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 -MERG ER-REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels, 11.6.2021  
C(2021 ) 4323 final  
PUBLIC VERSION  
 
Mayr -Melnhof Karton AG  
Brahmsplatz , 6 
1040 Vienna  
Austria  
Subject : Case M. 10122  – Mayr -Melnhof Karton / Kotkamills  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 4 May 2021 , the European Commission received notification of a proposed 
concentration pu rsuant to Article 4 of the Merger Regulation  and following a referral 
pursuant to Article 4(5) of Council Regulation (EC) No 139/2004  by which Mayr -
Melnhof  Cartonboard International GmbH (Austria), belonging to the group Mayr -
Melnhof Karton AG ( “MM”; or “t he Notifying Party” ) intends to acquire within the 
meaning of Article 3(1)(b) of the Merger Regulation control of the whole of 
Kotkamills Group Oyj (together with its subsidiaries “Kotkamills”, Finland)3 (the 
“Transaction”).  MM and Kotkamills  are designate d as the 'P arties' .) 
                                                 
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’).  
3  Publication in the Official Journal of the European Union No C 184, 12.05.2021 , p. 15. 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and other  
confidential information. The omissions are 
shown thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
 
2 1. THE  PARTIE S  
(2) MM is a producer of both cartonboard (in particular folding box board, “ FBB”) and 
packaging products, in particular folding cartons (also referred to as “folding 
boxes”). To a limited extent, MM also produces mechanical pulp. MM  is based in 
Vienna, Austria, and is active worldwide.  
(3) Kotkamills is a manufacturer of virgin -fibre cartonboard4 based in Kotka, Finland. 
Cartonboard (including FBB) accounted for […]% of Kotkamills’ sales in 2019. I n 
addition to cartonboard, i t also produces Saturating Base Kraft (“SBK”)5 and sawn 
softwood.  
2. THE  OPE RATION  
(4) The Transaction consists of the acquisition of 100% of the shares in, and sole control 
over, Kotkamills by MM. The Transaction therefore is a concentration within the 
meaning of Ar ticle 3(1)(b) of EUMR.  
3. UNION  DIME NSION  
(5) On 22 February 2021 , the Commission received, by means of a reasoned 
submission, a referral request pursuant to Article 4(5) of the Merger Regulation with 
respect to the Transaction. The Commission transmitted this su bmission to all 
Member States on 24 February 2021. The Member States competent to examine the 
concentration6 did not express their disagreement to the request of referral within 15 
working days. The notified operation therefore has a U nion dimension.   
4. MARK E T DE FINITIO N 
(6) The Parties ’ activities overlap with regard to the production and supply of 
cartonboard. Moreover, MM is active in the production and supply of folding boxes, 
which are made out of cartonboard. Therefore, this section will assess the market 
definition of (i) cartonboard and (ii) folding boxes.  
4.1. Cartonboard  
(7) Cartonboard is the main raw material used to manufacture folding cartons. A first 
broad distinction can be made between cartonboard for liquid packaging  (“LPB”)  
and cartonboard for non -liquid packaging  (NLPB”) .7 Within non -liquid packaging 
board, a  distinction is normally made between four main categories of cartonboard: 
white lined chipboard (“WLC”) which is made from recycled fibre;  solid bleached 
                                                 
4  Virgin fibre cartonboard is made from cellulose fibres that are produced from timber (pulp) . 
5  SBK is used as core material for high pressure laminates and is used for end applications such as furniture, 
worktops, flooring etc., together with other spe ciality uses such as films, electrical insulators.  
6  Austria, Germany, Lithuania and Poland.  
7  Form CO, paragraph 93.  
 
 
3 sulphate board (“SBB”  or “SBS ”); solid unbl eached sulphate board (“SUS”) ; and 
FBB, which are all made from virgin fibre.8  
(8) In addition to the se categories of cartonboard, the cartonboard industry has more 
recently developed “cup board”,  another type of board made of virgin fibre used 
(primarily) fo r the production of cups (“cupstock”), i.e., open cups such as for 
coffee, ice -cream etc. Cup board is made by applying a rather complex, coated 
barrier to the cartonboard. Only a limited number of suppliers produce cup board, 
among them Kotkamills which h as developed a plastic -free, water based dispersion 
coated barrier.9 
(9) In some cases, l arge brand -owners procure cartonboard directly from manufacturers 
by means of tenders , and then separately procure conversion services to produce 
their boxe s. 
(10) As regards c artonboard, MM only manufactures and sells FBB and WLC and 
Kotkamills only manufactures and sells FBB and cup board. The only horizontal 
overlap between the Parties’ activities is therefore in FBB.  
4.1.1.  Product market  
4.1.1.1.  The Commission’s decisional practice  
(11) Cartonboard is the main raw material for the manufacturing of cartons. It is made 
from cellulose fibres that are produced either from timber (pulp) or by reusing 
recovered fibre. A combination of the two can be used and there are various types of 
fibre tha t produce different characteristics.  
(12) The Commission has in the past considered a distinction between FBB, WLC , SBS, 
SUS as well as coated natural kraft (“CNK”) in its case practice,10 but has ultimately 
left this open. The Commission previously also considered but ultimately left open  
whether the market for the supply of cartonboard could potentially be sub -segmented  
on the basis of relevant end -use (e.g. food applications, pharmaceuti cal applications  
etc.).  
4.1.1.2.  The Notifying Party’s view  
(13) The Parties submit that the main different types of cartonboard are FBB, WLC,  SBS 
and SUS. According to the P arties, t he relevant market comprises  all types of 
cartonboard , for the following reasons . 
(14) From a demand -side perspective, customers can to a significant degree switch 
between the various types of cartonboard, and often do so.  
(15) From a supply -side perspective, there is significant supply -side substitutability 
between LPB  on the one hand and (certain) n on-liquid cartonboard grades on the 
other. This applies in particular to FBB. Generally , FBB can be, and is, also 
                                                 
