final sale value of the Divestment Business, such success premium may only be 
earned if the divestiture takes place within the Trustee Divestiture Period.  
 
  Proposal by th e Notifying Party   
 
25. No later than two weeks after the Effective Date, the Notifying Party shall submit the 
name or names of one or more natural or legal persons whom the Notifying Party 
proposes to appoint as the Monitoring Trustee to the Commission for ap proval. No 
later than one month before the end of the First Divestiture Period or on request by the 
Commission, the Notifying Party shall submit a list of one or more persons whom the 
Notifying Party proposes to appoint as Divestiture Trustee to the Commis sion for 
approval. The proposal shall contain sufficient information for the Commission to 
verify that the person or persons proposed as Trustee fulfil the requirements set out in 
paragraph 23 and shall include:  
 
(a) the full terms of the proposed mandate, which shall include all provisions 
necessary to enable the Trustee to fulfil its duties under these Commitments;  
(b) the outline of a work plan which describes how the Trustee intends to carry out 
its assigned  tasks;  
(c)  an indication whether the proposed Trustee is to act as both Monitoring Trustee 
and Divestiture Trustee or whether different trustees are proposed for the two 
functions.  
 
  Approval or rejection by the Commission  
 
26. The Commission shall have th e discretion to approve or reject the proposed Trustee(s)  
and to approve the proposed mandate subject to any modifications it deems necessary 
for the Trustee to fulfil its obligations. If only one name is approved, the Notifying 
Party  shall appoint or caus e to be appointed the person or persons concerned as 
 
12  Trustee, in accordance with the mandate approved by the Commission. If more than 
one name is approved, the Notifying Party shall be free to choose the Trustee to be 
appointed from among the names approve d. The Trustee shall be appointed within one 
week of the Commission’s approval, in accordance with the mandate approved by the 
Commission.  
   
  New proposal by the Notifying Party   
 
27. If all the proposed Trustees are rejected, the Notifying Party shall submi t the names of 
at least two more natural or legal persons within one week of being informed of the 
rejection, in accordance with paragraphs 21 and 26 of these Commitment s.  
 
  Trustee nominated by the Commission  
 
28. If all further proposed Trustees are rejected by the Commission, the Commission shall 
nominate a Trustee, whom the Notifying Party shall appoint, or cause to be appointed, 
in accordance with a trustee mandate app roved by the Commission.  
 
 
 II. Functions of the Trustee  
 
29. The Trustee shall assume its specified duties and obligations in order to ensure 
compliance with the Commitments. The Commission may, on its own initiative or at 
the request of the Trustee or the No tifying Party, give any orders or instructions to the 
Trustee in order to ensure compliance with the conditions and obligations attached to 
the Decision.  
 
  Duties and obligations of the Monitoring Trustee  
 
30. The Monitoring Trustee shall:  
 
(i)   propose in its  first report to the Commission a detailed work plan describing how it 
intends to monitor compliance with the obligations and conditions attached to the 
Decision.  
 
(ii) oversee, in close co -operation with the Hold Separate Manager, the on -going 
management of t he Divestment Business with a view to ensuring its continued 
economic viability, marketability and competitiveness and monitor compliance by 
the Parties with the conditions and obligations attached to the Decision. To that 
end the Monitoring Trustee shall:   
 
  (a) monitor the preservation of the economic viability, marketability and 
competitiveness of the Divestment Business, and the keeping separate of the 
Divestment Business from the businesses retained by the Notifying Party, in 
accordance with paragraph s 10 and 11 of these Commitments;  
 
  (b) supervise the management of the Divestment Business as a distinct and 
saleable entity, in accordance with paragraph 12 of these Commitments;  
 
13   
  (c) with respect to Confidential Information:  
 determine all necessary measures to ensure that the Notifying Party 
does not after the Effective Date obtain any Confidential Information 
relating to t he Divestment Business,  
 in particular strive for the severing of the Divestment Business’ 
participation in a central information technology network to the extent 
possible, without compromising the viability of the Divestment 
Business,  
 make sure that any Confidential Information relating to the Divestment 
Business obtained by the Notifying Party before the Effective Date is 
eliminated and will not be used by the Notifying Party and  
 decide whether such information may be disclosed to or kept by the 
Notifyi ng Party as the disclosure is reasonably necessary to allow the 
Notifying Party to carry out the divestiture or their obligations under 
these Commitments or as the disclosure is required by law.  
 
