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, 26.03.2020  
C(2020)  2002 final  
PUBLIC VERSION  
 
To the notifying party 
Subject : Case M.9316 – PEAB / YIT’s PAVING AND MINERAL 
AGGREGATES BUSINESS  
Commission decision pursuant to Article 6(1)(b) of Council 
Regula tion No  139/20041 and Article 57 of the Agreement on the 
European Economic Area2 
Dear Sir or Madam,  
(1) On 20 February 2020, the Commission received the  notification of a proposed 
concentration pursuant to Article 4 of Council Regulation (EC) No 139/20043 by 
which Peab AB (“Peab” or “Notifying Party”) acquires sole control of the mineral 
aggregates  business of YIT Oyj (“YIT”) in Denmark, Finland, Norway and 
Sweden (the “Transaction” , as set out in paragraph 5 below ). The bus iness 
targeted by the acquisition  is referred  to as the “Target”, while Peab and the 
Target  are collectively referred to as the “Parties”.  In a post -Transaction context, 
Peab, all the subsidiaries under its control and the Target may also be collectively 
referred to as the “merged entity”.  
                                                 
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  OJ L 24, 29.1.2004, p. 1 (the "Merger Regulation"). 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and other  
confidential information. The omissions are 
shown thus […]. Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
2 1. THE PARTIES  
(2) Peab , the acquirer , is a construction and civil engineering company, active in 
busin esses such as civil engineering;  construction and renovations of buildings 
and infrastructure;  paving of roads  and other surfaces; as well as the production of 
mineral aggregates, concrete, asphalt and prefabricated concrete elements. P eab is 
registered in Sweden.  
(3) YIT, the seller, is a construction company active in the construction and 
renovation of buildings and infrastructur e; the paving of roads and other surf aces; 
and the production of mineral aggregates and asphalt. YIT is registered in 
Finland.  
(4) The Target  comprises the following YIT businesses : i) the production and sale of 
mineral aggregates in Finland, Norway and Sweden; ii) the production and sale of 
asphalt in Denmark, Finland, Norway and Sweden; iii) the paving of roads in 
Denmark, Finland, Norway and Sweden; iv) sale of bitumen in Norway, and 
v) operation of transport sea vessels. Bitumen is a marginal activity as the Target 
does not produce bitumen but rather buys them from oil companies for its own 
asphalt production needs. If asphalt production falls below the forecasted 
production, the Target sells the surplus it does not need .  Transport is also a 
marginal activity as the Target has only one cargo s hip and one bulk carrier ship, 
which carry, inter alia, some mineral aggregates.  
2. THE OP ERATION  
(5) The Transaction is accomplished by way of a share acquisition (Finland, Norway 
and Denmark) and partly through a business asset acquisition (Sweden). Peab will 
acquire all shares of the Danish company YIT Danmark A/S, all shares of the 
Norwegian company YIT Norge AS and all shares of the Finnish company YIT 
Teollisuus Oy. In addition, Peab will acquire from the Swedish company YIT 
Sverige AB all assets related to its mineral aggregates, asphalt and paving 
businesses. The concentration will be implemented by the conclusion of an 
agreement.  
3. THE CONCENTRATION  
(6) As a result of the Transaction Peab  will acquire sole control within the meaning 
of Article 3(1)(b) the Merger  Regulation over the Target . 
4. UNION  DIMENS ION  
(7) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million4 (Peab: EUR  5 471 million; 
Target:  EUR  600 million). Each of them has a Union -wide turnover in excess of 
EUR 250 million (Peab: EUR 4 815 million; Target: EUR 457 million), but they 
do not achieve more than two -thirds of their aggregate Union -wide turnover 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission Consolidated 
Jurisdict ional Notice (OJ C 95, 16.4.2008, p. 1).  
 
3 within one and the same Member State. The notifie d operation therefore has 
Union dimens io n.  
5. RELEVANT MARKE TS AND COMP ETITIV E AS S ES S MEN T.  
5.1. Introduction and overview of horizontal and vertical links  
(8) Mineral aggregates (“aggregates”)  are different types of grained particulate 
minerals used as base materials in the construction of buildings, roads and other 
infras tructure. They are also used as raw material in the production of concrete, 
asphalt and mortar. Bitumen  is a viscous liquid or semi -liquid form of petroleum 
found in natural deposits and often obtained as a result of oil refining process. It is 
primarily u sed as a binding agent in the production of asphalt (road bitumen), in 
the construction industry and in the production of paper (industrial bitumen). 
Asphalt  is the building material of roads, bicycle lanes, car parks, sidewalks, sport 
areas and airport ru nways. It is a mixture of aggregates and bitumen. Ready -mix 
concrete (“RMX”)  is a common construction material  made of cement, 
aggregates and water. It is manufactured at a concrete plant and transported in a 
semi-wet form in specific mixer truck vehicles to the construction site. Paving , 
also referred to as contract surfacing, is the application of asphalt and other 
materials to surface roads, car parks, footpaths, airport runways and other sites. 
Construction  has been defined as the on -site construction o r assembly of 
buildings and other structures, including building engineering. The upstream -
downstream relationships of these various products and services are illustrated in 
figure 1 below.  
 
Figure 1 Upstream - downstream links b etween the relevant construction materials and services  
 
(9) The Transaction involves a number of horizontal overlaps and vertical 
relationships. Horizontal overlaps include:  
i. ) the production and sales of aggregates in Finland, Sweden and Norway.  
ii.) the production and sales of asphalt in Norway and Sweden; and  
iii.) the supply of road paving services in Norway and Sweden.  

 
4 (10) There is no horizontal overlap in asphalt or paving in Finland or Denmark as Peab 
is not active in these activities in these Member States. Neither the  Target nor 
Peab is active in aggregates in Denmark. Furthermore, Peab is not active in 
bitumen, while the Target is not active in RMX and construction. As regards the 
latter, YIT’s construction business is not part of the Transaction.   
(11) Vertical relations hips between the Parties include:  
i. ) Aggregates – asphalt relationship in Norway and Sweden  
ii.) Aggregates – RMX relationship in Finland, Norway and Sweden  
iii.) Aggregates – construction relationship in Finland, Norway and Sweden  
iv.) Bitume n – asphalt relationship in Nor way 
v.) Transport – aggregates relationship in Norway.  
vi. ) Asphalt – paving relationship in Norway and Sweden  
vii.) Paving – construction in Norway and Sweden  
(12) The aggregates – asphalt relationship stems from the fact that both Parties are 
active in aggregates and aspha lt in Norway and Sweden. However, there is no 
such relationship in Finland as Peab is not active in asphalt in Finland. As Peab is 
active in RMX in Finland, Norway and Sweden and the Target is active in 
aggregates in all of these EEA Contracting Parties, t here is an aggregates – RMX 
link between the parties in all these EEA Contracting Parties. Likewise, the 
Target’s aggregates activities are in a vertical relationship with Peab’s 
construction activities in Finland, Norway and Sweden. The Target’s minor 
activities in bitumen restricted to Norway, and thus the vertical links to asphalt 
only occurs in Norway. The same applies to transport as the Target operates a 
cargo ship and a bulk carrier ship only in Norway and these carry, inter alia, some 
mineral aggreg ates. Asphalt is the main input in paving but due to the fact that 
Peab is not active in asphalt and paving in Denmark and Finland, the asphalt -
paving vertical link only arises in Norway and Sweden. Finally, Peab is active in 
construction, of which road construction is a particular segment, and paving could 
be regarded as an input service to road construction. This vertical link only arises 
in Norway and Sweden as Peab is only active in road construction in these EEA 
Contracting Parties.   
(13) There are no bitu men-construction links as the Target only sells bitumen to 
asphalt producers. Lastly, there are no RMX -construction vertical links because 
the Target is not active in either activity.  
5.2. Market definition  
5.2.1. Aggregates  
5.2.1.1. Product market definition  
(14) Aggregates are  used as (i) base materials in the construction of roads, buildings 
and other infrastructure, and (ii) raw materials to make products such as concrete, 
 
5 asphalt and mortar. They may be quarried from land and dredged from the sea 
(together, “primary aggregat es”); obtained from waste products of other mining 
or industrial services (“secondary aggregates”); or obtained from recycled sources 
such as demolition sites and construction waste (“recycled aggregates”). The two 
types of aggregates are crushed rock (“cr ushed rock”) on the one hand and gravel 
and sand (“gravel and sand”) on the other. Finally, “specialist aggregates” such as 
rail ballast, high polished stone value ('PSV') aggregates, and high -purity 
limestone aggregates can also be distinguished from prim ary and 
secondary/recycled aggregates used in the asphalt, RMX and construction 
businesses.  
(A) The Notifying Party’s view  
(15) The Notifying Party submits that the distinction between primary and 
secondary /recycled  aggregates is irrelevant as  (i) there is no over lap in secondary 
aggregates , and (ii) secondary /recycled  aggregates make up a very small share of 
the overall market (less than 4% in Finland and Sweden and less than 1% in 
Norway) .5 Furthermore, in the Notifying Party’s view, secondary aggregates can 
be substituted by primary aggregates for all purposes, whereas the opposite is not 
always true.6 Consequently, the total aggregates market essentially corresponds to 
the primary aggregates market.  
(16) The Notif ying Party further submits that, within primary aggre gates, no 
distinction should be made between i) gravel and sand on the one hand and 
ii) crushed rock on the other as the two types of aggregates are substitutable for 
most uses.7 Customers buying aggregates for construction purposes usually 
procure all typ es of aggregates.8 RMX customers traditionally used gravel and 
sand but due to the scarcity of natural gravel, it is increasingly replaced by 
crushed rock.9 Generally crushed rock is used for asphalt production and thus 
asphalt producers seek to buy crushe d rock.10 The price differences between the 
two types of aggregates are minimal.11 When aggregates are purchased in public 
procurements, gravel/sand and crushed rock is usually purchased together.12 
(17) As regards the distinction between specialist and other prim ary and 
secondary/recycled aggregates, the Notifying Party submits that Peab only 
produces specialist aggregates in Sweden, whereas the Target only does so in 
Finland. There is no vertical link between one party’s specialist aggregates 
production and the other party’s operations. Absent horizontal and vertical links, 
the Notifying Party considers that the distinction between specialist aggregates on 
                                                 
5  Form CO, paragraph 90.  
6  Form CO, paragraph 90. 
7  Form CO, paragraph 94. 
8  Form CO, paragraph 98. 
9  Form CO, paragraph 95. 
10  Form CO, paragraph 95. 
11  Form CO, paragraph 96. 
12  Form CO, paragraph 99. 
 
6 the one hand and primary and secondary/recycled aggregates on the other can be 
left open.13   
(18) Thus the Notifyi ng Party considers that, for the purposes of the Transaction, the 
relevant product market covers all aggregates.  
(B) Commiss io n precedents  
(19) In some past decisions the Commission considered aggregates as a single, 
separate product market without further distinct ions.14 
(20) In other cases, the Commission has considered, but ultimately left open, a 
segmentation between (i) primary aggregates (crushed rock, gravel and sand) and 
(ii) secondary / recycled aggregates (such as colliery and china clay waste, slate, 
power stat ion ash, slags and demolition/construction waste).15  
(21) Within the primary aggregates category, the Commission has also considered a 
further distinction between (i) gravel and sand and (ii) crushed rock , but 
ultimately left the definition open.16  
(22) Additionally , the Commission has also carried out a separate assessment of the 
impact of a merger as regards specialist aggregates despite ultimately leaving 
open the market definition.17  
(C) The Commission’s assessment  
(C.i) Primary vs secondary/recycled aggregates  
(23) The market  investigation has not produced conclusive results on the distinction 
between primary and secondary/recycled aggregates. Some respondents consider 
that slag is interchangeable with primary aggregates18 and, in a more general 
fashion, there is a degree of su bstitutability between primary and 
secondary/recycled aggregates.19 Others exclude the possibility of switching 
between these types of aggregates.20  
(24) However, the Parties’ presence in secondary/recycled aggregates is minimal 
without there being any horizonta l and vertical links between their respective 
operations.21 Considering these aggregates separately would therefore not lead to 
                                                 
13  Form CO, paragraph 100.  
14  Cases M.2317 Lafarge/Blue Circle (II); M.1779 - Anglo American/Tarmac; M.3415 – CRH/Semapa/Secil JV, 
recital 10; M.3141 – Cementbouw/Enci/JV, recital 11.  
15  Case M.7252 – Holcim/Lafarge, paragraphs 331-333; Case M.7054 – Cemex/Ho lcim Assets, paragraph 302; Case 
M.1779 – Anglo American/Tarmac, paragraph 20. 
16  Case M.7252 – Holcim/Lafarge, paragraphs 331-333; Case M.7054 – Cemex/Holcim Assets, paragraph 302; Case 
M.5803 - Eurovia/Tarmac, 10 June 2010, recital 10. 
17  Case COMP/M.7252 – Holcim/Lafarge , paragraph 334.  
18  SSAB’s response to Q1 – Questionnaire to customers – aggregates, Finland, question 11. 
19  Q1 – Questionnaire to customers – aggregates, Finland, question 11; Q2 – Questionnaire to competitors – 
aggregates, Finland, question 15; Q10 – questionnaire to customers – aggregates, Sweden, question 11.  
20  Q1 – Questionnaire to customers – aggregates, Finland, question 11; Q2 – Questionnaire to competitors – 
aggregates, Finland, question 15; Q10 – questionnaire to customers – aggregates, Sweden, question 11.  
21  Form CO, paragraph 90. 
 
7 competition concerns. Furthermore, the responses to the market investigation 
suggest that secondary and recycled aggregates can a lways be substituted with 
primary aggregates and doubts on the substitutability arise in the opposite 
direction.22 This would imply that there can be no market power separately in 
secondary/recycled aggregates because producers of primary aggregates exercis e 
a constraint on producers of secondary/recycled aggregates. Thus, the separate 
investigation of secondary/recycled aggregates is not warranted.  
(25) The Commission also notes that secondary/recycled aggregates are a very small 
part of the overall aggregates market. In line with the Notifying Party’s view, 
public statistics indicate that the share of secondary/recycled aggregates is less 
than 4% of total aggregates production in Sweden and Finland and less than 1% 
of total aggregates production in Norway.23 Thus the competitive assessment of 
an overall aggregates market and a separate primary aggregates market would 
essentially be the same.  
(26) Consequently, for the purpose of the assessment of the Transaction, the 
Commiss io n will not distinguis h primary and second ary/recycled aggregates.  
(C.ii)  Specialist aggregates vs. primary and secondary/recycled aggregates  
(27) Concerning the possible segmentation between specialist aggregates, on one side, 
and primary/secondary/recycled aggregates on the other, similar considerations 
apply as in the case of the potential primary aggregates – secondary/recycled 
aggregates distinction. First, the Parties’ presence is minimal in specialist 
aggregates without there being any horizontal and vertical links between their 
respective operations.24 Thus considering these aggregates separately would not 
lead to competition concerns. Second, the specialist aggregates segment is a niche 
market relative to the primary and secondary/recycled aggregates segment, 
constituting less than 0.5 -5% of the two seg ments combined.25 Consequently, the 
competitive assessment of an overall aggregates market and a separate 
primary/secondary/recycled aggregates market would substantially be the same.  
(28) Consequently, for the purpose of the assessment of the Transaction, the 
Commission will not distinguish specialist aggregates and primary, 
secondary/recycled aggregates.  
(C.iii)  Crushed rock vs. gravel and sand  
(29) The market investigation indicated that crushed rock and gravel/sand can be used 
interchangeably in construction.26  
(30) RMX producers indicated that they use both types of aggregates 
interchangeably27 or use gravel/sand only in quality products.28 However, if 
                                                 
22  Q1 – Questionnaire to customers – aggregates, Finland, question 11; Q2 – Questionnaire to competitors – 
aggregates, Finland, question 15; Q10 – questionnaire to customers – aggregates, Sweden, question 11.  
23  See http://www.uepg.eu/statistics/estimates -of-production-data/data-2017.  
24  Form CO, paragraph 90. 
25  Notofying Party’s Response to the Commission’s RFI 5, questions 1-2. Data for Finland and Sweden.  
26  Q1 – Questionnaire to customers – aggregates, Finland, question 12. Minutes of phone call with [a competitor] on 
10 March 2020.   
 
8 gravel and sand is not available nearby, it will be substituted with crushed rock.29 
Thus, while only gravel and sand has been used in RMX production, it is 
increasingly replaced by crushed rock. For example, according to a report by the 
Swedish Geological Survey, 2016 was the first year when rock material in 
Sweden surpassed gravel and sand in the manufacture of concrete. Out of the 
aggregates used for manufacture of concrete, 51 % consisted of rock material.30 
These facts suggest a significant degree of substitutability between the two types 
of aggregates for the purposes of RMX production.  
(31) The market investigation also indicated  that mainly crushed rock is used for 
asphalt and that gravel and sand is not suitable for this purpose.31 
(32) Further, construction represents around 80 % of all aggregates use, with asphalt 
and RMX representing 11% and 5 % of total use respectively (disregard ing 
specialist aggregates).32  
(33) Based on the above the Commission considers that gravel and sand can be 
substituted with crushed rock, even if, in the case of RMX, the substitution is not 
perfect. However, despite the lack of full substitutability in the cas e of RMX, it 
appears difficult to raise the price of gravel and sand as construction customers 
would readily switch to crushed rock, making such a small but not insignificant 
price increase unprofitable. Since the market investigation has not yielded any 
indications that arbitrage could be prevented by aggregate producers, the 
Commission does not consider that selectively raising the price for RMX 
customers (i.e. price discrimination) is feasible. On the contrary, there are 
indications that quarries do not even control the final destination of their 
deliveries,33 which makes it unlikely that they would be able to control secondary 
sales. Thus, despite the lack of perfect substitutability, crushed rock can be 
considered as a demand -side constraint that prevent s price increases in gravel and 
sand.   
(34) As regards substitution of crushed rock with gravel and sand, the Commission 
considers that such substitution is possible in construction and in RMX 
production but not in asphalt production. However, for the same rea sons as 
discussed above in relation to substitution from gravel and sand to crushed rock, 
increasing the price of crushed rock appears difficult because the switching of 
construction customers would defeat such a move and selectively raising the price 
for asphalt customers does not appear feasible due to the inability of the 
aggregates suppliers to control arbitrage. Thus, despite the lack of perfect 
substitutability, gravel and sand can be considered as a demand -side constraint 
that prevents price increase s in crushed rock.   
                                                                                                                                                 
27  Customer response to Q1 – Questionnaire to customers – aggregates, Finl and, question 12. 
28  Customer reply to Q1 – Questionnaire to customers – aggregates, Finland, question 12. 
29  Customer reply to Q1 – Questionnaire to customers – aggregates, Finland, question 12. 
30  See the Geological Survey of Sweden, Grus, sand och kross berg 2016, periodiska publikationer 2017:2, p. 22. 
31  Q1 – Questionnaire to customers – aggregates, Finland, question 12. Minutes of phone call with a competitor on 
10 March 2020.   
32  Minutes of phone call with a competitor on 10 March 2020.   
33  Form CO, paragraph 817. 
 
9 (35) On this basis, the Commission considers that the degree of substitution is at such 
levels that an overall aggregates market is probable. Consistent with this, the 
Swedish Competition Authority has concluded (and was upheld by the Swedi sh 
Market Court on this point) that sand and gravel belong to the same product 
market with crushed rock as they are substitutable with each other to more than 
only a limited extent.34  
(36) Thus, while the Commission also received unsubstantiated responses on th is 
issue, the market investigation overall suggests that crushed rock and gravel and 
sand belong to one market. In any event, the question whether separate markets 
should be defined for crushed rock, on the one hand, and gravel and sand on the 
other, can b e left open as this would not change the competitive assessment in this 
case.   
(37) Consequently, for the purpose of the assessment of the Transaction, the 
Commission will take a single aggregates market as a basis without distinguishing 
between (i) gravel and  sand and ii) crushed rock. However, it ultimately leaves 
this question open as it would not change the competitive assessment.  
5.2.1.2. Geographic market definition  
(A) The Notifying Party’s view  
(38) The Notifying Party submits that  the definition of a relevant geograph ic market 
for aggregates is dependent on the fact that aggregates are heavy and voluminous 
products with significant transport costs. Around half of the price of aggregates is 
made up of transport costs.35 Consequently, the size of the geographic market 
depends on the distance to which it is economically reasonable to transport 
aggregates.  
(39) In the Notifying Party’s view, this distance varies to a certain extent by country 
and by region, as it depends on the cost of producing the aggregates (if aggregates 
can be produced at a lower cost, they can be sold competitively further away from 
the production site than aggregates produced at a higher cost), and the cost of 
transport.36 The cost of producing aggregates in turn is tied to a number of 
variable components ( e.g. whether the quarry is on an owned or leased property, 
the amount of landscaping works necessary for production), while the cost of 
transport depends on the location of the quarry and the road network available.37 
Further, in sparsely populated areas ag gregates need to be transported to longer 
distances despite the higher costs as the place of use are often further away from 
the source of aggregates than in more densely populated areas. Thus quarries tend 
to compete in somewhat larger areas in sparsely p opulated areas than in 
metropolitan areas.38 
                                                 
34  Decision by the Swedish Competition Authority, Dnr 211/97, Skanska Sydöst / Bjursells i Jönköping AB och 
Bjursells Kran AB, 18 June 1997; MD 2011:11, Swerock AB mot Konkurrensverket, 12 April 2001, p. 15. 
35  Form CO, paragraph 103.  
36  Form CO, paragraph 104.  
37  Form CO, paragraph 104. 
38  Form CO, paragraph 110.  
 
10 (40) Based on the share of the Parties’ aggregates sales to different distances the 
Notifying Party considers that the most appropriate geographic market is a 50 km 
radius around the quarry and 80 km radius is the sec ond best alternative.39 For 
example, based on internal estimates, in Sweden [ 50-60]% of Peab’s aggregates 
are used within a radius of 25 km of the quarry, [ 90-100]% is used within a radius 
50 km and [90-100]% were used within 80 km from the quarry. The 
corresponding figures of the Target are as follows: [20-30]% of aggregates are 
used within a radius of 25 km, [ 70-80] % of aggregates are used within a radius of 
50 km and [90-100]% are used within a radius of 80 km.40  
(41) Further, while in the countries affected by the Transaction aggregates are 
predominantly transported by road, in certain areas, most notably in northern 
Norway, they are also transported by boat. In the case of boat transport, 
aggregates can be transported to distances of 150 -250 km.41 
(B) Commiss io n precedents  
(42) In past decisions, the Commission has considered the aggregates market to be 
local/regional in scope42 and has retained a radius of 50 to 80 km depending on 
the particularities of the areas concerned.43 This approach was based on the fact 
that agg regates are heavy and voluminous products with significant transport 
costs.  
(43) Exceptionally, a national market was also defined but this concerned the 
Netherlands, which has a relatively small size, very easy geography as well as a 
dense and good quality road network.44  
(44) Most recently, in Holcim /Lafarge, the Commission retained a 5 0-80 km radius 
around the production site as t he relevant geographic market, in line with the 
standard practice.45 
(C) The Commission’s assessment  
(45) It is clear on the basis of the prece dents that the appropriate market size depends 
on how far it is reasonable to transport aggregates, which is confirmed by the fact 
that customers that the maximum distance from which customers source 
aggregates is 100 km.46 
(46) However, the maximum distance cou ld be an exceptional outlier that does not 
reflect real competitive conditions. If the vast majority of aggregates are sold 
within a shorter radius, competition between suppliers mostly takes place within 
                                                 
39  Form CO, paragraph 120.  
40  Form CO, paragraph 108.  
41  Form CO, paragraph 107.  
42  Case M.4298 – Aggregate Industries/Foster Yeoman, paragraph 13. 
43  Case M.3713 - Holcim/Ag gregate Industries, paragraph 8; M.2317 – Lafarge/Blue Circle (II), paragraph 10; 
COMP/M.1827 Hanson/Pioneer.  
44  COMP/M.3141 Cementbouw/ENCI/JV, paragraph 12. 
45  M.7252 Holcim / Lafarge, paragraphs 343 and 340-342.  
46  Q1 – Questionnaire to customers – aggregates, Finland, question 14; Q2 – Questionnaire to competitors – 
aggregates, Finland, question 19; Q10 – questionnaire to customers – aggregates, Sweden, question 14.  
 