8  Form CO, paragraph 96.  
9  Form CO, paragraph 99.  
10  M.8421 - Westrock/MPS, paras. 6 -8; M.4057 - Korsnas/Assidoman  Cartonboard, paras. 13 and 22; 
M.1225 - Enso/Stora, paras. 18, 42 and 43.  
 
 
4 produced on machines used for LPB (by contrast, the same flexibility does not exist 
in the other direction). Supply -side substitution also exi sts between FBB and other 
NLPB grades.  
(16) The P arties further argue that, even if FBB is considered separately, the market 
should not be further sub -segment ed, e.g. on the basis of different end -uses or 
grades/qualities . The characteristics of FBB do not sign ificantly vary depending on 
end-use applications or grades, and customers can use the same type of FBB for a 
variety of different end -uses.11 
4.1.1.3.  The Commission’s assessment  
(17) In the market investigation, from a supply -side perspective, competitors indicated 
that while the type of fibre and fibre preparation was different according to the 
categories of cartonboard  (notably WLC has a very different fibre preparation to the 
other categories) ,12 the remainder of the production process was similar. 
Adjustments  can be made  to the board machine, according to the category of 
cartonboard being manufactured.13  
(18) However, from a demand -side perspective, a majorit y of respondents indicated that 
the different categories of cartonboard were not all substitutable, although this 
typically depended on the end application .14 Examples of different end applications 
could include, packaging for food, pharmaceuticals, cosmetics or cigarettes.15 For 
example, one customer noted that “ Generally, in the normal course of business, the 
answer is no. There may be limited occasions where board types could be substituted 
[…]. The board grades have differing technical, physical, visual and commercial 
characteristics, rendering them fit for  a certain purpose for certain applications and 
not for fit for  purpose for oth ers.”16 A competitor similarly noted that: “ It is very 
much depending on the end use segment. For some of them all can be used, for 
some, only selected ones. Also the price/m2 factor is decisive. There can be a big 
difference e.g. in between  SBS and WLC .”17  
(19) A majority of respondents also highlighted that d ifferent end uses required specific 
types of cardboard , with food packaging in particular requiring virgin -fibre grade 
cartonboard where food contact was required. For example, one competito r noted 
that: “ Some difference exists for the grades used for tobacco packaging. Due to a 
specific printing method and high -speed packing lines not all FBB products are 
suitable for tobacco packaging. WLC cannot normally be used in applications that 
are in  direct contact with food without an additional barrier as the recycled fibers 
may create a risk of food contamination .”18  
                                                 
11  Form CO, paragraph 151.  
12  Non-confidential reply to question 8  of Questionnaire to  competitors.  
13  Non-confidential replies  to question 8 of Questionnaire to competitors .  
14  Replies to question 6 of Questionnaire to customers and replies  to question 7 of Questionnaire to 
competitors . 
15  Form CO, paragraph 156.  
16  Non-confidential reply to question 6  of Questionnaire to customers.   
17  Non-confidential reply to question 6 of Questionnaire to  competitors.  
18  Non-confidential reply to question 9  of Questionnaire to competitors.   
 
