Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERGER -REGISTRY@ec.europa.eu .  EUROPEAN COMMISSION  
Brussels,  30.01.2020  
C(2020 ) 614 final  
PUBLIC VERSION  
 
To the notifying p arty 
Subject : Case M.9503 – Gardner Denver/Ingersoll Industrials  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 16 December 2019, the European Commission received the notification of a 
proposed concentration pursuant to Article 4 of Council Regulation (EC) No 
139/2004 by which Gardner Denver Holdings, Inc. ("GDI") acquires within the 
meaning of Article 3(1)(b) of  the Merger Regulation control of the whole of 
Ingersoll -Rand U.S. HoldCo, Inc. ("IR Industrials ") (the "Transaction") .3 IR 
Industrials is referred to as the "Target" and together with GDI as the "Parties".  
1. THE PARTIES  AND THE OPERATION  
(2) GDI  (US-based) is a provider of air and gas compression equipment and aftermarket 
parts and services for industrial, energy and medical industries. GDI designs, 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union (“TFEU”) has introduced certain changes, such as the replacement of 
“Community” by “Union” and “common market” by “internal market”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3  (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C 428 , 20.12.2019 , p. 41.  
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information omitted has been replaced by 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 manufactures and markets compressors, vacuum pumps and blowers for a range of 
industrial applicati ons. 
(3) IR Industrials  (US-based) is the industrial business of Ingersoll -Rand (Ireland), 
active in air and gas compressors, blowers , vacuum pumps , gas systems and 
services, power tools and material handling systems, as well as utility and consumer 
low-speed vehicles.  
(4) Pursuant to a Separation and Distribution Agreement dated 30 April 2019, Ingersoll -
Rand will spin off IR Industrials by either (i) causing Ingersoll -Rand shareholders to 
receive all of the shares of IR Industrials, or (ii) consummating an offer t o exchange 
shares of IR Industrials for shares of Ingersoll -Rand.  
(5) IR Industrials will then be merged with Merger Sub, a corporation wholly -owned by 
GDI and newly created for the purpose of consummating the Transaction. IR 
Industrials will continue as the surviving corporation and become a wholly -owned 
subsidiary of GDI. The separate existence of Merger Sub will cease.  
(6) The post -Transaction GDI board will consist of ten members, including seven 
current GDI directors selected by the GDI board, and three dire ctors selected by 
Ingersoll Rand. Voting rights will be exercised within the Board of Directors by a 
simple majority, and Ingersoll Rand will not retain any consent or veto rights. As a 
result, immediately following closing, IR Industrials will be owned by  and solely 
controlled by GDI, within the meaning of Article 3(1) of the EUMR.  
2. UNION  DIMENSION  
(7) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million .4 Each of them has an EU -wide turnover in excess of 
EUR 2 50 million, but they do not achieve more than two -thirds of their aggregate 
EU-wide turnover within one and the same Member State. The notified operation 
therefore has an EU dimension.   
3. COMPETITIVE ANALYSIS  
3.1. Market definition  
3.1.1.  Air compressors  
3.1.1.1.  Product marke t definition  
(8) Air compressors are mechanical devices used to increase the pressure of air  and 
reduc e its volume. Industrial air compressors are able to release the compressed air 
at a high velocity and pressure and can be used to drive other machines. Air 
compressors are used in a wide range of applications including industrial, 
manufacturing and domestic use.5 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
5  Form CO, paragraph 148.  
 
 
3 (A) The Commission's decisional practice  
(9) In Ingersoll -Rand / MAN , the Commission distinguished between (i) air 
compressors, (ii) process  gas compressors , and (iii) air ends.6 The Transaction does 
not result in reportable markets for process gas compressors , therefore this potential 
sub-segment will not be further discussed.  
(10) The Commission stated in Alchemy / CompAir  that air compressors can be 
segmented in the following categories: (i) portable vs. stationary, (ii) oil -injected vs. 
oil-free, (iii) by type of technology used and (iv) by capacity, but ultimately le ft the 
product market definition open.7 
(11) The segmentation based on capacity the Commi ssion used  in Ingersoll -Rand / MAN 
defines (i) large stationary air compressors as having a pressure range from 15 to up 
to 200 bar, (ii) standard air compressors (mobile and stationary) as covering 4 -14 bar 
and (iii) low pressure machines as covering a ra nge of less than 4 bar.8 
(B) The Notifying Party's view  
(12) The Notifying Party agree s that air compressors constitute a relevant product market 
distinct from gas compressors . In any case, the Parties do not overlap in gas 
compressors in the EEA based on technolog y.9  
(13) The Notifying Party considers that the further segmentation discussed  by the 
Commission in  paragraph  (10) is appropriate.  
(14) The Notifying Party states that segmentation by technology would be relevant . 
Technologies used in air compressors include  rotary screw, water injected screw, dry 
screw, scroll, rotary vane, rotary lobe, liquid ring, reciprocating piston, and 
centrifugal.10 
(15) The Notifying Party argues that a segmentation by application is unnecessary , as 
they consider air compressors general pu rpose products.11 
(C) The Commission’s assessment  
(16) The Commission considers that air compressors and gas compressors constitute 
separate markets .12  
(17) As will be explained, t he Commission considers there can  be a further potential sub-
segmentation (i) between low, medium and high output pressure  air compressors , 
                                                 
