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, 18.6.2021  
C(2021) 4612 final  
PUBLIC VERSION 
 
Cinven Capital Management (VII) General 
Partner Limited  
Level 4, Mill Court, La Charroterie,  
St Peter Port  
Guernsey GY1 1EJ  
 Bain Capital Investors, LLC  
c/o Bain Capital Private Equity (Europe), 
LLP  
Devonshire House  
5th Floor  
Mayfair Place  
London W1J 8AJ  United Kingdom  
Subject : Case M.10234 – Bain Capital/Cinven/Lonza Specialty Ingredients  
Commission decision pursuant to Article 6(1)(b) of Council  Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
                                                 
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 ( the ‘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 D ecision.  
2  OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’). 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and other  
confidential information. The omissions are shown thus […]
. Where possible the 
information omitted has been replaced by ranges of figures or a general description.
 
 
 
2 Dear Sir or Madam,  
(1) On 11 May 2021, the Commission received notification of a proposed concentration 
pursuant to Article 4 of Council Regulation (EC) No 139/2004 by which Bain 
Capital Investors L.L.C. (‘Bain Capital’, US) and Cinven Capital Management (VII) 
General Partner Li mited (‘Cinven’, UK) acquire joint control of Lonza Group AG’s 
specialty ingredients  business (‘Lonza Specialty Ingredients’, Switzerland).3 
Together, Bain Capital, Cinven and Lonza Specialty Ingredients are referred to as 
the ‘Parties’ and the acquisition of joint control is referred to as the ‘Transaction’. 
1. THE PARTIES  
(2) Bain Capital  is a private equity investment firm that invests in companies across a 
number of industries, including information technology, healthcare, retail and consumer products, communi cations, financial services and 
industrial/manufacturing.  
(3) Cinven is a private equity business engaged in the provision of investment 
management and investment advisory services to a number of investment funds.  
(4) Lonza Specialty Ingredients  comprises the business of Lonza Group AG that focuses 
on microbial control solutions and specialty chemical services. It is divided into two business units:  
- The Microbial Control Solutions (“MCS”) business unit provides microbial 
control solutions and chemical technologie s for the protection of homes, 
schools, food processing and healthcare sites, workplaces and other institutional 
environments from bacteria, viruses, mould and other potential pathogens, as 
well as personal care products and ingredients for wood protection, oil and gas, 
plastics, metals, and paints and coatings applications. In the financial year 2019, 
the MCS business unit accounted for around  […] of Lonza Specialty 
Ingredients’ total net sales.  
- The Specialty Chemical Services (“SCS”)  provides composite m aterials, 
performance intermediates and chemicals, and custom development and manufacturing services, for the agrochemical, food and feed ingredients, 
personal care and cosmetics, non-cGMP intermediates electronics, 
transportation and aerospace applications and industries. In the financial 
year 2019, the SCS business unit accounted for  around […] of Lonza Specialty 
Ingredients’ total net sales.    
- Prior to the Transaction, Lonza Specialty Ingredients is owned by Lonza Group 
AG (Switzerland).  It consists of 17 manufacturing sites, 11 research and 
development centres, and has around 2 800 employees worldwide. 
                                                 
3  Publication in the Official Journal of the European Union No C 197, 26.5.2021, p. 6.  
 
 
3 2. THE CONCENTRATION  
(5) On 8 February 2021, Bain Capital, Cinven and Lonza Group AG entered into a sale 
and purchase agreement whereby Bain Capital and Cinven would acquire the entire 
issued share capital  of the companies that compose the  Lonza Specialty Ingredients  
business,  as well as certain ancillary employees, assets and liabilities necessary for 
the operation of Lonza Specialty Ingredients .4  
(6) Post-Transaction, Bain Capital and Cinven will each indirectly hold  around 50% of 
the share capital of Herens HoldCo AG (“Herens HoldCo”), a Swiss entity  
established solely for the purpose of the Transaction, that will wholly own Lonza 
Specialty Ingredients . Bain Capital and Cinven  will each have the right to appoint 
50% of the directors on the board of this holding entity. The board will take 
decisions by […]. All material matters, such as the approval of the budget and 
business plan as well as the appoi ntment and removal of the management of Lonza 
Specialty Ingredients, are planned to be reserved matters requiring the approval of 
both Bain Capital and Cinven. Bain Capital and Cinven will thus have joint control 
over Lonza Specialty Ingredients.  
(7) The Tran saction is therefore a concentration within the meaning of Article 3(1)(b) of 
the Merger Regulation.  
3. UNION DIMENSION  
(8) The undertakings concerned have a combined aggregate worldwide turnover of more 
than EUR 5 000 million5. Each of them has a Union-wide turnover in excess of 
EUR  250 million, but they do not achieve more than two-thirds of their aggregate 
Union -wide turnover within one and the same Member State. The notified operation 
therefore has a Union dimension  within the meaning of Article 1(2) of the Me rger 
Regulation.  
4. RELEVANT MARKETS  
4.1. Activities of the Parties  
(9) Lonza Specialty Ingredients manufactures and distributes microbial control solutions 
and chemical technologies for the protection of homes, workplaces and other environments from bacteria, viruse s, mould and other potential pathogens. In 
particular, Lonza Specialty Ingredients offers a range of biocidal products for 
hygiene end-uses.  
(10) Bain Capital, through its controlled investment Diversey, Inc. (‘Diversey’, US) 
produces cleaning and hygiene products and systems. It therefore purchases biocidal products for hygiene end-uses from Lonza Specialty Ingredients (amongst others) as 
an input for its cleaning and hygiene products and systems. This vertical relationship 
will be discussed in paragraphs (13) to (65) below.  
                                                 