11 the smaller area determined by that radius and a su pplier that is located from 
100 km from the customer does not exercise competitive constraints on suppliers 
closer to the customer in a meaningful way. In this regard, the market 
investigation indicates that the vast majority of aggregates are sold within a radius 
of 50 km.47  
(47) The Commission also notes that, in line with the Notifying Party’s view, the 
investigation confirmed that in northern Norway aggregates are also transported 
by boat.48 For example respondents included a shipping company that operates in  
Northern Norway and transports aggregates for both Parties.49 The Target also 
operates boats that transport, inter alia, aggregates.50 This is in line with the fact 
that northern Norway has a long and fractured coastline, that the population 
centres are loc ated along the coast and that all inland destinations are relatively 
close to the coast. In the case of boat transport, aggregates can be transported to 
longer distances than by road, approximately 200 km.51  
(48) Thus, in line with the precedents, the Commissio n considers that the appropriate 
geographic market is in general a radius of 50 kms in Finland, Norway and 
Sweden. However, to the extent necessary, it will also take into account regional 
variations in the competitive assessment. The most important region al variation is 
that in northern Norway boat transport is also used and this increases the area 
within which aggregates suppliers compete.   
5.2.2. Bitumen  
5.2.2.1. Product market definition  
(49) Bitumen is a viscous liquid or semi -liquid form of petroleum found in natural 
deposits and often obtained as a result of oil refining process. It is primarily used 
as a binding agent in the production of asphalt (road bitumen), in the construction 
industry and in the production of paper (industrial bitumen).  
(A) The Notifying Party’s vi ew 
(50) The Notifying Party considers bitumen to be one product market without further 
segmentation. However, it submits that the exact product market definition can be 
left open for the purpose of this case52.  
(B) Commiss io n precedents  
(51) In previous decisions, the Commission has considered that bitumen should be 
distinguished from other refined oil products , based on its characteristics and 
                                                 
47  Q10 – questionnaire to customers – aggregates, Sweden, question 13, Q2 – Questionnaire to competitors – 
aggregates, Finland, question 17; Q1 – Questionnaire to customers – aggregates, Finland, question 13. 
48  Minutes of phone call with a competitor on 10 March 2020.   
49  Customer response to Q9 – Questionnaire to customers – aggregates,  Norway, question 1. 
50  Form CO, paragraph 56.  
51  Minutes of phone call with a competitor on 10 March 2020.   
52  Form CO, paragraph 251. 
 
12 specific use53. In addition, the Commission has considered but ultimately left 
open, a further segmentation according to the typ e of bitumen used for a given 
end-application, such as road/standard bitumen, modified bitumen, bitumen 
emuls io ns and industr ia l bitumen.54 
(C) The Commission’s assessment  
(52) In line with previous decisions, the Commission considers a distinct market for 
the supp ly of bitumen, with a potential further segmentation, depending on the 
type of bitumen.55 In this case, the Target processes the purchased bitumen 
predominantly for its own asphalt production in Norway,56 and sells any surplus 
on an ad -hoc basis to third par ties.57 Because of the Target’s minor activity, the 
competitive assessment would not change under any plausible product market 
definition. For the purpose of this case, the exact product market definition can 
therefore be left open, as regardless of the exa ct product market definition for 
bitumen, no competition concerns would arise as a  result of the transaction .  
5.2.2.2. Geographic market definition  
(A) The Notifying Party’s view  
(53) The Notifying Party submits that, in line with precedents, the market for bitumen 
shoul d be national. However, the Notifying Party also notes that the exact 
geographic market definition can be left open as the Transaction will not result in 
any competition issues due to the vertical relationship between bitumen and 
asphalt.58 
(B) Commiss io n prece dents  
(54) In its past practice, the Commission has assessed national markets for the supply 
of bitumen and considered whether the geographical scope of bitumen supply 
could be narrower than national, without ever concl uding on the market 
definition.59 In addit ion, the  Commission has considered  whether  the geographic 
scope of bitumen markets could be radius -based , pointing to radi i of 200- 300 km 
and 400- 500 km.60 
                                                 
53  M.6151 – Petrochina/Ineos/JV, paragraph 28; M.5005 – Galp Energia/ExxonMobil Iberia, paragraph 19; M.3543 
– PKN Orl en/Unipetrol, paragraph 20; M.3516 – Repsol Ypf/Shell Portugal, paragraph 13; M.1464 – 
Total/Petrofina, paragraph 18. 
54  M.7849 – MOL Hungarian Oil And Gas/ENI Hungaria/ENI Slovenija, paragraph 15; M.5781 – Total Holdings 
Europe SAS/ ERG Spa/ JV, paragraph  24. 
55  M.7849 – MOL Hungarian Oil And Gas/ENI Hungaria/ENI Slovenija, paragraph 15; M.5781 – Total Holdings 
Europe SAS/ ERG Spa/ JV , paragraph 24. 
56  Form CO, paragraph 263. 
57  Form CO, paragraph 271. 
58  Form CO, paragraph 252.  
59 M.7849 – MOL Hungarian O il And Gas/ENI Hungaria/ENI Slovenija, paragraph 38; M.5781 – Total Holdings 
Europe SAS/ERG Spa/JV , paragraphs 40-43; M.5005 – Galp Energia/ExxonMobil Iberia, paragraphs 36-38. See 
also M.3516 – Repsol Ypf/Shell Portugal , paragraphs 13-14; M.1464 – Total/Petrofina , paragraph 19. 
60 M.7849 – MOL Hungarian Oil And Gas/ENI Hungaria/ENI Slovenija; M.6151 – Petrochina/Ineos/JV , 
paragraph  28; M.5781 – Total Holdings Europe Sas/ERG Spa/JV , paragraphs 40-43; M.3516 – Repsol Ypf/Shell 
Portugal , paragraphs 13-14. 
 
13 (C) The Commission’s assessment  
(55) In the present case, the Target sells bitumen in Norway over a distance of up to 
600 km.61 The market investigation has not provided any indications that would 
speak against defining bitumen markets in this case in line with the Commission's 
findings in previous cases. In any event, for the purpose of this decision the exact 
scope of the geographic market can be left open, as the Transaction would not 
give rise to any competition concerns in  this regard,  irrespective of the exact 
market definition.   
5.2.3. Asphalt  
5.2.3.1. Product market definition  
(56) Asphalt is used for surfacing roads, car pa rks, footpath pavements, airport 
runways and other sites. As asphalt is produced by heating but it may also be 
produced at lower temperatures as so -called half -warm mix or cold mix asphalt, 
which is generally done by heating the asphalt mix with steam or a dding 
chemicals to the asphalt mix. Regardless of the production temperature, all 
asphalt is used for generally similar paving purposes. Warm asphalt mix is more 
durable than half -warm mix, which is in turn more durable than cold mix. The 
vast majority (ar ound 90%) of all asphalt produced and used in paving in the 
countries affected by the Transaction is warm mix.62 Asphalt is 100% recyclable 
and because of the increased focus on the circular economy, the share of recycled 
asphalt has been increasing over th e recent years.63 Asphalt can be produced in a 
fixed plant or in a mobile plant, which can change location several times a year.64 
Most suppliers are vertically integrated with in -house paving operations,65 and 
asphalt is used exclusively for paving.66   
(A) The N otifying Party’s view   
(57) The Notifying Party submits that, with a single exception, all of the Parties’ and 
their competitors’ asphalt plants produce warm asphalt in all of the horizontally 
and vertically affected markets and therefore the distinction betwee n warm, half -
warm and cold mix asphalt is irreleva nt.67 
 
(58) The Notifying Party further submits that mobile plants are usually sent to a 
particular location for specific paving projects, for which competition takes place 
before the plant is moved.68 As mobile p lants produce asphalt almost exclusively 
for captive use, they do not in actuality compete with fixed plants in asphalt 
production.69 
                                                 
61  Request for Information 5, question 3. 
62  Form CO, paragraph 297. 
63  Form CO, paragraph 296/  
64  Q6 – questionnaire to competitors – asphalt, Sweden, question 14. 
65  Notifying Party’s response to the Commission’s Request for Information RFI 2  
66  Form CO, pa ragraph 372. 
67  Form CO, paragraph 299. 
68  Form CO, paragraph 303. 
69  Form CO, paragraph 306. 
 
14  
(59) As regards the link between asphalt and paving, the Notifying Party considers that 
paving has indeed a strong vertical lin k to the upstream market of production and 
sale of asphalt. In the countries affected by the Transaction, there is a high degree 
of vertical integration between the production of asphalt and paving. In addition 
to the Parties, many notable players in Norwa y and Sweden such as NCC, 
Skanska, Svevia, Sandahls and Veidekke operate on both levels and source most 
or at least a significant amount of their asphalt internally .70 Nonetheless, the 
Parties and other notable asphalt producers also sell significant amount s of 
asphalt to external customers such as independent, including some independent 
paving contractors. As such independent paving operators exist and asphalt is sold 
to them regularly, the Notifying Party considers that asphalt and paving form two 
separate  markets.71  
(B) Commiss io n precedents  
(60) In past decisions, the Commission has consistently found that the production and 
sale of asphalt constitutes a distinct product market without further subdivision 
into warm, half -warm and cold mix asphalt .72 Likewise, past decisions have 
consistently found that asphalt constitutes a distinct product market , separate from 
paving.73 
(61) The Commission has not previously assessed the use of mobile plants, since the 
Commission’s previous cases only related to Member States in which m obile 
plants are not used.    
(C) The Commission’s assessment  
(62) Given that the asphalt produced in all but one of the horizontally and vertically 
affected markets is warm asphalt, there is no need to distinguish between warm, 
half-warm an d cold mix in this case . In other words asphalt in this case means 
warm asphalt and is the sole focus of the assessment.  
(63) As regards the question whether asphalt and paving should constitute one 
combined market or, on the contrary, asphalt and paving should form separate 
markets , the market investigation confirmed that there are a number of 
independent paving operators, mostly small firms in big metropolitan areas.74 The 
majority of respondents also submitted that although the majority of the asphalt is 
produced for captive use, s ome asphalt is sold on the external market.75 
Furthermore, detailed catchment area data reveals that significant amounts of 
                                                 
70  Form CO, paragraph 309. 
71  Form CO, paragraph 310. 
72 Case COMP/M.7252 Holcim/Lafarge, paragraph 383; Case M.5803, Eurovia/Tarmac; Case M.5158 Strabag / 
Kirchhoff. 
73  Case COMP/M.7252 – Holcim/Lafarge, paragraph 383; Case M.5803, Eurovia/Tarmac; Case M.5158 Strabag / 
Kirchhoff. 
74  Q6 – questionnaire to competitors – asphalt, Sweden, question 19. Q4 – questionnaire to competitors – asphalt, 
Norway, question 19. 
75  Q6 – questionnaire to competitors – asphalt, Sweden, question 20. Q4 – questionnaire to competitors – asphalt, 
Norway, question 20. 
 
15 asphalt are sold externally.76 As asphalt is sold regularly between buyers and 
sellers, there is demand for asphalt separate from dema nd for paving works that 
include captive asphalt production. Separate demand means that asphalt is a 
product separate from paving and thus forms a product market distinct from the 
market for paving.77  
(64) The Notifying Party also made the argument that mobile plants should be 
excluded from the product market definition. In this regard, the market 
investigation revealed that mobile plants are not always an alternative to fixed 
plants. Whether or not they are an alternative to customers depends on the actual 
location even within a country. Therefore the Commission will assess this 
question in the geographic market definition in Section 5.2.3.2. The Commission 
notes, however, that the Notifying Party’s argument that asphalt production in 
mobile plants is purely cap tive does not justify excluding asphalt produced in 
mobile plants from the product market. Captive production by a mobile plant is 
not different from captive production by a fixed plant and the Notifying Party 
does not argue that captive production should be excluded per se. On the contrary, 
the Notifying Party considers that market shares based on the combined merchant 
and captive production are a better indicator of market power than market shares 
based only on merchant sales, which is not consistent with  the view that 
production by mobile plants should be excluded from the market.78  
(65) On the basis of the above, for the purposes of the present decision, the 
Commission considers that asphalt is a market separate from paving. The 
Commission does not distinguis h between warm, half -warm an d cold mix asphalt 
in this case as practically the only type of asphalt that matters for the competitive 
assessment is warm asphalt. The issue of mobile plants is taken into account in 
the geographic market definition as they ca n only be a viable customer choice in 
certain areas.  
5.2.3.2. Geographic market definition  
(A) The Notifying Party’s view  
(66) The Notifying Party submits that asphalt is produced by heating and as a result it 
is perishable because it is best laid before it cools down an d hardens. In practice 
this implies that it has to be laid within 2 -3 hours of production, which limits the 
transport time to 1 –2 hours.79  
(67) Consequently, the Notifying Party considers that, in line with precedents, the 
relevant geographic market is local in  scope and correspond to the catchment area 
of each asphalt plant.80  
                                                 
76  Notifying Party’s response to the Commission’s Request for Information RFI 2.  
77  The question whether an integrated asp halt and paving supplier’s captive asphalt production constrains indirectly 
another supplier’s merchant sales indirectly will be discussed in the com petiti ve assessment 
(Section  5.3.4.1.(A.iii.a)).   
78  As indicated in footnote 74, the role of captive sale s will be discussed in the competitive assessment.  
79  Form CO, paragraph 297.  
80  Form CO, paragraph 313.  
 
16 (68) Just like in the case of aggregates, the Notifying Party is of the view that the size 
of the geographic market varies to a certain extent by country and by region.81 In 
general, transport distances tend to be shorter in urban areas and longer in 
sparsely populated areas.82 In suitable regions, namely in Northern Norway, 
asphalt can also be transported by boat occasionally. Boats can transport larger 
amounts than trucks because the increased volume makes it easier to keep the 
asphalt warm, which in turn reduces its perishability. Thus, asphalt can be 
transported further by boat than by truck.83  
(69) Based on the share of the Parties’ asphalt sales to different distances the Notifying 
Party consider s that the most appropriate geographic market is a 50 km radius 
around the asphalt plants but notes that a wider radius could be more appropriate 
in sparsely populated areas.84  For example, based on internal estimates, in 
Sweden [60-70]% of asphalt produce d by Peab is used within a radius of 25 km 
of the asphalt plant, [ 80-90]% is used within a radius 50 km and [ 90-100]% is 
used within 80 km from the plant. The corresponding figures of the Target are as 
follows: [20-30]% of the asphalt it produced is used w ithin a radius of 25 km, 
[70-80] % of its production is used within a radius of 50 km and [90-100]% is 
used within a radius of 80 km.85 
(70) The Notifying Party also suggests that radiuses of 40 km and 80 km can also be 
used as an alternative but considers that radiuses smaller or larger than these are 
not plausible. 86 Further, in the case of boat transport in Northern Norway, the 
transport distance can be 250 km.87 
(B) Commiss io n precedents  
(71) In previous decisions, the radius of catchment areas that comprised the relev ant 
geographic market varied between 25 km and 100 km depending on the 
circumstances.88 In line with the Notifying Party’s view, these precedents confirm 
that asphalt is a perishable product which needs to be transported in special 
heated containers to prev ent it from hardening before it can be laid.  
(72) In the most recent Holcim/Lafarge  case that concerned the United Kingdom, the 
Commission retained a radius of 40 km  around the asphalt facility.89 
(C) The Commission’s assessment  
(73) In line with the precedents and the Notifying Parties’ view, the market 
investigation confirmed that asphalt is perishable and needs to be laid within a 
                                                 
81  Form CO, paragraph 317. 
82  Form CO, paragraph 317. 
83  Form CO, paragraph 316. 
84  Form CO, paragraph 321. 
85  Form CO, paragraph 319. 
86  Form CO, p aragraph 321. 
87  Form CO, paragraph 316. 
88  M.3754 Strabag/Dywidag; M.1827 Hanson/Pioneer; M.1779 Anglo American/Tarmac; M.678 Minorco/Tilcon. 
89  Case COMP/M.7252 – Holcim/Lafarge, paragraph 388.  
 
17 few hours of production.90 For example, a competitor observed that “ The driving 
distance combined with the driving time determines the maxim um distance to 
transport the asphalt from production facility’s to paving site. Mixed asphalt has 
a minimum temperature that defines if you can pave the material or not .”91 
(74) Given the perishable nature of asphalt, the definition of the relevant geographic 
market revolves around the appropriate radius of the catchment area within which 
most of the competition takes place. In this regard customers indicated that they 
source close to 100 % of their asphalt within a radius of 50 km from their paving 
projects,92 while 5 out of 7 competitors submitted that they sell 85% -100% of 
their asphalt within this radius.93 Thus, most of the competitive interactions 
between competitors with fixed plants in Norway and Sweden take place within a 
radius of 50 km from the asphalt pl ant.  
(75) However, the Commission notes that two competitors indicated that they sell 25% 
and 30 % of their asphalt outside the radius of 50 km but within a radius of 
80 km.94 Furthermore, another of the Parties’ competitors submitted that there are 
few asphalt  plants in the north of Norway and thus distances can be larger.95 
These facts suggest that in sparsely populated rural areas the appropriate size of 
the geographic market may be larger than a radius of 50km around the plant and 
rather correspond to a radiu s of 80 km around the plant.  
(76) The market investigation also confirmed that asphalt is transported by boat in 
northern Norway and therefore in that region the transport distances and the 
geographic market can be larger.96 Boats can transport larger amounts t han trucks 
and the increased volume allows longer travel distances97 because it is easier to 
keep larger volumes warm.  
(77) Mobile asphalt plants are also relevant in the systematic identification of 
competitive constraints the Parties face. In this regard the market investigation 
indicates that, unless there is no alternative, municipalities prefer fixed plants 
over mobile plants due to environmental concerns. The use of mobile plants leads 
to noise, dust and other types of pollution. Furthermore, fixed plants can use a 
much higher share of recycled asphalt than mobile plants. Consequently , in 
densely populated areas, where there are enough fixed plants and where issues 
such as dust and noise weigh more, mob ile plants are not used. By contrast , 
mobile plants are  used in less densely populated areas since in those areas 
                                                 
90  Q6 – Questionnaire to competitors – asphalt, Sweden, que stion 22; Q4 – Questionnaire to competitors – asphalt, 
Norway, question 22; Q5 – Questionnaire to customers – asphalt, Sweden, question 11 ; Q3 – Questionnaire to 
customers – asphalt, Norway, question 11.  
91  Competitor response to Q6 – Questionnaire to competitors – asphalt, Sweden, question 22.  
92  Q5 – Questionnaire to customers – asphalt, Sweden, question 10; Q3 – Questionnaire to customers – asphalt, 
Norway, question 10. 
93  Q6 – Questionnaire to competitors – asphalt, Sweden, question 21 ;  Q4 – Questio nnaire to competitors – asphalt, 
Norway, question 21. 
94  Q6 – Questionnaire to competitors – asphalt, Sweden, question 21 ;  Q4 – Questionnaire to competitors – asphalt, 
Norway, question 21. 
95  Competitor response to Q4 – Questionnaire to competitors – asph alt, Norway, question 22. 
96  Q3 – Questionnaire to customers – asphalt, Norway, question 10. 
97  See the study “Boat transport and quality of hot mix asphalt” by the Norwegian Public Roads Administration, 
page 9, table 4.  
 
18 environmental concerns weigh less and there is n ot always a fixed plant nearby. 
More specifically, responses to the market investigation indicated that mobile 
plants are considered as an alternativ e in northern Sweden and in the whole of 
Norway with the exception of metropolitan areas such as, for example, Oslo, 
Bergen, Stavanger and Trondheim. Within the regions where mobile plants are an 
alternative, they can be moved to any area within 10 to 30 d ays.98  
 
(78) Although mobile plants are mainly used captively to support the asphalt 
supplier’s paving operations, there is nothing to prevent an owner of a mobile 
asphalt plant to deploy such a plant for merchant asphalt sales. Thus, if there is an 
opportunity  to sell asphalt externally, mobile plants can represent additional 
constraints in these regions. Further, even when they are used captively, they may 
constrain other suppliers’ merchant sales indirectly.99  
 
(79) Based on the above, the Commission will retain g eographic markets with a radius 
of 50 km but will take into account regional differences in the competitive 
assessment as appropriate. These regional differences are as follows:  
 
i. ) in sparsely populated areas a radius of 80 km may be more appropriate;  
ii.) in northern Norway boat transport is also an alternative that can result in 
a larger geographic market as boat transport allows larger volumes, 
which reduces perishability; and  
iii.) in northern Sweden and in Norway outside the metropolitan areas, 
mobile asphalt plants can also be competitive constraints.  
5.2.4. Paving (contract surfacing)  
5.2.4.1. Product market definition  
(A) The Notifying Party’s view  
(80) The Notifying Party submits that, in line with the Commission’s previous 
decisions, paving of roads / contract surfacing constitutes  one product market.100 
(B) Commiss io n precedents  
(81) In previous decisions, the Commission has considered contract surfacing to be a 
relevant product market in itself, distinct from the materials used (namely 
aggregates and asphalt).101 
(C) The Commission’s assessment  
(82) As discussed in Section 5.2.3.1., paving is distinct from asphalt. Within paving, 
the market investigation indicated that standards and working methods differ on 
the basis of the surface to be paved (e.g. highways, roads, streets, pavements, 
parking lots, a irport runways etc. ) such that paving works paving works to be 
performed for one type of surface are not suitable to execute paving works for 
                                                 
98  M inutes of a call with a compet itor, 10 march 2020; Minutes of a call with a competitor, 10 march 2020. 
99  As indicated in footnote 74, the role of captive sales will be discussed in the competitive assessment.   
100  Form CO, paragraph 534. 
101  Case M.5158 Strabag/Kirchhoff, recital 20; Case M.7252 – Holcim/Lafa rge, paragraph 401.  
 
19 another type of surface .102 However, respondents also considered that most 
suppliers are capable of performing all k inds of paving works and that all 
suppliers are capable of performing most of the paving works.103 Consequently, 
the Commission considers that paving is a single, distinct product market.  
5.2.4.2. Geographic market definition   
(A) The Notifying Party’s view  
(83) The Notify ing Party considers that  the paving market is national as all the major 
competitors on the paving market in Sweden and Norway are active on a national 
basis. The machinery and equipment used in paving can be moved around 
nationally if needed.  
(B) Commiss io n p recedents  
(84) In Holcim Lafarge , the Commission considered that the market for contract 
surfacing, i.e. paving, is national in scope.104 This finding was based on the fact 
that equipment for paving is mobile and can be moved around to the point of 
demand, that the asphalt input is sourced from the vicinity of the paving project 
and that the biggest paving players in the United Kingdom are all active 
nationally.105   
(C) The Commission’s assessment  
(85) A majority of both customers and competitors considered that paving pl ayers bid 
nationally and not only regionally.106 As bidding has substantial costs, it is 
unlikely that a firm would bid in a tender if it did not consider that it has a non -
negligible chance of success. Consequently, the fact that bidding takes place 
nationa lly indicates that suppliers constrain each other in the entire EEA state 
concerned and not only in the region where they have equipment or employees. 
This would therefore be indicative of a national market. In the same vein, 
respondents to the market inve stigation were of the view that paving suppliers can 
bid competitively anywhere in the EEA state regardless of having equipment and 
employees in the area, even if they considered that local presence is an 
advantage.107 The Commission notes that having an adv antage implies 
differentiation within the same market rather than separate markets.  
(86) As regards the possibility of a market larger than national in scope, competitors 
considered that they would not be able to bid competitively in an EEA State 
where they ar e not present.108 Similarly, customers considered that paving 
                                                 
102  Q7 – Questionnaire to customers – paving, Sweden, question 10. Q8 – Questionnaire to competitors – paving, 
Sweden, question 9. 
103  Q7 – Questionnaire to customers – paving, Sweden, question 11. Q8 – Questionna ire to competitors – paving, 
Sweden, question 10. 
104  Case M.7252 – Holcim/Lafa rge, paragraph 405.  
105  Case M.7252 – Holcim/Lafa rge, paragraphs 402-405. 
106  Q8 – Questionnaire to competitors – paving, Sweden, question 15; Q7 – Questionnaire to customers – paving, 
Sweden, question 16.  
107  Q7 – Questionnaire to customers – paving, Sweden, question 14; Q8 – Questionnaire to competitors – paving, 
Sweden, question 13.  
108  Q8 – Questionnaire to competitors – paving, Sweden, question 16. 
 
20 companies from neighbouring countries cannot bid competitively without 
presence in their own Member State, in this case Sweden.109 Barriers include 
cultural differences, language and lack of contact s.110  
(87) On the basis of the above , the Comm ission considers that, in line with precedents, 
the market for paving is national.  
5.2.5. RMX  
5.2.5.1. Product market definition  
(A)  The Notifying Party’s view  
(88) The Notifying Party submits that, in line with the Commission’s precedent s, 
RMX constitutes a single product market.111 
(B) Commiss io n precedents   
(89) The Commission has consistently considered RMX to constitute a single, distinct 
product market.112  
(C) The Commission’s assessment  
(90) RMX is homogenous and distinct from other types of building m aterials. Given 
the consistent past practice, which is in accordance with the Notifying Party’s 
view, the Commission considers that RMX is a single distinct product market 
without further subdivisions.  
5.2.5.2. Geographic market definition  
(A) The Notifying Party’s vi ew 
(91) The Notifying Party submits  that the definition of a relevant geographic market 
for RMX is dependent on the fact that RMX is perishable over time, and can 
therefore only be transported up to a maximum distance.113 A second limiting 
factor is the question of economic viability of transport distances.114 
(92) In the view of the Notifying Party, exact driving distances may vary from location 
to location. Distances may be larger compared other European states given the 
size of the countries relevant to the Transactio n. Transport distances may also 
vary depending on the density of population.115 In less populated areas, distances 
tend to be longer. In urban areas on the other hand, there are more competing 
                                                 
109  Q7 – Questionnaire to cus tomers – paving, Sweden, question 17. 
110  Q8 – Questionnaire to competitors – paving, Sweden, question 16.1. 
111  Form CO, paragraph 534. 
112  Cases M.3572 Cemex/RMC, recital 12; M.4719 HeidelbergCement/Hanson, recital 21; M.6153 Anglo 
American/Lafarge/JV, reci tal 22; Case M.7054 – Cemex/Holcim  Assets , paragraph 319; Case COMP/M.7252 – 
Holcim/Lafa rge, paragraph 281.  
113  Form CO, paragraph 668. 
114  Form CO, paragraph 664. 
115  Form CO, paragraph 665. 
 