 
5 (20) The market investigation therefore tended to support the Commission’ s previous 
practice to leave open the possibility of a distinction between the different categories 
of cartonboard ( FBB, WLC, SBS, SUS ). 
(21) Within the category of FBB, there are different sub -grades, namely GC1 and GC2. 
These terms are derived from the DIN Standard 193030 “Paperboard – Terms and 
Grades” that de fines different grades of paperboard based on the surface treatment, 
the main finish  and the  colour or bulk.19 GC1 is a fully coated board with a coated 
reverse and GC2 is a fully coated board with an uncoated reverse.20 GC1 is brighter 
in appearance, more e xpensive and tends to be used for more luxury applications  and 
for good quality printing  results  and GC2 is less bright and a little cheaper, and tends 
to be used for cheaper applications  such as food packaging.21 The dif ferent sub -grade 
of FBB used may  therefore vary according to the different end application.22 
Different end applications could include : food, tobacco and pharmaceutical 
applications .23  
(22) The market investigation results were however mixed regarding the question of 
whether there should be separate product markets according to the type of sub -grade 
of FBB24, or according to the type of end application.25 While a  majority of 
customers said that there were specific end use applications that required a specific 
sub-grade of FBB, the reasons given  for this differed.26 Some converters27 referred to 
the fact that their own customers specified the sub -grade to be used, others referred 
to the particular function of the packaging i.e. one customer noted that: “ E.g. in case 
one would like to print on the r everse side of a  board, one might want to have the 
board pigment coated also on the reverse side. In case one would like to put in hot 
liquid,  the board needs to fulfill this temperature requirement  etc.”28 The replies did 
not indicate a consensus  around an y possible further distinctions within FBB; the 
needs of each customer varied. For example, one converter noted: “ Some end 
customer prefer a special board for their product it could be product safety, product 
appearance or price and other commercial/operat ional demands that defines the 
need .”29 The responses in the market investigation therefore tend to indicate that it is 
the customer preferences that drives the type of FBB and this can vary from 
customer to customer.  
(23) The majority of competitors in the market investigation however confirmed that it 
would be possible to switch between production of GC1 and GC2  without significant 
                                                 
19  Form CO, paragraph 97.  
20  Form CO, paragraphs 158 – 159. 
21  Replies to questions 8, 9  of Questionnaire to customers and replies  to question 11  of Qu estionnaire to 
competitors.  
22  Replies to question 8 of Questionnaire to customers and replies  to question 11 of Question naire to 
competitors.   
23  Form CO, paragraph 218 . 
24  Replies to question 8 of Questionnaire to customers and replies  to question 11 of Questionnaire to 
competitors.  
25  Reply to question 9  of Questionnaire to customers . 
26  Replies  to question 9 of Questionnaire to customers . 
27  A converter is a company which uses cartonboard as an input for producing packaging products f or end -
customers.  
28  Reply to question 9 of Questionnaire to customers .  
29  Reply to question 9 of Questionnaire to customers .  
 
 
6 investments of time or cost30 and that the production process was similar.31 
However, it is easier to switch from GC1 to GC2 than  vice-versa. As noted by one 
competitor: “Switching from GC2 or FSB to GC1 typically requires an investment 
into a reverse side coater (if the machine does not already have one), but the 
technical properties of GC1 (white reverse) can also be achieved thro ugh adjusting 
the pulps in the middle and reverse layer ”; and “If the machine does not have a 
coating unit on reverse side the investment could be 5 -10 M€ .”32 
(24) In any case, for the purpose of this decision the exact product market definition can 
be left open  between an overall market for cartonboard33 or FBB, and between an 
overall FBB market or sub-segments for FBB according to end use or sub -grade of 
FBB, as the proposed T ransaction does not raise serious doubts as to its 
compatibility with the internal mark et or the functioning of the EEA Agreement 
under any plausible market definition.  
(25) In conclusion, the Commission will analyse  the effects of the proposed Transaction 
on the basis that  the market for FBB is segmented either by end -application i .e. food, 
pharmaceuticals , tobacco , cosmetics , graphical and “other non -food” ,34 or by sub -
grade of FBB i.e. GC1 and GC2 . No affected markets arise  if considering an overall 
cartonboard market or an overall FBB market and so these will not be analysed 
further in this decision . 
4.1.2.  Geographic market  
4.1.2.1.  The Commission’s decisional practice  
(26) The Commission has previously defined the market for FBB as at least E EA-wide.35  
4.1.2.2.  The Notifying Party’s view  
(27) The Parties consider the market for cartonboard to be at least EEA -wide and 
potentially worldwide , for the following reasons:36  
(28) First, FBB is traded cross -border within the EEA (and beyond). Within the EEA, 
FBB production sites in Finland and Sweden account for 71% of EEA -wide 
maximum production capacity of FBB. At the same time, Finland and Sweden 
correspond to only 2% of EEA demand for FBB in 2019.37 
                                                 
30  Replies  to question 14  of Question naire to competitors.  
31  Replies  to question 12  of Questionnaire to competitors . 
32  Reply to question 14 of Questionnaire to competitors .  
33  The transaction does not give rise to affected markets in an overall cartonboard market and this will 
therefore not be addressed further in this decision.  
34  The non -specified category “other non -food” a ccounts for a small portion of the FBB segment. It is very 
fragmented, including several unrelated end -uses, such as car accessories, clothing, shoes, fashion 
accessories, electrical devices, IT, shipping packaging, etc. Form CO, footnote 52.  
35  Case COMP/ M.8951 – Suzano Papel e Celulose/Fibria Celulose, paragraph 82 and Case COMP/M.8421 – 
Westrock/MPS, paragraph 28.   
36  Form CO, paragraph 168.  
37  Form CO, paragraph 173.  
 