4  Form CO, paragraphs 152- 160. 
5  Turnover s calculated in accordance with Article 5 of the Merger Regulation.  
 
 
4 (11) In addition, the Notifying Pa rties submit that both Lonza Specialty Ingredients and 
Bain Capital, through its controlled investment Italmatch Chemicals S.p.A 
(‘Italmatch’, Italy), produce specialty chemicals. Specialty chemicals are value -
added products manufactured using polymerisati on and other reactive processes to 
transform commodity raw materials into polymers and other complex chemical outputs that are used as ingredients by customers to formulate finished products for a 
range of industries including healthcare, consumer goods, c onstruction and others.  
(12) In specialty chemicals, the Parties ’ activities  overlap (a) in the market for polymer 
additives and (b) in the market for cosmetic ingredients, however their combined market shares are [0-10]% under any market definition that the Commission 
considers plausible, be it in the EEA and on a worldwide  level .
6 Therefore, these 
overlaps are not further considered in this Decision.7 Moreover, the Commission 
considers that the Transaction does not raise serious doubts  as to its com patibility 
with the internal market or the functioning of the EEA Agreement in relation to potential conglomerate effects involving product s sold by Lonza Special Ingredients 
on the one hand and either of the Notifying Parties on the other hand.  
4.2. Market Def initions  
4.2.1. Biocidal products for hygiene end-uses  
(13) Biocidal products consist of a large variety of chemicals that are used in a range of applications to kill or control the growth of organisms that might otherwise have a 
negative effect on processes, products , machinery, and end-users. In the EEA, 
biocidal products are subject to registration requirements in accordance with 
European Biocidal Products Regulation (“BPR”).
8 
4.2.1.1. Product market definition  
(14) In previous cases, the Commission found that it would not be appropriate to assess 
an overall market for ‘all biocides’ or ‘all specialty biocides’.9 Rather, the 
Commission considered it appropriate to assess the relevant markets for biocidal products segmented on the basis of application/end-use or by active ingredient 
chemistry.
10  
(15) In the case at hand, the vertical link would be present in the hygiene end-use. 
Concerning active ingredients, the Notifying Parties submit11 that Lonza Specialty 
Industries supplies the following biocidal products for hygiene end-uses: quate rnary 
ammonium compounds (“quats”), didecyldimethylammonium chlorides 
                                                 
6  Form CO, paragraphs 152- 160. 
7  For completeness, Lonza Specialty Ingredients and Italmatch also minimally overlap in the supply of 
corrosion inhibitors in the EEA. However, their combined market shares are [0 -10]%  under any market 
definition  that the Commission considers plausible  (Form CO, footnote 19). This overlap is therefore not 
further assessed in this D ecision.  
8  Regulation (EU) No 528/2012 of the European Parliament and of the Council concerning the making 
available on the market and use placing of biocidal products ( OJ L 167, 27.6.2012, p. 1) .   
9  Case COMP/M.5424 – Dow/Rohm and Haas , Commission decision of 8 January 2009, recital 209. 
10  Case COMP/M.5424 – Dow/Rohm and Haas , Commission decision of 8 January 2009, recital 209; Case 
COMP/M.5327 – Ashland/Hercules , Commission decision of 6 October 2008, recital 26 . 
11  Response to RFI 8 of 10.06.2021.  
 
 
5 (“diamines”), polyhexamethylene biguanide hydrochloride (“PHMB”) and 
pyrithione zinc and sodium pyrithione. According to the Notifying Parties, these 
active ingredients are largely inter changeable for hygiene end-use purposes, 
therefore the BPR identifies them under the same product types. 
(16) The Notifying Parties consider that biocidal products for hygiene end-uses have properties and characteristics that make them suitable for one end-use (for example, 
disinfectant properties suitable for cleaning hard surfaces) and are not typically suitable for other end-uses (for example personal care products for human 
application). Therefore, downstream customers would not switch and demand-side 
substi tutability is limited. Likewise, supply-side substitution is limited given that 
biocidal products for different end-uses typically involve different technologies, know -how, mix of ingredients and manufacturing processes, as well as the existence 
of differe nt registration requirements under the BPR.
12 
(17) The market investigation confirmed the Notifying Parties’ arguments. In particular, the market investigation confirmed that manufacturers of biocidal products for 
hygiene end-uses can and do develop and register biocidal products for hygiene end-
uses under the BPR. This is necessary in order to stay competitive with their peers 
and gain market shares in applications that are attractive to downstream customers.
13  
(18) The market investigation further indicated that act ive ingredients for biocidal 
products for hygiene end-uses are to a considerable extent interchangeable for 
customers, such that “ [i]n case an active ingredient is no longer available, it should 
be possible to make a new formulation using an alternate acti ve substance ”.14 
(19) In light of the above, and in particular the level of supply- side substitutability 
between different active ingredients, the Commission considers that a segmentation 
based on active ingredient might not  be fully appropriate  in the present case , whereas 
a segmentation based on end-use continues to be  appropriate in light of the above 
demand and supply-side considerations.   
(20)  In any event, the Commission considers that, for the purposes of the present 
Decision, the exact scope of the product market definition for the supply of biocidal products can be left open, since the Transaction does not raise serious doubts as to its 
comp atibility with the internal market or the functioning of the EEA Agreement  
under any product market definition that the Commission considers plausible  (i.e. 
biocidal products for hygiene end-uses overall or biocidal products segmented by the  
active ingredi ents produced by Lonza Specialty Chemicals for hygiene end-uses, see 
paragraph (15)). 
4.2.1.2. Geographic market definition  
(21) The Commission has previously consi dered the relevant geographic market for 
biocidal products for hygiene end-uses to be at least EEA -wide, while leaving open 
whether the relevant market should be EEA -wide or worldwide.
15 
                                                 
12  Form CO, paragraph s 116- 120. 
13  Reply by competitor of 04/06/2021.  
14  Reply by competitor of 04/06/2021. 
15  Case COMP/M.5424 – Dow/Rohm and Haas , recital 210. 
 