21 plants and traffic congestion, making the costs caused by longer transport 
distances a bigger disadvantage than in less populated areas. In urban areas, 
maximum distances for RMX therefore tend to be shorter.  
(93) The Notifying Party submits that a clear majority of its RMX products are sold 
within a radius of 50 km or less. On average, its Finnish plants sell approximately 
[70-80]% of its products within an area of 25 km from the plant, but [50 -60]%  of 
its products outside a radius of 15 km116. Swedish and Norwegian RMX plants 
would sell close to [90-100]% of its products with in a distance of 25 km, 
and [70-80]% within a radius of 15 km around a plant117. The Notifying Party 
estimates that maximum transportation distances for RMX are 100 km, and for 
some plants in Sweden up to 150 km.  
(94) Based on this sale shares, the Notifying Par ty submits that a radius of 50 km 
around each plant can be used as the relevant geographic area for RMX, with a 
radius of 25 km as an alternative.118 
(B) Commiss io n precedents  
(95) In past decisions, the Commission has considered that a relevant geographic 
market fo r RMX is a catchment area of a radius of 25 km around each plant119. 
However, the decision concerned markets located predominantly in France, 
Germany and the UK, and was partly based on the responses to the market 
investigation as well as arguments provided by the Notifying Party in the context 
of the Transaction in the respective countries.  
(C) The Commission’s assessment  
(96) The Commission considers that a plausible geographic market for RMX would be 
either 25 km or 50 km around each plant. Based on previous decis ions, as well as 
information provided by the Notifying Party, a narrower catchment area would be 
the more likely alternative in urban and more densely populated areas. However, 
the Commission acknowledge the argument by the Notifying Party that in 
Finland,  Norway and Sweden, transport distances depend highly on the specific 
region in question. In the northern and other rural regions, which are sparsely 
populated, a catchment area around of 25 km around each plant would likely 
underestimated the actual sales  territory.  
(97) However, the ultimate market definition can be left open for the assessment of the 
case. As the Target is not active in the RMX business120, no horizontal overlaps 
occur. Vertical relationships are considered in the context of a link with upstrea m 
aggregates businesses in all three countries. For the assessment of this specific 
case, applying a wider catchment area of 50 km is the more prudent approach.  
(98) With respect to possible input foreclosure, the market shares on the respective 
aggregates mark ets upstream are decisive. However, those would not change 
                                                 
116  Form CO, paragraph 666. 
117  Form CO, paragraph 667. 
118  Form CO, paragraph 669.  
119  Case COMP/M.7252 – Holcim/Lafarge, paragraph 286. 
120  Form CO, paragraph 671. 
 
22 under a narrower geographic market definition. On the other hand, the overall 
number of affected markets would decline, as fewer catchment areas would 
overlap as a radius of 25 km would be consider ed as catchment area for RMX.  
(99) Downstream market shares would indeed matter for the assessment of possible 
customer foreclosure. However, customer foreclosure is not a concern in the 
context of the aggregates – RMX relation, as further explained in the comp etitive 
assessment section.  
(100)  For the purposes of the present decision, a wider catchment area will be used as 
general assumption, as it would allow for a more prudent analysis. The ultimate 
geographical market definition can be left ope n between catchment areas of 
25 km and 50 km around each RMX site, as it would not change the outcome of 
the assessment.  
5.2.6. Construction   
5.2.6.1. Product market definition   
(A) The Notifying Party’s view  
(101)  The Notifying Party submits that the market definition can be left open as the 
numbe r of affected markets and the Notifying Party’s market share will remain 
roughly the same under all plausible market definitions.  
(B) Commiss io n precedents   
(102)  Construction  has in the past been defined as the on -site construction or assembly 
of buildings and oth er structures and building engineering.  
(103)  In previous decisions, the Commission has considered the division of the 
construction market into three sub -segments: the construction of residential 
buildings (blocks of flats, single household buildings), the const ruction of non -
residential buildings (industrial buildings, offices, shopping centres and hospitals) 
and the construction of infrastructure/civil engineering (roads, bridges, railroads, 
sewage systems).121 The Commission has, however, usually left the final market 
definition open. Within the segments of residential building, non-residential 
building and infrastructure building , a further segmentation has occasionally been 
made based on contract value.122 
(104)  The Commission also considered dividing the infrastructur e construction / civil 
engineering  segment into the construction of roads, the construction of bridges, 
the construction of tunnels and other infrastructure construction.123 However, in 
this case too, the Commission has left the final product market definiti on open.   
                                                 
121 Case COMP/M.6841 – Goldman Sachs/TPG Lundy/Tullock Homes Group Limited, paragraph 17; M.6020 — 
ACS/HOCHTIEF, paragraph 6. 
122  Case COMP/M.1157 – Skanska /Scanc em, paragraph 53-54.  
123  Case COMP/M.3864 – Fimag/Züblin , paragraph 10; Case COMP/M.5200 – Strabag/Kirchner , paragraph 12; and 
Case COMP/M.5158 – Strabag /Kirchhoff , paragraph 12.  
 
23 (C) The Commission’s assessment  
(105)  The Parties do not have any horizontal overlap in construction as the Target is not 
active in construction. Peab’s share in construction stays below 30 % under any 
market definition that the Commission considers plau sible in all three EEA states 
involved in the Transaction.124 Thus construction markets are of interest because 
they are the downstream leg of a vertical link involving aggregates in the 
upstream market. In these vertical relationships the competitive assess ment is the 
same under any market definition that the Commission considers plausible.   
(106)  Consequently, for the purpose of the assessment of the Transaction, the exact 
market definition can be left open.  
5.2.6.2. Geographic market definition  
(A) The Notifying Party’s v iew 
(107)  The Notifying Party considers the market for construction to be national, and 
considers that the ultimate geographic market definition can be left open.  
(B) Commiss io n precedents  
(108)  In previous cases, the Commission has considered the market for construction  
works to be national, and potentially EEA -wide for certain types of construction 
works such as the construction of tunnels or bridges. However, geographic market 
definitio ns were ultima te ly left open.125  
(C) The Commission’s assessment  
(109)  For the present case, th e Commission considers the market for construction to be 
national or wider. Peab itself is active in construction in Finland, Sweden and 
Norway, which is also the case for Skanska. NCC and Veidekke have a presence 
in construction in both Norway and Sweden126. However, companies do not 
compete in all parts of the EEA, and market investigation provided no 
information on whether presence in the respective country is a perquisite for 
successfully competing for construction projects.  
(110)  For the assessment of the case , a geographic market of at least national is 
considered, as no concerns would occur under the narrower definitions.  
5.2.7. Transport  
5.2.7.1. Product market definition  
(111)  The Target owns a general dry cargo ship and a bulk carrier that operate in 
northern Norway127.  
                                                 
124  For Finland, see Form CO, paragraph 814; for Norway see Form CO, paragra ph 822; for Sweden see Form CO, 
paragraph 829.   
125  M.3864 – Fimag / Züblin; M.6020 ACS / Hochtief. 
126  Annex 5.7. 
127  Form CO, paragraph 872. 
 
24 (A) The No tifying Party’s view   
(112)  The Notifying Party submits that transport business has a vertical relationship 
with its aggregations operations, as the vessels are to transport, inter alia, 
aggregates. However, the Notifying Party considers that the relevant produc t 
market can be left open as the relationship between aggregates and cargo shipping 
does not give rise to affected markets under any plausible market definitions or 
result in any competitio n issues.128     
(B) Commiss io n precedents  
(113)  In its previous decisions, the  Commission defined a separate product market for 
short-sea container liner shipping, i.e. distinct from deep -sea container shipping, 
non-liner shipping and non -containerised shipping, such as bulk shipping.129  
(114)  Additionally, the Commission has recognised th e need to consider vessel sizes 
and contract types when defining the relevant product market for vessels.130 
(C) The Commission’s assessment  
(115)  Given that the Target only has one cargo ship and one bulk carrier ship, which 
carry, inter alia, some mineral aggregates , the Commission considers that the 
market definition can be left open as there are no conceivable competition 
concerns linked to these transport vessels.  
5.2.7.2. Geographic market definition  
(A) The Notifying Party’s view  
(116)  The Notifying Party submits information on t he basis of a national market, and 
considers that the exact geographic market definition can be left open.131 
(B) Commiss io n precedents  
(117)  In previous decisions, the Commission has considered that  smaller ships tend to 
focus on coastal/short -range trade, while lar ger ships tend to go long -range, which 
may be worldwide.132 Ultimately, the market definition was left open.  
(C) The Commission’s assessment  
(118)  The ships in question are rather small,133 the geographic market is therefore 
smaller than worldwide. For the assessment of  this case, the market definition can 
be left open. Possible vertical effects would origin from the link between the 
Target’s cargo ship business in northern Norway and the aggregates production of 
Peab. Combined market shares in aggregates stay below 30% in all local markets 
                                                 
128  Form CO, paragraph 874. 
129  Case COMP/M.9016 – CMA CGM/Container Finance , paragraph 31. 
130  Case COMP/M.5346 – APM M/Broström , paragraph 11. 
131  Form CO, paragraph 876. 
132  Case Comp/M.5346 – APMM / Broström. 
133  Form CO, paragraph 875. 
 
25 in Norway.134 Markets could therefore only become affected if market shares in 
cargo shipping would exceed 30%.  
(119)  On a national level, market shares are negligible below 2%. If markets would be 
defined regional, no links would occur, as P eab’s two quarries are located in 
central Norway in Verrabotn135 and in Jessheim near Oslo.136 Therefore, under an 
even more narrow market definition than national, upstream and downstream 
market would no longer fall into the same geographic area.  
(120)  Thus the Com mission considers that the exact geographic market definition can 
be left open.  
5.3. Com petitive assessm ent  
5.3.1. Market share methodology  
(121)  In the case of local markets defined as a catchment area around a plant or a 
quarry, obtaining reliable sales and volume data for each local competitor poses 
great challenges. Such data is not readily available and reliable data collection 
may not be possible. Thus, in previous cases,137 the Commission has relied on 
indirect estimation of market shares and proxies.  
(122)  Following the m ethodology used in previous cases, the market shares for 
catchment areas have been compiled as follows.138  
• The size of the market (local demand) is computed as the product of 
consumption per capita in the relevant country and the population of the 
catchment  area. A NASA population dataset has been used to estimate the 
size of the local market in terms of population.  
• The Parties' combined sales attributed to each catchment area are all sales of 
the production site in the centre of the catchment area plus a sh are of the sales 
of each of the Parties' production sites with an overlapping catchment area, 
calculated based on the percentage of the overlap from the entire catchment 
area.  
• The Parties’ local market share is calculated as these sales divided by the tot al 
estimated consumption for the relevant product in the catchment area.  
• Unless otherwise stated, the sales market shares of competitors are estimated 
by allocating the market volume minus the Parties' volumes to each 
competitor in proportion to its produc tion capacity shares in the area. The 
production capacity share of each competitor is calculated in relation to the 
total capacity of competitors in the area  
                                                 
134  Form CO, paragraph 877. 
135  The quarry is closed. 
136  Form CO, Picture 4 / paragraph 133. 
137  M.7550, CRH / Holcim Lafarge Divestment Bus iness, paras 174-176. Also see Case M.7252, Holcim / Lafarge, 
paras 75 -77. 
138  Form CO, paragraphs 62-64. 
 
26 (123)  The Commission considers that this methodology is in line with precedents in this 
sector139 and prov ides the best available proxy given the challenges of data 
gathering. The Commission notes that because the total market size is proxied 
with per capita consumption and population data whereas the Parties’ sales are 
concrete sales figures, the market share s can sometimes exceed 100%, especially 
in more sparsely populated areas.  
5.3.2. Overview of affected markets  
(124)  Table 1 below gives an overview of the product and country combinations in 
relation to which the Transaction gives rise to affected markets. A cell in a table 
does not necessarily correspond to a specific market as in many cases the markets 
are local. Thus one cell can refer to several markets, involving the same 
product(s)  and the same EEA state .  
      Table 1 - overview of affe cted markets  
Finland  Sweden Norway  
Horizontally affected markets  
aggregates  aggregates   
 asphalt  asphalt  
 paving   
Vertically affected markets  
 aggregates -asphalt  aggregates -asphalt  
aggregates -RMX  aggregates -RMX  aggregates -RMX  
aggregates – const ruction   aggregates – construction 
 asphalt – paving asphalt – paving  
  bitumen – asphalt  
 
(125)  The Commission notes that there are no affected markets in relation to transport, 
which would only concern Norway. The relationship would be between transport 
and aggregates as the Target’s boats transport some aggregates from time to time. 
As discussed in Section 5.2.7., combined market shares in aggregates stay 
below  30% in all local markets in Norway.140 Markets could therefore only 
become affected if market sh ares in cargo shipping would exceed 30%. If the 
cargo shipping market is national or wider, this would be wholly implausible as 
the Target has only two boats. If the cargo shipping market is local with a very 
small radius, the market share is still unlikel y to exceed 30% and, in addition, the 
Target’s boats could not serve the catchment areas of Peab’s quarries. This is 
because Peab has only two quarries in Norway, one in Jessheim in southern 
Norway and one in Verrabotn in central Norway, whereas the Target ’s boats 
operate in northern Norway.141   
                                                 
139  M.7550, CRH / Holcim Lafarge Divestment Business, paras 174-176. Also see Case M.7252, Holcim / Lafarge, 
paras 75 -77. 
140  Form CO, paragraph 877. 
141  Form CO, paragraph 872. 
 
27 5.3.3. Finland  
5.3.3.1. Horizontally affected markets  
(A) Aggregates  
(A.i) List of affected markets and market shares  
(126)  Overall, Peab currently has limited presence in the aggregates business in 
Finland. It operates three aggregates quarrie s located in the wider Forssa area in 
south -western Finland and in the wider Lahti area in the southeast.142  
(127)  The Target, on the other hand, is a well -established supplier of aggregates in 
Finland. It owns approximately 200 aggregates quarries, around half of which are 
currently operative.143 
(128)  Overlaps of catchment areas of the three quarries currently owned by the 
Notifying Party with a number of catchment areas around the YIT’s quarries give 
rise to 15 horizontally affected market in the Turku / Forssa / Uusim aa area. In 
addition, six market become vertically affected in the area of Lahti / 
Lappeenranta. The affected markets are listed in Tables 2 and Table 3 below.  
Table 2 - horizontally affected aggregates markets in the Turku / Forss a / Uusima area  
Catchment area  Peab  Target  Combined  
    
Forssa / Forssanporti   [5-10]% [30-40]%  [40-50]%  
Forssa / Vuori  [5-10]%  [30-40]%  [40-50]%  
Humppila  [5-10]%  [20-30]%  [20-30]%  
Jokioinen, M yllymäki  [5-10]%  [30-40]%  [30-40]%  
Jokioinen, Ripunkallio  [5-10]%  [30-40]%  [40-50]%  
Murronmaa  [0-5]% [20-30]%  [30-40]%  
Nummensyrjä  [0-5]% [20-30]%  [30-40]%  
Salo, Hiekkanummi  [0-5]% [20-30]%  [30-40]%  
Somero, Matinmäki  [5-10]%  [30-40]%  [30-40]%  
Somero Sora -Heikkilä  [5-10]%  [30-40]%  [30-40]%  
Tammela, Penttilä  [0-5]% [40-50]%  [40-50]%  
Vahva Sora  [0-5]% [20-30]%  [20-30]%  
Tehdaspalsta  [0-5]% [20-30]%  [30-40]%  
Hämeenlinna  [0-5]% [20-30]%  [20-30]%  
Pusula  [0-5]% [20-30]%  [20-30]%  
 Source: Form CO, table 1, paragraph 80.  
Table 3 - horizon tally affected aggregates markets in the Lahti/Lappenrata area  
Catchment area  Peab  Target  Combined  
    
Hämeenlinna  [0-5]% [20-30]%  [20-30]%  
Hamina  [0-5]% [20-30]%  [20-30]%  
Kotka  [0-5]% [20-30]%  [20-30]%  
Lahti  [0-5]% [20-30]%  [20-30]%  
Luumäki, Heimala  [0-5]% [20-30]%  [20-30]%  
Ämmänäyräs  [0-5]% [20-30]%  [20-30]%  
Source: Form CO, table 1, paragraph 80. 
                                                 
142  Form CO, paragraph 126. 
143  Form CO, paragraph 125. 
 
28 (129)  A further segmentation of aggregates into crushed rock and gravel / sand would 
not substantially change that picture. In the Turku / Forssa / Uusimaa ar ea, three 
more markets would be horizontally affected in that case (Pori, Söörmarkku, 
Ulvia), all with moderate market shares of well under 30%. In the Lahti / 
Lappeenranta area, three additional markets would become horizontally affected 
(Pernaja, Keltti 1, 2), all three with moderate market shares of below 30%. Also 
under such distinction, as shown in Table 4 and 5, combined market shares do not 
exceed [40-50]% in any affected areas, which is also the case for the combined 
market shares for the overall ag gregates market.  
Table 4 - market shares in horizontal ly affected aggregates markets separately for  i) crushed rock   
and ii) gravel and sand  
Catchment area  Crushed Rock  Gravel + Sand  
   
Forssa / Forssanporti144 - - 
Forssa / Vuori  [40-50]%  - 
Humppila  - [30-40]% 
Jokioinen, M yllymäki  - [40-50]%  
Jokioinen, Ripunkallio  [30-40]% - 
Murronmaa  - [40-50]%  
Nummensyrjä145 - - 
Salo, Hiekkanummi  - [30-40]%  
Somero, Matinmäki  - [40-50]%  
Somero Sora -Heikkilä  - [40-50]%  
Tammela, Penttilä  [40-50]% - 
Vahva Sora  [10-20]%  [20-30]%  
Tehdaspalsta  - [40-50]%  
Hämeenlinna  [20-30]% - 
Pulsua  - [20-30]%  
Pori [20-30]%  - 
Söörmarkku  [20-30]%  - 
Ulvila  [20-30]%  - 
Source: Form CO, Annex 7, Table 67. 
Table 5 - market shares in horiz ontally affected aggregates markets in the Lahti / Lappe enranta 
area separately for i) crushed rock and ii) gravel and sand  
Catchment area  Crushed Rock  Gravel + Sand  
   
Hämeenlinna  [20-30]%  - 
Hamina  [40-50]%  [5-10]%  
Kotka  [40-50]%  - 
Lahti  [20-30]%  - 
Luumäki, Heimala  [30-40]%  - 
Ämmänäyräs  - [10-20]%  
Pernaja  [20-30]%  - 
Kouvola, Keltti 1  [20-30]%  - 
Kouvola, Keltti 2  [20-30]%  - 
Source: Form CO, Annex 7, Table 67.  
                                                 
144  Forssa / Forssanporti does not produce new aggregates and sells only recycled / secondary aggregates. 
145  No data available 
 
29 (130)  Tables 4 and 5 show that in most quarries, either crushed rock or gravel / sand is 
produ ced. In few catchment areas, market shares in segments may be lower than 
in the overall aggregates market. This is because in Tables 2 and 3, production of 
all aggregates by both parties within the catchment area is taken into account. In 
Tables 4 and 5, only all production by the parties of the specific type of 
aggregates that is produced in the respective quarry is analysed.  
(A.ii)  The Notifying Party's view  
(131)  The Notifying Party considers that the Transaction would have no impact on the 
aggregates markets in que stion. First, an increase of the Parties’ combined market 
shares would only be nominal, as the Notifying Party’s production is used fully 
captively and therefore would not put competitive pressure on the market. 
Production will remain for interna l use only  post Transaction.146 
(132)  Second, the combined market shares in the local areas would still remain 
moderate, and the Notifying Party would still meet plenty of competition in all 
markets.147 
(A.iii)  The Commission’s assessment  
(A.iii.a)  Common characteristics of all markets  
(133)  Market  shares as discussed in this section comprise both captive and non -captive 
production. As discussed under 5.3.1, also volumes that are not sold on the 
market, but used internally by companies with an integrated downstream 
business, are considered. For the purposes of the assessment, no distinction is 
therefore made between captive and non -captive sales, despite the Notifying 
Party’s argument that almost the entire production of aggregates in its three 
quarries would be used internally148. This is because also  internally used volumes 
reflect the market power of a specific company. The Notifying Party also appears 
to acknowledge that switching between internal and external sales is relatively 
easy149, and that captively used production would reflect the capability  to 
participate in the market or extent their sales.150 
(134)  Aggregates are a rather homogeneous product, and as evidenced by the market 
investigation, costs of switching between suppliers are generally moderate. A 
majority of customers responding to the investig ation indicate that they can easily 
switch to other companies than the ones they source from151. The only reported 
barriers to switching pertain to different price levels or lack availability, and only 
to a minor degree on product differentiation connected t o respective specific 
suppliers152. All undertakings that have responded to the market investigation 
                                                 
146  Form CO, paragraph 164, 170. 
147  Form CO, paragrap h 166, 172. 
148  Form CO, paragraph 127. 
149  Form CO, paragraph 68. 
150  Form CO, paragraph 69. 
151  See Q1, questionnaire to aggregates customers in Finland, question 15.  
152  See Q1, questionnaire to aggregates customers in Finland, question 17.1. 
 
30 source from more than one aggregates supplier153. Therefore, the presence of 
actual or potential alternative aggregates suppliers within a market exert 
competi tive pressure on aggregates companies, as customers can switch when 
prices are raised unilaterally.  
(135)  Production of aggregates in Finland is generally limited due to the fact that 
sourcing aggregates requires a permit, which is not easy to obtain because of  
environmental requirements. Respondents to the market investigation consistently 
state that acquiring a permit could take several years, a factor that constrains 
capacity expansion.154 Therefore, barriers to enter the market or to expand 
production are not negligible. Even though the costs for opening a new or 
additional quarry are moderate155, the time required to get a permit makes a 
timely entry into any market to respond to increased demand in that market 
unlikely, which may lead to capacity constraints.  
(136)  Responses from the market investigation indicated that, while there is not a 
general capacity problem regarding aggregates in Finland, there are regional 
differences156. This was further developed during calls with aggregates 
competitors. One of the main comp etitors of YIT confirmed that there would be 
significant excess capacities in rural Finland, for example in the Forssa area, 
where lots of excess capacities exist157. By contrast, access to aggregates would 
be more difficult in metropolitan areas, such as He lsink i.158  
(137)  Despite a more limited availability in metropolitan areas, as highlighted by the 
same competitor, in such areas however aggregates could not only be sourced 
from quarries, but also as by -product from construction sites, such as construction 
of ro ads, metro lines or tunnels. Such aggregates would add another 10% to 40% 
to the overall market of aggregates159. As these volumes are linked to specific 
construction projects, the availability of aggregates in metropolitan areas would 
be subject to signific ant variations. Therefore, in some years, demand for 
aggregates would outstrip capacities, including in Helsinki and other metropolitan 
areas.160 
(A.iii.b)    Turku / Forssa / Uusimaa area  
(138)  The Commission considers that there are two main reasons why the Transaction 
will not lead to higher prices for aggregates in the Turku / Forssa / Uusimaa area. 
First, the Transaction does not change the competitive structure of the market, as 
merged entity would not have a significantly stronger position compared to 
situation pre -transaction. Increments remain close to or below [5-10]% in all of 
the areas. This was further substantiated by replies to the market investigation. As 
an illustration, a competitor in aggregates production in Finland expressly 
                                                 
153  See Q1, que stionnaire to aggregates customers in Finland, question 17. 
154  See Q1, questionnaire to aggregates customers in Finland, question 25. 
155  At around EUR 100.000, see Q2, questionnaire to aggregates competitors, question 30. 
156  See Q1, questionnaire to aggreg ates customers in Finland, question 23. 
157  Call with a competitor, 10 March 2020, point 9. 
158  Call with a competitor, 10 March 2020, point 6, 7. 
159  Call with a competitor, 10 March 2020, point 4. 
160  Call with a competitor, 10 March 2020, point 7. 
 
31 confirmed the Transaction would  not have material effects on the market structure 
regarding aggregates in the Forssa / Turku / Uusimaa area161. 
(139)  The point that the Transaction would not change the market structure was further 
substantiated in the market investigation. None of the responden ts stated that Peab 
would currently exercise significant or even some competitive pressure on YIT, 
while customers rather stated that it would not exercise any significant pressure (a 
majority stated it would not be able to answer this question)162. Therefor e, no 
significant competitive force would leave the market due to the Transaction.  
(140)  Second, the merged entity would still be constrained by other players. This is 
illustrated in the first place by the fact its combined market shares remain below 
45% in all  markets, and well below that figure in most of the regions. As 
switching costs for aggregates customers are generally moderate, the presence of 
alternative suppliers leave customers with the option of sourcing from other 
companies. In the second place, as  Table 6 shows, the competitor base consists of 
both small players as well as larger, integrated competitors, in line with overall 
market structures within Finland generally.  
(141)  The fragmentation of the Finnish market for aggregates is illustrated by the fac t 
that, in 2013, there were more than 6000 permits across the country for quarrying 
various kind of grounds. 4000 of these quarries were producing gravel and sand, 
1800 rock, and 200 other types of grounds163. Overall, around one third of all 
aggregates in t he wider Turku / Forssa / Uusimaa area are produced by smaller 
suppliers.  
Table 6 - estimated market shares of aggregates competitors in the Turkuu / Forssa / Uusima 
area  
Competitor  Estimated market shares164 
  
Rudus (CRH)  [10-20]% 
Hämeen Kuljetus  [5-10]% 
Destia  [5-10]%  
NCC  [5-10]%  
TerraWise  [5-10]%  
Palovuoren Kivi  [5-10]%  
Kiertomaa  [5-10]%  
Läänin Kuljetus  [5-10]%  
Hämeen kuljetus  [5-10]%  
Others  approx. [30-40]% 
 Source: Form CO, Table 16  
(A.iii.c)  Lahti / Lappeenranta area  
(142)  Similar a rguments as stated above are valid for the assessment of the Lahti / 
Lappeenranta area. First, the Transaction would not change the structure of 
competition in the area compared to the situation pre -transaction. Increments in 
                                                 
161  Call w ith a competitor, 10 March 2020, point 9. 
162  Q1, questionnaire to aggregates customers in Finland, question 19. 
163  The Finnish Ministry of Employment and the Economy, Kiviaines - ja luonnonkiviteollisuuden kehitysnäkymät 
(report on aggregates),  report 54/2015, page 28 
164  Form CO, Table 16; estimates for an area of 160 km around the Target`s quarries in the Turku and Forssa area, 
and therefore potential competitors under catchment areas of 80 km. 
 