6  Commission decision of 28 July 1994 in Case No. COMP/M.479 – Ingersoll Rand / Man, paragraph 17.  
7  Commission decision of 17 June 2002 in Case No. COMP/M.2834 – Alchemy / CompAir, paragraph 5. 
For completeness, in this Decision it was found that low pressure compressors might constitut e a separate 
market named blowers but the Parties' activities in the segment do not lead to horizontally affected 
markets. Form CO, paragraph 248.  
8  Commission decision of 28 July 1994 in Case No. COMP/M.479 – Ingersoll Rand / Man, paragraph 17.  
9  Form C O, paragraph 345.  
10  Form CO, paragraph 170.  
11  Form CO, paragraph 409.  
12  As, in any case, the Transaction does not result in affected markets on the market for gas compressors, this 
market will not be further discussed in this Decision. Form CO, paragrap h 234.  
 
 
4 (ii) between oil -free and oil -lubricated air compressors, ( iii) between stationary and 
portable air compressors and ( iv) between air compressor s based on different 
technologies.  
(18) First, the results of the mar ket investigation support a distinction between air and gas 
compressors according to the majority of both competitors and custom ers, 
“[b]ecause it is not the same process and […] a different compressor technology. 
Gas compressor [sic] can convey different type of gas (sometimes including Air) 
whereas air compressor [sic] can ONLY convey Air. ”13 The Commission therefore 
distinguishes between air and gas  compressors . However , only in air compressors is 
there an overlap  resulting in an affe cted market . Therefore the present Decision will 
focus on air compressors.  
(19) Second , the results of the market investigation confirmed  a plausible  distinction of 
types of air compressors by output  pressure.  A majority of respondents agreed on the 
main distin ction being between low pressure air compressors, called " blower s" (< 2 
bar) and other types of air compressor s (2 bar or more) . There appears to be  a 
“common understanding that the definition of compressor is applicable for the 
system able to provide a discharge pressure over 2 bar  g”. As a competitor 
explained, “[t] o distinguish air blowers and air compressors is reasonable due to 
different product types, applications, engineering requirements and mostly different 
competitive dynamics as well as market channels. Further distinction between 
medium and high pressure air compressors is necessary .”14  
(20) As for this further distinction, suggested by a limited number of competitors and 
customers, the definition seems to be less clear -cut. For instance, one custom er 
suggests a distinction “between Blower (<2 bar),  industrial air compressor (<15 
bar) and high pressure compressor (>15 bar) ”15. A competitor distinguishes 
between “ standard pressure air compressors 2 - 15 bar g, medium pressure air 
compressors 16 - 100 b ar g, high pressure air compressors above 100 bar g ”.16 The 
Commission considers that the exact split between the markets based on their output 
pressure can be left open . However, the Parties’ activities in the low and high 
pressure segments of air compress ors do not lead to affected markets. Therefore the 
present Decision will focus on the medium pressure segment for air compressors.  
(21) Third , oil-free and oil -lubricated  air compressors can also be regarded as two 
separate product markets, according to the vast majority of the respondents to the 
market investigation, as “ technology, production costs and prices, health and 
environment and security aspects etc. are different ”.17 Whereas for some 
applications, oil -free and oil -injected air compressors are substi tutes, “[f] or some 
application field [sic] like Pharma environment, oil -free air compressor is 
mandatory to avoid contamination by oil ”. In addition, “ oil-free technology is much 
more expensive than the oil -injected technology ”.18 The Commission considers t hat a 
                                                 
13  Reply to question 3 of Questionnaire to customers.  
14  Reply to question 3.1 of Questionnaire to competitors.  
15  Reply to question 4.1 of Questionnaire to customers.  
16  Reply to question 4.1 of Questionnaire to competitors.  
17  Reply to question 5 of Questionnaire to customers.  
18  Reply to question 5 of Questionnaire to customers.  
 