  (d) monitor the splitting of assets and the allocation of Personnel between the 
Divestment Business and the Parties or Affiliated Undertakings;   
 
(iii) propose to the Notifying Party such measures as the Monitoring Trustee considers 
necessary to ensure the Notifying Party’s compliance with the conditions and 
obligation s attached to the Decision, in particular the maintenance of the full 
economic viability, marketability or competitiveness of the Divestment Business, 
the holding separate of the Divestment Business and the non -disclosure of 
competitively sensitive informa tion; 
 
(iv) review and assess potential purchasers as well as the progress of the divestiture 
process and verify that, dependent on the stage of the divestiture process:  
 
  (a) potential purchasers receive sufficient and correct information relating to the 
Dive stment Business and the Personnel in particular by reviewing, if 
available, the data room documentation, the information memorandum and 
the due diligence process, and  
  (b) potential purchasers are granted reasonable access to the Personnel;  
 
(v) act as a con tact point for any requests by third parties, in particular potential 
purchasers, in relation to the Commitments;  
 
(vi) provide to the Commission, sending the Notifying Party a non -confidential copy at 
the same time, a written report within 15 days after the en d of every month that 
shall cover the operation and management of the Divestment Business as well as 
the splitting of assets and the allocation of Personnel so that the Commission can 
assess whether the business is held in a manner consistent with the Comm itments 
and the progress of the divestiture process as well as potential purchasers;  
 
 
14  (vii) promptly report in writing to the Commission, sending the Notifying Party a non -
confidential copy at the same time, if it concludes on reasonable grounds that the 
Partie s are failing to comply with these Commitments;  
 
(viii) within one week after receipt of the documented proposal referred to in paragraph 
20 of these Commitments, submit to the Commission, sending the Notifying Party 
a non-confidential copy at the same time, a reasoned opinion as to the suitability 
and independence of the proposed purchaser and the viability of the Divestment 
Business after the Sale and as to whether the Divestment Business is sold in a 
manner consistent  with the conditions and obligations attached to the Decision, in 
particular, if relevant, whether the Sale of the Divestment Business without one or 
more Assets or not all of the Personnel affects the viability of the Divestment 
Business after the sale, t aking account of the proposed purchaser;  
 
(ix) assume the other functions assigned to the Monitoring Trustee under the 
conditions and obligations attached to the Decision.  
 
31. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the  
Monitoring Trustee and the Divestiture Trustee shall cooperate closely with each other 
during and for the purpose of the preparation of the Trustee Divestiture Period in order 
to facilitate each other's tasks.  
 
  Duties and obligations of the Divestiture Trustee  
 
32. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no 
minimum price the Divestment Business to a purchaser, provided that the Commission 
has approved both the purchaser and the final binding sale and purchase agreement 
(and ancillary agreements) as in line with the Commission's Decision and the 
Commitments in accordance with paragraphs 19 and 20 of these Commitments. The 
Divestiture Tr ustee shall include in the sale and purchase agreement (as well as in any 
ancillary agreements) such terms and conditions as it considers appropriate for an 
expedient sale in the Trustee Divestiture Period. In particular, the Divestiture Trustee 
may includ e in the sale and purchase agreement such customary representations and 
warranties and indemnities as are reasonably required to effect the sale. The 
Divestiture Trustee shall protect the legitimate financial interests of the Notifying 
Party, subject to th e Notifying Party’s unconditional obligation to divest at no 
minimum price in the Trustee Divestiture Period.  
 
33. In the Trustee Divestiture Period (or otherwise at the Commission’s request), the 
Divestiture Trustee shall provide the Commission with a compre hensive monthly 
report written in English on the progress of the divestiture process. Such reports shall 
be submitted within 15 days after the end of every month with a simultaneous copy to 
the Monitoring Trustee and a non -confidential  copy to the Notifyin g Party.  
 
 III. Duties and obligations of the Parties  
 
34.  The Notifying Party shall provide and shall cause its advisors to provide the Trustee 
with all such co -operation, assistance and information as the Trustee may reasonably 
 
15  require to perform its tasks . The Trustee shall have full and complete access to any of 
the Notifying Party’s or the Divestment Business’ books, records, documents, 
management or other personnel, facilities, sites and technical information necessary 
for fulfilling its duties under th e Commitments and the Notifying Party and the 
Divestment Business shall provide the Trustee upon request with copies of any 
document. The Notifying Party and the Divestment Business shall make available to 
the Trustee one or more offices on their premises and shall be available for meetings 
in order to provide the Trustee with all information necessary for the performance of 
its tasks.  
 