32 all markets are close to or be low [0-5]%. Therefore, Peab would not gain a 
stronger position than YIT currently has. As the market investigation confirmed, 
Peab currently does not form a significant competitive constrain on YIT165. 
Therefore, no significant competitor would be eliminated due to the Transaction.  
(143)  Second, the merged entity would still face significant competition, as its modest 
market shares remain below 30% in the Lathi / Lappeenranta area below 30%. As 
switching costs for aggregates customers are generally moderate, the p resence of 
alternative suppliers leave customers with the option of sourcing from other 
companies. As switching costs between aggregates suppliers are generally 
moderate, the merged entity will not be in a position to raise prices unilaterally.  
(144)  Also in the  Lahti / Lappeenranta area, the merged entity faces competition from a 
number of competitors. The competitor base consists partly of bigger, integrated 
companies such as Rudus, Destia or NCC. In addition to this, a large number of 
small suppliers with a ma rket share below 5% account for around [40-50]% of all 
aggregates supply in the region, as Table 7 shows.  
Table 7 - estimated market shares of aggregates competitors in the Lahti / Lappeenranta area  
Competitor  Estimated market share s166 
  
Rudus (CRH)  [20-30]% 
Savon Kuljetus  [10-20]% 
Destia  [5-10]% 
NCC  [5-10]%  
Tykkimäki  [5-10]%  
Turpeinen  [5-10]%  
Others  approx. [40-50]% 
 Source: Form CO, Table 17.  
(A.iii.d)  Conclusio n  
(145)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to unilateral effects in 
the markets for aggregates in Finland.  
5.3.3.2. Vertically affected markets  
(A) Aggregates – RMX  
(A.i) List of affected markets and market shares  
(146)  The Notifying party has a limited presence in the aggregates business in Finland. 
It operates three aggregates quarries located in the wider Forssa area in south -
western Finland and in the wider Lahti area in the southeast.167 However, the 
                                                 
165  Q1, questionnaire to aggregates customers in Finland, quest ion 19. 
166  Form CO, Table 17; estimates for an area of 160 km around the Target`s quarries in the Lappeenranta area, and 
therefore potential competitors under catchment areas of 80 km. 
167  Form CO, paragraph 126. 
 
33 Notifying Party is well active in the production of RMX in Finland and operates 
several RMX plants in the south and the west of the country168.  
(147)  The Target, on the other hand, has no RMX production169, but is very strong in 
the aggregates business. It owns approximately 200 aggregates quarries, around 
half of w hich are currently operative.170  
(148)  Potential concerns result therefore from the fact that the merged entity would 
reach a strong presence both in upstream aggregates and downstream RMX 
markets. The Transaction gives rise to a number of vertically affected mar kets, as 
catchment areas around the YIT’s quarries overlap with the catchment areas of 
Peab’s RMX plants. In given local markets, combined market shares exceed 30% 
either or both upstream and / or downstream. Concerns arise therefore in the 
context of both  input foreclosure and customer foreclosure.  
(149)  Lists with affected markets are presented in the respective sections A.iii.a (input 
foreclosure) and A.iii.b (customer foreclosure). 
(A.ii)  The Notifying Party's view  
(150)  The Notifying Party considers that it would not ha ve the ability to engage in input 
foreclosure, as RMX competitors would still have the opportunity to source from 
a large number of other suppliers in all areas. An obvious lack of ability would 
also eliminate any incentive to engage in such a strategy.171 
(151)  As for customer foreclosure, the Notifying Party submits that aggregates are a 
highly versatile product with many end -uses. As aggregates competitors would 
still be able to sell to other RMX manufacturers, as well as construction, asphalt 
or mortar companie s, there would be no ability for customer foreclosure.172  
(A.iii)  The Commission’s assessment   
(A.iii.a)  Input foreclosure  
(152)  The Transaction gives rise to a number of vertically affected markets with a 
combined upstream market share of more than 30% and an overlap with the 
catchment area of one of the Notifying Party's RMX plants. All these markets, 
listed in Table 8, are broadly located in the wider Turku / Forssa / Uusimaa area.  
                                                 
168  Form CO, paragraph 674. 
169  Form CO, parag raph 671. 
170  Form CO, paragraph 125. 
171  Form CO, paragraph 709, 710. 
172  Form CO, paragraph 711. 
 
34 Table 8 - upstream aggregat es markets with combined market shares above 3 0% 
Catchment area  Combined market shares in 
upstream aggregates  Ov erlapping RMX plants173 
   
Forssa, Forssanportti  [40-50]% Loimaa, Salo, Ylöjärvi, Tampere, 
Naantali, Lieto, Lohja, Kirkkonummi, 
Espoo  
Forssa, Vuori  [40-50]%  Loimaa, Salo, Ylöjarvi, Lieto, T ampere, 
Naantali, Lohja, Kirkkonummi, Espoo  
Jokioinen, Myllymäki  [30-40]% Loimaa, Ylöjärvi, Tampere, Lieto, 
Naantali, Salo, Lohja, Espoo  
Jokioinen, Ripunkallio  [40-50]%  Loimaa, Salo, Ylöjärvi, Lieto, Naantali, 
Tampere, Lohja, Kirkkonummi, Espoo  
Salo, Hi ekkanummi  [30-40]%  Lohja, Salo, Loimaa, Lieto, Naantali, 
Kirkkonummi, Espoo, Helsinki  
Somero, Matinmäki  [30-40]%  Lohja, Loimaa, Salo, Lieto, Naantali, 
Kirkkonummi, Espoo, Helsinki  
Somero, Sora -Heikkilä  [30-40]%  Lohja, Loimaa, Salo, Lieto, Naantali, 
Kirkk onummi, Espoo, Helsinki  
Tammela, Pentt  [40-50]%  Loimaa, Salo, Ylöjärvi, Tampere, 
Naantali, Lieto, Kirkkonummi, Espoo, 
Helsinki  
 Source: Form CO, Table 169, paragraph 702.  
(153)  RMX can be generally produced using both types of aggregates, crushed rock or 
grave l and sand. Whereas gravel / sand is generally the preferred for the 
production of RMX174, it is more and more replaced by crushed rock175. The 
market investigation confirmed that it is generally possible to use both crushed 
rock and gravel / sand for RMX production176.  
(154)  For the assessment of input foreclosure, the conclusion would remain the same 
even if a product segmentation between crushed rock and gravel / sand was made. 
A segmentation would indeed give rise to two additional affected markets in 
Murronmaa an d Humppila. However, as Table 9 shows, also with a segmentation 
in crushed rock and gravel / sand, combined market shares of the merged entity 
would remain in similar ranges compared to overall combined markets shares and 
remain below [40-50]% in all of th e markets.  
Table 9 - upstream aggregates markets with a combined market share of more than 30% 
separately for i) crushed rock and ii) gravel and sand  
Catchment area  Crushed Rock  Gravel + Sand  
   
Forssa, Forssanportti177 - - 
Forssa,  Vuori  [40-50]% [30-40]%  
Humppila, Kair  - [30-40]%  
Jokioinen, Myllymäki  - [40-50]%  
Jokioinen, Ripunkallio  [30-40]% - 
                                                 
173  Downstream market shares: Loimaa [40-50]%; Salo [40-50]%; Ylöjärvi plant opened in 2019; Tampere plant 
opened in 2019; Naantali [50-60]%; Lieto [50-60]%; Lohja [10-20]%; Kirkkonummi [10-20]%; Espoo [10-20]%; 
Helsinki [10-20]%. 
174  Confirmed minutes of a call with a competitor, 10 March 2020, point 10. 
175  The Finnish Ministry of Employment and the Economy, Kiviaines - ja luonnonkiviteollisuuden kehitysnäkymät 
(report on aggregates),  report 54/2015, page 12. 
176  Q1, questionnaire to aggregates competitors in Finland, question 12.1.1. 
177  Site do not produce new aggregates, sales only from recycled / secondary aggregates. 
 
35 Catchment area  Crushed Rock  Gravel + Sand  
Murronmaa Iii   [40-50]%  
Salo, Hiekkanummi  - [30-40]%  
Somero, Matinmäki  - [40-50]%  
Somero, Sora -Heikkilä  - [40-50]%  
Tammela, Pentt  [40-50]% - 
Source: Form CO, Annex 7, Table 186.  
(155)  Production of aggregates in Finland is limited due to the fact that sourcing 
aggregates requires a permit, which is not easy to obtain because of 
environmental requirements. Respondents to the market investig ation consistently 
state that acquiring a permit could take several years, which limits the possibility 
for capacity expansion.178 Response from the market furthermore showed that 
generally there is no  capacity problem regarding aggregates in Finland , even 
though there are  regional differences179. This was further developed  during calls 
with aggregates competitors. As an illustration, one of the main competitor s of 
YIT confirmed that there would be significant excess capacities in rural Finland, 
for example in the Forssa  area180.  
(156)  While some respondents indicated that access to aggregates would be more 
difficult in metropolitan areas,  such as Helsinki,181 as already illustrated within 
the horizontal assessment, in such metropolitan areas, aggregates would not only 
be sourced from quarries, but also as by -product from construction sites, such as 
construction of roads, metro lines or tunnels. Such aggregates would add another 
10% to 40% to the overall market of aggregates182. As these volumes are linked to 
specific const ruction projects, the availability of aggregates in metropolitan areas 
would be subject to significant variations. Therefore, in some years, demand for 
aggregates would outstrip capacities in Helsinki and other metropolitan areas. 
This may lead to longer t ransport distances to alternative sources farther away. 
Overall, however, there would generally be enough capacity of aggregates even in 
metropolitan areas such as Helsinki.183 Even though aggregates sourced from 
construction sites cannot be used directly as  input for RMX production due to 
quality requirements,184 they still form a general capacity relaxation on the overall 
aggregates market.  
(157)  During the market investigation, a downstream competitor in RMX pointed 
specifically to possible shortages in aggregate s following the Transaction. The 
company raised its concern regarding access to aggregates post -transaction, as it 
would currently source aggregates from YIT, which is, unlike Peab, not a 
competitor in the downstream RMX business185. The same competitor also  
referred to the possibility that, post transaction, the merged entity and its largest 
                                                 
178  See Q1, questionnaire to aggregates custom ers in Finland, question 25. 
179  See Q1, questionnaire to aggregates customers in Finland, question 23. 
180  Confirmed minutes of a call with a competitor, 10 March 2020, point 9. 
181  Confirmed minutes of a call with a competitor, 10 March 2020, point 6, 7. 
182  Confirmed minutes of a call with a competitor, 10 March 2020, point 4. 
183  Call with a competitor, 10 March 2020, point 7. 
184  Call with a competitor, 10 March 2020, point 10. 
185  Q1, questionnaire to aggregates customers, question 32.  
 
36 upstream competitor Rudus (CRH) could exert market power as large integrated 
players throughout the whole value chain186.  
(158)  However, for the specific markets in question, t he Commission comes to the 
conclusion that it is unlikely that the merged entity could foreclose inputs for 
downstream competitors, as it would not have the ability and unlikely the 
incentive for such a strategy. In addition to this, input foreclosure woul d not have 
an impact, as it would not lead to an increase of downstream RMX prices.  
(159)  First, the merged entity  would not have the ability to foreclose downstream RMX 
competitors , as these companies could still source from other suppliers . 
Combined market sh ares in the upstream aggregates business remain well below 
50% in all affected markets . As discussed above, switching costs for aggregates 
customers are generally moderate. Within the area in question, alternative 
suppliers are present. The competitor base  consist of both small players as well as 
larger competitors with an overall presence across the region.  
Estimated market shares of  competitors in the Turku / Forssa / Uusimaa area  
Table 10 – estimated market shares of aggregates c ompetitors in the Turku / Forssa / Uusima 
area  
Competitor  Estimated market shares187 
  
Rudus (CRH)  [10-20]%  
Hämeen Kuljetus  [5-10]%  
Destia  [5-10]%  
NCC  [5-10]%  
TerraWise  [5-10]%  
Palovuoren Kivi  [5-10]%  
Kiertomaa  [5-10]%  
Läänin Kuljetus  [5-10]%  
Häm een kuljetus  [5-10]%  
Others  approx. [30-40]% 
Source: Form CO, Table 16.  
(160)  With respect to capacities, the Notifying Party submits that YIT is currently not a 
significant source for RMX competitors in the areas where the merged entity 
reaches upstream mark et shares of more than 30% that have overlapping 
catchment areas with one of Peab’s RMX plants. In Forssa / Forssanportti, Forssa 
/ Vuori, Jokioinen / Ripunkallio, Jokioinen / Myllymäki, Salo / Hiekkanummi, 
Somero / Matinmäki and Tammela Pentt, YIT reports  no current sales to RMX 
manufacturers. In Somero / Sora -Heikkilä, sales to RMX companies remain 
moderate at around [10-20]%188. YIT indeed  does report significant sale shares to 
Peab’s RMX  competitors for some markets where either combined upstream 
markets shares remain below 30% or that cannot serve one of Peab’s RMX plants. 
However, in areas where input foreclosure may be a concern, RMX competitors 
predominantly source from other suppliers that the Target.  
(161)  Second, the merged entity  lacks  incentive for inp ut foreclosure, for two reasons. 
On the one hand, the merged entity does not have a large enough downstream 
                                                 
186  Submission by a customer, 10 March 2020. 
187  Form CO, Table 16; estimates for an area of 160 km around the Target`s quarries in the Turku and Forssa area, 
and therefore potential competitors under catchment areas of 80 km. 
188  Reply to RFI1, question 1.  
 
37 presence in RMX market s to recoup the margins lost through lower sales in the 
upstream aggregates market. Overall,  Peab is not the largest player in  four out of 
eight RMX downstream markets in question189. In the two by far biggest markets 
in Helsinki and Espoo, it is only the fourth biggest RMX supplier. In all markets 
in question, four or more other competitors with a market share of at least 5% are 
present, and at least one with  a market share exceeding 15%.190 191 This is 
compounded by limited barriers to switching for a homogeneous product such as 
aggregates, as explained in the horizontal assessment section.  
(162)  On the other hand, the merged entity would indeed need large gains in market 
share downstream to level potential losses in upstream aggregates sales. As stated 
above, RMX forms only a small part of the overall aggregates customer base .192 
However, as the merged entity does not have control over the s econdary market, 
and cannot avoid arbitrage, it would have to sustain higher aggregate prices not 
only for RMX customers, but also for customers from the construction or asphalt 
business in the context of an input foreclosure strategy. Therefore, in the fa ce of 
limited potential gains downstream, it would risk facing losses in other customer 
groups upstream, which makes an incentive to pursue such a strategy unlikely.  
(163)  Third, the Commission considers that it is unlikely that an input foreclosure 
strategy wo uld have an overall impact on downstream RMX prices. As shown 
above, the Notifying Party meets a number of credible competitors in all local 
markets, the largest of which have access to own upstream aggregates.  
(164)  The Notifying Party’s main competitor Rudus ( CRH) is an integrated company 
itself with own access to aggregates193 and therefore does not rely on purchases 
from the Notifying Party . Further, the Notifying Party submits it would face 
competition from four additional integrated RMX competitors in the Tur ku / 
Forssa area (Santalan Betoni, 10Betoni, Vammalan Betoni and Laurilan Betoni), 
and competition from five integrated players in the Uusimaa area (Rusko, Luja, 
Betonicenter, Santalan Betoni, 10Betoni)194. As explained above, it is furthermore 
unlikely that  the merged entity would have the ability to foreclose non -integrated 
competitors. Therefore, even if input foreclosure by the merged entity would 
affect single downstream competitors, it would not eliminate effective 
competition on the downstream market, and therefore not raise RMX prices.  
(A.iii.b)  Customer foreclosure  
(165)  The Transaction gives  rise to  a number of vertical aggregates and RMX markets 
where customer foreclosure is a potential concern . This would be the case in the 
four downstream RMX markets where the m erged entity reaches shares 
exceeding 30%, as listed in Table 11.  
                                                 
189  Applying a catchment area of 50 km radius for Loimaa, Salo, Naantali, Lieto, Lohja, Kirkkonummi, Espoo, 
Helsinki; no data available for Ylöjärvi, Tampere, as plants opened in 2019. 
190  Annex 7, table 155.  
191  Under a catchment area of 25 km, the Notifying Party would face at  least three competitors of more than 5% 
market share, with at least one of them with a share exceeding 10%. 
192  The Finnish Ministry of Employment and the Economy, Kiviaines - ja luonnonkiviteollisuuden kehitysnäkymät 
(report on aggregates),  report 54/2015, page 11. 
193  See Q1, questionnaire to aggregates customers in Finland, question 4.  
194  See response to RFI 1, 11 March 2020. 
 
38 Table 11 – downstream RMX markets where Peab’s market share exceeds 30%  
Catchment area  Market shares195 
  
Lieto  [50-60]% 
Naantali  [50-60]%  
Salo [40-50]% 
Loimaa  [40-50]%  
Source: Form CO, Table 186.  
(166)  All upstream aggregates markets listed above for input foreclosure are also 
affected vertically due to market shares exceeding 30% in Peab’s downstream 
RMX business, and put in italics in Table 12. In addition, a number  of other areas 
are affected only because of the Notifingy Party’s strong downstream position.  
Table 12 – affected upstream aggregates markets  
Catchment area  Market shares  Linked RMX catchment area  
   
Humppila, Kair  [20-30] % Loimaa, Salo, Lieto, Naantali  
Hyvinkää, Noppo  [5-10]%  Loimaa, Salo, Lieto  
Hämeenlinna/Hatt  [20-30] %  Loimaa  
Kemiönsaari, Nord  [0-5] % Loimaa  
Laitila, Haijanen  [5-10]%  Loimaa, Salo, Lieto, Naantali  
Lempäälä, Aukeas  [5-10]%  Loimaa  
Loppi, Läyl  [5-10]%  Loim aa, Salo  
Loppi, Pilpala  [10-20]% Loimaa, Salo  
Pirkkala, Linnakorpi  [5-10]%  Loimaa  
Puslua  [20-30] %  Salo, Loimaa, Naantali  
Pöytyä, Kum  [10-20]%  Loimaa, Salo, Lieto  
Tampere, Sorila  [5-10]%  Loimaa  
Tarvasjoki, Tyllilä  [5-10]%  Lieto, Loimaa, Naantali, Sal o 
Tupuri  [10-20]%  Lieto, Salo, Naantali, Loimaa  
Ulvila, Pirunkynsi  [10-20]%  Loimaa  
Valkeakoski, Patavuori  [10-20]%  Loimaa, Salo  
Vantaa, Kiila  [5-10]%  Salo 
Vantaa, Voutila  [5-10]%  Salo 
Forssa, Forssanportti  [40-50]% Loimaa, Salo, Lieto, Naantali  
Forssa, Vuori  [40-50]%  Loimaa, Salo, Lieto, Naantali  
Jokioinen, Myllymäki  [30-40]% Loimaa, Salo, Lieto, Naantali  
Jokioinen, Ripunkallio  [40-50]%  Loimaa, Salo, Lieto, Naantali  
Salo, Hiekkanummi  [30-40]%  Loimaa, Salo, Lieto, Naantali  
Somero, Matinmäki  [30-40]% Loimaa, Salo, Lieto, Naantali  
Somero, Sora -Heikkilä  [30-40]%  Loimaa, Salo, Lieto, Naantali  
Tammela, Pentt  [40-50]%  Loimaa, Salo, Lieto, Naantali  
Source: Form CO, Annex 5.6a.  
(167)  However, it is in general unlikely for RMX producers to be able to foreclose  
upstream aggregates suppliers, as RMX typically forms only a small port ion of 
the overall aggregates demand. Aggregates can be used for a number of end -
products, such as asphalt, mortar, RMX and overall construction works.  
(168)  In fact, RMX forms only a small  part of around 10% of the overall aggregates 
customer base196. This number was confirmed during the market investigation, as 
market participants estimated the share of total aggregates that would be used for 
                                                 
195  Annex 7, table  
196  The Finnish Ministry of Employment and the Economy, Kiviaines - ja luonnonkiviteollisuuden kehitysnäkymät 
(report on aggregates),  report 54/2015, page 11. 
 
39 RMX production at below 10%.197 High market shares in downstream RMX 
markets alone do therefore not imply the ability for customer foreclosure, as the 
Notifying Party’s RMX business accounts in fact for significantly less than 10% 
of the total customer base of upstream competitors in the aggregates busines s.  
(169)  Therefore, with respect to a potential product segmentation into crushed rock and 
gravel / sand, the assessment would not change, as both types of aggregates are 
used for the production of RMX. Concerning the geographic market definition, 
the conclusio n remains the same if a narrower catchment area of 25 km was 
applied, as even very high downstream market shares in RMX would not be 
sufficient to successfully engage in customer foreclosure.  
(170)  Also a possible combination of all end -uses, combining market s hares of all the 
merged entity’s end -uses, would not increase the ability for customer foreclosure. 
The biggest part of overall aggregates production is used in the construction 
sector, where Peab currently has a market share of around [0-5]%198, while YIT’s  
construction business is not part of the Transaction. Peab itself is not active in 
manufacturing of asphalt in Finland, but aquires YIT’s asphalt business. 
However, the ability for customer foreclosure for the merged entity post -
transaction is significant ly lower than it is currently for YIT.  
(A.iii.c)   Conclusio n  
(171)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition as a result of the aggregates -
RMX vertical links in Finland .  
(B) Aggregates – construction  
(B.i) Affected markets  
(172)  The Transaction gives rise to a vertically affected market due to the aggregates -
construction vertical link. The downstream construction market is national and 
the combined market share on this market stays well below 30% a s only Peab is 
active in construction and its share is moderate. Namely, its share stays below 3% 
regardless of how construction market is defined.199 
(173)  Thus the only potential issue is input foreclosure due to high individual or 
combined market shares in a nu mber of aggregates markets. The affected market 
is the national paving market.  
(174)  Table 13 below lists the aggregates markets where the Parties’ individual or 
combined market share exceeds 30%.  
                                                 
197  See call with a competitor on 10 March 2020.  
198  Form CO, Table 220 / paragraph 809. 
199  Form CO Table 220, see also Form CO paragraph 814. 
 