 
5 further sub -segmentation based on whether air compressors are oil -free or oil -
lubricated can be left open . 
(22) Fourth , a small majority of respondents o f the market investigation supported a 
segmentation between  stationary and portable  air compre ssors . Respondents noted 
that in some cases, portable air compressors can substitute stationary air compressors 
and are “ used as a backup compressor in cases when a stationary compressor 
fails”.19 However, generally applications and customer groups are different as 
“stationary compressors go mainly into  [sic]  manufacturing industry, portable 
compressors mainly into the construction industry ”20 and “ the cost of ownership is 
lower for the stationary c ompressors .”21 The Commission considers that a further 
sub-segmentation based on whether air compressors are portable or stationary can be 
left open . The Transaction does not result in reportable markets for portable air  
compressors, therefore this potentia l sub -segment will not be further discussed.  The 
present Decision will therefore focus on stationary compressors.22 
(23) Fifth , the results of the market investigation also suggested a segmentation by type 
of technology used.  Types of technology that have been mentioned both by the 
Notifying Party and respondents of the market investigation are piston, rotary vane, 
screw, centrifugal, etc. Respondents explained that certain technologies are close 
substitutes and can be intercha nged from a technical point of view, but depending on 
the application, each technology has certain advantages and disadvantages : “the one 
or the other compressor technology has some specific advantages or disadvantages 
such as long life time, heat, mainten ance, air quality, basically price. So mostly one 
Technology is leading in a certain application or you have 2 leading 
technologies .”23 The Commission considers that a further sub -segmentation by type 
of air compressor technology can be left open . 
(24) Sixth , the results of the market investigation show that  an additional segmentation by 
application would not be pertinent. A vast majority of competitors and a majority of 
customers who responded to  the market investigation confirmed this. Most 
respondents noted th at the categories  outlined in recitals (18) to (23) would be 
sufficient, explaining that different technologies could be used for the same 
application and a specific technology could be used for different applications.24 As a 
competitor explaine d, “[c] ompressed air is a very neutral type of energy, 
comparable to electricity, so the market should not be further sub segmented by 
application or industry .”25 Therefore, the  Commission considers that a further sub -
segmentation by application should not be warranted as it was clearly rejected by the 
                                                 
19  Reply to question 6.1 of Questionnaire to customers.  
20  Reply to question 6.1 of Questionnaire to customers.  
21  Reply to question 6.1 of Questionnaire to customers.  
22  The Commission had been made aware that in the lower pressure segment of compressors (also called 
blowers), the Parties may have a non -negligible presence for specific applications (such as trucks). 
However, since this market segmentation is not warranted,  as the Commission found there exist 
alternative suppliers of similar products and as the lower pressure segment of compressors does not lead to 
any affected market under the plausible market definition discussed in Section 3.1.1.1.(C), this will not be 
further discussed.  
23  Reply to question 7.1. o f Questionnaire to competitors.  
24  Replies to questions 8 and 8.1 of Questionnaires to customers. Replies to questions 8 and 8.1 of 
Questionnaires to competitors.  
25  Minutes of a call with a competitor  of 12 Nove mber 2019.  
 
 
6 market investigation. A further sub -segmentation by application will therefore not be 
further discussed.  
(25) In conclusion, the Commission will analyse the Transaction on the basis of all 
plausible product markets  and combinations of them  (as listed below) , but will leave 
the market definition open (except on a potential segmentation by application that 
will not be discussed as explained in paragraph (24)) as the Transaction does not 
raise co ncerns on any plausible market.  
3.1.1.2.  Geographic market definition  
(A) The Commission's decisional practice  
(26) The Commission has previously considered the markets for  air compressors to be at 
least EEA -wide, and maybe even global, given the large trade flows and low 
transportation costs, but has left the definition open.26 
(B) The Notifying Party's view  
(27) The Notifying Party considers the market for the manufacture and supply  of air 
compressors to be EEA -wide because (i) the competitive landscape and dynamics 
differ substantially between EEA and the rest of the world, (ii) consumer preferences 
vary across regions as customers in the EEA have a distinct demand profile from 
many  non-EEA customers, (iii) the Parties organise their sales and marketing 
organi sations by region and (iv) products sold in the EEA must meet EEA specific 
standards.27 
(C) The Commission’s assessment  
(28) The market investigation has shown mixed results , according to which  the market 
for air compressors could be EEA -wide or worldwide.  A majority of competitors and 
customers considers the market as worldwide, as “[a] ll main competitors of air 
compressor deliver worldwide and are in competition in all count ries”28 and “[o] nly 
some smaller compressor packagers supply mainly in their home country. ”29 
Respondents generally considered regulatory requirements (like for instance the CE -
approval) as not constituting entry barriers within or to the EEA .30 
(29) Several customers and competitors also note that “[w] ithout nationwide distribution, 
engineering, maintenance and service network the success of market penetration 
would be not possible .”31 Nevertheless, the Commission finds that national markets 
are not appropriat e in this case. A majority of competitors who responded to the 
market investigation stated they would be able to use an existing distributor in order 
to supply air compressors in a new Member State in the EEA, or use other means. 
Several competitors argue that other options exist, such as “ import by the final 
                                                 