35. The Notifying Party shall provide the Monitoring Trustee with all managerial and 
administrative support that it may reason ably request on behalf of the management of 
the Divestment Business. This shall include all administrative support functions 
relating to the Divestment Business which are currently carried out at headquarters 
level. The Notifying Party shall provide and sh all cause its advisors to provide the 
Monitoring Trustee, on request, with the information submitted to potential 
purchasers, in particular give the Monitoring Trustee access to the data room 
documentation and all other information granted to potential pur chasers in the due 
diligence procedure. The Notifying Party shall inform the Monitoring Trustee on 
possible purchasers, submit lists of potential purchasers at each stage of the selection 
process, including the offers made by potential purchasers at those stages, and keep 
the Monitoring Trustee informed of all developments in the divestiture process.  
 
36. The Notifying Party shall grant or procure Affiliated Undertakings to grant 
comprehensive powers of attorney, duly executed, to the Divestiture Trustee to ef fect 
the sale (including ancillary agreements), the Closing and all actions and declarations 
which the Divestiture Trustee considers necessary or appropriate to achieve the sale 
and the Closing, including the appointment of advisors to assist with the sale  process. 
Upon request of the Divestiture Trustee, the Notifying Party shall cause the documents 
required for effecting the sale and the Closing to be duly executed.  
 
37. The Notifying Party shall indemnify the Trustee and its employees and agents (each an 
“Indemnified Party ”) and hold each Indemnified Party harmless against, and hereby 
agrees that an Indemnified Party shall have no liability to the Notifying Party for, any 
liabilities arising out of the performance of the Trustee’s duties under the 
Commitments , except to the extent that such liabilities result from the wilful default, 
recklessness, gross negligence or bad faith of the Trustee, its employees, agents or 
advisors.  
 
38. At the expense of the Notifying Party, the Trustee may appoint advisors (in particu lar 
for corporate finance or legal advice or expert advice on the work necessary, feasible 
and reasonable for the insourcing), subject to the Notifying Party’s approval (this 
approval not to be unreasonably withheld or delayed) if the Trustee considers the  
appointment of such advisors necessary or appropriate for the performance of its 
duties and obligations under the Mandate, provided that any fees and other expenses 
incurred by the Trustee are reasonable. Should the Notifying Party refuse to approve 
the a dvisors proposed by the Trustee the Commission may approve the appointment of 
such advisors instead, after having heard the Notifying Party. Only the Trustee shall 
 
16  be entitled to issue instructions to the advisors. Paragraph 37 of these Commitments 
shall apply mutatis mutandis . In the Trustee Divestiture Period, the Divestiture Trustee 
may use advisors who served the Notifying Party during the Divestiture Period if the 
Divestiture Trustee considers this in the best  interest of an expedient sale.  
 
39. The Notifying Party agrees that the Commission may share Confidential Information 
proprietary to the Notifying Party with the Trustee. The Trustee shall not disclose such 
information and the principles contained in Article 17 (1) and (2) of the Merger 
Regulation apply mutatis mutandis .  
 
40. The Notifying Party agrees that the contact details of the Monitoring Trustee are 
published on the website of the Commission's Directorate -General for Competition 
and it shall inform interes ted third parties, in particular any potential purchasers, of the 
identity and the tasks of the Monitoring Trustee.  
 
41. For a period of 10 years from the Effective Date the Commission may request all 
information from the Parties that is reasonably necessary t o monitor the effective 
implementation of these Commitments.  
 
 IV. Replacement, discharge and reappointment of the Trustee  
 
42. If the Trustee ceases to perform its functions under the Commitments or for any other 
good cause, including the exposure of the Trus tee to a Conflict of Interest:  
 
(a) the Commission may, after hearing the Trustee and the Notifying Party , 
require the Notifying Party to replace the Trustee; or  
(b) the Notifying Party may, with the prior approval of the Commission, replace 
the Trustee.   
43. If the Trustee is removed according to paragraph 42 of these Commitments, the 
Trustee may be required to continue in its function until a new Trustee is in place to 
whom the Trustee has effected a full hand ove r of all relevant information. The new 
Trustee shall be appointed in accordance with the procedure referred to in paragraphs 
21-28 of these Commitments.  
 