 
6 (22) The Notifying Parties argue that that there are reasons to consider the relevant 
geographic product market has become broader and so a worldwide market 
definition is appropriate. In particular, they point to the fact that manufacturers 
typically transport biocidal products for hygiene end-uses from centralised 
production fac ilities to customers around the world with insignificant costs. They 
argue that a non-EU manufacturer can sell biocidal products for hygiene end-uses in the EU if it can prove that its products are equivalent to biocidal products for 
hygiene end-uses that are approved in the EU.  
(23) The Notifying Parties argue that in any event, the relevant geographic market 
definition can be left open for the purposes of this case.
16 In particular, they submit 
that a substantial part of the biocidal products for hygiene end-uses they supply in 
the EEA is imported from the US.17 
(24) The market investigation did not provide sufficient indications to determine which of the plausible alternative potential geographic market definitions (i.e. EEA -wide or 
worldwide) is appropriate for biocidal products for hygiene end-uses. 
(25) The Commission takes note of the […] sales of Lonza Specialty Ingredients into 
Europe from the US. However, on the basis of the inconclusive market investigation 
and the fact that the outcome of the competitive assessme nt of the Transaction as to 
its compatibility with the internal market or the functioning of the EEA Agreement 
is not affected under either of the two plausible alternative geographic market 
definitions (EEA -wide or worldwide), the Commission considers tha t for the 
purpose of assessing the Transaction, the exact scope of the geographic market 
definition for biocidal products for hygiene end-uses can be left open.  
4.2.2. Cleaning and hygiene products and systems  
(26) Cleaning and hygiene products and systems comprise cleaning products intended for 
routine cleaning of offices, institutions, warehouses, and industrial facilities, 
including the removal of visible dirt, soil and grease from a surface. They are 
available in various forms such as sanitation and janitorial cl eaners, 
industrial/technical cleaners, kitchen and catering cleaning agents, food and dairy 
processing cleaners, laundry agents and others. 
4.2.2.1. Product market definition  
(27) In previous cases, the Commission has considered a segmentation for the supply of 
hygiene and cleaning products between the industrial sector (customers such as 
commercial laundries and food and beverage producers) and the institutional sector 
(customers such as hotels, restaurants, hospitals and schools), but ultimately left 
open the scope of the relevant product market.
18 The Commission also considered 
further sub-segmentations by end-use, namely for the industrial sector between (i) food and beverage hygiene, and (ii) professional laundry detergent, and for the 
                                                 
16  Form CO, paragraphs 123- 125. 
17  Form CO, paragraphs 124 and 144 and re spons es to RFI 4, paragraph 12 and to RFI 5, paragraph 1.  
18  Case COMP/M.2665 – Johnson Professional Holdings/DiverseyLever , Commission decision of 
4 March  2002, recitals 8 -16; Case COMP /M.704 – Unilever / Dive rsey, Commission decision of 
20 March 1996, recitals 7 -12; Case COMP/M.6012 – CD&R / CVC / Univar , Commission decision of 
25 November 2010, recitals 17 -20. 
 
 
7 institutional sector between (i) kitchen hygiene, (ii) on-premises laundry, and 
(iii) housekeeping hygiene), without concluding whether such  sub-segmentations  
were appropriate .19  
(28) The Notifying Parties consider that the relevant product market is the supply of 
cleaning and hygiene product s and systems (overall), without any further 
segmentation. They submit that from a demand-side perspective customers can and 
do use the same cleaning and hygiene products regardless of sector and from a 
supply-side perspective suppliers tend to offer the full range of products. In any 
event, the Notifying Parties submit market data for all plausible product market 
definitions .20 
(29) The market investigation did not provide indications that would allow the Commission to determine which of the plausible alternative potential product market 
definitions (i.e. overall, industrial, or institutional, or further segmentations by end-
use) would be appropriate for the market for the supply of cleaning and hygiene 
products and systems. 
(30) In any event, the Commission considers  that for the purpose of this Decision, the 
question of whether there is an overall relevant product market for the supply of 
cleaning and hygiene products and systems, or whether it should be segmented by 
sector and/or end use can be left open. Neit her of these alternative product market 
definitions affect s the outcome of the competitive assessment of the Transaction as 
to its compatibility with the internal market or the functioning of the EEA 
Agreement.  
4.2.2.2. Geographic market definition  
(31) The Commission has pre viously found that competition for the supply of cleaning 
and hygiene products and systems (in the institutional sector) takes place at the 
national level. However, it has left open the relevant geographic market definition 
and assessed the supply of cleaning and hygiene products to the institutional and 
industrial sectors at national and EEA level.
21 
(32) The Notifying Parties submit that the market dynamics have evolved since the 
Commission’s last decision in relation to these product markets (in 2010). They 
submit that cleaning and hygiene products are increasingly sold at European, if not at 
worldwide, level. While the majority of customers still source cleaning and hygiene products and systems locally, cross -border trade flows have increased and national 
disparities in prices, transport costs and legislative requirements have decreased. The 
Notifying Parties accordingly submit that the relevant geographic market should be 
at least EEA -wide.
22 
(33) The market investigation did not provide sufficient indications to de termine which of 
the plausible alternative potential geographic market definitions (i.e. EEA -wide or 
                                                 