 
7 (29) Second, European cartonboard producers also face significant c ompetitive pressure 
from outside the EEA.  Producers outside Europe fulfil approximately 10 -12% of 
European demand for FBB .38  
(30) Third, the customers that procure by way of tenders mostly launch these tenders at a 
global level or at least cover multiple countr ies within the EEA.  Out of the […] 
tenders in which Kotkamills participated in the past three years, […] had a global 
scope, […] had an EEA -wide scope and the remaining […] covered one country 
(however, these tenders covered countries where Kotkamills does not have any 
production, therefore also indicating an EEA -wide market).39 Out of the […] tenders  
in which MM participated in the past three years, […] included non -EEA coun tries, 
[…] had an EEA -wide scope and […] covered one EEA -country .40 
(31) However, the  Parties  submit  that the exact market definition can be left open 
between EEA -wide and global since no significant impediment of effective 
competition is to be expected even by the narrowest definition.41 
4.1.2.3.  The Commission’s assessment  
(32) The vast majority of customers confirmed that their suppliers were located in the 
EEA or worldwide,42 with a majority of competitors also confirming that their 
customers were located at either EEA or wo rldwide level.43 Similarly, the majority 
of both customers and competitors indicated that they either requested bids, or 
participated in bids, at least at EEA level, if not worldwide.44 The majority of 
respondents also confirmed that price differences were not significant within the 
EEA, price differences generally tended to be explained by the differences in product 
(e.g. the different grade etc.).45 While a majority of respondents confi rmed that 
transport costs were however significant by the EEA,46 the results of the market 
investigation indicate that this has not prevented customers from sourcing, and 
competitors from supplying, across the EEA and beyond.  
(33) In any case, for the purpose o f this decision the exact geographic market definition 
can be left open between EEA -wide and worldwide as the proposed T ransaction 
does not raise serious doubts as to its compatibility with the internal market or the 
functioning of the EEA Agreement under any of these two plausible market 
definition s.  
                                                 
38  Form CO, paragraph 174.  
39  Form CO, paragraph 176.  
40  Form CO, paragraph 177.  
41  Form CO, paragraph 180.  
42  Replies to question 15 of Questionnaire to customers.  
43  Replies  to question 15  of Questionnaire to competitors.  
44  Replies to question 15  of Questionnaire to customers and replies  to question 15  of Questionnaire to 
competitors.  
45  Replies to question 18  of Questionnaire to customers and replies  to question 18  of Questionnaire to 
competitors.  
46  Replies to question 17  of Questionnaire to customers and replies  to question 17  of Questionnaire to 
competitors.  
 
 
8 (34) In conclusion, the Commission will analyse the effects of the proposed Transaction 
on the basis that the market for FBB is EEA -wide.  No affected markets arise under 
at worldwide level so this will not be anal ysed further in this decision .47 
4.2. Folding boxes  
4.2.1.  Product market  
4.2.1.1.  The Commission’s decisional practice  
(35) In previous cases, the Commission has defined folding boxes  as multi -layered 
paperboard cartons which are printed/coated  and cut into carton  blanks. The carto n 
blanks also incorporate creases, which enable the carton to be formed for packaging 
the customer's product. Folding boxes can be used to pack a wide range of products, 
such as cosmetics, tobacco, pharmaceuticals, etc. The Commission established that 
these products have different requirements for packaging,  therefore the folding  box 
market could be further subdivided by end -use application .48 For example, the 
Commission has considered separate markets for (i) folding boxes  used for tobacco 
packaging,49 as well as (ii) folding boxes  for pharmaceutical packaging and (iii) 
folding boxes  for beverages.50 The Commission ultimately left open whether the 
market for folding boxes should be further segmented by end -use.  
4.2.1.2.  The Notifying Party’s view  
(36) The Parties sub mit that the exact definition of the product market can be left open in 
the present case since the Transaction does not give rise to competition concerns 
based on any plausible market definition.51 
4.2.1.3.  The Commission’s assessment  
(37) In the market investigation, a majority of respondents replied that production 
processes of folding boxes differ depending on the end -application.52 According to a 
customer of the Parties : “The production processes required to manufacture folding 
boxes are dependent on the characteristic s, format, order run length, decoration and 
design of the boxes. Certain of these characteristics will be more or less used in the 
various end use segments .”53 However, a majority of respondents also replied that it 
is feasible both economically and technic ally to switch production of folding boxes 
for one end -application to another end -application .54 There are some exceptions 
where switching is not possible in the short -term. Notably , several respondents 
mentioned that this is the case  when  produc ing folding  boxes for the food and 
pharmaceutical sectors  where special certification and approval systems require time 
(in addition to switching the production process, where required) . One respondent 
also noted that switching production might not be viable “ economi cally if a 
                                                 
47  Form CO, paragraph 19 3. 
48  M.8421 – Westrock/MPS, para 6 and cases cited therein.  
49  M.5599 – Amcor/Alcan, paras. 44 -45. 
50  M.8421 – Westrock/MPS, paras 8 et seq.  
51  Form CO, paragraph 189.  
52  Replies to question 13 of Questionnaire to customers.  
53  Non-confidential reply to question 13.1 of Questionnaire to customers.  
54  Replies to question 1 4 of Questionnaire to customers.  
 