26  Commission decision of 17 June 2002 in Case No. COMP/M.2834 – Alchemy / CompAir, paragraph 7 -8. 
27  Form CO, paragraph 370.  
28  Reply to question 9.1 of Questionnaire to competitors.  
29  Replies to question 9.1 of Questionnaire to competitors.  
30  Minutes of a call with a customer  of 4 November 2019 (paragraph 5), see in particular: “ there are no 
specific constraints (of a regulatory nature, or other) to source at EEA or world -wide level ”. 
31  Reply to question 10.1 of Questionnaire to competitors.  
 
 
7 customer ”32, sale through an independent distributor “ as well as sale through online 
channels .”33  
(30) Indeed, none of the competitors who participated in the market investigation are 
active at national leve l only, but most of them have activities at a global level (with a 
focus on developed countries). Even smaller competitors who do not export 
worldwide confirm that the “ same compressors producers are on the whole EU 
market .”34 
(31) In any case, the exact definit ion of the air compressor market can be left open 
between the EEA and worldwide, as the Transaction does not give rise to serious 
doubts as to its compatibility with the internal market or the functioning of the EEA 
Agreement even on the narrowest plausibl e markets  on any of the two plausible 
geographic market definition s. 
3.1.2.  Vacuum pumps  
3.1.2.1.  Product market definition  
(32) Vacuum pumps remove air or gas to reduce the pre ssure below atmospheric levels. 
They have a wide range of applications from domestic to industrial use. Vacuum 
pumps rely on the same technologies as compressor s, but employ them in reverse.35 
(A) The Commission's decisional practice  
(33) The Commission has not analyse d the market for vacuum pumps prev iously .36  
(B) The Notifying Party's view  
(34) The Notifying Party considers that vacuum pumps constitute a distinct product from 
compressors. This is because instead of creating positive air displacement, vacuum 
pumps create a reduction in pressure. The use of the two products is therefore quite 
different.  
(35) While proposing to leave the market definition open, t he Notifying Party argues that, 
similarly to compressors, vacuum pumps may need to be distinguished  for (i) oil -
injected vs. oil -free, and (ii) by type of tech nology used.  Indeed,  vacuum pumps , 
similarly to compressors, rely on a range of technologies such as , rotary vane, dry 
claw, dry screw, rotary lobe, liquid ring, and centrifugal.  
                                                 
32  Reply to question 10.2 of Questionnaire to competitors.  
33  Reply to question 10.2 of Questionnaire to competitors.  
34  Reply to question 9.1 of Questionnaire to competitors.  
35  Form CO, paragraph 106.  
36  This is with the exception of one precedent that exclusively focused on vacuum pumps for cars as relevant 
markets. The market for the manufacture and supply of vacuum pumps was analysed in a similar way as a 
car component. In the precedent at hand, only this very specific type of pumps was relevant for t he 
decision, i.e. as an input installed in a car. The Commission considers that this precedent is not relevant 
for the present decision considering the present Transaction is much wider in terms of diversity of types of 
vacuum pumps manufactured by one Par ty of the other; see Commission decision of 28 November 2012 
in Case No. COMP/M.6748 – MAGNA/ IXETIC.  
 