19  Case COMP/M.6012 – CD&R/CVC/Univar , recitals 18 -20. 
20  Form CO, paragraph  129- 132. 
21  Case COMP/M.6012 – CD&R/CVC/Univar , recital 25 ; Case COMP/M.2665 – Johnson Professional 
Holdings/DiverseyL ever, recital 24.  
22  Form CO, paragraphs 134- 135. 
 
 
8 national) would be appropriate for the supply of cleaning and hygiene products and 
systems.  
(34) In any event, the Commission considers that for the purpose of assessing the 
Transaction, the exact scope of the geographic market definition for cleaning and hygiene products and systems can be left open. Neither of the  plausible alternative 
geographic market definitions (EEA -wide or national) affect s the outcome of the 
competitive assessment of the Transaction as to its compatibility with the internal 
market or the functioning of the EEA Agreement.  
5. 
ASSESSMENT  
5.1. Analytical framework  
(35) Under Articles 2(2) and 2(3) of the Merger Regulation,23 the Commission must 
assess whe ther 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.  
(36) A concentration can entail horizontal effects. When the Commission analyses such 
cases it does so in line with the Commission Guidelines on the assessment of horizontal merge rs under the Merger Regulation.
24  
(37) Furthermore, a concentration can entail vertical and/ or conglomerate effects. The 
Commission Guidelines on the assessment of non-horizontal mergers under the 
Merger Regulation25 (the “Non-Horizontal Merger Guidelines”) also distinguish 
between two main ways in which non-horizontal mergers may significantly impede effective competition: (a) when the y give rise to input and/or customer foreclosure 
(non-coordinated effects); and (b) when the merger changes the nature of 
competition in such a way that firms that previously were not coordinating their 
behaviour, are now more likely to coordinate to raise  prices or otherwise harm 
effective competition (coordinated effects).
26 The Non-Horizontal Merger 
Guidelines distinguish two types of foreclosure: (a) where the merger is likely to 
raise the costs of downstream rivals by restricting their access to an important input 
(input foreclosure) and (b) where the merger is likely to foreclose upstream rivals by 
restricting their access to a sufficient customer base (customer foreclosure)27. 
According to the Non-Horizontal Merger Guidelines, the Commission is unlikely to 
find concern in non-horizontal mergers, where the market share post -merger of the 
new entity in each of the markets concerned is below 30%.28 The Non-Horizontal 
Merger Guidelines define conglomerate mergers as  mergers between firms that are 
                                                 
23  As regards the application of the Merger Regulation in the EEA, see also Annex XIV to the EEA 
Agreem ent.  
24  Commission Guidelines on the assessment of horizontal mergers under the Merger Regulation ( OJ C 31, 
5.2.2004, p. 5) .  
25  Commission Guidelines on the assessment of non- horizontal mergers under the Merger Regulation 
(OJ C 265, 18.10.2008, p. 6) .  
26  Ibid, paragraphs 17- 19. 
27  Ibid, paragraph 30.  
28  Ibid, paragraph 25.  
 
 
9 in a relatio nship which is neither horizontal (as competitors in the same relevant 
market) nor vertical (as suppliers or customers).29 
5.2. Vertical Relationships 
5.2.1. Overview of affected markets  
(38) Upstream, Lonza Specialty Industries’ market share in the supply of biocidal 
products for hygiene end-uses is moderate both at worldwide level ([10-20]%) and in 
the EEA ( [20-30]%).30 It faces competition from a number of sizeable competitors 
across the EEA and globally. Specifically for the EEA these are Stepan ([10-20]%), 
Thor ([10-20]%), Solvay ([10-20]%), and others ([30-40]%) including Kao, Evonik, 
Nouryon, Pilot, Lanxess and BASF.  
(39) Downstream, Diversey’s market share in the overall market for the supply of 
cleaning and hygiene products and systems is [10-20]% at EEA level and does not  
exceed 30% in any EEA Member State.31 Likewise, its market share would not 
exceed 30% based on a segmentation between the industrial and institutional sector on an EEA -wide or national basis.
32 Diversey’s main competitors in relation to 
cleaning and hygiene  products and systems  across the EEA include: 
Ecolab  ([10-20]%), P&G ([0-5]%), Hako ([0-5]%), and others ([60-70]%) including 
Nilfisk and Deb. 
(40) If the relevant market were to be further sub-segmented by end-use, Diversey’s 
market share would be less than 30% for most end-uses in most Member States and 
at EEA level.33  
(41) However, Diversey’s market share in the supply of cleaning and hygiene products to 
the institutional sector would be 30% or more for certain end-uses in some Member 
States, namely (a) in Finland: Kitchen hygiene ([30-40]%), (b) in Greece: 
Housekeeping hygiene ([40-50]%) and (c) in Portugal: (i) Food and beverage end-
use ( [30-40]%), (ii) on-premises laundry ([40-50]%).  
(42) Therefore, the Transaction gives rise to vertically affected markets in the supply of 
biocidal products for hygiene end-uses in the EEA (upstream) and the supply of cleaning and hygiene products and systems in the institutional sector for particular 
end uses in Finland, Greece and Portugal (downstream). The risk of customer 
foreclosure in each of these Member States is assessed below.  The Commission will 
discuss the Notifying Parties’ ability and incentives to run a customer foreclosure strategy as well as the possible effects of such a strategy  in paragraphs (44) to (53) 
below.  
                                                 