44. Unless remov ed according to paragraph 42 of these Commitments, the Trustee shall 
cease to act as Trustee only after the Commission has discharged it from its duties 
after all the Commitments with which the Trustee has been e ntrusted have been 
implemented. However, the Commission may at any time require the reappointment of 
the Monitoring Trustee if it subsequently appears that the relevant remedies might not 
have been fully and properly implemented.  
 
Section F.  The review cla use 
 
45. The Commission may extend  the time periods foreseen in the Commitments  in 
response to a request from the Notifying Party or, in appropriate cases, on its own 
initiative. Where the Notifying Party requests an extension of a time period, it shall 
submit  a reasoned request to the Commission no later than one month before the 
 
17  expiry of that period, showing good cause . This request shall be accompanied by a 
report from the Monitoring Trustee, who shall, at the same time send a non -
confidential copy of the r eport to the Notifying Party. Only in exceptional 
circumstances shall the Notifying Party be entitled to request an extension within the 
last month of any period.  
 
46. The Commission may further, in response to a reasoned request from the Notifying 
Party show ing good cause waive, modify or substitute, in exceptional circumstances, 
one or more of the undertakings in these Commitments. This request shall be 
accompanied by a report from the Monitoring Trustee, who shall, at the same time 
send a non -confidential c opy of the report to the Notifying Party. The request shall not 
have the effect of suspending the application of the undertaking and, in particular, of 
suspending the expiry of any time period in which the undertaking has to be complied 
with.  
 
Section G.  Entry into force  
 
47. The Commitments shall take effect upon the date of adoption of the Decision.  
 
 
duly authorised for and on behalf of Knauf International GmbH  
 
  
 
18  SCHEDULE  
 
1. The Divestment Business comprises the Target’s mineral fibre and grids business in 
the Relevant Countries, in particular  
(a) the Target’s sales operations in the Relevant Countries, including the Target 
Sales Teams together with their entire relevant customer base;  
(b) the Team Valley MF Facility, and  
(c) the Team Valley Grid Facility,  
together wit h all essential functions which are necessary to ensure the viability and 
competitiveness of the business, as set out below.  
 
2. In accordance with paragraphs 6-8 of thes e Commitments, the Divestment Business 
includes, but is not limited to:  
(a) all tangible assets and production equipment/machinery of the Team Valley MF 
Facility and the Team Valley Grid Facility as well as all tangible assets 
necessary to continue the Target ’s sales operations in the Relevant Countries. A 
list of all tangible assets that will form part of the Divestment Business is 
contained in AWI Confidential  Annex  2;  
(b) exclusive and royalty -free licenses for the company brand Armstrong as well as 
for the re levant product trademarks (for mineral fibre tiles, including Specials, 
and grids) for exclusive use for the Relevant Products in the Relevant Countries 
for a term of […] years (which may be used in parallel to different existing 
brands by the Divestment B usiness)5, with the option for the Divestment 
Business to terminate the license at any time, followed by a black -out period of 
[…] years. Non -exclusive licences for a term of […] years for the relevant 
product trademarks, with the option for the Divestment  Business to terminate the 
license at any time, will also be offered on an EEA -wide basis, provided that, 
outside the Relevant Countries, the product trademarks may only be used in 
conjunction with a brand name. Moreover, the Purchaser will also be offered  
non-exclusive licenses for all relevant production related IP. The terms and 
conditions of these trademark and other IP licenses are further described in AWI 
Confidential  Annex 3 ;  
(c) main necessary licences, permits and authorisations, a list of which is co ntained 
in AWI Confidential  Annex 4 ; 
(d) the entire customer base of the Target Sales Teams in relation to the Relevant 
Products, including – to the extent existing and still running at the time of 
Closing – all customer contacts, contracts, commitments, inven tory and orders in 
relation to the sale of the Relevant Products in the Relevant Countries. A list of 
the Target’s customers in relation to the Relevant Products in the Relevant 
Countries is provided in AWI Confidential Annex 5 ; to the extent the transfer 
of a customer contract/order requires the customer’s consent, the Parties will use 
                                                 
5  Note that the license would not bar the Notifying Party from  manufacturing products under the brand(s) and 
product trademarks in the Relevant Countries.  
 