 
8 (36) The Notifying Party  notes  that v acuum pumps have a wide range of applications . 
They are integral to manufacturing processes in applications for packaging, 
pneumatic conveying, drying, holding / lifting, distillation, evacuation, forming / 
pressing, removal and coating. Vacuums may also be used for domestic applications 
such as on a utomobiles or for draining water in dishwashers.   
(37) The Notifying Party argues that a segmentation by application is unnecessary  for the 
reasons outlined in paragraph  (24).  
(C) The Commission’s assessment  
(38) The Commission considers that whether the vacuum pump market must be further 
segmented can be left open but will consider plausible market distinctions  (i) 
between oil -injected and oil -free vacuum pumps and (ii) by type of  technology.  
(39) First, the Commission considers  that insofar as compressors and vacuum pumps are 
different in terms of their end use, i.e. one removes air or gas, while the other 
releases it, compressors and vacuum pu mps constitute distinct product markets . 
(40) Second , the results of the market investigation support a distinction between oil-
injected and oil -free vacuum pumps according to the majority of both competitors 
and customers that responded. Differences mentioned were the " production costs 
and prices, hea lth and environment and security aspects etc.  […]. "37 Respondents 
also raised the fact that " regulation may require pumps to be oil -free in an 
increasing number of applications. As a result, production of oil -free products is 
steadily increasing. This means  that rotary lobe pumps are becoming more common 
than rotary vane pumps which require oil -lubrication ."38 
(41) Third , the results of the market investigation support a distinction by type of 
technology used  according to the majority of both competitors and custo mers that 
responded. Types of technologies for vacuum pumps mentioned by the Notifying 
Party and respondents to the market investigation were rotary lobe, claw, screw, side 
channel, radial, etc. Different technologies are not necessarily substitutable with  one 
another. As explained by a competitor : "[g]enerally vacuum pumps cannot easily be 
substituted. There are three criteria for the choice of a specific technology: 
(a) Compatibility with the application (e.g. for certain applications, pumps have to 
be ro bust against corrosion, aggressive gases, explosive gases, humid gases etc.); 
(b) The price; (c) The cost of ownership (such as price, maintenance, service and 
utilities needed to operate the pumps, like energy and water); (d) [Potentially, 
environmental a spects could constitute a fourth factor] ".39 
(42) Finally , regarding a possible segmentation  by application,  the results of the market 
investigation show that a distinction by technology is sufficient and that an 
additional segmentation by application would ther efore not be pertinent. Moreover, a 
competitor explained that vacuum pumps "usually do not serve only one final 
application, but many different ."40 Another added that there " is no link between the 
                                                 
37  Replies to question 12.1 of Questionnaire to customers.  
38  Minutes of a call with a competitor  on 5 November 2019, paragraph 4.  
39  Minutes of a call wi th a competitor  on 22 November 2019, paragraph 9.  
40  Reply to question 16 and 16.1 of Questionnaire to competitors.  
 
 
9 application and the design or type of vacuum pumps ."41 Custom ers were particularly 
not in favour of a distinction by application , also emphasising that the same vacuum 
pump could serve different applications.42 Therefore, the  Commission considers that 
a further sub -segmentation by application should not be warranted as it was clearly 
rejected by the market investigation. A further sub -segmentation by application will 
therefore not be further discussed.  
(43) In conclusion, the Commission will analyse the Transaction on the basis of the 
plausible product markets, but will le ave the market definition open (except for a 
potential split by application, which has been rejected and will not be further 
discussed)  as the Transaction does not raise concerns on any plausible market .43  
3.1.2.2.  Geographic market definition  
(A) The Commission's dec isional practice  
(44) As explained in paragraph  (33), the Commission has not previously analysed a 
vacuum pumps market.  
(B) The Notifying Party's view  
(45) The Notifying Party considers the market for the manufacture and supply of vacuum 
pumps  to be EEA -wide  because (i) the c ompetitive landscape and dynamics differ 
substantially between EEA and the rest of the world , (ii) c onsumer p references vary 
across regions as c ustomers in the EEA have a distinct demand profi le from many 
non-EEA customers, (iii) the Parties organi se their sales and mar keting organi sations 
by region and (iv) p roducts sold in the EEA mu st meet EEA specific standards.44 
(C) The Commission’s assessment  
(46) The results of the market investigation point to a worldwide market.45 The majority 
of co mpetitors do not consider technical specifications or regulatory requirements as 
limiting the number of competitors in the EEA.46 The vast majority of customers 
also consider this market global, due to the fact that vacuum pumps are a mature 
technology, market players  have a global footprint and production and delivery is 
global.47 
(47) In any case, the exact product and geographic market definition  can be left open  
between the EEA and worldwide , as the Transaction will not  give rise to serious 
doubts as to its compatibility with the internal market or the functioning of the EEA 
Agreement even on any of the two plausible geographic market definition s. 
                                                 