29  Ibid, paragraph 5  
30  Form CO, Tables 3- 4, paragraph s 162-164. Market share estimates presented in this D ecision are on a 
value basis and for 2020. For completeness, its market shares would not exceed 30% in the EEA or 
worldwide if the relevant market for biocidal products for hygiene end- uses were segmented by active 
ingredient chemistry (Form CO, paragraph 165) . 
31  Form CO, paragraph 168 (a). 
32  Form CO , paragraph 168 (b). 
33  Form CO, paragraph 168 (c) – (e).  
 
 
10 (43) The Commission notes that in its response to t he market investigation, a market 
participant raised concerns about the Parties trying to implement an input foreclosure 
strategy relating to biocidal products in the EEA post -Transaction.  The Commission 
also notes that no other market participant raised any similar concerns. For the sake 
of completeness, although the merged entity’s market shares would be less than 30% 
in the upstream market for the supply of biocidal products under any plausible 
market definition, the Commission assesses below the risk of input foreclosure. The 
Commission will discuss the Notifying Parties’ ability and incentives to run an input 
foreclosure strategy as well as the possible effects of such a strategy in 
paragraphs  5.2.3.1 to (65) below.  
5.2.2. Customer foreclosure  
5.2.2.1. Notifying Parties’ submissions  
(44) Despite the merged entity’s  high market shares downstream (in certain end-uses), the 
Notifying Parties argue that it is unlikely that the Transaction would give rise to any 
anti-competitive effects as a result of a customer foreclosure strategy in Finland, 
Greece or Portugal, for the following reasons.  
(45) Firstly, the Notifying Parties submit that the merged entity would have no ability to 
engage in customer foreclosure, since Diversey accounts for a low proportion of 
demand for biocidal products for hygiene end-uses across the EEA ( [5-10]%) and so 
upstream suppliers of biocidal products for hygiene end-uses have a number of 
sizeable downstream customers to which they can sell their products.34  
(46) Secondly, the Notifying Parties consider that the merged entity would not have any 
incentive to engage in customer foreclosure . Since  Diversey represents only a low 
proportion of demand the strategy is unlikely to lead to material gains for Lonza 
Specialty Ingredients.35  
(47) Thirdly, the Notifying Parties submit that upstream rivals will continue to be able to sell to a number of major international manufacturers of cleaning and hygiene 
systems, so any attempted customer foreclosure strategy would not have a 
detrimental effect on competition.
36 
5.2.2.2. The Commission’s assessment  
(48) The results of the Commission’s  investigation indicate that the merged entity is 
unlikely to be able to successfully engage in a customer foreclosure strategy in 
relation to the purchase of biocidal products for cleaning hygiene end-uses for the 
following main reasons.  
(49) The Commission c onsiders that the merged entity will lack the ability  to engage in a 
successful customer foreclosure strategy:  
(a) First, the market investigation confirms that the upstream market is at least 
EEA -wide, given that suppliers of biocidal products are active at EEA -wide 
                                                 
34  Form CO, paragraphs 177- 182. 
35  Form CO, paragraphs 183- 184. 
36  Form CO, paragraphs 185- 188. 
 
 
11 level and sell their products to customers across the EEA (in addition, 
customers procure products from across the EEA).37 Suppliers of biocidal 
products for hygiene applications can therefore turn to customers in the EEA as a whole, where Diversey represents a small share of purchases of only 
[5-10]%.
38  
(b) Second, a narrow product market segmentation at the downstream level 
(i.e. segmenting between industrial and institutional customers, and then 
further sub-segmenting by type of institutional custom er) does not reflect the 
reality that upstream suppliers can and do sell biocidal products for hygiene 
end-uses to all types of institutional customers.39 A number of institutional 
purchasers of cleaning and hygiene products will remain available to 
supplie rs. This is illustrated by the fact that, while Diversey’s market share 
exceeds 30% for particular end-uses in Finland, Greece and Portugal, in the institutional sector overall its market share remains less than 30% in all of 
these three Member States.
40  
(c) Third, Diversey only accounts for a modest proportion of purchases in each 
of these Member States.41 At national level, Diversey represents 
approximately [10-20]% of purchases of biocidal products destined to be 
processed and then sold to the institutional s ector in Finland, [10-20]% in 
Greece and [20-30]% in Portugal. It is noteworthy that Diversey does not 
have any manufacturing plants in Finland, Greece or Portugal and supplies its 
own customers from its plants located elsewhere.  
(d) Fourt h, in each of the affected Member States, a number of major customers 
will remain post -Transaction, including Ecolab and P&G (all three Member 
States), Unilever (Portugal and Finland), 3M (Finland and Greece) and others. 
(50) Therefore, Diversey as a producer of cleaning and hygiene products and systems is 
not an important customer in Finland, Greece, Portugal or the EEA as a whole , 
despite i ts high market shares for the narrow er market segments discussed in 
paragraph (41). Consequently, post-Transaction, suppliers of biocidal products for 
hygiene end-uses, will continue to have a sufficient customer base (of producers of 
cleaning and hygiene products and systems) for whom they will continue to compete fiercely. Thus, the combined entity would not have the ability to engage in a 
customer foreclosure strategy. 
(51) As regards the incentive  of the merged entity to engage in a customer foreclosure 
strategy, upstream, Lonza Speciality Ingredients has a modest base of sales of 
biocidal products for hygiene end uses on which to recoup profits from a foreclosure 
strategy ([20-30]% market share in the EEA). However, even if a national -level 
customer foreclos ure strategy were to be attempted in Finland, Greece or Portugal, 
upstream suppliers are major international manufacturers capable of supplying biocidal products for hygiene end-uses to customers downstream (producers of 
                                                 