19  their best endeavours to procure the customer’s consent; to the extent customer 
contracts/orders also relate to other products (e.g. metal tiles), the Parties will 
use their  best endeavours to procure the customer’s consent to split these 
agreements and to procure that all Relevant Products in the Relevant Countries 
are henceforth supplied by the Divestment Business.  
(e) all Personnel and Key Personnel, a list of which is contai ned in AWI 
Confidential  Annex 6 ;  
(f) key supplier contracts, commitments and orders relating to the Divestment 
Business as set out in  AWI  Confidential  Annex 7 , to the extent still running at 
the time of Closing. To the extent the transfer of a supply contract  requires the 
supplier’s consent, the Parties will use their best endeavours to procure the 
supplier’s consent. If a supplier refuses to consent, the Notifying Party commits, 
at the request of the Purchaser, to supply the relevant material to the Divestmen t 
Business for the remaining duration and on the terms and conditions of the 
relevant supply contract;   
(g) all customer, credit and other records, as set out in AWI Confidential  Annex 8 ; 
(h) for a transitional period of up to […] years after Closing and on terms and 
conditions equivalent to those at present afforded to the Divestment Business, all 
current arrangements under which the Parties or their Affiliated Undertakings 
supply products or services to the Divestment Business, as detailed in 
Confidential  Annex 9 , unless otherwise agreed with the Purchaser; to the extent 
transitional supplies and services to be provided by the Notifying Party to the 
Divestment Business relate to supplies and services under the supply agreements 
and transitional service agreements foreseen in the SPA, the terms and 
conditions of these agreements shall, mutatis mutandis , also apply to the 
transitional supplies and services to be provided by the Notifying Party to the 
Divestment Business;  
(i) a commitment of the Notifying Party to fund t he investments necessary to enable 
the Team Valley MF Facility to manufacture the Target’s [list of products]  
mineral fibre tile products, undertaken by the Purchaser and, to the extent 
feasible and reasonable, prepared by the Hold Separate Manager at his own 
discretion, up to a sum of EUR  […], whereas the question whether the 
investments are necessary, feasible and reasonable shall be established taking 
into consideration  AWI Confidential Annex IV and  will be subject to review by 
the Monitoring Trustee;  
(j) a commitment of the Notifying Party to fund the investments necessary to enable 
the Team Valley Grid Facility to manufacture the Target’s following grid 
products: [list of products]  , undertaken by the Purchaser and, to the extent 
feasible and reasonable, pr epared by the Hold Separate Manager at his own 
discretion, up to a sum of EUR  […]; 
(k) at the option of the Purchaser, for a transitional period until the production of the 
Target’s [list of products]  mineral fibre tiles has been insourced by the Purchaser 
and – in any event – no longer than for a term of […] years after Closing, a 
supply agreement under which the Notifying Party will supply the Divestment 
Business with these tiles [terms of the supply agreement ];  
 
20  (l) at the option of the Purchaser, for a transiti onal period of up to […] years after 
Closing, a supply agreement under which the Notifying Party will supply the 
Divestment Business with the Target’s Specials [terms of the supply agreement] ; 
(m) at the option of the Purchaser, for a transitional period until  the production of the 
Target’s [list of products]  grid systems has been insourced by the Purchaser and 
– in any event – no longer than for a term of […] years after Closing, a supply 
agreement under which the Notifying Party will supply the Divestment Bus iness 
with these grids [terms of the supply agreement] ; 
(n) in case of difficulties of access to t he single market after 30  March  2019, at the 
request of the Purchaser and approved by the European Commission based on a 
reasoned submission of the Monitoring Tru stee, a supply agreement under which 
the Purchaser will be able to source the Relevant Products and Specials from the 
Notifying Party (i.e., those Relevant Products and Specials which the Notifying 
Party produces in its plants) irrespective of the insourci ng for a period of […], 
which may be extended on a yearly basis up to a total of […] years from 
Closing, [terms of the supply agreement]  that allows the Divestment Business to 
be competitive;  
(o) to the extent not already with the Divestment Business and unles s not required 
by the Purchaser, a commitment of the Notifying Party to hire, in coordination 
with the Hold Separate Manager and the Purchaser, at the Notifying Party’s sole 
cost, adequate personnel to carry out the Key Functions as reasonably necessary 
to ensure the viability of the Divestment Business – i.e. […] FTEs in 
procurement, […] FTE in R&D, […] FTEs in marketing, […] FTEs in technical 
sales, […] FTEs in finance ; this personnel shall be available to the Purchaser at 
the day of Closing;  
(p) the benefit  of the Notifying Party bearing the one -off costs of up to EUR […] for 
the hiring of up to […] additional R&D FTEs, to the extent not already with the 
Divestment Business and reasonably required by the Purchaser;  
(q) the benefit of the Notifying Party bearing the one -off costs of up to EUR […] for 
the hiring of […] additional engineering FTEs, to the extent not already with the 
Divestment Business and reasonably required by the Purchaser;  
(r) the benefit of the Notifying Party bearing the one -off costs of up to EUR  […] for 
the hiring of […] additional customer service FTEs, to the extent not already 
with the Divestment Business and reasonably required by the Purchaser;  
(s) the benefit of the Notifying Party bearing the one -off costs of up to EUR […] for 
the hiring of […] additional IT FTEs , to the extent not already with the 
Divestment Business and reasonably required by the Purchaser;  
(t) the benefit of the Notifying Party purchasing, in coordination with the Hold 
Separate Manager and the Monitoring Trustee, the following  R&D equipment 
for the Divestment Business, to the extent not already with the Divestment 
 