41  Reply to question 16.1 of Questionnaire to competitors.  
42  Replies to question 15 and 15.1 of Questionnaire to customers.  
43  A potential additional sub -segmentation in vacuum pumps mirroring the compressors' split (between low, 
medium and high pressure vacuum pumps, and/or between portable and stationary vacuum pumps) was 
not argued by the Notifying Party, nor was it clearly est ablished in response to the market investigation. 
However, since such potential additional segmentations would not lead to further affected markets, these 
potential segmentations are not further discussed in this Decision.  
44  Form CO, paragraph 370.  
45  Replies to question 18 and 18.1 of Questionnaire to competitors.  
46  Replies to question 19 and 19.1 of Questionnaire to competitors.  
47  Replies to question 16 and 16.1 of Questionnaire to customers.  
 
 
10 3.1.3.  Air ends  
3.1.3.1.  Product market definition  
(A) The Commission's decisional practice  
(48) Air ends refer to the mechanism within the device that mechanically compresses the 
air or gas in air compressors (i.e. excluding motors, filters, etc.) . Many compressor 
manufacturers, including the Parties, sell air ends as replacement parts following an 
initial equipment sale . They also sell air ends on the open market to third party 
compressor manufacturers or to OEMs to be incorporated as inputs into other 
products which require compressed air to operate such as for pneumatic conveying 
machinery, snow blo wers or agricultural machinery.  
(49) In Ingersoll -Rand / Man, the Commission considered a relevant product market for 
air ends, which the Commission described as “ the central components of 
compressors which actually compress air or gas ”. The Commission also con sidered 
a plausible segmentation for the air ends product markets to be between oil-free on 
the one hand and oil -lubricated  on the other hand. Moreover , it defined a plausible  
product market for “ oil-free air ends/screws ”.48 
(B) The Notifying Party's view  
(50) The Notifying Party does  not contest the product market definition  in the 
Commission’s past practice . 
(C) The Commission’s assessment  
(51) The market investigation suggested a plausible segmentation between  (i) oil -injected 
vs. oil -free and (ii ) by output pressure  and potentially also by (iii) technology.  
(52) First, a majority of customers and competitors that participated in the market 
investigation found a segmentation of the product market into oil -injected vs. oil -free 
appropriate,49 given their “[d] ifferent technology, production price and different 
application. ”50  
(53) Second , a majority of customers and competitors that participated in the market 
investigation also found a segmentation of the product market by output pressure 
appropriate.51 This refers mainly to the distinct ion between air ends for compressors 
and air ends for blowers along the lines of paragraph  (19). A competitor also noted 
that “ some air  ends […] are only used in spec ific applications such as gas (not air) 
applications or high pressure ( above 40 bar) applications .”52  
                                                 
48  Commission decision of 28 July 1994 in Case No. COMP/M.47 9 – Ingersoll Rand / Man, paragraphs 17 -
19. 
49  Replies to question 18 of Questionnaire to customers . Replies to question 20 of Questionnaire to 
competitors.  
50  Reply to question 18.1 of Questionnaire to customers.  
51  Replies to question 21 of Questionnaire  to customers . Replies to question 23 of Questionnaire to 
competitors.  
52  Reply to question 23.1 of Questionnaire to competitors.  
 