37  Responses of upstream competitors dated 27 May 2021.  
38  Form CO, table 6. 
39  Reply of an upstrea m competitor dated 28 May 2021.  
40  Form CO, table 6. 
41  Form CO, table 6 
 
 
12 cleaning and hygiene products and s ystems ) across the EEA. So, any attempt of 
customer foreclosure at national level would fail. Further, the market investigation 
suggested that Lonza Specialty Ingredients may not produce all products required by 
Diversey  for its production, implying that a  foreclosure strategy may take some time 
to implement.42 The Commission therefore concludes that the merged entity would 
have no incentive to engage in a customer foreclosure strategy.  
(52) As regards the likely impact  of a customer foreclosure strategy, the Commission’s 
investigation indicates that upstream suppliers are unlikely to face any significant impact even if the merged entity were to internalise all of its purchases. On the one 
hand, already pre -Transaction, Diversey spreads its purchases of biocidal products 
for hygiene end-uses across a number of suppliers other than Lonza Specialty Ingredients, namely […]. These suppliers are large, international players active 
across the EEA, with a combined market share that is substantially higher than that 
of Lonza Specialty Ingredients (whose market share upstream at the EEA level is 
only [20-30]%). On the other hand, a number of other major suppliers (who do not 
sell to Diversey) will continue to operate in the EEA post -Transaction, such as […]. 
Finally, none of the competitors who replied to the market investigation indicated 
any concerns regarding the possibility of customer foreclosure.
43 Any attempted 
customer foreclosure strategy is therefore unlikely to have such an impact on 
upstream suppliers that competi tive conditions in the supply of biocidal products for 
the hygiene end-use would deteriorate. 
(53) In light of the above, taking into account the results of the market investigation and 
of all the evidence available to it, the Commission considers that the Transaction 
does not raise serious doubts as to whether it  would lead to customer foreclosure 
risks in the EEA or any Member State from the vertical link between biocidal products for hygiene end-uses (upstream) and cleaning and hygiene products 
(downstream). 
5.2.3. Input foreclosure  
5.2.3.1. Notifying Parties’ submissions  
(54) The Notifying Parties argue that the Transaction is unlikely to give rise to any anti -
competitive effects from input foreclosure in the EEA.  
(55) Firstly, the Notifying Parties consider the merged entity would have no ability for 
such a strategy, given that Lonza Specialty Ingredients’ market share in the supply of 
biocidal products for hygiene end uses is less than 20% worldwide and only [20-30]% in the EEA. They submit that Lonza Specialty Ingredients’ market s hare 
would remain less than 30% even if the relevant product market were segmented by 
active ingredient. In addition, a number of strong competitors remain in the EEA and 
customers are sophisticated, price sensitive purchasers who typically multisource 
and can switch.
44  
                                                 
42  Reply of a competitor to Q1 dated 28 May 2021.  
43  Replies of competitors to Q1.  
44  Form CO,  paragraph 174.  
 
 
13 (56) Secondly, the Notifying Parties submit that Diversey’s competitors represent an 
important source of income for Lonza Specialty Ingredients, which would have a 
continued incentive to supply to downstream competitors. Further, Diversey’s 
marke t share is small downstream at EEA level ( [10-20]%), meaning that an 
upstream foreclosure strategy would, at best, only translate into limited additional 
sales downstream.45 
(57) Thirdly, given that Lonza Specialty Ingredients does not have a significant degree of 
market power in the supply of biocidal products for hygiene end-uses, any input 
foreclosure strategy would be unlikely to have a significant detrimental effect on 
competition in the market for cleaning and hygiene solutions.46 
5.2.3.2. The Commission’s assessment  
(58) The Commission notes that on the basis of market shares data, which represent the 
Notifying Parties’ best estimates, Lonza Specialty Ingredients market shares in the 
upstream market for the supply of biocidal products for hygiene end-uses are 
[20-30]% in the EEA (and [10-20]% worldwide). These estimates are based on the 
Parties own sales data and knowledge of the market, while relying on third party 
market intelligence reports from IHS Markit, Biocides International and  Reports and 
Data, as well as public ly available announcements from competitors.47 The 
Commission reviewed the robustness of the Parties’ estimates, which are further 
supported by market factbooks prepared for Lonza Specialty Ingredients by […] and 
internal documents and estimates prepared by the Parties in the ordinary course of 
business.48 Finally, the market investigation did not give rise to any reason to doubt 
the Parties’ estimates. In light of the above, the Commission is satisfied that the Parties’ estimates of their market shares are r easonably accurate.  
(59) The results of the Commission’s investigation indicated that the merged entity is 
unlikely to be able to successfully engage in an input foreclosure strategy in relation 
to the supply of biocidal products for cleaning hygiene end-uses f or the following 
main reasons.  
(60) The Commission considers that the merged entity will lack the  ability  to engage in a 
successful input foreclosure strategy:  
(a) First, the Commission notes that the Parties’ market shares in the upstream market for the supply of biocidal products are [20-30]% in the EEA and 
[10-20]% worldwide. In both cases, on the assumption that none of the smaller “other” competitors identified by the Notifying Parties has a market 
share greater than that of the smallest of the identified major competitors the 
post-Transaction HHI is […] for the EEA and […] worldwide.
49 The 
                                                 