21  Business and reasonably required by the Purchaser, to be available to the 
Divestment Business at the day of Closing: [list of R&D equipment] ;6  
(u) at the option of the P urchaser, for a transitional period of […] years after Closing 
the benefit of certain transitional services, such as IT systems and processes, 
application engineering, etc., to be provided by the Notifying Party [terms of 
transitional services  agreements]  in order to facilitate a smooth transfer of the 
Divestment Business.  
3. The Divestment Business shall not include:  
(a) any shared IT systems between the Parties and the Divestment Business as set 
out in AWI Confidential  Annex 10 ; 
(b) shared personnel between the Par ties and the Divestment Business as set out in 
AWI Confidential  Annex 11 ; 
(c) parts of shared customer contracts/orders (to the extent such contracts/orders are 
in place at the time of Closing) relating to other than the Relevant Products as set 
out in AWI Con fidential Annex 12 ; 
(d) shared assets between the Parties and the Divestment Business as set out in AWI 
Confidential  Annex 13 . 
4. If there is any asset or personnel which is not be covered by paragraph 2 of this 
Schedule but which is both used (exclusively or not ) in the Divestment Business 
and necessary for the continued viability and competitiveness of the Divestment 
Business, that asset or adequate substitute will be offered to the Purchaser.  
5. The proposed concentration shall not be implemented before the Notify ing Party 
or the Divestiture Trustee has entered into a final binding sale and purchase 
agreement for the sale of the Divestment Business and the Commission has 
approved the purchaser and the terms of sale in accordance with paragraph 20 of 
the Commitments.  
  
                                                 
6  Note that, already today, the Divestment Business has the following R&D equipment: [list of R&D 
equipment] .   
 
22  ANNEXES  & EXHIBITS  
 
 AWI Confidential Annex 1:  Products manufactured and/or sold by the Divestment 
Business in the Relevant Countries  
 AWI Confidential Annex 2: Tangible Assets of the Divestment Business   
o AWI Confidential Exhibit 2.2.1 : Fixed asset register for the Team Valley MF 
Facility  
o AWI Confidential Exhibit 2.2.2:  Land register excerpts for the Team Valley 
MF Facility  
o AWI Confidential Exhibit 2.2.3: Plant layout of the Team Valley MF Facility  
o AWI Confi dential Exhibit 2.3.1 : Fixed asset register of the Team Valley Grid 
Facility  
o AWI Confidential Exhibit 2.2.2 (Part 1 and Part 2) : Land register excerpts 
for the Team Valley Grid Facility  
o AWI Confidential Exhibit 2.3.2 : Plant layout of the Team Valley Grid Facility  
 AWI Confidential Annex 3:  Intangible Assets of the Divestment Business  
 AWI Confidential Annex 4:  Main licenses, permits and authorizations of the 
Divestment Business  
 AWI Confidential Annex 5:  Customer contracts, commitments and orders of the 
Dive stment Business  
o AWI Confidential Exhibits 5.1 - 5.25: Customer contracts  
 AWI Confidential Annex 6:  Personnel and Key Personnel of the Divestment Business  
o AWI Confidential Exhibit 6.1.1 : Organisational chart of the Team Valley MF 
Facility  
o AWI Confidential  Exhibit 6.1.2 : Organisational chart of the Team Valley Grid 
Facility  
o AWI Confidential Exhibit 6.2.1 : Agency agreement for the Baltics  
 AWI Confidential Annex 7: Key supplier contracts, commitments and orders of the 
Divestment Business  
 AWI Confidential Ann ex 8: Customer, credit and other records of the Divestment 
Business  
 Confidential Annex 9: Supply, production, distribution, service or other contracts 
between the Parties and the Divestment Business  
 AWI Confidential Annex 10: Shared IT  systems or other sys tems not included in the 
Divestment Business   
 AWI Confidential Annex 11: Shared personnel not included in the Divestment 
Business   
 AWI Confidential Annex 12:  Shared customers between the Target and the 
Divestment Business  
 