 
11 (54) In relation to the output pressure, oil -free air ends require different technologies, as 
explained by a competitor : “Distinctions of […] air ends are one-stage blower or 
screw compressor oil -free (low pressure) for transport of material and two -stage oil -
free air  end (middle pressure 5 -12 bar) for industrial applications .”53 However, t he 
Transaction only results in  affected  markets for medium pressure ai r ends  segments , 
therefore low and high pressure air ends  will not be further discussed.  The present 
Decision will therefore focus on medium pressure air ends.  
(55) Third , as for segmentation by technology, a majority of customers and competitors 
that participa ted in the market investigation considered it not necessary .54 A 
customer explained that supply substitutability is high: “ You don't find different 
Technologies in air Ends, that can't be provided from similar manufacturing 
Technology. ”55 However, both the Notifying Party and some respondents to the 
market investigation note that “[e] ach type of blower and compressor require a 
specific type of air end .”56 The Commission therefore takes note that compressors 
must use an air end with the same technology they ar e based on.  
(56) Fourth , a vast majority of respondents also rejected a segmentation according to the 
application or intended use of the air end.57 As a customer explain ed, the “[s] ame air  
ends can be used for many applications and it is up to user to decide .”58 Therefore, 
the Commission considers that a further sub -segmentation by application should not 
be warranted as it was clearly rejected by the market investigation. A further sub -
segmentation by application will therefore not be further discussed.  
(57) Finally , the Commission notes that the Parties overlap only in oil -lubricated 
compressor air  ends for rotary screw air compressors.59 
(58) In conclusion, the Commission will analyse the Transaction on the basis of the 
following plausible product markets, but will leave t he market definition open  
(except for a potential split by application, which is not warranted)  as the 
Transaction does not raise concerns on any plausib le market.  
3.1.3.2.  Geographic market definition  
(A) The Commission's decisional practice  
(59) In Ingersoll -Rand / Man , the Commission left ope n whether these  are national or 
EEA -wide markets. The Commission acknowledged that there are nearly no trade 
barriers between the European countries concerned,  however it took account of 
(i) existing strong national preferences in th e market relations between compressor 
and air end suppliers and users, and (ii) the importance for customers of the 
                                                 
53  Reply to question 23.1 of Questionnaire to competitors.  
54  Replies to question 19 of Questionnaire to customers . Replies t o question 21 of Questionnaire to 
competitors.  
55  Reply to question 19.1 of Questionnaire to customers.  
56  Reply to question 25 of Questionnaire to competitors.  
57  Replies to question 20 of Questionnaire to customers . Replies to question 22 of Questionnai re to 
competitors.  
58  Reply to question 2.1 of Questionnaire to customers.  
59  Form CO, paragraph 362.  
 
 
12 reliability of products and good after -sales service.60 However, in the subsequent 
case Alchemy / Compare , the Commission considered that the  market for compressor  
air end s is at least EEA -wide.  
(B) The Notifying Party's view  
(60) Concerning the geographic market definition, the Parties argue that the market for air 
compressor air ends is at least EEA -wide as: (i) all major manufacturers are active in 
all EEA member States, (ii) air end products, like compressors, are frequently sold 
across country lines and (iii) IR Industrial’s air end manufacturing now takes place 
exclusively in China and the United States, as IR Industrials discontinued its EEA air 
end production in 2018. In addition, the Parties argue that there are no barriers to 
enter local, national or supra -national distribution networks, as all that is necessary 
to partner with a distributor is a commercial agreement.  
(C) The Commission’s assessmen t 
(61) The replies of the majority of competitors and customers of the market investigation 
point to a worldwide market ,61 because  market players have a global footprint and 
production and delivery are global.62  
(62) The majority of customers  do not consider technica l specifications or regulatory 
requirements as limiting the number of competitors in the EEA  while the replies of 
competitors are inconclusive .63 Requirements such as “[c]ertified components ”, “CE 
Certification ” and “ ISO standard testing ”64 are seen as limiting the number of 
competitors in the EEA by some competitors, while others state that  these are easy to 
comply with.  
(63) The results of the market investigation confirm that no regulatory barriers or 
equivalent barriers exist within the EEA. The Commission therefore considers that 
with regard to the geographic definition, the market for air ends is at least  EEA -wide 
and probably worldwide.  
(64) In any case, the exact geographic scope of the air ends market can be left open  
between the EEA and worl dwide , as the Transaction does not give rise to serious 
doubts as to its compatibility with the internal market or the functioning of the EEA 
Agreement on any of the two plausible geographic market definition s. 
3.2. Competitive assessment  
(65) With regard to any of the plausible  relevant markets as defined or left open in 
Section 3.1, the Parties activities only give rise to ten plausible  horizontally affec ted 
markets  in the EEA :  
                                                 
60  Case COMP/M.479 – Ingersoll Rand / Man , paragraph 20.  
61  Replies to question 24 of Questionnaire to customers. Replies to question 26 of Questionnaire to 
competitors.  
62  Replies to question 24.1 of Questionnaire to customers. Replies to question 26.1 of Questionnaire to 
competitors.  
63  Replies to question 25 of Questionnaire to customers. Replies to question 28 of Questionnaire to 
competitors.  
64  Replie s to question 28.1 of Questionnaire to competitors.  
 