45  Form CO, paragraph 175.  
46  Form CO, paragraph 176.  
47  Response  to RFI 4, question 3, of 28/05/2021. See […] . 
48  Annex 4.2 to RFI 4, pages 21 onwards; Annex 4.8 to RFI 4, page 8; Annex 4.5 to RFI 4, pages 10, 14, 
23, 28, 35, 50.  
49  Calculated on the basis of the market shares presented in Form CO, Tables 3 -4, paragraphs 162- 164. 
 
 
14 Commission considers that it is unlikely to find non-horizontal concerns in 
such a market structure.50 
(b) Second, there are several credible competitors active in the EEA, who will 
continue to meet customers’ needs, including Stepan, Thor, Solvay, Nouryon, Kao, Evonik, Pilot and Lanxess. The Notifying Parties’ internal documents in 
the ordinary course of business confirm that these are active competitors that 
constrain the Lonza Specialty Ingredients in the supply of biocidal product s 
for hygiene end uses and that this market is fragmented.
51 Likewise, 
shipments from outside the EEA appear to be a credible constraint for any 
foreclosure strategy at EEA level; for example, shipments of biocidal 
products for hygiene uses from its facilit ies in the US represent at least […]  
of Lonza Specialty Ingredients’ sales in the EEA.52  
(c) Third, the Commission considers that there is some spare capacity in the 
production of biocidal products at the upstream level. Estimates submitted by the Notifying Pa rties indicate that competing suppliers of biocidal products 
have likely sufficient spare capacity to meet all of the downstream demand 
even if LSI were to stop supplying to any customers in the EEA.
53 The 
market investigation support s the finding that competing producers of 
biocidal products have some spare capacity.54 Rival suppliers will also be 
able to turn to toll manufacturers to ensure sufficient production to meet 
downstream demand.55 In the event that Lonza Specialty Ingredients’ input 
foreclosure strategy were to divert its sales away from Diversey’s downstream rivals in order to vertically integrate with Diversey, Lonza 
Specialty Ingredients’ rival suppliers who were previously supplying 
Diversey would have spare capacity to sell to the (former) cust omers of 
Lonza Specialty Ingredients.
56 
(d) Third, the Commission investigated to what extent customers can switch 
between rival suppliers of biocidal products. The Commission considers that 
switching is a credible threat by customers to render an input foreclo sure 
strategy unlikely:  
                                                 
50  Non-Horizontal Merger Guidelines, paragraph 25.  
51  Annex 4.5 to RFI 4, page 10; Annex 4.6 to RFI 4, page 4.  
52  Case Team calculations based on Notifying Party’s response to question 1 of RFI 5 and question 1 of 
RFI 6.  
53  Case Team calculations based on Notifying Party’s response to question 1 of RFI 5 and Table 3 of the 
Form CO; also response to question 5 of RFI 4.  
54  Upstream competitor’s response to Q2 dated 28 May 2021.  
55  Indeed, […]  – response to question 5 of RFI 4 and question 2 of RFI 5 and RFI 6. […] . 
56  For completeness, the COVID -19 pandemic led to a substantial increase in demand for certain cleaning 
and hygiene products during 2020. However, following the peak in demand, the level of demand appears to be decreasing: IHS Markit estim ates the “biocide market to reach their 2019 levels again in 
the second half of 2021” and notes that “ [i]ndustry sources anticipate that the biocides used in 
disinfection will normalize at a level about 5% to 15% above the pre -coronavirus consumption” . 
(https://ihsmarkit.com/research -analysis/the -biocides -market -in-the-ti mes -of-coronavirus.html). This is 
also supported by Lonza Specialty Ingredients’ year -on-year sales  performance comparing 2020 
and 2021 (response to question 6 of RFI 4). This indicates tha t there should be spare capacity currently 
and in the near future.  
 
 
15 – Substitution of active ingredients. Downstream manufacturers rely on 
particular biocidal active ingredients in their formulas to produce 
different cleaning and hygiene products. As explained in section 4.2.1.1 
above, the biocidal active ingredient must be authorised under the BPR. 
Generally, there are multiple suppliers who have obtained BPR 
authorisations  for a given active ingredient. The Notifying Parties 
demonstrated that for the active ingredients for cleaning and hygiene end-uses supplied by Lonza Specialty Ingredients, other suppliers 
already have active ingredient authorisations.
57 Moreover, the 
Notifying Parties confirmed that there is nothing to prevent other 
producers from applying for and obtaining a BPR authorisation for the 
same active ingredients of biocidal products for cleaning and hygiene 
end-uses, which are supplied by Lonza Specialty Ingredients and for 
which the  latter holds an authorisation under the BPR.58 Finally, even if 
the specific active ingredient is unavailable, the market investigation 
indicates that generally customers are able to find alternatives: “[i ]n 
case a specific active ingredient is no longer available, it should be possible [for customers] to make a new formulation using an alternate 
active substance ”.
59 
– Regulatory barriers, time and cost of switching. The market 
investigation confirmed that for a customer to be able to use a particular active i ngredient in its cleaning and hygiene product, the 
biocidal active ingredient must be authorised under the BPR and the 
downstream product must also be authorised. The Notifying Party estimates that a customer seeking to switch to another authorised 
active ingredient for its end-product would incur costs of [below 500 
000 EUR] for authorisations in all Member States at the national 
level, and that this could take up to two years (though in some 
Member States, such as France and Germany the process is substan tially faster and would take approximately one month).
60 The 
results of the market investigation indicated that these estimates were broadly accurate.
61 This time frame and level of cost appears 
moderate, in particular in light of the substantial margins generated by downstream manufacturers of cleaning and hygiene products.
62 
                                                 