 
9 commercial agreement/volume rebate is in place .”55 Overall, the market 
investigation did not provide clear evidence for the definition of an overall market 
for folding boxes, nor for separate markets for folding boxes per end -use.  
(38) In case  the folding box  market was further segmented by end -use, the relevant end -
uses appear to be (i) food, (ii) beverages, (iii) tobacco, (iv) cosmetics and personal 
hygiene, (v) pharmaceuticals, and (vi) household. These segments account for […]% 
of MM’s folding c arton sales.56 Also the respondents in the market investigation 
mentioned these sub -segments when asked for which end -applications they produce 
folding boxes.57 
(39) For the purpose of this decision the exact product market definition can be left open 
between an overall market for folding boxes and sub -segments for (i) food,  (ii) 
beverages, (iii) tobacco, (iv) cosmetics and personal hygiene, (v) pharmaceuticals, 
and (vi) household , as the proposed Transaction does not raise serious doubts as to 
its compatibility w ith the internal market or the functioning of the EEA Agreement 
under any plausible market definition.   
(40) In conclusion, the Commission will analyse the effects of the proposed Transaction 
on the basis that the markets for folding boxes are segmented . by end -application, 
notably folding boxes for the end-uses (i) food, (ii) beverages, (iii) tobacco, ( iv) 
cosmetics  and personal hygiene, (v) pharmaceuticals, and (vi) household .58 No 
affected markets arise if considering an overall market for folding boxe s and this will 
therefore not be analysed further in this decision . 
4.2.2.  Geographic market  
4.2.2.1.  The Commission’s decisional practice  
(41) In the past, the Commission left open whether the market for folding boxes is 
national or EEA -wide, based on the level at which sourcing of folding cartons takes 
place .59 
4.2.2.2.  The Notifying Party’s view  
(42) The Parties submit that customers source folding cartons from suppliers across 
Europe (and beyond) and there are no particular barriers to cross -border trading in 
folding cartons. Therefo re, individual national markets would not adequately reflect 
the competitive dynamics in the folding cartons market. Consequently, the Proposed 
                                                 
55  Replies to question 14.1 of Questionnaire to customers. See for instance non -confidential reply to question 
14.1 of Questionnaire to customers: “ variou s segments require differing business processing standards 
and certification, such as food hygiene standards for the Food Industry (such as BRC/IAM) and material 
control processes for the Pharmaceutical industry (PS9000) .” 
56  Form CO, footnote 53.  
57  Replies to question 12 of Questionnaire to customers.  
58  As MM’s market shares in the potential markets for folding boxes for food, beverages, cosmetics and 
personal hygiene, and household remain below 30% under any plausible geographic market definition, 
these will not be further discussed in this Decision.  
59  M.8421 - Westrock/MPS, paras 29 et seq.  
 
 
10 Concentration should be analysed on the basis of an (at least) EEA -wide market for 
folding cartons.60 
4.2.2.3.  The Commiss ion’s assessment  
(43) In the market investigation, a minority of suppliers replied that their customers of 
folding boxes are located in the same country as their folding box production. Half 
of the respondents supply folding boxes at EEA or worldwide level, whe reas some 
respondents supply at regional level, i.e. beyond their own country but not in all 
EEA-countries.61 Notably, none of the respondents who replied participate in tenders 
in their own country only. A vast majority of respondents participate in tender s at 
EEA-level and some at worldwide level, which indicates that the market for folding 
boxes has moved further towards an at least EEA -wide market.62 Although a 
majority of respondents consider that transport costs for folding boxes are 
significant,63 this does not appear to limit sales to other national markets.  
(44) In any case, for the purpose of this decision the exact geographic market definition 
can be left open as the proposed Transaction does not raise serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement 
under any plausible market definition.   
(45) In conclusion, since no affected markets arise under a broader market definition (i.e.  
regional, EEA or worldwide), the Commission will analyse the effects of the 
proposed Transaction  on the  market for folding boxes at national  level. 
5. COMPE TITIVE ASSE SSME N T 
(46) The proposed Transaction  gives rise to affected market s in the plausible market s for 
the supply of FBB for food applications ([20-30%] ) and the supply of GC2 ([20-
30%]) in the EEA.  The Commission does not consider it nece ssary to analyse 
separately these two plausible markets as the conditions of competition and the 
position of the Partie s in both markets  are similar.  
(47) Moreover, MM is active in the production and supply of folding boxes, which are 
made out of cartonboard . This vertical link gives rise to two vertically affected 
markets, as MM’s market shares in the market for folding boxes for the pharma 
industry in France and folding boxes for the tobacco industry in Germany exceed 
30% (with <40% and <50% respectively).  
5.1. Assessment of horizontally affected market s 
(48) According to the Commission’s Guidelines on the assessment of horizontal merge rs 
under the Council Regulation on the control of concentrations between undertakings 
(“Horizontal Merger Guidelines ”)64, mergers between actual or potential competitors 
                                                 
60  Form CO, paragraph 191.  
61  Replies to question 20 of Questionnaire to customers.  
62  Replies to question 21 of Questionnaire to customers.  
63  Replies to ques tion 22 of Questionnaire to customers.  
64  OJ C 31, 05.02.2004.  
 