40 Table 13 – upstream aggregates markets where individual or 
combined market shares exceed 30%  
 Target  Peab  Combined share  
Forssa, Forssaporti  [30-40]% [0-5]% [40-50]%  
Forssa, Vouri  [30-40]%  [5-10]%  [40-50]%  
Jokioininen/M yllymaki  [30-40]%  [0-5]% [30-40]%  
Jokioininen/Ripunkallio  [30-40]%  [5-10]%  [40-50]%  
Salo, Hiekkanummi  [20-30]%  [0-5]% [30-40]%  
Salo, Muronmaa  [20-30]%  [0-5]% [30-40]%  
Salo, Nummensyrja  [20-30]%  [0-5]% [20-30]%  
Salo, Tehdaspalsta  [20-30]%  [0-5]% [30-40]%  
Somero/M atinmaki  [20-30]%  [0-5]% [30-40]%  
Somero/Soraheikkila  [20-30]%  [0-5]% [30-40]%  
Tammela  [30-40]%  [0-5]% [40-50]%  
Lappeenranta,Viipurinportti  [30-40]%  [0-5]% [30-40]%  
Ruokolahti 1:5  [30-40]%  [0-5]% [30-40]%  
Joutseno  [30-40]%  [0-5]% [30-40]%  
Kerimäki  [30-40]%  [0-5]% [30-40]%  
Oulu Vittakangas  [40-50]% [0-5]% [40-50]%  
Pattijoki  [40-50]%  [0-5]% [40-50]%  
Savonlinna  [30-40]%  [0-5]% [30-40]%  
Siikajoki  [40-50]%  [0-5]% [40-50]%  
Taipalsaari Ahola  [30-40]%  [0-5]% [30-40]%  
Taipalsaari Sorala  [30-40]%  [0-5]% [30-40]%  
 Source: Form CO, Table 2018, paragraph 809.   
(B.ii)  The Notifying Party’s view  
(175)  The Notifying Party submits that it would not have the ability to foreclose 
competing construction companies in the relevant catchment areas post -
Transaction because the pre -Transaction Peab quarries produce aggregates 
entirel y for Peab’s RMX business and the market share of the Target’s quarries 
are limited. Market shares of at most 30 -40% indicate that several significant 
competitors remain in the area from whom aggregates can be sourced.200  
(176)  Furthermore, many of the Target's l argest customers in the areas are independent 
transport companies that deliver the aggregates to their own customers. Peab 
would not be able to prevent these companies from choosing their own end -
customers.201  
(177)  In addition, many of the Target's current compe titors in aggregates also operate in 
infrastructure construction, which means they could counter such hypothetical 
foreclosure strategy through the use of their own aggregates production.202  
(178)  Any segmentation of aggregates into (i) crushed rock and (ii) sand  and gravel 
would not change this assessment to a significant extent as the number of 
catchment areas with more than 30% market share and the market shares would 
not change appreciably.203  
(179)  The Notifying party also notes that YIT (the seller of the Target) i s a much larger 
player in the Finnish construction market than Peab. Thus, as a result of the 
                                                 
200  Form CO, paragraph 816. 
201  Form CO, paragraph 817. 
202  Form CO, p aragraph 817. 
203  Form CO, paragraph 818. 
 
41 Transaction, the combined entity's ability to attempt input foreclosure would not 
increase.204 
(B.iii)   The Commission’s assessment  
(B.iii.a)  Markets with upstream increments    
(180)  In 11 upstream markets,205 there is an increment due to the Transaction. Given 
that the combined market share in these markets are above 30%, these markets 
were all horizontally affected. In Section 5.3.3.1. (A.ii), the Commission 
concluded that the Transaction will not lead to unilateral non -coordinated effects 
in these catchment areas. The lack of horizontal effects implies that, for the 
reasons explained in Section 5.3.3.1. (A.ii), the increment will not lead to 
significant price increases in the upstream mark et. This in turn implies that the 
merged entity will lack the ability to engage in input foreclosure.  
(181)  As regards incentives, in general the merged entity will face  a trade -off when 
considering input foreclosure strategies. An increase of prices in the upst ream 
market (or a refusal to sell) will reduce profits due to decreasing sales to 
down stream rivals. However,  by raising downstream rivals’ input costs it may 
gain additional profits downstream by capturing additional sales or by incr easing 
prices downstre am.  
(182)  In this regard, the Transaction will decrease, rather than increase Peab’s 
incentives to engage in input foreclosure. This is because pre -Transaction the 
Target was part of YIT, the seller, which is a much larger player in the Finnish 
construction mar ket than Peab.206 Thus, the merged entity’s downstream market 
share will be lower than YIT’s was pre -Transaction. The decreasing market share 
downstream will reduce the incentives to foreclose as downstream the merged 
entity would be able to recoup less of t he lost profits upstream than YIT was able 
to pre -Transaction due to the fact that it will have a smaller  sales base .    
(183)  On the basis of above, the Commission considers that the Transaction will not 
lead to a significant impediment of effective competition  on account of input 
foreclosure in the catchment areas of the Forssa/Forssaporti, Forssa/Vouri 
Jokioininen/Myllymaki, Jokioininen/Ripunkallio, Salo/Hiekkanummi, 
Salo/Muronmaa, Salo/Nummensyrja, Salo/Tehdaspalsta, Somero/Matinmaki, 
Somero/Soraheikkila and  Tamme la quarries.  
(B.iii.b)  Markets with zero upstream increments  
(184)  In 10 upstream markets207 the increment brought about by the Transaction is zero 
as Peab has no quarries in these catchment areas. Hence, the Transaction does not 
increase the ability of the merged ent ity to engage in input foreclosure.  
                                                 
204  Form CO, paragraph 819. 
205  Forssa, Forssaporti; Forssa, Vouri  ; Jokioininen/M yllymaki; Jokioininen/Ripunkallio; Salo, Hiekkanummi; Salo, 
Muronmaa; Salo, Nummensyrja; Salo, Tehdaspalsta; Somero/Matinmaki; Somero/S oraheikkila; Tammela.  
206  Form CO, Table 227. 
207  Lappeenranta,Viipurinportti; Ruokolahti 1:5; Joutseno; Kerimäki; Oulu/Vittakangas; Pattijoki; Savonlinna; 
Siikajoki; Taipalsaari/Ahola; Taipalsaari/Sorala.  
 
42 (185)  As discussed in Section 5.3.3.2 (B.iii.b) above, the Transaction decreases, rather 
than increases the incentives to engage in input foreclosure as the Peab’s 
downstream presence post -Transaction will be smaller than YIT ’s pre -
Transaction.  
(186)  On the basis of above, the Commission considers that the Transaction will not 
lead to a significant impediment of effective competition on account of input 
foreclosure in the catchment areas of the Lappeenranta/Viipurinportti, Ruokolah ti 
1:5, Joutseno,  Kerimäki, Oulu/Vittakangas, Pattijoki, Savonlinna, Siikajoki, 
Taipalsaari/Ahola, Taipalsaari/Sorala quarries.  
(B.iii.c)   Conclusio n  
(187)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effect ive competition as a result of the aggregates -
constructio n vertical links in Finland . 
5.3.4. Norway  
5.3.4.1. Horizontally affected markets  
(A) Asphalt – unilateral effects  
(A.i) List of affected markets and market shares  
(188)  The Transaction gives rise to two  horizon tally affected mar kets in Norway . The 
markets and the relevant market sha res for 2018 are indicated in Table 14 below . 
The market shares are based on the 50 km radius approach and volume based. 
Both of these areas are south/southwest of Oslo, 140 km (Grenland) and 100 km 
(Tonsberg) from the capital.  
Table 14 – market shares in horizontally affected asphalt markets in Norway  
Catchment 
area  Peab  Target  Combine
d Veidekke  Skanska  NCC  Feiring  Others  
Tonsberg  [5-10]% [10-20]% [20-30]% [30-40]% [5-10]%  [30-40]% [5-10]%  [0-5]% 
Grenland  [5-10]%  [30-40]% [40-50]% [30-40]% [0-5]% [20-30]% [0-5]% [0-5]% 
Source: Form CO, table 49, paragraph 393 .  
(A.ii)  The Notifying Party’s view  
(189)  The Notifying Party submits that the Transaction will not lead to a significant 
impedi ment of effective competition for three general reasons.  
(190)  First, the production and sale of asphalt mass to external customers is not a key 
business to the Parties. They mainly supply asphalt internally to their own paving 
operations. External sales vary c onsiderably from year to year. As effectively all 
asphalt sold is used for paving and all major paving players produce asphalt in 
both fixed and mobile asphalt plants of their own, there are no customers that 
would be dependent on the Parties' asphalt sale s. Thus raising prices vis -à-vis 
these customers would not be effective.208 
                                                 
208  Form CO, paragraph 396.  
 
43 (191)  Second, there are significant amounts of spare capacity available in asphalt 
production in the areas where the Parties have horizontal overlaps. Regardless of 
the combined entity's m arket share in any catchment area, competitors would be 
able to easily increase their production to respond to any hypothetical increase in 
the combined entity's prices. This would impose a powerful constraint for such 
behaviour.209 
(192)  Third, the Parties' aspha lt opera tions are largely complementary and the merged 
entity would face strong integrated competitors such as Veidekke, Skanska and 
NCC. Any anti -competitive effects on the horizontally affected asphalt markets 
are thus unlikely.210 
(193)  Specifically with regard  to the affected markets in Norway, the Notifying Party 
submits that in the catchment area of the Tønsberg plants, the Parties' competition 
is significant but their combined market shares are relatively modest, as NCC and 
Veidekke – both much larger player s locally – are also active in the area through 
their plants in Larvik. NCC is also present through its plant in Lierskogen, from 
which there is a direct road to the area. The competitors have significant amounts 
of spare capacity available. For example, b ased on the notifying party's estimate 
on their production volumes, the capacity utilisation rate of both Veidekke's and 
NCC's Larvik plant and NCC's Lierskogen plant is around [20-40]%.211 
(194)  The Notifying Party further submits that in the Grenland catchment a rea, the 
combined market share is high but the Parties are not geographically close 
competitors and do not exercise major competitive pressure on each other. The 
driving distance between the Target's Grenland plant and Peab's Holmestrand 
plant is approxima tely 90 km, and there are two competing Veidekke plants and a 
competing NCC plant closer to the Target's Grenland plant than Peab's 
Holmestrand plant.  The Holmestrand plant's operations are oriented towards Oslo, 
opposite direction from the Grenland area.212  
(195)  In addition, the Target’s market share has varied considerably  in the Grendland 
catchment area, decreasing from [60-70]% to [40-50]% between 2017 and 2018. 
This decrease, which results from a drop in production after a 4 lane highway 
project through the Vestfold County was concluded, shows that the Target does 
not possess any real market power in the area. Such fluctuations are not 
uncommon and they are larger than the increment brought about by the 
Transaction.213  
(196)  The merged entity will continue to be con strained by NCC and Veidekke, who 
possess the full capability to significantly increase their production if the 
combined entity tried to increase its prices post - Transaction.214  
                                                 
209  Form CO, paragraph 397. 
210  Form CO, paragraph 398. 
211  Form CO, paragraph 403.  
212  Form CO, paragraphs 401-402.  
213  Form CO, paragraph 404-405.  
214  Form CO, paragraph 409. 
 
44 (A.iii)  The Commission’s assessment  
(A.iii.a)  Relevance of market shares and captive production .  
(197)  As a preliminary remark, the Commission notes that the market shares indicated 
above are appropriate to measure market power.  
(198)  In this regard the Commission notes that the shares are volume based, which is 
appropriate in the case of a homogenous good li ke asphalt according to the 
Commiss io n’ s Market definitio n notice.215  
(199)  Furthermore, they are based on the overall asphalt production, i.e. both internal 
(captive) production and external (merchant) sales, which appear more 
appropriate in this particular case  for two reasons.  
(200)  First, overall production figures fluctuate less than merchant sales and thus 
provide a more reliable indication of market power. Indeed, the share of external 
sales can and do fluctuate widely. For example, in the years 2016 -2018, the s hare 
of external sales can go from around 20% to 90% in some of the Parties’ asphalt 
plants.216  It is important to note in this regard that most asphalt suppliers are 
integrated and have their own paving operations,217 and that asphalt is used 
exclusively for  paving.218 Consequently, external sales and purchases of asphalt 
are driven by the supplier’s success or lack thereof on the paving market (e.g. a 
supplier needs extra asphalt if it wins a lot of paving contracts) and by the 
location of the paving works (e.g. a supplier may buy extra asphalt if the 
competitor’s location is more favourable relative to the paving site than its own 
plant). As paving is a bidding market, demand is lumpy in any given asphalt 
catchment area and market shares fluctuate considerably  from one year to another 
(even if these fluctuations even out on a national basis in paving). Likewise, the 
location of paving works relative to the plant is also random and this also adds to 
the fluctuating nature of external sales. These fluctuations ar e evened out or 
reduced considerably in the case of total production and thus the latter is a more 
reliable indicator of market power, even if the lumpy demand on the underlying 
paving market can cause even the combined shares to fluctuate somewhat. The 
Commission also notes that switching between external sales and captive 
production is very easy as it involves the same product and the same distribution 
channels.  
(201)  Second, a supplier’s captive production indirectly constrains another supplier’s 
external sal es. As asphalt is used exclusively for paving and is one of the most 
important inputs to paving, a supplier that sells asphalt to an external paving 
supplier has to take into account its customer’s competitiveness on the paving 
market. As in in most cases the asphalt supplier is an integrated player, it is fully 
aware of the yearly fluctuation of merchant sales and the cost structure of paving 
operators. Consequently, when selling on the merchant market, it is likely to take 
                                                 
215  Commission Notice on the definition of relevant market for the purposes of Community competition law, 
paragraph 55. 
216  Form CO, Annex 2 to Annex 7 (Copenhagen Economics: Catchment Areas, Market Sizes and Market Shares, 
18 February 2020). 
217  Notifying Party’s response to the Commission’s Request for Information RFI 2  
218  Form CO paragraph 372. 
 
45 into account the constraint exer cised by an integrated competitor. In summary, the 
close link between asphalt and the fact that all major players are integrated 
implies that captive production indirectly constrains merchant sales.  
(202)  The use of shares based on combined production does not imply that such figures 
are always appropriate in all cases where some suppliers are vertically integrated. 
However, having regard to the particular circumstances discussed above (very 
close link between the asphalt and paving markets, most players are int egrated, 
fluctuating merchant sales and indirect constraints), in the case of the asphalt -
paving markets in Norway they are a good proxy.  
(A.iii.b)  Common characteristics of all Norwegian markets  
(203)  Before assessing the individual affected markets, the Commission will  discuss 
factors that apply to all affected markets in Norway. These involve barriers to 
entry and customer buyer power.  
(204)  As regards entry, the Commission considers that entry barriers are not high. The 
cost of a fixed plant with medium capacity is around EUR 3 -5 million.219 By 
comparison, the Target’s sales in Norway alone (combined sales of asphalt, 
paving and aggregates) amounted to roughly EUR […] million.220 Furthermore, 
setting up a plant and starting production takes 3 -12 months, including the time 
neces sary for obtaining the permits.221 This is consistent with the fact that 
respondents pointed to a number of entries in the different Norwegian regions by 
suppliers that have not been present in those regions, including Nord Vei & 
Anlegg in Liland, Askøy D ekkelegging  in Askøy and Velde Asphalts in Mandal 
and Karmoy.222  
(205)  As regards buyer power, the buyers in the downstream paving market are public 
authorities who tender out paving contracts, have expertise in commissioning 
paving works and have budget constraints . All competitors noted that buyers 
exercise buyer power due to overcapacity, the number of suppliers and the focus 
of buyers on price, with the possible exception of very remote regions.223 It was 
also mentioned in this regard that asphalt has few different iators and it is a 
volume driven (and not margin driven) business, which implies that it is difficult 
for suppliers to exercise market power in the presence of choice and 
overcapacities.   
(206)  Consequently, it appears that paving customers have some buyer powe r and that 
this has effects in the upstream asphalt market due to the strong link between the 
two markets and to the fact that most players are integrated. This is true, even if 
the responses reveal that such buyer power is not absolute and could be 
outwei ghed if the particular market in question capacities are tight and the 
                                                 
219  Q6 – Quest ionnaire to competitors – asphalt, Norway, question 29; Q5 – Questionnaire to customers – asphalt, 
Norway, question 21. 
220  Annex 5.4.18 to the Form CO, Project Aniola presentation 26 October 2018, page 25.    
221  Q6 – Questionnaire to competitors – asphalt,  Norway, question 29; Q5 – Questionnaire to customers – asphalt, 
Norway, question 21. 
222  Q5 – Questionnaire to customers – asphalt, Norway, question 21.  
223  Q6 – Questionnaire to competitors – asphalt, Norway, question 27. 
 
46 number of competitors is low, which does not appear to be case in Norway in 
general.  
(A.iii.c)  Tonsberg  
(207)  The combined market share in the Tonsberg area is very moderate, barely above 
the thresho ld for affected markets. In line with paragraph 18 of the Horizontal 
Merger Guidelines, limited combined market shares is an indication that the 
merger will not create undue market power and the price effects, if any, will be 
minor.   
(208)  In this catchment are a, three nationally active competitors (Veidekke, Skanska, 
NCC) and one smaller competitor (Feiring) remain post -Transaction. Taking 
market share as a basis, Veidekke and NCC will be stronger than the merged 
entity, and all competitors of the merged entity  except Feiring have exercised a 
stronger constraint on Peab than the Target. Thus the merged entity will face 
sufficiently strong constraints post -merger.  
(209)  In addition, there are considerable excess capacities in the region as the overall 
capacity utilisat ion in the catchment area is 63%.224 Competitors have 11 plants 
that can serve this catchment area and their capacity utilisation levels range from 
23.4% to 74.4% with 6 plants running at a capacity utilisation of less than 40%.225 
Thus, to the extent the merg er could lead to increased prices, competitors will 
have the ability to prevent such increases. They will also have the incentive to do 
so as asphalt plants have high fixed costs,226 which implies that leaving capacity 
idle is costly. Consequently, if the me rged entity were to raise prices, competitors 
can be expected to defeat such attempts by expanding their output and 
undercutting the merged entity’s prices.  
(210)  Furthermore, as discussed in Section (A.iii.b), entry barriers are not high and 
customers have som e buyer power.  
(211)  Based on the above the Commission considers that the Transaction will not lead  
to a significant impediment to effective competition due to unilateral effects in the 
catchment area of the Tonsberg plant.  
(A.iii.d)  Grenland  
(212)  In the Grenland area, the c ombined market share is very high (around [40-50]%) 
and the increment is also significant ( [5-10]%). Moreover, the Transaction 
reduces the number of players from four to three, which can potentially lead to 
serious concerns. However, the Transaction is unl ikely to lead to anticompetitive 
effects for the following reasons.  
(213)  First, capacity utilisation is very low in this market. Overall capacity utilisation is 
35%, suggesting ample spare capacities.227 Indeed Veidekke has three plants that 
could serve the catc hment area with capacity utilisation levels of [ 30-40]% 
                                                 
224  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
225  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
226  Minutes of a call with a competitor 10 March 2020. 
227  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
 
47 (Larvik), [60-70]% (Skien) and [ 70-80]% (Moss).228 NCC has three plants that 
can serve this region with capacity utilisation levels of [20-30]% (Larvik), 
[20-30]% (Lierskogen) and [30-40]% (Notodden).229 Skanska has one plant in 
Halden that can serve (a small part of) the catchment area with capacity utilisation 
level of [20-30]%.230 Veidekke’s total capacity available for this catchment area is 
around […] kt, while NCC’s is […] kt, which compares to 420 kt of annual 
demand.231 Thus, given their low capacity utilisation levels, Veidekke and NCC 
have enough spare capacities to serve the entire demand in the catchment area. 
This implies that the merged entity will not have guaranteed demand and thus will 
not be a ble to exercise market power provided competitors have the incentive to 
use their capacities to prevent price increases by expanding output. This appears 
to be the case as asphalt plants have high fixed costs.232  
(214)  Second, in addition to the free capacities i n fixed plants, mobile plants can 
provide further capacity and choice. As discussed in Section 5.2.3.2, mobile 
plants are not a viable choice in every region but they are used in Norway outside 
the metropolitan areas. Grendland being 140 km away from Oslo, mobile plants 
can be used in this catchment area, which was explicitly confirmed by the market 
investigation.233 These mobile plants can be mo ved to any area within 10 to 
30 days.234 The capacity of a mobile plant is about 150 -200 kt/year,235 which 
roughly equa ls half of the total demand of this catchment area. One major 
competitor, Skanska, is not already present in the region with fixed plants and has 
3 mobile plants.236 In addition NCC and Veidekke could also increase their 
capacities as each of them has 3 mobi le plants.237 This means, for example, that 
by bringing one mobile plant online NCC could have enough spare capacity in the 
catchment area to serve the entire demand, suggesting a very competitive post -
merger market. Even if these catchment areas are not the  only place in Norway 
where mobile plants can be used, it is likely that at least one plant from one of the 
competitors would be available for use if prices were to increase. As one single 
plant could serve half of the entire demand of this catchment area,  the possibility 
of providing additional capacity and choice through mobile plants makes any 
competitive harm even less likely.  
(215)  Third, as discussed in Section 5.4.3.1. (A.iii.b), entry barriers (with fixed plants) 
are not high and customers have some buye r power.  
(216)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to unilateral effects in 
the Grenland catchment area.  
                                                 
228  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
229  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
230  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
231  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
232  Minutes of a call with a competitor 10 March 2020. 
233  Minutes of a call with a competitor 10 March 2020. 
234  Minutes of a call with a competitor, 10 march 2020; Minutes of a call wi th a competitor, 10 march 2020. 
235  Minutes of a call with a competitior, 10 march 2020; Minutes of a call with a competitor, 10 march 2020. 
236  Notifying Party’s response to the Commission’s Request for Information RFI 4, question 1. 
237  Notifying Party’s resp onse to the Commission’s Request for Information RFI 4, question 1. 
 
48 (A.iii.e)   Conclusio n  
(217)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to unilateral effects in 
the markets for asphalt in Norway.  
5.3.4.2. Vertically affected markets  
(A) Aggregates – asphalt  
(A.i) List of affected markets and market shares  
(218)  The Trans action gives rise to two vertically affected markets due to the 
aggregates – asphalt relationship. Both the upstream and downstream markets are 
local, each corresponding to a 50 km radius around the quarry and the asphalt 
plant. The Parties’ individual or combined market shares in aggregates are well 
below 30% in any catchment area and thus it is unlikely that  input foreclosure 
will occur. However, since two asphalt catchment areas around Peab’s asphalt 
plants where Peab’s share exceeds 30 % can be supplie d by three of the Target’s 
quarries, the Commiss io n will examine the possibility of customer foreclosure.  
(219)  Table 15 below lists the downstream markets.  
Table 15 – downstream asphalt markets with individual or combined market shares  above 30% in 
Norway, aggregates – asphalt link   
Catchment area   Market share Peab  Market share 
Target  Combined market share  
Trondheim  [40-50]% [0-5]% [40-50]% 
Verdal  [90-100]% [0-5]% [90-100]% 
Source: Form CO, table 72.  
(220)  Table 16 lists the affected upstream markets.  
Table 16 – upstream affected aggregates markets and market shares in Norway, aggregates – 
asphalt link   
Catchment area   Market share Peab  Market share 
Target  Combined market share  
Skamfersætra  [0-5]% [0-5]% [0-5]% 
Reitan  [0-5]% [0-5]% [0-5]% 
Bjornli  [0-5]% [0-5]% [0-5]% 
Source: Form CO, table 69.  
(A.ii)  The Notifying Party’s view  
(221)  The Notifying Party considers that it would not have the ability to foreclose 
competing aggregates suppliers. Peab's market share in a sphalt would remain 
below 40% in the Trondheim catchment area. Even more importantly, as 
described above, aggregates are an extremely versatile product that has many 
fully independent end -uses. It would always be possible to sell aggregates to 
other, downs tream markets such as infrastructure construction and mortar.238 
                                                 
238  Form CO, paragraph 451. 
 
49 (A.iii)  The Commission’s assessment  
(222)  As discussed in relation to the product market de finition of aggregates 
(Section  5.2.1.1. (C.iii.), construction represents around 80 % of all aggregates 
use, with asphalt and RMX representing 11% and 5 % of total use respectively 
(disregarding specialist aggregates).239 As upstream aggregates competitors will 
be able to sell aggregates to construction and RMX customers (as well as to 
Peab’s asphalt competitors) even i f Peab’s asphalt plants were to stop buying 
aggregates from them, they cannot be foreclosed. As Peab’s asphalt plants 
represent a fraction of the 11% of aggregates sales in these catchment areas, they 
cannot be considered to be important customers.   
(223)  This applies also if the aggregates market were further divided into crushed rock, 
on one side, and gravel and sand on the other, as both can be used for 
construction,240 which makes up around 80% of all aggregates use. Moreover, 
asphalt plants usually buy crushe d rock and do not buy gravel/sand,241 so in a 
divided market the potential customer foreclosure concern would apply to crushed 
rock. Crushed rock is used more widely than gravel and sand (as discussed in 
Section 5.2.1., crushed rock is used for construction, RMX and asphalt, whereas 
gravel and sand is used for construction and RMX), and thus in a separate crushed 
rock market the importance of an asphalt customer would be similar to that of a 
customer on the overall aggregates market.  
(224)  Based on the above the C ommission considers that the Transaction will not lead 
to a significant impediment of effective competition as a result of the Parties’ 
aggregates -aspha lt vertical links in Norway.  
(B) Aggregates – RMX  
(B.i) List of affected markets and market shares  
(225)  The Notifying  Party only has two aggregates quarries in Norway242, and both are 
not relevant in a vertical aggregates RMX relation due to low market shares. Peab 
furthermore operates three RMX plants in Norway in Troms ø, Jessheim and 
Kongsberg. In the latter two catchmen t areas, Peab’s market shares remain below 
30% under both possible geographic market definitions of 25 km and 50 km243. 
Affected markets are identified as market shares in Troms ø exceed 30% under 
both possible definitions, and the catchment area overlaps wit h those of three 
aggregates production sites currently owned by YIT, as shown in Table 17.  
(226)  The Target produces aggregates in 30 different locations in Norway244, but is not 
active in RMX245. The same markets as mentioned above are therefore also 
affected due t o market shares exceeding 30% in the upstream aggregates business. 
Possible concerns therefore arise in the context of i nput and customer foreclosure.  
                                                 
239  Minutes of phone call with a competitor on 10 March 2020.   
240  See Section 5.2.1.1. (C.iii.) 
241  See Section 5.2.1.1. (C.iii.) 
242  Form CO, paragraph 130. 
243  Form CO, paragraph 686. 
244  Form CO, paragraph 130. 
245  Form CO, paragraph 671. 
 