57  With the exception of one product, for which there is nothing to prevent rival suppliers applying for a 
BPR authorisation and which the Notifying Party explains is “very similar” to and substitutable for the hygiene end -use with another active ingredient for which several other suppliers have received 
authorisation. Response to RFI8 of 10.06.21, annex RFI8.1  
58  Response to RFI 7 of 9.6.2021.  
59  Upstream competitor’s response dated 4 June 2021.  
60  Response to question 3 of RFI 5.  
61  Upstream competitor’s response dated 4 June 2021.  
62  The Commission notes that Diversey’s gross profit margin in the downstream supply of cleaning and 
hygiene products in Europe was approximately […]  in 2020, implying gross profits of c irca EUR […] 
(RFI 5 question 2). This suggests that the level of gross profits of manufacturers of cleaning and 
hygiene products in the downstream market would be more than sufficient to absorb the necessary level of investment t o switch suppliers, without any impact on the competitiveness of manufacturers cleaning 
and hygiene products.  
 
 
16 – Evidence of switching.  In practice, already pre -Transaction, 
manufacturers of cleaning and hygiene products and systems pursue a 
multi-sourcing strategy for biocidal products for hygiene uses. For 
example, Diversey spreads its EEA purchases of these products across 
a number of different suppliers, with its […] largest suppliers each 
accounting for […] of its needs.63 Moreover, the market investigation 
confirmed that downstream customers can and do apply a multi -
sourcing strategy.64 The Notifying Parties have also provided details of 
Lonza Specialty Ingredients’ customers successfully switching 
considerable parts of their procurement needs to rival suppliers.65 
Competitors confirm that customers can switch in practice subject to the BPR elements described above.
66 
(61) Therefore, Lonza Spe cialty Ingredients is unlikely to have significant market power 
in the supply of biocidal products for hygiene end-uses in the EEA or worldwide and 
the merged entity would not have the ability to engage in an input foreclosure 
strategy, in particular as it s market shares are limited, a number of credible rival 
sources of supply will remain and have spare capacity, and customer switching is a 
credible threat.  
(62) As regards the incentive  of the merged entity to engage in an input foreclosure 
strategy, downstrea m, Diversey only has a relatively small base of sales of cleaning 
and hygiene products ([10-20]% in the EEA) from which to capture any customer 
diversion from an input foreclosure strategy. Moreover, Lonza Specialty Ingredients’ 
internal documents suggest that […].67  
(63) Finally, an input foreclosure strategy would require a change of business strategy for Lonza Specialty Ingredients, and pursuant to the joint venture, Cinven’s consent is 
required for the approval of the business plan and budget of Lonza Specialty 
Ingredients. While a successful input foreclosure strategy might benefit Bain Capital 
(which controls Diversey), it is unlikely that Cinven would benefit from such a 
strategy since it would lose profits from foregone upstream sales by Lonza Specialty 
Ingredients, but without a corresponding increase in downstream profits (given that 
it is not active in the downstream market). So it is unlikely that Cinven will approve 
any such strategy. Accordingly, it appears  unlikely that the merged entity would 
have the incentive to engage in an input foreclosure strategy relating to biocidal 
products. 
(64) As regards the likely impact  of an input foreclosure strategy, the Commission notes 
the modest market share of the merged entity ( [20-30]% in the EEA, [10-20]% 
worldwide) and the fact that downstream customers can, if necessary with time and 
manageable investment, turn to rival suppliers. Moreover, other than one customer, 
the market investigation did not give rise to any conce rns regarding the risk of input 
foreclosure. The Commission therefore concludes that any customer foreclosure 
strategy of the merged entity would have no impact on downstream customers.  
                                                 
63  Table 4.4 of the reply to RFI 4.  
64  Response of an upstream competitor dated 9 June 2021.  
65  Response to RFI 5, paragraph 11. In particular, this indicates that one customer was able to move […] . 
66  Response of an upstream competitor dated 4 June 2021.  
67  Annex 4.5, pages 8, 22, 23 of reply to RFI 4.  
 
 
17 (65) In light of the above, taking into account the results of the market investigation and 
of all the evidence available to it, the Commission considers that the Transaction 
does not raise serious doubts as to whether it would lead to input foreclosure risks in 
the EEA or worldwide from the vertical link between the supply of b iocidal products 
for hygiene end-uses (upstream) and cleaning and hygiene products (downstream). 
6. CONCLUSION  
(66) For the above reasons, the European Commission has decided not to oppose the 
notified concentration and to declare it compatible with the internal m arket and with 
the EEA Agreement. This Decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.  
For the Commission  
  
(Signed)  
Margrethe VESTAGER  
Executive Vice -President