 
11 can result in horizontal non -coordinated effects  which are harmful to competition .65 
The Horizontal Merger Guidelines list a non-exhaustive  number of factors which can 
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  and the limited possibilities for 
customers to switch suppliers .66 
5.1.1.  The Notifying Party’ s view  
(49) The Notifying Party submits that the Transaction does not raise competition 
concerns with regard to the supply of FBB for f ood applications and the supply of 
GC2 in the EEA for the following reasons.  
(50) First, the Parties’ combined market shares remain moderate post -merger.67 The 
current market leaders (Stora  Enso and Metsä Board) have significantly higher 
market shares both in an  EEA-wide FBB market in the EEA.68 
(51) Second, the Parties are not close competitors since  (i) they offer different product 
portfolios;69 (ii) they have relatively few customers in common;70 (iii) their 
customers multi -source from at least two suppliers to ensure  supply security and 
handle unexpected contingencies;71 (iv) they win and lose customers from and to 
Metsä Board and Stora  Enso (rather than from and to each other);72 (v) they do not 
compete closely in tenders organi sed by customers ;73 and they consider Metsä Board 
and Stora  Enso as their real rivals and close substitutes .74 
(52) Third, switching costs/times are generally low/short in the market, as contract 
durations are usually short, namely in the range of three months for converters and 
one year for end -users.75  
(53) Fourth, suppliers in the EEA have spare capacity and there are various other sources 
for significant additional (potential) capacity in the market. Any attempt of 
                                                 
65  See Horizontal Merger Guidelines, paragraph 24: “A merger may significantly impede effective 
competition in a market by removing important competitive constraints on one or more sellers who 
consequently have increased market power. The most direct effect of the merger will be the loss of 
competition between the merging firms. For example, if prior to the merger one of the merging firms had 
raised its price, it would have lost some sales to th e other merging firm. The merger removes this 
particular constraint. Non -merging firms in the same market can also benefit from the reduction of 
competitive pressure that results from the merger, since the merging firms’ price increase may switch 
some dema nd to the rival firms, which, in turn, may find it profitable to increase their prices. The 
reduction in these competitive constraints could lead to significant price increases in the relevant 
market ”. 
66  Horizontal Merger Guidelines, paragraph 26 et seq.  
67  Form CO, paragraph 224.  
68  Form CO, paragraph 225 et seq.  
69  Form Co, paragraph 238.  
70  The customer  overlap for one Party is calculated as the percentage of volumes that are sold to  customers 
that bought similar products also from the other Party in th e same year.  (Form CO, paragraph 239)  
71  Form CO paragraph 239.  
72  Form CO, paragraph 241.  
73  Form CO, paragraph 242.  
74  Form CO, paragraph 244.  
75  Form CO, paragraph 246.  


 
 
14 replied to the market investigation indicated that there are several suppliers able  to 
provide them with the same volumes as both Parties for their EEA consumption of 
FBB, including Stora  Enso, Metsä  Board, IP Kwidzyn , Iggesund and Pankaboard.84 
Moreover, although Reno di Medici (Italy) recently left the FBB market , two thirds 
of the customers indicated that there would be sufficient suppliers should the merged 
entity stop supplying FBB.85 
(59) Fourth, although there is a qualification process  required  to switch FBB suppliers ,86 
the vast majority of the  customers who replied to the market inv estigation indicated 
that they already multisource  from various FBB suppliers , mostly in order to secure 
supply and not to depend on a single supplier .87 Therefore, if a given customer were 
to stop sourcing from one of its suppliers, it could start the qual ification process with 
a new supplier while sourcing from existing qualified suppliers.  
(60) Fifth, half of the competitors who replied to the market investigation confirmed that 
there are not significant barriers to enter the FBB market.88 Among the barriers to  
entry mentioned by some competitors, there are environmental permits, building a 
new mill and building customer relationships (including the qualification process).89 
Yet, the majority of competitors identified new market entrants in the previous years  
such as Kotkamills and Sappi .90 Moreover, KAMA (Russia) confirmed that it is 
entering the market (both GC1 and GC2, including FBB for food applications) in 
2021 .91  
(61) Sixth, the market for the supply of FBB in the EEA seems to be balanced. Although 
the market investigation revealed that most of the FBB suppliers have high capacity 
utilisation rates,92 competitors indicate d that, in addition to  KAMA in Russia, 
Dobrush (Belarus) will start operating a new machine later in 2021.93 Moreover, 
several  competitors repli ed that the market is balanced or there is over capacity .94 
The majority of respondents submitted that the market for the supply of FBB is 
expected to grow steadily in the coming years.95 In this regard, there are some plans 
to expand capacity in the short t erm, including  Metsä Board  by 2023.96  
(62) Seventh, as regards the i mpact of the Transaction, the results of the market 
investigation are mixed. Although some respondents acknowledge the fact that the 
Transaction may bring more volumes to the market, some custo mers expressed 
concerns  that prices might rise post -Transaction , including common customers of the 
                                                 