50 Table 17 – upstream and downstream markets with the Parties’ combined market sh ares, 
aggregates – RMX link, Norway  
Upstream 
aggregates 
catchment area Combined 
market shares 
upstream Downstream 
RMX catchment 
area  Combined 
market share 
downstream 25 
km radius  Combined 
market shares 
downstream 50 
km radius  
Breivika  [40-50]% Tromsø  [60-70]% [30-40]% 
Tyttebaervika  [50-60]%    
Ullsfjord  [50-60]%    
   Source: Form CO, Annex 5.6a; Annex 7, Table 129.  
(B.ii)  The Notifying Party’s view  
(227)  The Notifying Party considers that the vertical aggregates – RMX relation does 
not cause any plausible compet ition concerns. As for input foreclosure, the 
Notifying Party submits that downstream RMX competitors do not rely on 
aggregates produced by the Target’s quarries, and can therefore not be 
foreclosed.246  
(228)  Concerning customer foreclosure, the Notifying Party a rgues that it would not 
have the ability for such a strategy, given the fact that aggregates are an input for 
a number of end products. Therefore, upstream competitors would still be able to 
sell to a high number of customers.247 
(B.iii)   The Commission’s assessment   
(B.iii.a)  Input foreclosure in the Tromsø  area 
(229)  Concerning the specific market in Tromsø , the Commission considers that the 
merged entity would not have the ability to foreclose downstream customers, and 
that it is unlikely that it would have an incentive to do so.  
(230)  First, existing RMX competitors currently do not purchase aggregates from YIT, 
and will therefore not rely on aggregate supply by the merged entity post 
transaction. In the downstream RMX market, Peab faces two competitors in the 
Troms ø area, Berg betong with a market share of [30-40]% and Storegga with a 
market share of [ 20-30]%.248 Berg betong is a vertically integrated company with 
its own aggregates production around Troms ø. Currently, the Notifying Party 
itself sources aggregates from Berg betong for it s own RMX business.249 Also the 
second competitor Storegga currently does not source aggregates from YIT. 
Therefore, the merged entity will not have the ability to foreclose these two 
competitors.  
(231)  The market investigation provided further evidence that the merged entity will not 
have the ability for input foreclosure in the Troms ø area. On the one hand, 
capacities in the north of Norway are generally high250. On the other hand, 
aggregates in northern Norway can be transported over longer distances to still 
                                                 
246  Form CO, paragraph 722. 
247  Form CO, paragraph 725. 
248  Annex 7, table 132. 
249  Form CO, paragraph 723; response to RFI 4.  
250  Call with a competitor, 10 March 2020, points 14, 15. 
 
51 economically reasonable terms, as they are also shipped by boat. This was 
confirmed during the market investigation by [a transport company ], which stated 
to be active for companies such as Veiddeke, NCC and the Parties in northern 
Norway.251 The geographic mar ket definition of a catchment area of 50 km 
around each plant is likely to over -estimate the actual market power of the 
merging entity with respect to the Troms ø area.252  
(232)  Second, the merged entity will unlikely have the incentive to engage in input 
foreclos ure. Overall, RMX forms only a small portion of the overall customer 
base of aggregates suppliers. As the merged entity does not have control over the 
secondary market, and cannot avoid arbitrage, it would have to raise aggregates 
not only for RMX customer s, but also for customers from the construction or 
asphalt business in the context of an input foreclosure strategy. Therefore, it 
would lose clients in all customer groups upstream. Given the fact that an input 
foreclosure strategy would likely not affect  the RMX market, as YIT currently 
does not sell to RMX customers, there would be no incentive for the merged 
entity to risk decreasing sales in the upstream aggregates market.  
(233)  A possible segmentation of aggregates into rock and gravel / sand would not 
change the assessment of the RMX – aggregates link in the Tromsø  area. First, 
market shares would still be below 50% under any possible segmentation, as 
shown in Table 18. Second, as YIT currently does not sell any type of aggregate 
to RMX competitors, the sam e applies under a possible segmentation. Third, as 
both types of aggregates are used for the production of RMX, but also in the 
construction business, the incentive to engage in input foreclosure would not 
increase under a further product segmentation.  
Table 18 – upstream aggregates market shares when market is divided into i) crushed rock  and 
ii) gravel and sand, aggregates –  RMX link, Norway  
Catchment area  Crushed rock  Gravel / sand  
Breivika  [30-40]% - 
Tyttebaervika  [30-40]%  - 
Ullsfjord  [30-40]%  [50-60]%  
   Source: See Annex 7, table 180.  
(B.iii.b)  Customer foreclosure in the Tromsø  area 
(234)  The merged entity would not have the ability to successfully foreclose upstream 
aggregates competitors. As aggregates can be used for many end -products , such 
as construction works, asphalt and mortar, a strong downstream position in RMX 
alone would not be sufficient to engage in customer foreclosure. Upstream 
competitors can deviate sales not only to other RMX competitors, but also to 
suppliers of other end uses. In fact, the market investigation showed that, among 
all end -uses for aggregates, RMX is not very important. Market participants 
estimated the share used for RMX production at less than 10%.253  
                                                 
251  Q9, questionnaire to aggregates Norway, question 1, 18. 
252  In that context, it is noted that in a wider catchment area of 80 km radius, the Target would have significantly 
lower market shares in Breivika ([30-40]%), Tyttebaervika ( [30-40]%) and Ullsfjord ([20-30]%). Market shares 
for even wider areas are not available. 
253  See call with a competitor on 10 March 2020.  
 
52 (235)  This assessment would not change under a possible pro duct segmentation. As 
both crushed rock and gravel / sand are can be used for the production of RMX, 
the share of demand linked to this specific end -product would remain small. Also 
a possibly narrower geographic market definition of RMX of a 25 km radius 
around each production facility would not change the assessment, as even very 
high market shares in RMX are not sufficient to successfully pursue a customer 
foreclosure strategy.  
(B.iii.c)  Conclusio n  
(236)  Based on the above the Commission considers that the Transaction w ill not lead 
to a significant impediment of effective competition as a result of the aggregates -
RMX vertical links in Norway.  
(C) Aggregates – construction  
(C.i) List of affected markets and market shares  
(237)  The Notifying Party only has two aggregates quarries in Nor way254, and both are 
not relevant in a vertical aggregates RMX relation due to low market shares. Peab 
is active the construction business in Norway, with overall market shares of 
below 5%. Its market shares in construction would not rise above 20% under any  
possible product market segmentation255. The geographic market definition for 
construction is national, as explained under 5.2.6.2. 
(238)  The Target produces aggregates in 30 different locations in Norway256. Affected 
market results from market shares exceeding 30%  in five upstream aggregates 
markets, listed in Table 19. The Target is not active in the construction business 
in Norway257. The only possible concern can therefore be input foreclosure.  
Table 19 – upstream aggregates markets with co mbined market shares above 30%, aggregates -
construction link, Norway   
 Peab  Target  Combined share  
Breivika  - [40-50]% [40-50]%  
Tyttebaervika  - [50-60]% [50-60]%  
Ullsfjord  - [50-60]%  [50-60]%  
Bjarkoy  - [50-60]%  [50-60]%  
Lodingen  - [60-70]%  [60-70]%  
   Source: Form CO, table 221 / paragraph 809.  
(C.ii)   The Notifying Party’s view  
(239)  On input foreclosure, the Notifying Party considers that its market shares in 
aggregates would be too low to successfully foreclose downstream construction 
competitors, as there w ould be several other aggregates suppliers active in the 
area.258 
                                                 
254  Form CO, paragraph 130. 
255  Form CO, paragraph 822. 
256  Form CO, paragraph 130. 
257  Form CO, paragraph 791. 
258  Form CO, paragraph 821, 823. 
 
53 (240)  On customer foreclosure, the Notifying Party states that its market shares in the 
downstream construction market would be too low to successfully foreclose 
upstream aggregates competitors.259 
(C.iii)  The Commission’s assessment  
(241)  Aggregates are an input used in all kind of construction works. As market 
investigation suggested, construction is overall the main source of demand for 
aggregates.260 The aggregates produced in the five quarries in question are in deed 
almost entirely sold to construction companies.261  
(242)  However, the Commission considers that the merged entity will not be able to 
engage in input foreclosure post -transaction. Availability of aggregates is 
generally not a concern in northern Norway. Resp onse from the market has 
shown that there are no capacity constraints in the area,262 and the merged entity 
would not become unavoidable in any region.  
(243)  This assessment concerning general availability of aggregates is plausible despite 
high market shares of the merged entity given the fact that aggregates are also 
transported by boat over longer distances in northern Norway. This was 
confirmed during the market investigation by [a transport company] , which stated 
to be active for companies such as Veiddeke, N CC as well as YIT in northern 
Norway.263 As aggregates can be shipped over longer distances to economically 
reasonable terms, also suppliers outside a 50 km radius pose a competitive 
constraint, and market shares for this geographic market likely over -estima te the 
market position of the merged entity in the Tromsø  area264. 
(244)  Second, input foreclosure would not have a significant effect on construction 
competitors. The cost of aggregates form only a very small fraction of 1% to 
2.5% of the total costs in a constru ction project. For any segmentation of 
construction that the Commission considers plausible, the cost of aggregates does 
not exceed 5% of total cost. In particular, this share would only be reached in 
infrastructure construction, which includes the constru ction of roads. For the 
construction of buildings, for instance, aggregates account for below 1% of total 
costs for non -residential buildings, and below 0.5% of total costs for residential 
buildings.265 
(245)  Third, the merged entity would not have a clear incenti ve to engage in customer 
foreclosure, as there are no indications that it would benefit from such a strategy. 
Peab currently only has a small market share in overall construction of below 5%, 
which would remain below 20% under any product segmentation266. In the 
                                                 
259  Form COm paragraph 824. 
260  Call with a competitor, 10 March 2020, point 19; call with a competitor, 10 March 2020, point 15.  
261  See answers to RFI1. 
262  Call with a competitor, 10 March 2020, point 15; Q4, questionnaire to asphalt competitors in Norwa y, 
question 30, replies by competitors. 
263  Q9, questionnaire to aggregates Norway, question 1, 18. 
264  Under a catchment area of 160 km radius, the Target would only have a market share of 24% in aggregates in the 
Troms ø area, Form CO, table 233. 
265  See rep ly RFI 4, question 2.  
266  Form CO, paragraph 822. 
 
54 construction of buildings and in infrastructure construction, Peab only has a 
respective market share of [0 -5]%267. However, it faces competition by large, 
integrated competitors, such as Veidekke, Skanska and NCC268. Given this minor 
market position, it is questionable if the merged entity will be able to recoup 
losses in upstream sales with additiona l gains in downstream business.  
(246)  This assessment does not change under a possible segmentation between crushed 
rock and gravel / sand. Both types of aggregat es are used in construction work, 
and market investigation suggested an overall availability of aggregates 
regardless of the segmentation. Also the impact of aggregates prices on overall 
costs of construction projects and the competition the merged entity faces in the 
construction business does not change under a product segmentation.  
(C.iii.a)  Conclusio n  
(247)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition as a result of the aggregates -
construction vertical links in Norway.  
(D) Asphalt – paving  
(D.i) List of affected markets and market shares  
(248)  The Transaction gives rise to a vertically affected market due to the asphalt -
paving relationship. The downstream paving market is national and the combined  
market share on this market stays below 30 %. Thus the only potential 
competition concern is input foreclosure due to high individual or combined 
market shares on a number of asphalt markets. The affected market is the national 
paving market.  
(249)  Table 20 be low lists the asphalt markets where the Parties’ individual or 
combined market share exceeds 30%.  
Table 20 – upstream asphalt markets with a combined market share above 30%, asphalt -paving 
link Norway  
Catchment area   Market share Peab  Market share 
Target  Combined market share  
Grenland  [5-10] % [30-40]% [40-50]%  
Ravneberget  [0-5]% [40-50]%  [40-50]%  
Trondheim  [40-50]% [0-5]% [40-50]%  
Verdal  [90-100]% [0-5]% [90-100]%  
Otta [0-5]% [60-70]% [60-70]% 
Eikefet  [0-5]% [30-40]% [30-40]% 
Sotra  [0-5]% [30-40]%  [30-40]%  
Karmøy  [0-5]% [60-70]%  [60-70]%  
Harstad  [0-5]% [120-130]% [120-130]%  
Tana Finnmark  [0-5]% [50-60]% [50-60]%  
Tromsø  [0-5]% [90-100]%  [90-100]%  
Bodø  [0-5]% [170-180]% [170-180]%  
Narvik  [0-5]% [150-160]% [150-160]%  
 Source: Form CO, table 129  
                                                 
267  Form CO, table 234 / paragraph 819. 
268  Form CO, table 234 / paragraph 819. 
 
55 (250)  With regard to Table 20, it should be noted that market shares above a 100% are a 
result of the market share methodology, which estimates the total market size as a 
multiple of the Norwegian per capita asphalt consumption and the population of 
the catchment area. These market shares are therefore merely a rough indicator 
for high or very high market shares rather than precise shares of supply in the 
relevant market.  
(251)  The Commission also notes that, having regard to its analysis in relation to 
geographic market in Section 5.2.3.2., some of these catchment areas are sparsely 
populated rural areas or fall into areas where boat transport is also possible. Both 
of these factors could modify the size of the relevant geographic market and 
hence the market shares. These points will be discussed in the individual 
assessment of the relevant catchment areas below.  
(252)  Tables 21 -22 below lists the market shares on the downstream paving market both 
in volume and value.  
Table 21 - volume base d market shares - paving, Norway  
Peab  [5-10]% 
Target  [10-20]% 
Combined  [10-20]%  
Veidekke  [30-40]% 
NCC  [20-30]% 
Skanska  [5-10]%  
Others  [10-20]%  
 Source: Form CO, table 127  
Table 22 - value base d market s hares - paving, Norway  
Peab  [5-10]%  
Target  [10-20]%  
Combined  [10-20]%  
Veidekke  [30-40]%  
NCC  [20-30]%  
Skanska  [5-10]%  
Others  [10-20]%  
 Source: Form CO, table 127  
(D.ii)  The Notifying Party’s view  
(D.ii.a)  Grenland and Ravneberget  
(253)  With regard to the Grenland a rea, the Notifying Party considers that, in line with 
the horizontal assessment related to this market, the Parties' actual market power 
in the Grenland catchment area is considerably smaller than their imputed 
combined market share would suggest. The Part ies are not geographically close 
competitors, and the Transaction would not have any significant impact on the 
market situation in the Grenland catchment area. The Target's market share has 
considerably decreased in this catchment area, which is not nearly  offset by the 
small increase in Peab's market share.269  
                                                 
269  Form CO, paragraph 573. 
 
56 (254)  Furthermore, the merged entity will have three competing plants in its close 
proximity, two Veidekke plants located 6 and 29 km from Grenland, and one 
NCC plant, located 26 km away from the plant. Cus tomers therefore would have 
alternative plants from where they could purchase asphalt, affecting Peab's ability 
to foreclose any customers from access to inputs.270 Customers will also have 
alternative plants in the Ravneberget catchment area.  
(255)  In addition, a ll major paving competitors are vertically integrated and have 
mobile plants at their disposal, so an attempt to foreclose their access to asphalt in 
these catchment areas would not be successful.271 
(256)  Consequently, the merged entity will lack the ability to engage in input 
foreclosure in these catchment areas.  
(D.ii.b)  Trondheim, Verdal and Otta (Central Norway)  
(257)  The Notifying Party submits that use of a broader geographical market than a 
radius of 50 km is particularly justified in this market in the fairly sparsely 
inhabited region. Thus the merged entity’s market power is smaller than what is 
suggested by its market share.272  
(258)  Further, in the absence of upstream increment the Transaction does not change 
the Peab’s ability or incentive to engage in input foreclosure. T he increment in the 
downstream paving market will also not change the ability or incentive because 
the combined market share of the merged entity would remain moderate.273  
(D.ii.c)   Eikefet, Sotra, Karmøy (Western Norway)  
(259)  The Notifying Party considers that in the ab sence of an upstream increment, the 
Transaction would not affect the  combined entity's market power in asphalt in 
western Norway .274  
(260)  The only impact brought about by the Transaction would be the minor increase of 
approximately [5-10]% to the Target's existi ng market share on the paving side, 
which would have no impact on the overall competition.275 
(261)  Vertically integrated competitors Velde, Veidekke and NCC are all present in the 
area. As they all have their own supplies of asphalt available, a customer 
foreclos ure strategy by Peab would not have any effect on the paving market.276 
(D.ii.d)   Harstad, Tana Finnmark, Tromsø, Bodø, Narvik (Northern Norway)  
(262)  The Notifying Party submits that the use of a broader geographical market than a 
radius of 50 km is particularly justifie d in this market in a fairly sparsely 
                                                 
270  Form CO, paragraph 574. 
271  Form CO, paragraph 574. 
272  Form CO, paragraph 579. 
273  Form CO, paragrap hs 580-582.  
274  Form CO, paragraph 584. 
275  Form CO, paragraph 587.  
276  Form CO, paragraph 585.  
 
57 inhabited region in the north of Norway. Due to the use of boat transports along 
the western and northern coast of Norway, the relevant geographical market could 
arguably be even larger than a radius of 80 km. Thus the  merged entity’s market 
power is much smaller than what is suggested by its market share.277  
(263)  Further in the absence of an upstream increment, the Transaction would not affect 
the combined entity's market power in asphalt in western Norway .278  
(264)  The only impact  brought about by the Transaction would be the minor increase of 
approximately [5-10]% to the Target's existing market share on the paving side, 
which would have no impact on the overall competition.279 
(265)  Vertically integrated competitor Veidekke has a strong presence in the area. As 
Veidekke has its own supplies of asphalt available, an input foreclosure strategy 
by Peab would not have any effect on the paving market. Veidekke therefore has 
sufficient alternatives for selling its asphalt, and a customer forecl osure strategy 
undertaken by Peab post -Transaction would have no impact.280 
(D.iii)  The Commission’s assessment  
(D.iii.a)  Grenland  
(266)  With regard to the Grenland cathment area, in Section 5.3.4.1. (A.iii.), the 
Commission concluded that the Transaction is unlikely to lead to pri ce increases. 
This assessment was based on the following reasons: low capacity utilisation and 
large amounts of excess capacity in the hands of competitors; additional choice 
and capacity in the form of mobile plants; low entry barriers and buyer power. 
Lack of price effect on the upstream market implies that the merged entity will 
not have the ability to increase prices on the upstream asphalt market (or prevent 
access to asphalt) in the Grenland area.   
(267)  This is especially the case because the largest pavi ng competitors (Skanska, NCC 
and Svevia) are all integrated players with asphalt plants in the area,281 which 
seriously limits the ability of the merged entity to foreclose them.  
(268)  As regards the incentives of the merged entity to foreclose, post -Transaction Peab 
will face  a trade -off when considering input foreclosure strategies. An increase of 
prices in the upstream market (or a refusal to sell) will reduce profits due to 
decreasing sales to downstream rivals. On the other hand , by raising downstream 
rivals’  input costs it may gain additional profits downstream by capturing 
additional sales or by increasing pr ices downstream. In theory, the [ 10-20]% 
increment downstream can increase Peab ’s incentives to engage in input 
foreclosure as it can recoup more profit s downstream than before the merger due 
to the fact that it has a larger sales base than pre -Transaction.  
                                                 
277  Form CO, paragraph 588. 
278  Form CO, paragraphs 589-590. 
279  Form CO, paragraph 591.  
280  Form O, paragraph 592.  
281  Notifying Party’s response to the Commission’s RFI 2. 
 
58 (269)  However, [Strategic information]282 and thus it is unlikely that asphalt sales 
would be sacrificed for gaining paving sales. At the very least [Strateg ic 
information]  significantly reduces the incentives to engage in this strategy. Thus 
the merged entity is unlikely to have the incentives to engage in input foreclosure.  
(270)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to input foreclosure in 
the Grenland catchment area.  
(D.iii.b)  Analytical framework and general considerations for the catchment areas 
other than Grenland  
(271)  In the rest of the catchment areas, there is no merger -specific change in the 
upstream market and hence there is no merger -specific change in the ability to 
foreclose. However, there is a merger specific change in the downstream market, 
namely Peab’s downstream share on the paving market increases by [10-20]% 
points. As discussed in relation to Grenland in Section 5.4.3.2.(D.iii.a), this could, 
in principle, increase the incentives to foreclose as the merged entity  can recoup 
more profits downstream than before the merger due to the fact that it has a larger 
sales base than pre -Transaction.  Thus it is necessary to analyse Peab’s ability to 
do so (even if there is no merger specific change in the ability) and its incentives.  
(272)  As some of the catchment areas are located in sparsely populated areas, the 
application of an 80 km radius may be justified in these cases. Likewise, some of 
the catchment areas are located by the sea, which means that sea transport may be 
an option, leading to an even wider radius.  
(273)  In addition, a number of catchment areas are located outside m etropolitan areas 
and are therefore suitable for the use of mobile plants. As discussed in 
Section  5.2.3.2, mobile plants are not a viable choice in every region but they are 
used in in Norway outside the metropolitan areas. These mobile plants can be 
move d to any area within 10 to 30 days.283 The capacity of a mobile plant is on 
average 150 -200 kt/year.284 Among the competitors Veidekke, NCC and Skanska 
have mobile plants and the number of their mobile plants is 5, 3 and 3 
respectively.285 Mobile plants reduce t he ability of the merged entity to cut off 
competitors’ access to asphalt or to increase the cost of this input. It is true that 
mobile plants cannot be deployed in all of the catchment areas simultaneously as 
they may be needed in other parts of the count ry too. However, given that neither 
the projects, nor the hypothetical foreclosure attempts are likely to occur 
simultaneously and that the plants can be moved three times a year, this option to 
mitigate foreclosure risk is available in all of the catchmen t areas where they can 
be used.   
(274)  A common consideration that applies to all catchment areas is that the merged 
entity is unlikely to have the incentive to engage in input foreclosure despite the 
fact that the downstream increment allows it to recoup more losses downstream.  
                                                 
282  Notifying Party’s response to the Commission’s RFI 1, question 3. 
283  Minutes of a call with a competitor, 10 march 2020; Minutes of a call with a competitor, 10 march 2020. 
284  Minutes of a call with a competitor, 10 march 2020; Minutes of a ca ll with a competitor, 10 march 2020. 
285  Notifying Party’s response to the Commission’s RFI 4, question 1. 
 
59 (275)  First, the merged entity’s downstream combined market share ( [10-20]%) and the 
thus the possibility for recoupment remains moderate.  
(276)  Second, [Strategic information]286 and thus it is unlikely that asphalt sales would 
be sacrificed for ga ining paving sales or at least further reduces the incentives to 
engage in this strategy.  
(D.iii.c)  Ravneberget  
(277)  As the Ravneberget plant is around 100 km from Oslo and the main mode of 
transport is road, and 80 km or larger radius is not justified. Consequently, th e 
standard 50 km radius applies.  
(278)  Despite a relatively high ( [40-50]%) market share, the merged entity is unlikely to 
have the ability to raise prices or cut off competitors’ access to asphalt.  
(279)  First, capacity utilisation in the catchment area is low and competitors have 
significant amounts of excess capacity. Total market capacity utilisation stands at 
29%.287 Veidekke has […]  kt of capacity available to serve the market and the 
capacity utilisation of its two plants is [30-40]% and [60-70]%.288 NCC has […] 
kt of capacity available to serve the market and the capacity utilisation of its three 
plants are [20-30]%, [30-40]% and [30-40]%.289 In addition, Nordic Asphalt has 
[…] kt of capacity available in this market.290 The capacities of competitors 
therefore signifi cantly exceed the total market demand of 171 kt.291 Thus, given 
their low capacity utilisation levels competitors have enough spare capacities to 
serve the entire demand in the catchment area. This implies that the merged entity 
will not have guaranteed dema nd and thus will not be able to exercise market 
power, provided competitors have the incentive to expand output to prevent a 
price increase or an attempt to foreclose access to asphalt. This appears to be the 
case as asphalt plants have considerable fixed costs292 and thus leaving capacity 
idle is very costly.  
(280)  Second, as the area is sufficiently outside the Oslo metropolitan area, mobile 
plants can also be used to bring additional capacity online and to increase choice. 
Although extra capacity is unlikely to  be needed in this market, a single mobile 
plant would be able to serve the entire demand in the region, which would defeat 
any foreclosure strategy.  
(281)  Third, as the paving competitors present in the catchment area with an asphalt 
plant (NCC, Veidekke are l arge paving competitors Nordic Asphalt is smaller) are 
vertically integrated, and, as discussed above, have ample spare capacities, their 
access to asphalt cannot be cut off or made more difficult. In addition, the third 
large paving competitor, Skanska ca n make use of its mobile plants and also 
                                                 
286  Notifying Party’s response to the Commission’s RFI 1, question 3. 
287  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
288  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
289  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
290  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
291  Notifying Pa rty’s response to the Commission’s Request for Information RFI 2. 
292  Minutes of a call with a competitor 10 March 2020. 
 