23   AWI Confidential Annex 13 : Tangib le assets not included in the Divestment Business  
 AWI Confidential Annex 14: List of Specials  
 AWI Confidential Annex IV : Summary  assessing the insourcing of mineral fibre tiles 
currently not produced at Team Valley  
 
 


 
3 AWI Confidential Annex 2  
Tangible Assets of the Divestment Business  
 
I. Target Sales Teams   
1. Mova ble property  
1. Other than non -material assets such as personal computers, desk -chairs or other adjuvant office supplies, the Target Sales Teams do not 
have any fixed assets . 
 
 
2. Immovable property  
The Target does not have real property which is attributed to e ither of the Target Sales Teams. All of the relevant sales offices are rented 
and these rental agreements will be transferred with the Divestment Business.   
 
II. Team Valley MF Facility  
1. Movable property  
A. List of fixed assets  
For a list of fixed assets, product ion machinery and equipment at the Team Valley MF Facility, please refer to the 2017 Fixed 
Asset Register submitted as AWI Confidential Exhibit 2.2.1 .  
 
B. Raw materials, stocks, work -in-progress, semi -finished products  
Production -related movable property of  the Divestment Business also includes all stocks of raw materials intended for the 
production of the Relevant Products as well as all stocks of work -in-progress, finished and semi -finished Relevant Products 
manufactured at the Team Valley MF Facility at t he date of Closing.   
 
 
4 2. Immovable property  
A. List of land/buildings  
The relevant real property where the production site, including  plant , warehouse and distribution center are located, is leased from 
a third party, i.e. no real property will be transferred to the Purchaser. However, the relevant leasing agreements will be transferred 
to the Purchaser. These agreements are attached as AWI Confidential Exhibit 2.2.2.  
 
B. Plant layout  
An overview of the layout of the Team Valley MF Facility, including warehouse a nd distribution centre, is submitted as 
AWI Confidential Exhibit 2.2.3.   
 
III. Team Valley Grid Facility  
1. Movable property  
A. List of fixed assets  
For a list of fixed assets, production machinery and equipment at the Team Valley Grid Facility, please refer to the 2017 Fixed 
Asset Register submitted as AWI Confidential Exhibit 2.3.1 . 
 
B. Raw materials, stocks, work -in-progress, semi -finished products  
Production -related movable property of the Divestment Business also includes all stocks of raw materials intended for t he 
production of the Relevant Products as well as all stocks of work -in-progress, finished and semi -finished Relevant Products 
manufactured at the Team Valley Grid Facility at the date of Closing.  
 
2. Immovable property  
A. List of land/buildings  
The relevant real property where the production plant is located, is leased from a third party, i.e. no real property will be 
transferred to the Purchaser. However, the relevant leasing agreements will be transferred to the Purchaser. These agreements  are 
attached as AWI  Confidential Exhibit 2.2.2.  
 
 
5 B. Plant layout  
An overview of the layout of the Team Valley Grid Facility is submitted as AWI Confidential Exhibit 2.3.2 . 
 
AWI Confidential Exhibit 2.2.1 : Fixed asset register for the Team Valley MF Facility  
[…] 
AWI Confidentia l Exhibit 2.2.2:  Land register excerpts for the Team Valley MF Facility  
[…] 
AWI Confidential Exhibit 2.2.3: Plant layout of the Team Valley MF Facility  
[…] 
AWI Confidential Exhibit 2.3.1 : Fixed asset register of the Team Valley Grid Facility  
[…] 
AWI Conf idential Exhibit 2.2.2 (Part 1 and Part 2) : Land register excerpts for the Team Valley Grid Facility  
[…] 
AWI Confidential Exhibit 2.3.2 : Plant layout of the Team Valley Grid Facility  
[…] 
  