84  Replies to question 3 6 of Questionnaire to customers.  
85  Replies to question 44 of Questionnaire to customers.  
86  Replies to question 41 of Questionnaire to customers.  
87  Replies to question 27 of Questionnaire to customers.  
88  Replies to question 2 9 of Questionnaire to competitors.  
89  Replies to question 29.1 of Questionnaire to competitors.  
90  Replies to question 3 0 of Questionnaire to competitors.  
91  Replies to question 3 1.1 of Questionnaire to competitors.  
92  Replies to question 32 of Questionnaire to competitors.  See also non -confidential minutes of a conference 
call with a competitor, 16 April 2021 . 
93  See non -confidential minutes of conference calls with competitors, 16 April 2021 and 30 April 2021.  
94  Replies to question 3 2 of Questionnaire to competitors.  
95  Replies to question 3 5 of Questionnaire t o competitors.  
96  Replies to question 3 3 of Questionnaire to competitors.  
 
 
15 Parties that indicated that both Parties are among their three main suppliers.97 
However, these concerns were not supported by other elements derived from the 
market investigation since the Parties are not close competitors and there are  a 
number of credible alternative suppliers.  
5.1.3.  Conclusion  
(63) In view of the above, the Commission concludes that the proposed Transaction does 
not raise serious doubts as to its comp atibility with the internal market and the 
functioning of the E EA Agreement in relation to the supply of FBB for food 
applications in the EEA  and the supply of GC2 in the EEA .  
5.2. Assessment of vertically affected market  
(64) According to the Commission’s Guidelin es on the assessment of non -horizontal 
mergers under the Council Regulation on the control of concentrations between 
undertakings (“Non -horizontal Merger Guidelines”), foreclosure effects may occur 
where actual or potential rivals' access to supplies or ma rkets is hampered or 
eliminated as a result of the merger, thereby reducing these companies' ability and/or 
incentive to compete.98  
(65) In assessing the likelihood of an anticompetitive customer foreclosure  scenario, the 
Commission examines, first, whether the  merged entity would have the ability to 
foreclose access to downstream markets by reducing its purchases from its upstream 
rivals, second, whether it would have the incentive to reduce its purchases upstream, 
and third, whether a foreclosure strategy woul d have a significant detrimental effect 
on consumers in the downstream market.99  
(66) In assessing the likelihood of an anticompetitive input foreclosure  scenario, the 
Commission examines, first, whether the merged entity would have, post -merger, the 
ability to  substantially foreclose access to inputs, second, whether it would have the 
incentive to do so, and third, whether a foreclosure strategy would have a significant 
detrimental effect on competition downstream.  
(67) In addition to the Parties’ activities in the  FBB market , MM is active in the 
production and sale of folding boxes, which are made of FBB  and other types of 
cartonboard . This vertical link thus gives rise to two vertically affected markets, as 
MM’s market shares in the market for folding boxes for th e pharma industry in 
France and folding boxes for  the tobacco industry in Germany exceed 30% (with 
<40% and <50% respectively).  
(68) As Kotkamills does not produce FBB for the tobacco industry, the vertical 
relationship of this segment is pre -existing and does not change as a result of the 
Transaction. This vertical link is therefore not analysed further as it is not merger -
specific.  
(69) In the upstream market for FBB, if analysed by end -use (as for the downstream 
markets), the Parties’ combined market shares remains moderate, with the highest 
                                                 
97  Replies to question s 25.1 and 47  of Questionnaire to customers.  
98  Non-horizontal Merger Guidelines, paragraph 18.  
99  Non-horizontal Merger Guidelines, para graph 59. 
 