60 cannot be foreclosed. The vertical integration of the main competitors severely 
restricts the ability of the merged entity to engage in input foreclosure.  
(D.iii.d)  Trondheim and Verdal  
(282)  The Trondheim and Verdal  catchment are as are located close to the Trondheim 
metropolitan area. Thus the use of 80 km radius is not justified and road transport 
remains the principal mode of transport despite the location by the sea. Further, 
mobile plants are also unlikely to be used here.  
(283)  Despite high market shares ( [40-50]% and [ 90-100]%) Peab is unlikely to have 
the ability to raise prices or cut off competitors’ access to asphalt.  
(284)  First, capacity utilisation in the catchment area is low and competitors have a lot 
of excess capacity. Total  market capacity utilisation stands at 42% in Trondheim 
and at 19% in Verdal.293 The capacities of competitors (NCC, Veidekke, Froseth) 
exceed the total market demand in both areas.294 This implies that the merged 
entity will not have guaranteed demand and thu s will not be able to exercise 
market power, provided competitors have the incentive to expand output to 
prevent a price increase or an attempt to foreclose access to asphalt. This appears 
to be the case as asphalt plants have high fixed costs295 and thus le aving capacity 
idle is very costly.  
(285)  Second, the two large paving competitors (NCC, Veidekke) and a smaller paving 
competitor (Froseth) are present in the catchment area with asphalt plants. As 
these competitors are vertically integrated, and, as discussed  above, they have 
ample spare capacities, their access to asphalt cannot be cut off or made more 
diffic ult.  
(D.iii.e)  Otta  
(286)  Otta is located in a sparsely populated area in central Norway and thus the use of 
an 80 km radius is justified. Under an 80 km radius approac h, the Target’s (and 
thus the Parties’ combined) market share remains below 30%, which implies that 
post-Transaction the merged entity will not have the ability to raise prices 
upstream or cut off competitors’ access to asphalt.  
(287)  Furthermore, mobile plants  can also be used here, which would allow Veidekke, 
NCC and Skanska to bring additional capacity online. This makes it even less 
probable that Peab would have the ability to raise prices upstream or cut off 
competitors’ access to asphalt.  
(288)  The use of mobil e plants also implies that these major competitors cannot be 
foreclosed as they have their own source of asphalt.  
                                                 
293  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
294  Notifying Party’s response to the Commission’s Reques t for Information RFI 2. 
295  Minutes of a call with a competitor 10 March 2020. 
 
61 (D.iii.f)  Karmoy  
(289)  Although Karmoy lies by the sea, in the absence of specific indications to the 
contrary in the market investigation, the Commission wi ll apply the standard 
50 km radius. Despite a relatively high ( [60-70]%) market share, the merged 
entity is unlikely to have the ability to raise prices or cut off competitors’ access 
to asphalt.  
(290)  First, capacity utilisation in the catchment area is low an d competitors have a lot 
of excess capacity. Total market capacity utilisation stands at 27%.296 Veidekke, 
NCC, Velde and FM Asphalt have […] kt, […] kt, […] kt and […] kt of capacity 
available to serve the market respectively, which compares with a total de mand of 
188 kt.297 The capacities of competitors therefore significantly exceed the total 
market demand. This implies that the merged entity will not have guaranteed 
demand and thus will not be able to exercise market power, provided competitors 
have the inc entive to expand output to prevent a price increase or an attempt to 
foreclose access to asphalt. This appears to be the case as asphalt plants have high 
fixed costs298 and thus leaving capacity idle is very costly.  
(291)  Second, as the area is sufficiently outsi de the Stavanger metropolitan area, mobile 
plants can also be used to bring additional capacity online and to increase choice. 
Although extra capacity is unlikely to be needed in this market, a single mobile 
plant would be able to serve the entire demand i n the region, which would defeat 
any foreclosure strategy.  
(292)  Third, two large (NCC, Veidekke) the two smaller (Velde and FM Asphalt) 
paving competitors are present in the catchment area with asphalt plants. As these 
competitors are vertically integrated, an d, as discussed above, have ample spare 
capacities, their access to asphalt cannot be cut off or made more difficult. In 
addition, the third large paving competitor, Skanska can make use of its mobile 
plants and also cannot be foreclosed. The vertical inte gration of the main 
competitors severely restricts the ability of the merged entity to engage in input 
foreclosure.  
(D.iii.g)  Harstad  
(293)  Harstad is located in the sparsely populated northern part of Norway and thus the 
80 km radius is applicable. The Target’s market s hare of [ 120-130]% under the 
50 km approach drops to [70-80]%, which is still very high. Despite this very 
high market share the merged entity is unlikely to have the ability to raise prices 
or cut off competitors’ access to asphalt.  
(294)  First, capacity utili sation in the catchment area is low and competitors have a lot 
of excess capacity. Total market capacity utilisation stands at 22%.299 Veidekke 
has […] kt of capacity available, compared to the whole demand of 73 kt.300 
Thus, Veidekke can serve almost the enti re demand. This implies that the merged 
                                                 
296  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
297  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
298 Minutes of a c all with [a competitor] 10 March 2020 
299  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
300  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
 
62 entity will have very little guaranteed demand and thus will not be able to 
exercise market power, provided competitors have the incentive to expand output 
to prevent a price increase or an attempt to foreclose acces s to asphalt. This 
appears to be the case as asphalt plants have high fixed costs301 and thus leaving 
capacity idle is very costly. The Commission notes that the demand and capacity 
figures correspond to the 50 km approach. As under the applicable 80 km 
approach the Target’s market share drops, the merged entity is likely to have even 
less market power and less ability to foreclose un der the 80 km radius approach. 
(295)  Second, mobile plants can also be used here, which would allow Veidekke, NCC 
and Skanska to br ing additional capacity online. This makes it even less probable 
that Peab would have the ability to raise prices upstream or to cut off competitors’ 
access to asphalt.  
(296)  Third, the paving competitor present in the region with an asphalt plant, 
Veidekke, is  vertically integrated and has ample spare capacities. Consequently, 
its access to asphalt cannot be foreclosed. The same applies to Skanska, and NCC 
who can supply themselves with mobile plants.  
(D.iii.h)  Tanna Finnmark  
(297)  Tanna Finnmark is located in a sparsely pop ulated area in northern Norway and 
thus at least an 80 km radius would be justified. Furthermore, in Northern 
Norway asphalt is also transported by boat, which enlarges the geographic market 
even further. Already under an 80 km radius approach the market s hare remains 
below 30 %, which implies that Peab will not have the ability to raise prices 
upstream or cut off competitors’ access to asphalt.  The share would even be lower 
under the 200 km approach, implying that the merged entity would have even less 
market power.   
(298)  Moreover, mobile plants can also be used here, which would allow Veidekke, 
NCC and Skanska to bring additional capacity online. This makes it even less 
probable that Peab would have the ability to raise prices upstream or to cut off 
competitor s’ access to asphalt.  
(299)  In addition, the paving competitor present in the region with an asphalt plant, 
Veidekke, is vertically integrated and therefore its access to asphalt cannot be 
foreclosed. The same applies to Skanska, and NCC who can supply themselv es 
with mobile plants.  
(D.iii.i)  Tromso, Bodo and Narvik  
(300)  All three catchment areas are located in the sparsely populated northern part of 
Norway, and thus the use of the 80 km approach is justified. Under this approach 
the market shares are [ 70-80]%, [120-130]% an d [80-90]% for Tromso, Bodo and 
Narvik respectively. These are lower than the market shares under the 50 km 
approach ( Tromso  [90-100]%, Bodo [ 170-180]% and Narvik [ 150-160]%), but 
still very high. As in northern Norway boat transport is also used, the mark et is 
even larger, the Target’s share is even lower and there are additional sources of 
supply. Nonetheless in these catchment areas the market shares remain high under 
                                                 
301  Minutes of a call with [a competitor] 10 March 2020. 
 
63 any approach. Furthermore, in these catchment areas competitors do not have 
suffic ie nt fixed capacity available to meet local demand.  
(301)  However, Peab would not have the ability to engage in input foreclosure.  
(302)  First, overall demand in these regions is very small and only amounts to 115 kt, 
80kt and 57 kt in Tromso, Bodo and Narvik respectively . Thus, each catchment 
area’s demand can be served with a single mobile plant. A mobile plant could 
even supply all three catchment areas combined. Thus, through mobile plants, 
competitors have enough spare capacity and thus the ability to prevent upstream  
price increases by the merged entity. As asphalt plants have high fixed costs,302 
they are likely to have the incentive too  
(303)  Second, the use of mobile plants also implies that Veidekke, NCC and Skanska 
can rely on their own asphalt production. Given that, as  discussed above, the 
capacity of this captive production is sufficient for any need in these catchment 
areas, the three largest paving competitors cannot be foreclosed.  
(D.iii.j)  Eikefet and Sotra  
(304)  These catchment areas are located in the Bergen metropolitan area a nd thus the 
50 km radius applies and the principal mode of transport is by road. Furthermore, 
in these areas mobile plants are also not normally an alternative.  
(305)  Compared to other catchment areas in Norway, the capacity utilisation is 
relatively high ( [60-70]% and [70-80]%) and competitors’ capacities are 
sufficient to serve only a little more than half of the demand. 303  
(306)  However, Peab’s market share will remain moderate [ 30-40]% in Eikefet and 
[30-40]% Sotra , which makes it unlikely that Peab would have the  ability to 
increase the price of asphalt or cut competitors’ access to it.  
(307)  In any event, as discussed in Section 5.3.4.2.(D.iii.b), the merged entity will not 
have the incentive to engage in such foreclosure.  
(308)  Furthermore, the overall demand for asphalt in th ese two catchment areas is 
1120 kt against 7500 kt for the whole of Norway.304 As asphalt is only used for 
paving, this implies that the two catchment areas represent 15 % of overall paving 
demand in Norway. Thus, even if Peab had the ability and incent ive to foreclose 
paving competitors, the overall impact on paving competition would not amount 
to a significant impediment of effective competition.  
(D.iii.k)   Conclusio n  
(309)  Based on the above the Commission considers that the Transaction will not lead 
to a significan t impediment of effective competition as a result of the asphalt -
paving vertical links in Norway.  
                                                 
302  Minutes of a call with [a competitor] 10 March 2020. 
303  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
304  https://eapa.org/wp -content/uploads/2020/02/Asphalt -in-figures_2018.pdf 
 
64 (E) Bitume n – asphalt  
(E.i) List of affected markets and market shares  
(310)  The Notifying Party is not active in the production or sale of bitumen305, but has 
four asphalt plants in Norway306. 
(311)  The Target imports bitumen and produces bitumen emulsion and polymer -
modified bitumen predominantly for the purposes of its own asphalt in one 
location in Norway.307 It has twelve fixed and four mobile asphalt plants.308 
(312)  Bitumen is considere d as a national market, on which YIT currently has a very 
small share of [0 -5]% in volume and [0-5]% in value.309 310 Markets become 
affected due to two of Peabs downstream asphalt markets. The only relevant 
concern can therefore be customer foreclosure.  
(313)  The T ransaction would potentially have an impact in three areas where 
downstream markets of Peab or combined market shares exceed 30%, listed in 
Table 23. On other areas, the Transaction would not change any ability or 
incentive of foreclosure, as no increment occurs.  
Table 23 – downstream asphalt markets with combined market share above 30%, bitumen -
asphalt link, Norway  
Catchment area  Combined market shares  
Trondheim  [30-40]% 
Grenland  [40-50]% 
Verdal  [90-100]% 
 Source: Form CO, Annex  5.6a.  
(E.ii) The Notifying Party’s view  
(314)  The Notifying Party considers that the Transaction would not raise concerns 
regarding the asphalt – bitumen link in Norway. The Target would only sell small 
amounts of bitumen on an ad hoc basis when surpluses occur from production for 
its own downstream asphalt business, and sales would therefore only form a 
negligible part of the overall bitumen market.  
(E.ii.a)  The Commission’s assessment  
(315)  The merged entity would not have any ability to successfully foreclose the present 
upstre am bitumen competitors such as Nynäs, Puma Energy, Exxon Mobile and 
Total311 with its own asphalt business. First, the three downstream markets are 
local and therefore form only a fraction of the total customer base for bitumen 
competitors.  
                                                 
305  Form CO, paragraph 253. 
306  Form CO, paragra ph 326. 
307  Form CO, paragraph 256. 
308  Form CO, paragraph 326. 
309  Annex 5.6a. 
310  No additional markets would become affected under a possible product segmentation. 
311  Form CO, paragraph 482. 
 
65 (316)  Second, as YIT’s  upstream competitors are big oil companies, it is unlikely that a 
customer foreclosure strategy would affect these companies in a way that 
competitive pressure on the upstream market would decrease.  
(317)  Third, the Target is not an integrated bitumen producer,  but buys bitumen and 
process it to bitumen emulsion. Therefore, YIT, and thus post transaction the 
merged entity, relies on the upstream competitors it would foreclose as a supplier 
for input for its own bitumen sales, which does make a customer foreclosu re 
implaus ib le.  
(318)  The same arguments would apply under any kind of further product segmentation 
of bitumen, and no further markets would become affected under any 
segmentation.312 
(E.ii.b)   Conclusio n  
(319)  Based on the above the Commission considers that the Transaction wil l not lead 
to a significant impediment of effective competition as a result of the bitumen -
asphalt vertical links in Norway.  
5.3.5. Sweden  
5.3.5.1. Horizontally affected markets  
(A) Aggregates – unilateral effects  
(A.i) List of affected markets and market shares  
(320)  The Notifying P arty has an overall strong presence in Sweden with aggregates 
quarries in over 100 locations in the country.  
(321)  The Target has only very limited presence in aggregates production in Sweden. It 
operates one quarry located in Rimbo in the wider Stockholm area. The quarry 
itself is rather small, with an annual production of around […]  tonnes, which 
accounts for [0-5]% market share in a catchment area of 50 km radius.  
(322)  Affected markets therefore can only originate from overlapping catchment areas 
of the Target’s qu arry in Rimbo and one of the Notifying Party’s sites. Applying a 
catchment area of 50 km radius, this would give rise to one affected market, 
which is shown in Table 24.  
Table 24 – horizontally affected aggregates markets, Sweden.  
Catchment area  Market share Peab  Market share YIT  Combined share  
Harbo  [20-30]% [0-5]% [20-30]% 
   Source: Form CO, Table 14.  
                                                 
312  See response to RFI 3. 
 
66 (A.ii)   The Notifying Party's view  
(323)  The Notifying Party considers that the transaction would not lead to horizontal 
competition issues a s the increment is very small and market shares remain 
moderate under any market definition.  
(A.iii)  The Commission’s assessment  
(A.iii.a)   List of affec ted markets and market shares   
(324)  The Transaction will not lead to any unilateral effects in the aggregates market 
around  Harbo. First, overall market shares remain moderate. Combined market 
shares of below [ 20-30]% show that the Notifying Party faces sufficient 
competition in the area, not only by other larger competitors, but also due to the 
high number of small independen t aggregates suppliers. Responses obtained 
during the market investigation confirmed that other market participants do not 
consider that the Transaction will have any impact on the Swedish aggregates 
market.313 
Table 25 – market share s of competitors in the wider Stockholm area  
Competitor  Market share314 
Peab  [5-10]%  
YIT [0-5]% 
Jehander  [0-5]% 
NCC  [5-10]%  
Skanska  [0-5]% 
Svevia  [0-5]% 
Dala Frakt  [0-5]% 
Others  [70-80]%  
   Source: Form CO, Table 18.  
(325)  Second, the Transaction will lea d only to negligible additional market shares for 
Peab of below [0 -5]%. Given this small increment, it is not likely that the 
Transaction would increase the possibility for the Notifying Party to raise 
aggregates prices unilaterally.  
(326)  The quarry in Rimbo pr oduces predominantly crushed rock and some gravel / 
sand315. Peab has a market share of [10 -20]% for crushed rock in the Harbo area. 
As overlaps would decrease under a product market segmentation, a product 
segmentation would not change the assessment of the  Transaction.  
(A.iii.b)   Conclusio n  
(327)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to unilateral effects in 
the markets for aggregates in Sweden.  
                                                 
313  See Q10, questionnaire to aggregates customers Sweden, question 30. 
314  No reliable market shares for individual competitors in single catchment areas are available. The table reflects the 
overall competitive situation in the Stockholm area, based on a 320 km radius around the Rimbo quarry.  
315  Form CO, paragraph 134. 
 
67 (B) Asphalt – unilateral effects  
(B.i) List of affected markets and market shares   
(328)  The Transaction gives rise to six horizontally affected markets in Sweden. The 
relevant market shares for 2018 are indicated in Table 26 below. The market 
shares are based on the 50 km radius approach and volume -based.  
Table 26 – horizontally affected asphalt markets and market shares, Sweden  
Catchment 
area Peab  Target  Combined  Veidekke  Skanska  NCC  Svevia  Others  
Stockholm area  
Rosersberg  [10-20]%  [5-10]% [20-30]%  [5-10]%  [20-30]%  [10-20]%  [10-20]%  [5-10]%  
Vidbo  [20-30]%  [5-10]%  [20-30]%  [5-10]%  [20-30]%  [10-20]%  [10-20]%  [5-10]%  
Vastberga  [20-30]%  [0-5]% [20-30]%  [5-10]%  [20-30]%  [20-30]%  [10-20]%  [10-20]%  
Dingtuna  [40-50]% [0-5]% [40-50]% - [0-5]% [30-40]% [5-10]% [0-5]% 
Lulea a rea 
Mattsund  [0-5]% [40-50]%  [50-60]% - [20-30]%  [10-20]%  - - 
Boden  [0-5]% [40-50]%  [40-50]%  - [30-40]% [10-20]%  - - 
 Source: Form CO Tables 80 and 83.  
(B.ii)   The Notifying Party’s view  
(329)  The Notifying Party submits that the Transaction will not lead to a sign ificant 
impediment of effective competition for three general reasons.  
(330)  First, the production and sale of asphalt mass to external customers is not a key 
business to the Parties. They mainly supply asphalt internally to their own paving 
operations. Externa l sales vary considerably from year to year. As effectively all 
asphalt sold is used for paving and all major paving players produce asphalt in 
both fixed and mobile asphalt plants of their own, there are no customers that 
would be dependent on the Parties ' asphalt sales. Thus raising prices vis -à-vis 
these customers would not be effective.316 
(331)  Second, there are significant amounts of spare capacity available in asphalt 
production in the areas where the Parties have horizontal overlaps. Regardless of 
the combi ned entity's market share in any catchment area, competitors would be 
able to easily increase their production to respond to any hypothetical increase in 
the combined entity's prices. This would impose a powerful constraint for such 
behaviour.317 
(332)  Third, the Parties' asphalt opera tions are largely complementary and the merged 
entity would face strong integrated competitors such as Veidekke, Skanska and 
NCC. Any anti -competitive effects on the horizontally affected asphalt markets 
are thus impla us ib le.318 
(333)  Specifi cally with regard to the affected markets in Sweden, the Notifying Party 
submits that horizontally affected markets can be found in the Stockholm area 
(Peab plants: Vidbo, Västberga as well as Dingtuna; Target’s plants: Rosersberg) 
                                                 
316  Form CO, paragraph 396.  
317  Form CO, paragraph 397. 
318  Form CO, paragraph 398. 
 
68 and in the Lulea area in  Northern Sweden (Peab’s plant: Boden; Target’s plant: 
Måttsund ).  
(334)  In the Stockholm area, the merged entity would face strong, integrated 
competitors, such as Skanska, Svevia and NCC, all of which are equal in size to 
Peab.319 In addition, capacity utilisati on is as low as 35% in this area and thus 
competitors can easily counter any potential price increase.320 The high market 
shares in the Dingtuna catchment area are not indicative of any harm resulting 
from the Transaction as the increment is minimal.321 In par ticular, the Dingtuna 
plant’s sales are transported towards the north and west from the plant , i.e. away 
from the Stockholm metropolitan area, whereas the Target’s Rosersberg plant 
serves the metropolitan area.322    
(335)  In the Lulea area, the Notifying Party co nsiders that a radius larger than 50 km is 
justified to define the geographic market as this is a relatively sparsely populated 
area and asphalt is transported for longer distances. A larger market would 
decrease the Parties’ shares as it would include add itional competitive 
constraints.323 Further, both the Target’s and Peab’s market share have decreased 
in the area in recent years and they face strong competition from NCC and 
Skanska in this area.324 In particular, NCC currently holds paving contracts 
awarded  by the Lulea municipality, which shows that its market share in asphalt 
is set to grow at the expense of the merged entity.325 Finally, in this area Peab is a 
small player with a market share below [5-10]% and sales of less than EUR […] 
per year in recent y ears.326 
(B.iii)   The Commission’s assessment  
(B.iii.a)  Relevance of market shares  
(336)  As discussed earlier in relation to the Norwegian asphalt markets in Section 
5.3.4.1.(A.iii.a), market shares based on the combined captive and merchant sales 
are an appropriate indicator of m arket power in this particular case in relation to 
asphalt and appear more appropriate than merchant sales.  
(B.iii.b)  Common characteristics of all markets in Sweden  
(337)  Before assessing the individual affected markets, the Commission will discuss 
factors that apply to  all affected markets in Sweden. These involve barriers to 
entry and customer buyer power.  
                                                 
319  Form CO, paragraph 419. 
320  Form CO, paragraph 420. 
321  Form CO, paragraphs 421-422. 
322  Form CO, paragraph 423. 
323  Form CO, paragraph 431. 
324  Form CO, paragraph 433. 
325  Form CO, paragraph 434. 
326  Form CO, paragraph 436.  
 
69 (338)  The Commission considers that entry barriers are not high. The cost of a fixed 
plant with medium capacity is around EUR 3 -5 million.327 By comparison Peab’s 
paving sa les in Sweden amount to roughly EUR […].328 Furthermore, setting up a 
plant and starting production takes 7- 12 months, including the time necessary for 
obtaining the permits.329 This is consistent with the fact that respondents pointed 
to a number of entries i n the different Swedish regions by suppliers that have not 
been present in those regions.330  
(339)  As regards buyer power, the buyers in the downstream paving market are public 
authorities who tender out paving contracts, have expertise in commissioning 
paving wo rks and have budget constraints. All competitors noted that buyers 
exercise buyer power due to overcapacity and the focus of buyers on price.331 
Customers agreed that they are in a good negotiating position and considered that 
this is due to excess supply, t he excess number of players relative to demand and 
overcapacity.332  
(340)  Consequently, it appears that paving customers have some buyer power and that 
this has effects in the upstream asphalt market due to the strong link between the 
two markets and to the fact that most players are integrated. This is true, even if 
the responses reveal such buyer power is not absolute and could be outweighed if 
the particular market in question capacities are tight and the number of 
competitors is low, which does not appear to be case in Sweden in general. On the 
contrary, as will be discussed in relation to the individual catchment areas, there 
are significant amounts of excess capacities in Sweden in general.  
(B.iii.c)  Stockholm area  
Rosersberg, Vidbo and Vastberga  
(341)  In the Rosersberg, V idbo and Vastberga catchment areas the combined market 
shares of the Parties remain moderate, namely [ 20-30]% [20-30]% [20-30]%. 
This suggests that the merged entity’s market power will remain moderate. 
Furthermore, the increment, while not insignificant, is also modest and remains 
below [5-10]% in all three areas, indicating that the Target is a moderately strong 
constraint.  
(342)  In these areas four nationally active competitors will remain (Veidekke, Skanska, 
NCC and Svevia), each of them with at least [5 -10]% share, i.e. each of them 
stronger than the Target. In addition, the category “others” (in all three areas) in 
Table 26 covers three additional competitors Markona, Svenska Vag and 
Sandahls. Of these, Sandahls’s market share is close to that of the Target  ([0-5]% 
in Rosersberg, [0-5]% in Vidbo and [5-10]% in Vastberga). Thus in each of these 
areas the merged entity will face five competitors that are stronger or comparably 
                                                 
327  Q6 – Questionnaire to competitors  – asphalt, Sweden, question 29. 
328  Annex 5.4.17 to the Form CO, P eab board presentation, page 7. 
329  Q6 – Questionnaire to competitors – asphalt,  Sweden, question 29. 
330  Q6 – Questionnaire to competitors – asphalt, Sweden, question 28. 
331  Q6 – Questionnaire to competitors – asphalt, Sweden, question 27. 
332  Q5 – Questionnaire to customers – asphalt, Sweden, question 19. 
 