 
6 AWI Confidential Annex  3 
Intangible Assets of the Divestment Busi ness 
 
IP in relation to the production and sale of the Relevant Products  
Within the [information about the SPA]  (SPA) [information about the SPA]  and attached to the Form CO as Annexes 3.1.3 and 
Annex  3.1.3.(a),  non-exclusive licenses for the IP relating to the Relevant Products will be offered to the Purchaser by Knauf upon and 
subject to the terms  and conditions agreed between Knauf and AWI  in the SPA and in the AWI IP Licence Agreement and WAVE IP 
Licence Agr eement (as defined in the SPA). As far as tra demarks relating to the Relevant Products are concerned, these will be licensed 
for exclusive use in the Relevant Countries for a term of […] years,  after Closing, with the option for the Divestment Business to 
terminate the license at any time, followed b y a black -out period of […] years;  non-exclusive licences for a term of […] years for product 
trademarks, with the option for the Divestment Business to terminate the license at any time, will also be offered on an EEA -wide basis, 
provided that, outside th e Relevant Countries, the product trademarks may only be used i n conjunction with a brand name.  
  




 
11 3. Team Valley Grid Facility  
The following individuals are considered key personnel  for the functioning of the Team Valley Grids Facility:  
 […]; 
 […]; 
 […]; 
 […]. 
 
4. Central  Management of the Divestment Business  
The envisaged management team of the Divestment Business is considered key personnel:  
 […]. 
 […]. 
 […]. 
 […].  
 
AWI Confidential Exhibit  6.1.1 : Organisational chart of the Team Valley MF Facility  
[…] 
AWI Confidential Exhibit 6.1.2 : Organisational chart of the Team Valley Grid Facility  
[…] 
AWI Confidential Exhibit 6.2.1 : Agency agreement for the Baltics  
[…] 
 


 
14 AWI Confidential Annex 8 
Customer, credit and other records of the Divestment Business  
 
All relevant customer contacts are with the Target Sales Teams and – if and to the extent related t o the Re levant Products – will be 
transferred. Credit records [information on how the Target handles credit records and credit management]  and will be transferred.  
  

 
16 AWI Confidential Annex 10  
Shared IT systems or other systems not included in the Divestment Business  
I. Target Sales Teams in the Relevant Countries  
The Target Sales Teams in the Relevant Countries work with and are incorporated into AWI’s SAP system. There are a number of 
other programs which are currently owned/licensed by AWI and used by the Target Sales Teams. Neither AWI’s SAP license nor an y 
other software (license) currently owned by AWI will be transferre d with the Divestment Business.  
The main programs for which AWI holds a license and which are also used by the Target Sales Teams in the Relevant Countries are: 
[list of programs] . 
 
II. Team Valley MF Facility  
The main programs for which AWI holds a license and which are also used at the Team Valley  MF Facility are: [list of programs] . 
Neither AWI’s SAP license nor any other software (license) currently owned by AWI will be transferred with the Divestment 
Business.  
 
III. Team Valley Grid Facility  
The main programs for which AWI holds a license and which  are also used at the Team Valley Grid Facility are: [list of programs] . 
Neither of the  software (license s) currently owned by AWI will be transferred with the Divestment Business.  
  

 
18 AWI Confidential Annex  12 
Shared customers between the Target and the Divestment Business  
 
The Target does not have shared customers with the Divestment Business in a sense that a customer would be obliged to source 
Relevant P roducts together with other Target products (e.g. metal tiles) under one agreement. However, should any such agreements 
(or customer orders) be in place at the time of Closing, the Parties will use their best endeavours to procure the customer’s  consent to  
split these agreements and to procure that all Relevant Products are henceforth supplied by the Divestment Business. It is re iterated 
that customer contracts and records are only transferred if and to the extent they relate to Relevant Products. Other pro ducts, such as 
metal tiles, are not in scope of the Commitments.  
 
 
 
  
 
19 AWI Confidential Annex  13 
Tangible assets not included in the Divestment Business   
 
I. Target Sales Teams  
There are no tangible assets belonging to the Target Sales Teams that will not be  transferred . 
 
II. Team Valley MF  Facility  
There are no tangible assets of the Team Valley MF Facility that will not be transferred.   
 
III. Team Valley Grid  Facility  
There are no tangible assets of the Team Valley Grid Facility that will not be transferred.  
 

 
21 AWI Confidential Annex IV  
[…]