 
16 market share in a potential market for FBB for the food sector and GC2 [20-30]% 
(see paragraph  (46)). The Parties’ market share in an overall FBB market is [10-
20]%.100 However, as some customers of the Parties raised input foreclosure 
concerns, the Commission has  investigated both input and customer foreclosure for 
the purpose of this Decision.  
5.2.1.  The Notifying Party’s view  
(70) The Notifying Party  submit s that these links do not give rise to vertically “affected 
markets”, as , according to them,  the market for folding box es is at least EEA -wide 
(see paragraph (42)) and MM’s market share at EEA -level remains below 30% even 
if based  on a narrow product market definition of types of cart onboard  (i.e. FBB, 
WLC, SBS, SUS ), or an addition subsegmentation  by end -use (i.e. food, 
pharmaceuticals , tobacco , cosmetics, graphical and “other non -food” ). In any case, 
competition in the cartonboard and the converting markets is intense and  the Parties , 
in their view,  have a limited presence  in both markets. Therefore,  MM has no ability  
to foreclose cartonboard input to converters or access to customers (converters)  to 
cartonboard suppliers. Cartonboard suppliers have numerous alternative customers  
and converters have multiple alternatives of cartonboard supplies.101  
5.2.2.  The Commission’s assessment  
5.2.2.1.  No customer foreclosure  
(71) The Commission considers that customer  foreclosure concerns appear unlikely to 
arise even under the narrowest plausible product and geograp hic market definition, 
for the following reasons.  
(72) First, the Parties do not have the ability  to foreclose access to customers in the 
downstream market, as this would require a significant degree of market power in 
the downstream market.102 Although MM’s mark et share exceeds 30 % in the French 
market for folding boxes for pharma products, MM faces competition from 
numerous strong competitors active in the folding box market in other countries and 
sub-segments. Given that most folding box producers are active in  all sub -segments 
and participate in tenders throughout the EEA ( see paragraph (43)), significant 
competitive constraints exist. Competitors who could no longer sell FBB to MM in 
the markets for FBB for pharma in France could react to losing MM as a customer 
for FBB in different ways. In the short term, they could retaliate by suppl ing FBB to 
MM at worse conditions in other countries/end -use markets  where MM does not 
have market power . In the long term, even if looking at national markets, there are 
considerable cross -border tenders and sales, competitors  could  sell FBB to folding 
box producers in other countries who could sell their products at lower prices in 
France and Germany respectively , and thereby  counter a price rise by MM.  
(73) Second, the Parties do not have the incentive  to foreclose access to customers in the 
downstream French market  for folding boxes for pharma products . MM’s high 
market shares in the  downstream market predate the Transaction, and MM has been 
                                                 
100  Form CO, Table 15.  
101  Form CO, paragraph 284.  
102  Non-horizontal Merger Guidelines, paragraph 61.  
 
 
17 sourcing FBB from different upstream competitors rather than from its in -house 
production. As the Transaction only results in an increment of [5-10]% in the 
upstream market for FBB overall ( [0-5]% in FBB for pharma), the incentives to 
foreclose are unlikely to change as a result of the Transaction.   
(74) Third, even in case MM stopped sourcing FBB for its production of folding boxes 
for pharma products in France from other competitors upstream, a forecl osure 
strategy would have no detrimental effects  on competition in the downstream folding 
box market . Upstream FBB suppliers could locate alternative customers in  France 
(not only in pharma but other sectors) and  also in  other EEA countries . Finally, i n 
the market investigation, none of the competitors raised customer foreclosure 
concerns.103  
5.2.2.2.  No input foreclosure  
(75) The Commission considers that input  foreclosure concerns appear unlikely to arise 
even under the narrowest plausible product and geographic marke t definition, for the 
following reasons.  
(76) First, the Parties do not have the ability  to foreclose access to FBB, as this would 
require a significant degree of market power in the upstream market.104 However,  the 
Parties’ market shares in the upstream markets for all types of cartonboard are low 
and only exceed 20% in the sub -segment GC2 and for FBB for food (see paragraph 
(46)), the latter of which is not an input in fol ding boxes for pharmaceutical 
products. On an EEA market for all types of FBB, the Parties’ combined market 
share is low with [10-20]%. As for the other types of cartonboard, only MM is active 
(so any vertical relationships do not change as a result of the  Transaction) with the 
exception of cup board where Kotkamill’s market share at EEA level is below 5%.105 
(77) Second, the parties do not have the incentive  to foreclose access to FBB in the 
downstream market, as MM would lose more than […]% of its customers for FBB in 
case it stopped supplying competing firms downstream. Customers could also 
retaliate and stop buying other types of cartonboard from M M in case it stopped 
supplying  FBB to suppliers of pharmaceutical boxes in France . 
(78) Third, even if MM stopped supplying  FBB to other folding box manufacturers or 
converters  down stream, a foreclosure strategy would have no detrimental effects  on 
competition in these downstream markets, as a number of strong competitors remain 
active in the upstream FBB market (see Section 5.1.2 ).  
(79) Finally, a majority of customers replied that in case MM stopped supplying FBB to 
them, they would still have sufficient alternative suppliers to sou rce any type of 
FBB.106 
                                                 
103  Replies to question 37 of Questionnaire to competitors.  
104  Non-horizontal Merger Guidelines, paragraph 35.  
105  Form CO, table 10.  
106  Replies to question 44 of Questio nnaire to competitors.  
 
 
18 5.2.3.  Conclusion on customer  and input foreclosure in relation to folding boxes and FBB  
(80) In view of the above, the Commission concludes that the proposed transaction does 
not raise serious doubts as to its compatibility with the internal mar ket and the 
functioning of the EEA Agreement in relation to the vertical link between  the EEA -
wide market for FBB (overall or by end -use) upstream and national markets for 
folding boxes by end -use downstream ( in particular  the French market for folding 
boxes for pharma).  
6. CONCLUSION  
(81) For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with the 
EEA Agreement. This decision is adopted in application of Article  6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement .  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President