70 strong to the Target. Therefore, the merged entity will face sufficiently strong 
constraints.  
(343)  In addition, the fixed costs of asphalt plants are high333 and competitors’ capacity 
utilisation is relatively low, which will incentivise competitors to expand output 
in the case of any price increase. For example, Skanska has three plants in the 
region and with capacity utilisation levels of [ 40-50]%, [20-30]% and 
[30-40]%.334 NCC has four plants in the region with capacity utilisation levels of 
[50-60]%, [10-20]%, [30-40]% and [30-40]%.335 Svevia has two plants in the 
region with utilisation levels o f [30-40]% and [20 -30]%.336 Veidekke has one 
plant with a utilisation level of [20-30]%. Sandahls has one plant in the region, 
which runs at a level of [10-20]%.337 
(344)  Furthermore, as discussed in Section 5.3.5.1.(B.iii.b), entry barriers are not high 
and custome rs have some buyer power.  
(345)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to unilateral effects in 
the markets of Rosersberg, Vidbo and Vastberga . 
Dingtuna  
(346)  The Dingtun a catchment area is slightly different from the other catchment areas 
in the Stockholm area in that the combined market share is high, namely 
[40-50]%. However, the market share increment is minimal, only [0 -5] %, which 
implies that the Transaction -specifi c effect is marginal. Thus, despite the high 
combined market share the merger is unlikely to lead to competitive harm.  
(347)  Just like pre -merger, the merged entity will be constrained mainly by NCC 
([30-40]%), and three smaller competitors, Skanska, Svevia and  Sandahls, each of 
which is stronger than the Target in this region.  
(348)  The relevant plants of competitors and their capacity utilisation are the same as 
those in the case of the Rosersberg, Vidbo and Vastberga  catchment areas. 
Consequently, in this case too  competitors have the ability and incentive to 
compete strongly.  
(349)  Furthermore, as discussed in Section 5.3.5.1.(B.iii.b), entry barriers are not high 
and customers have some buyer power.  
(350)  Based on the above , the Commission considers that the Transaction wi ll not lead 
to a significant impediment of effective competition due to unilateral effects in 
the market of Dingtuna.  
                                                 
333  M inutes of a call with a competitor 10 March 2020. 
334  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
335  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
336  Notifying Party’s response to the Commission’s Request for Informat ion RFI 2. 
337  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
 
71 (B.iii.d)  Lulea area  
(351)  In the Lulea area, the combined market shares are very high, [50-60]% in 
Mattsund and [40-50]% in Boden. However, the incremen t is small in the case of 
Mattsund ( [0-5]%) and moderate in Boden ( [0-5]%), suggesting that Peab is not a 
very strong constraint in these markets and the Transaction does not have a 
pronounced effect. The markets have three strong players both before and a fter 
the Transaction (Target, Skanska and NCC) and the main effect of the 
Transaction is to replace the Target with Peab.  
(352)  In addition, capacity utilisation is very low in these markets. The overall capacity 
utilisation is below 20% in both markets, while Skanska’s and NCC's plant run 
below 50% capacity utilisation levels.338 Total market volume is estimated to be 
around 104 kt in Boden and 108 kt in Mattsund, whereas Skanska’s and NCC's 
total capacity serving these markets is above […] kt each.339 With such hi gh 
amounts of total and free capacities, price effects, if any, are expected to be 
insignificant because competitors, taken together, can serve almost the entire 
demand and they have the incentive to fill their free capacities due to the high 
fixed costs o f asphalt plants.   
(353)  Furthermore, mobile plants provide additional capacity and choice and could 
prevent hypothetical price increases. As discussed in Section 5.2.3.2, mobile 
plants are not a viable choice in every region but they are used in Northern 
Swede n, where these markets are located. These mobile plants can be moved to 
any area within 10 to 30 days.340 The capacity of a mobile plant is about 
150-200 kt/year,341 which roughly equals the total demand of these two 
neighbouring catchment areas. Competitors t hat have mobile plants and are not 
already present in the region with fixed pla nts (Svevia and Goodway) have 
6 mobile plants combined.342 In addition NCC and Skanksa could also increase 
their capacity as they have 4 and 3 mobile plants respectively.343 Even if  these 
catchment areas are not the only place in Northern Sweden where mobile plants 
can be used, it’s unlikely that at least one plant from one of the competitors would 
not be available for use if prices were to increase. As one single plant could serve 
the entire demand in both markets the possibility of additional capacity and 
choice in the form of mobile plants makes any competitive harm even less likely.  
(354)  Furthermore, as discussed in Section 5.3.5.1.(B.iii.b), entry barriers (with fixed 
plants) are not  high and customers have some buyer power.  
(355)  Based on the above , the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to unilateral effects in 
the Lulea area (Mattsund and Boden markets).  
                                                 
338  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
339  Notifying Party’s response to the Commission’s Request for Information RFI 2. 
340  Minutes of a call with a competitor, 10 march 2020; Minutes of a call with a competitor, 10 march 2020. 
341  Minutes of a call with a competitor, 10 march 2020; Minutes of a call with [a competitor], 10 march 2020. 
342  Notifying Party’s response to the Commission’s Request for Information RFI 4, question 1. 
343  Notifying Party’s response to the Commission’s Request for Information RFI 4, question 1. 
 
72 (C) Pavin g – unilateral effects   
(C.i) List of affected markets and market shares  
(356)  As a result of the Transaction the market for paving in Sweden is horizontally 
affected. In tables 27 -28 below, both volume and value based shares are 
presented.  
Table 27- volume based market shares -  paving, Sweden  
Peab  [20-30]% 
Target  [0-5]% 
Combined  [20-30]%  
Skanska  [20-30]%  
Svevia  [10-20]% 
NCC  [10-20]%  
Sandahls  [0-5]% 
Others  [10-20]%  
Source: Form CO, Table 126.  
Table 28- value based market shares - paving, Sweden  
Peab  [20-30]%  
Target  [0-5]% 
Combined  [20-30]%  
Skanska  [20-30]%  
Svevia  [10-20]%  
NCC  [10-20]%  
Sandahls  [0-5]% 
Others  [10-20]%  
Source: Form CO, Table 126.  
(C.ii)  The Notifying Party’s view  
(357)  The Notifying Party con siders that The Parties' combined market share in the 
Swedish national market for paving would be approximately [20 -30]%. Peab's 
current market share is above [20-30]%, while the Target's is around [5-10]% or 
less. Post -Transaction, Skanska, NCC and Svevia  would continue to compete 
with Peab as before. All three are strong national players, and Peab would gain no 
advantage over them from the small increment that the Target would add to its 
paving operations.  
(C.iii)  The Commission’s assessment  
(358)  The Commission note s that, although paving is a service, it is not very 
differentiated as it involves laying a homogenous product with techniques that 
have been around for decades. Thus volume based shares are also suitable to 
assess market power. In any event, it is clear o n the basis of Tables 27 -28 that 
both volume and value based market shares show essentially the same 
competitive picture.  
(359)  The Commission considers that the Transaction is unlikely to lead to competitive 
harm for the following reasons:  
(360)  First, the combined  market share of [20 -30]% remains moderate. In line with 
paragraph 18 of the Horizontal Merger Guidelines such moderate levels of 
 
73 combined market shares indicate the Transaction is compatible with the common 
market.  
(361)  Second, the increment is small, indicati ng that the Transaction will not bring 
about a meaningful effect. The market structure will essentially remain 
unchanged.  
(362)  Third, the merged entity will be constrained by three large competitors (Skanska, 
Svevia and NCC) and a number of smaller competitors , such as Sandahls  and 
others that altogether have [10 -20] % market share. These include, inter alia, 
Markona, Svenska Vag Sydbeläggningar, Asfaltgruppen, Asfaltbolaget and  JLB 
Markoch Asfalt  The loss of the Target as a competitive force equals to losing 
Sandahls or one of the several competitors that make up this group.  
(363)  Fourth, as discussed in relation to asphalt in Section 5.3.5.1. (C.iii.b), the buyers 
of paving works have some buyer power.  
(364)  Fifth, as discussed in relation to asphalt in Section 5.3.5.1. (C.iii.b), entry barriers 
are not high in asphalt market. They are even lower in the paving market as in 
principle there is no need to build out asphalt plants as asphalt can be sourced 
externally. The costs and time involved in entering the paving busines s was 
estimated to be around EUR 500 000 and 6 months.344 Indeed respondents noted 
that a significant number of smaller companies entered the market recently.345 
Even if a firm preferred to enter the market as an integrated asphalt -paving player, 
the entry bar riers do not appear high for the reasons mentioned in in 
Section  5.3.5.1. (C.iii.b).  
(365)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to unilateral effects in 
the marke t for paving in Sweden.  
5.3.5.2. Vertically affected markets  
(A) Aggregates – asphalt  
(A.i) List of affected markets and market shares  
(366)  The Notifying Party has a strong overall presence in Sweden both in the 
aggregates as well as in the asphalt business. It has quarries in  over 100 locations 
in the country346 and operates 14 fixed and nine mobile plants347. 
(367)  The Target is only active to a limited extend in Sweden. Concerning aggregates, it 
operates one aggregates quarry located in Rimbo in the wider Stockholm area348. 
With respect  to asphalt, the Target operates three fixed asphalt plants located in 
                                                 
344  Q8 – Questionnaire to competitors – paving, Sweden, question 28. 
345  Q8 – Questionnaire to competitors – paving, Sw eden, question 27. 
346  Form CO, paragraph 134. 
347  Form CO, paragraph 333. 
348  Form CO, paragraph 134. 
 
74 Rosersberg near Stockholm, in Måttsund near Luleå and in Kvissleby near 
Sundsvall, as well as one mobile asphalt plant349.  
(368)  Vertical relation stem from various overlaps from YIT’s asphalt  plants in 
Måttsund and Kvissleby with Peabs aggregates quarries in the respective area, 
shown in Table 29 and 30. The only relevant concern can therefore be customer 
foreclosure.  
Table 29 – upstream and downstream markets in the a ggregates – asphalt link, Lulea area, 
Sweden  
Upstream market  Market shares  Downstream market  Market shares  
Björnberg  [20-30]% Måttsund  [50-60]% 
Heden  [10-20]% 
Öjebyn  [10-20]%  
Rasmyran  [20-30]% 
Rutvik  [10-20]%  
Nordanas  -350 
Storsund  - 
Muskus  - 
Bränn träsk  - 
Ljusträk  - 
Heden  - 
Svartträsk  - 
Naartijärvi  - 
  Source: Form CO, Annex 5.6a.  
Table 30 - upstream and downstream markets in the aggregates –  asphalt link, Sundsv all area, 
Sweden  
Upstream market  Market shares  Downstream m arket  Market shares  
Bispgården  -351 Kvissleby  [30-40]% 
Hudiksvall -Sätra  -   
  Source Form CO, Annex 5.6a.  
(A.ii)   The Notifying Party’s view  
(369)   The Notifying Party submits that the vertical link between aggregates and asphalt 
in Sweden does not raise competition concerns in the context of the Transaction. 
First, asphalt producers would only form a part of the overall customer base of 
aggregates producers, as aggregates are an input for many end -uses, such as the 
production of RMX, mortar and in construction works.352 
(370)  Second, in all areas in question, the Notifying Party would face competition both 
upstream and downstream by integrated competitors. This limits the ability to 
engage in any kind of foreclosure strategy.  
                                                 
349  Form CO, paragraph 334. 
350  Markets become affected due to overlapping catchment areas. No reliable market shares can be provided for these 
relations. 
351  Markets become affected due to overlapping catchment areas. No reliable market shares can be provided for these 
relations. 
352  Form CO, paragraph 460. 
 
75 (A.iii)  The Commission’s assessment  
(A.iii.a)  Common characteristic s for all affected markets  
(371)  Asphalt producers form a minority of the overall customer base of aggregates 
manufacturers. In fact, aggregates can be used for a number of end -products, such 
as overall construction works, RMX or mortar. Therefore, one asphalt producer 
does likely not form a big enough share of the overall customer base of 
aggregates competitors to successfully engage in a customer foreclosure strategy.  
(372)  This argument would not change if a segmentation is made between crushed rock 
and gravel / san d. For the production of aggregates, only crushed rock can be 
used. Therefore, the Notifying Party would not be able to foreclose the gravel / 
sand production of upstream competitors. Crushed rock, in turn, is also used in 
the production or RMX and constru ction.353 Upstream aggregates competitors 
could therefore still sell to other asphalt manufacturers as well as companies 
active in the construction and RMX sector.  
(A.iii.b)  Luleå area  
(373)  As for all aggregates – asphalt links regarding customer foreclosure, the argument  
of versatility of aggregates as input for a number of end -products such as RMX 
and construction is valid. In the catchment area around  Måttsund, YIT currently 
has a market share of around [50-60]% of total asphalt production, so only half of 
the proportion asphalt customers form can be attributed to the merged entity.  
(374)  Second, a number of upstream aggregates competitors in the Luleå area are 
themselves integrated companies with own downstream production. Skanska and 
NCC own quarries in the area of Luleå354, all of them are active in downstream 
activities such as asphalt and construction. The Notifying Party would therefore 
likely not have the ability to foreclose these competitors. Neither would such a 
strategy have an impact on downstream asphalt prices, as competitors would still 
be able to source aggregates from own quarries.  
(375)  As both arguments would be valid even under a segmentation of aggregates into 
crushed rock and gravel / sand, the exact product market definition does not 
change the assessment of the  market in Luleå.  
(A.iii.c)  Sundsvall area  
(376)  With respect to the asphalt plant in Sundvall, YIT currently has a significantly 
weaker market position than in Luleå. As market shares remain below 40%, the 
plant forms the minority of the already limited share of all asph alt producers 
among the aggregates customer base. It is therefore highly unlikely that the 
Notifying Party would have the ability for customer foreclosure post -transaction.  
(377)  Also in the area of Sundvall, NCC and Skanska are all present with its own 
quarrie s355. As explained above, the Notifying Party would not have the ability to 
foreclose these companies, as they use their aggregates production partially 
                                                 
353  See call with a competitor, 10 March 2020. 
354  Form CO, paragraph 478. 
355  Form CO, paragraph 470. 
 
76 captively. Neither would such a strategy have a likely effect on downstream 
prices, as integrated competi tors would still be able to source from own quarries. 
(378)  As all arguments would be valid even under a segmentation of aggregates into 
crushed rock and gravel / sand, the exact product market definition does not 
change the assessment of the market in Sundvall.  
(A.iii.d)   Conclusio n  
(379)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition as a result of the aggregates -
asphalt vertical links in Sweden.  
(B) Aggregates – RMX  
(B.i) List of affected markets and  market shares  
(380)  The Notifying Party has a strong presence in Sweden both in aggregates and 
RMX. It owns quarries in over 100 locations across the country356 and operates a 
number of RMX plants located in and around the greater Stockholm area357. 
(381)  The Target is barely present in the aggregates production in Sweden. It operates 
one aggregates quarry in the country that is located in Rimbo358 in the wider 
Stockholm area and is not active in RMX.359  
(382)  Affected markets result from the strong position in Peabs RMX business , as 
shown in Table 31. The only plausible concern can therefore be customer 
foreclosure.  
Table 31 – upstream and downstream markets in the aggregates –  RMX vertical relationship  
Upstream aggregates 
market  Combined market 
shares  Dow nstream RMX 
market  Combined market 
shares  
Rimbo  [5-10]% Norrtälje  [50-60]% 
Rimbo  [5-10]%  Uppsala  [30-40]% 
  Source: Form CO, Annex 5.6a  
(B.ii)  The Notifying Party’s view  
(383)  The Notifying Party submits that the link between aggregates as input for RMX 
would not raise competition concerns in Sweden. Aggregates are an input for a 
number of other end -uses, such as construction works and asphalt production. Its 
RMX business would therefore not be a substantial part of the customer base of 
upstream aggregates competit ors360.  
                                                 
356  Form CO, paragraph 134. 
357  Form CO, paragraph 689. 
358  Form CO, paragraph 134. 
359  Form CO, paragraph 671. 
360  Form CO, paragraph 733. 
 
77 (B.iii)  The Commission’s assessment  
(384)  The Commission considers that the merged entity will not have the ability to 
successfully foreclose upstream competitors due to high market shares in its 
downstream RMX business.  
(385)  Aggregates for use in RMX accounts only for a small portion of overall 
aggregates sales. Aggregates can be used as an input for other products such as 
asphalt, mortar or construction works. Market investigation suggests that 
aggregates for the use in RMX overall accounts only for a fraction of l ess than 
10% of total aggregates production.361 The Notifying Party’s RMX business does 
therefore not form a dominant part of aggregates competitors' potential customer 
base, and upstream competitors would still have a broad range of customers to 
supply in o ther sectors such as construction and asphalt.  
(386)  In addition to that, the incentive for the merged entity to engage in customer 
foreclosure would not raise due to the Transaction compared to the current 
situation. Because of the small size of YIT’s quarry in  Rimbo, Peab would only 
gain an increment of additional [0-5] percentage points in the upstream 
aggregates market.  
(387)  The assessment of the vertical aggregates – RMX relation would not change if a 
narrower catchment area of 25 km radius around each respectiv e RMX plant was 
applied. Furthermore, it would still be valid under a possible segmentation of 
aggregates into crushed rock and gravel / sand, as both types are an input for 
RMX production, and the ability to foreclose upstream competitors would not 
rise. 
(B.iii.a)   Conclusio n  
(388)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition as a result of the aggregates -
RMX vertical links in Sweden.  
(C) Asphalt -paving  
(C.i) List of affected markets and market  shares  
(389)  The Transaction gives rise to a vertically affected market due to the asphalt -
paving relationship. The downstream paving market is national and the combined 
market share on this market stays below 30 %. Thus the only potential issue is 
input forec losure due to high individual or combined market shares on a number 
of asphalt markets. The affected market is the national paving market.  
(390)  Table 32 below lists the asphalt markets where the Parties’ individual or 
combined market share exceeds 30%.  
                                                 
361  See minutes calls with a competitor, 10 March 2020. . 
 
78 Table 32 – asphalt markets with an individual or combined market share of more than 30%, 
asphalt -paving relationship, Sweden  
Catchment area   Market share Peab  Market share 
Target  Combined market share  
Dingtuna  [40-50]% [0-5]% [40-50]%  
Måttsund  [0-5]% [40-50]%  [50-60]%  
Boden  [0-5]% [40-50]%  [40-50]%  
Vålberg  [70-80]%   [0-5]% [70-80]%  
Örebro  [70-80]%  [0-5]% [70-80]%  
Kvissleby  [0-5]% [30-40]%  [30-40]%  
Rällsjön  [60-70]%   [0-5]% [60-70]%  
Bjärsgård  [40-50]%   [0-5]% [40-50]%  
Linköping  [40-50]%  [0-5]% [40-50]%  
Linneryd  [50-60]%   [0-5]% [50-60]%  
Fröland  [50-60]%  [0-5]% [50-60]%  
Savsjo  [30-40]%   [0-5]% [30-40]%  
 Form CO, Table 132  
(C.ii)  The Notifying Party’s view  
(391)  With regard to the Dingtuna, Boden and Mattsund catchment areas, the Notifying 
Party considers that the merged entity’s market power will be constrained by 
strong competitors’ reducing its ability to engage in input foreclosure. 
Furthermore, most competitors in these areas are vertically integrated with their 
own asphalt production, making it impossible to foreclose their access to 
asphalt.362  
(392)  With regard to the Vålberg, Örebro, Kvissleby, Rällsjön Bjärsgård, Linköping, 
Linneryd, Fröland and Savsjo catchment areas, catchment areas, the Notifying 
Party submits that there is no Transacti on-specific change in the upstream market 
and very little change in the downstream market, which implies that the ability 
and incentive to engage in input foreclosure will be unaffected by the 
Transaction. In addition, the merged entity’s competitors are v ertically integrated 
and thus impossible to foreclose.363 
(C.iii)  The Commission’s assessment  
(393)  As explained below with respect to the different geographic areas, the 
Commission broadly agrees with the Notifying Party.  
(C.iii.a)  Catchment areas with zero upstream increment  
(394)  With regard to the Vålberg, Örebro, Kvissleby, Rällsjön Bjärsgård, Linköping, 
Linneryd, Fröland and Savsjo catchment areas (i.e. all catchment areas other than 
Dingtuna, Boden and Mattsund) the upstream increment is zero as either the 
Target or Peab is not pr esent in the area. Accordingly, the Transaction does not 
change the merged entity’s ability to foreclose.  
(395)  As regards incentives, in general the merged entity will face  a trade -off when 
considering input foreclosure strategies. An increase of prices in the  upstream 
market (or a refusal to sell) will reduce profits due to decreasing sales to 
downstream rivals. On the other hand by raising downstream rivals’ input costs it 
                                                 
362  Form CO, paragraphs 597-598 and 601.  
363  Form CO, paragraphs 604-607, 611-613. 
 
79 may gain additional profits downstream by capturing additional sales or by 
increasing p rices downstream. In theory, the increment downstream can increase 
Peab ’s incentives to engage in input foreclosure as it can recoup more profits 
downstream than before the merger due to the fact that it has a larger sales base 
than pre -Transaction.  
(396)  Howev er, the Commission considers it unlikely that the merged entity would have 
the incentive to engage in such conduct. First, the [0-5]% increment in the 
downstream market is also minimal, which will not change appreciably the 
incentives.  
(397)  Second, [Strategic i nformation]364 and thus it is unlikely that asphalt sales would 
be sacrificed for gaining paving sales or at least further reduces the incentives to 
engage in this strategy.  
(398)  Third, even if the Transaction increased the incentives in a meaningful way, quod 
non, the merged entity is unlikely to have the ability to engage in input 
foreclosure. This is because a number of paving competitors have asphalt plants 
in these catchment areas: Skanska and NCC have plants in all of these markets, 
while Sydbeläggningar, A sfaltgruppen, Asfaltbolaget, Svevia, Sandahls, JLB 
Markoch Asfalt  have asphalt plants in one or more markets.365 As such it is 
impossible to foreclose these paving competitors in these areas if they have 
sufficient excess capacity. This appears to be the cas e as the capacity utilisation of 
all of these competitors’ asphalt plants in these markets are below 60 %, the vast 
majority is below 50% and their combined capacities exceed overall asphalt 
demand per catchment area.366 Furthermore, it is precisely paving c ompetitors 
with asphalt plants in the catchment areas that are most likely to bid for paving 
contracts in these areas.  
(399)  On the basis of the above, the Commission considers that the Transaction will not 
lead to a significant impediment of effective competit ion on account of input 
foreclosure in the Vålberg, Örebro, Kvissleby, Rällsjön Bjärsgård, Linköping, 
Linneryd, Fröland and Savsjo catchment areas.  
(C.iii.b)  Dingtuna  
(400)  In the Dingtuna catchment area, the upstream increment is not zero but the 
merger -specific change is still minimal as the upstream increment is [0-5]%, 
while the downstream increment is [0 -5]%. As discussed in Section 5.3.5.2 
(C.iii.a) above, the [0 -5]% downstream increment will not change appreciably the 
incentives. As the [0-5]% upstream increment wi ll not change appreciably the 
ability to foreclose, the Transaction is unlikely to lead to input foreclosure in 
Dingtuna.  
(401)  Furthermore, in Section 5.3.5.1. (C.iii), the Commission concluded that the 
Transaction will not lead to horizontal unilateral effect s in the Dingtuna 
catchment area. The reasons included minimal increment, the presence of 
competitors with lots of excess capacity, low entry barriers and customer buyer 
                                                 
364  Notifying Party’s response to the Commission’s RFI 1, question 3. 
365  Notifying Party’s response to the Commission’s RFI 2. 
366  Notifying Party’s response to the Commission’s RFI 2. 
 
80 power in the downstream market. The lack of horizontal effects implies that the 
merged  entity will lack the ability to engage in input foreclosure.  
(402)  This is all the more the case as the largest paving competitors (Skanska, NCC and 
Svevia) all have asphalt plants in the Dingtuna catchment area367 with significant 
excess capacities. Thus it is impossible to foreclose these competitors, who 
happen to be the most likely to bid for paving contracts in the Dingtuna area on 
account of their asphalt presence.  
(403)  In addition, [Strategic information]368 and thus it is unlikely that asphalt sales 
would be sa crificed for gaining paving sales or at least further reduces the 
incentives to engage in this strategy.  
(404)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to input forecl osure in 
the Dingtuna catchment area.  
(C.iii.c)  Mattsund and Boden  
(405)  In the Mattsund and Boden  catchment areas, the combined upstream market 
shares are [50-60]% and [40-50]% while the upstream increments are [0-5]% and 
[0-5]% respectively. The downstream increment on the national paving market is 
[0-5]%.  
 
(406)  Although the increments on the upstream market are not negligible, they remain 
moderate. The increment in the downstream market is small. Taken together, they 
are unlikely to change the ability (upstream increment) a nd the incentive 
(downstream increment) significantly.  
(407)  Furthermore, in Section 5.3.5.1. (C.iii), the Commission concluded that the 
Transaction will not lead to horizontal unilateral effects in the Mattsund and 
Boden  catchment areas. Reasons included the f ollowing: moderate increment; 
competitors’ substantial excess capacities and very low capacity utilisation rate 
such that competitors can serve the entire demand and have the incentives to do 
so; additional capacity that can be brought online in the form o f mobile plants 
and/or additional suppliers that can compete with mobile plants; low entry 
barriers and buyer power of customers. The lack of horizontal effects implies that 
the merged entity will lack the ability to engage in input foreclosure.  
(408)  This is a ll the more the case as two of the three largest paving competitors (NCC 
and Skanska) all have asphalt plants in the Dingtuna catchment area369 with 
significant excess capacities. Thus it is impossible to foreclose these competitors, 
who happen to be the mos t likely to bid for paving contracts in the Dingtuna area 
on account of their asphalt presence.  
                                                 
367  Notifying Party’s response to the Commission’s RFI 2. 
368  Notifying Party’s response to the Commission’s RFI 1, question 3. 
369  Notifying Party’s response to the Commission’s RFI 2. 
 
81 (409)  In addition, [Strategic information]370 and thus it is unlikely that asphalt sales 
would be sacrificed for gaining paving sales or at least further reduces the 
incentives to engage in this strategy.  
(410)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition due to input foreclosure in 
the Mattsund and Boden catchment areas.  
(C.iii.d)   Conclusio n  
(411)  Based on the above the Commission considers that the Transaction will not lead 
to a significant impediment of effective competition as a result of the asphalt -
paving vertical links in Sweden. The Commission also notes that even if input 
foreclosure was possible,  it would only produce effects in these areas, i.e. the 
entire downstream, national paving market may not be affected as a whole.  
6. CONCLUSION  
(412)  Based on Section 5.3, the Transaction will not lead to a significant impediment of 
effective competition due to ho rizontal non -coordinated effects  
• in the markets for aggregates in Finland and Sweden;  
• in the markets for asphalt in Norway and Sweden, and  
• in the market for paving in Sweden.  
(413)  Based on Section 5.3, the Transaction will not lead to a significant impedime nt of 
effective competition due to customer or input foreclosure in the following 
vertical relations hips :   
• aggregates -asphalt link in Sweden and Norway;  
• aggregates -RMX link in Finland, Sweden and Norway;  
• aggregates – construction link in Finland and Nor way;  
• asphalt -paving link in Sweden and Norway, and  
• bitumen -asphalt link in Norway.  
                                                 
370  Notifying Party’s response to the Commission’s RFI 1, question 3. 
 
82 (414)  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 Ag reement. 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