 
13 (a) Overall medium -pressure oil-free stationary air compressors ; 
(b) Oil-free medium -pressure centrifugal stationary air compressors;  
(c) Oil-free medium -pressure dry screw stationary air compressors;  
(d) Oil-free medium -pressure rotary vane stationary air compressors;  
(e) All vacuum pumps;  
(f) All oil -free vacuum pumps;  
(g) Oil-free rotary lobe vacuum pumps;  
(h) All medium -pressure air compressor air ends;  
(i) All medium -pressure oil-lubricated air compressor air ends;  
(j) Medium -pressure o il-lubricated air compressor air ends (rotary screw).  
(66) The Transaction also gives rise to one potential vertically affected market between 
medium -pressure two -stage oil -free dry screw compressor air ends  (upstream)  and 
the corresponding  market for this type of compressor (downstream ). 
3.2.1.  Horizontal overlaps  
(67) The Notifying Party argues that the Transaction will not affect competition in the 
EEA or at a worldwide level and is therefore compatible with the internal market. 
Overlaps resulting in affected markets only occur in the market for medium -pressure 
oil-free stationary dry screw air compressors, medium -pressure oil-free stationary 
rotary vane air compressors , oil-free rotary lobe vacuum pumps  and medium -
pressure  oil-lubricated air compressor air  ends (rotary screw) . 
(68) The Notifying Party argues that in the markets where overlaps occur post -
Transaction, a sufficient number of viable alternative suppliers will ensure effective 
competition. Furthermore , post -Transaction, the  Parties will be better able to 
compete with market leader Atlas Copco, as well as with other strong competitors 
that are expected to  remain active in all affected markets.65 
(69) The Notifying Party also argues that barriers to entry in the EEA are low, so that  
suppliers from the United States or Asia have recently started entering the EEA 
market. Examples are US -based Sullair, Turkey -based Dalgakiran, India -based Elgi 
and Taiwan -based Fusheng which either export their products to the EEA (in the 
case of Sullair  and Dalgakiran) and/or have bought brands and production facilities 
in the EEA (in the case of Elgi and Fusheng).66 
(70) Finally, according to the Notifying Party, d istribution channels are available to 
facilitate the e ntry to the EEA market : the Parties estima te that instead of having to 
                                                 
65  Form CO, paragraph 397.  
66  Form CO, paragraph 403.  
 
 
14 set up an entire distribution and service network, a new entrant would only need 
approximately six employees per EUR 2 million sales.67 
3.2.1.1.  Air c ompressors  
(71) The Parties ’ activities give rise to affected markets in the EEA68 on four plausible  
markets (i) the market for all medium -pressure oil-free stationary air compressors, 
(ii) the market for medium -pressure oil-free centrifugal air stationary air 
compressors, (iii) the market for medium -pressure oil-free dry screw stationary air 
compressors, (iv) the market for medium -pressure oil-free rotary vane stationary air 
compressors.  
(A) The Notifying Party's view  
(72) The Notifying Party argues that their activities in the  market  for medium -pressure 
stationary air compressors  will face competitive constraints from the high number of 
competitors present in all plausible  market segments post -Transaction.  
(73) According to the Notifying Party, both for oil -lubricated and oil -free compressors, 
Atlas Copco is and will remain the market leader  across most technology types , 
followed by Kaeser. Other strong competitors active in the EEA include Boge, 
Renner, Parker, FNA, Fusheng, Sullair and Kobelco.69  
(74) The Notifying Party describes the market for medium -pressure stationary air 
compressors a s being characterised by aggressive competition on price, [confidential 
information regarding competitive strategy and pricing model ].70  
(75) In the unlikely scenario that the Parties would be able to raise prices post -
Transaction, c ompetitors would not only re taliate but could additionally expand their 
production capacity, as Kaeser did in 2019 and Renner in 2014, or their warehousing 
capacity as Boge did recently.71  
(76) Finally, the Notifying Party notes that competitive constraints in practice do not only 
come fr om competitors in the same technology segment, but from alternative 
technologies that act as close substitutes for many end -uses.72 
                                                 
67  Form CO, paragraph 403: “ including a manager, 2 -3 commercial and sales employees, 1 -2 back office 
and support employees sales people, and 1 -2 service employees including engineers and field support ”. 
68  For compressors, t he Notifying Party confirms that the market shares of the Parties at global level do not 
exceed the market shares at EEA level with the exception of oil -free rotary vane air com pressors. In the 
latter case, the analysis will be conducted on  both the EEA and the worldwide market s. In the other few 
instances , where the worldwide market is affected but less than the EEA one, the Commission considers 
that the market conditions at worldwide and EEA level are sufficiently similar that the analysis conducted 
at EEA level (i.e. the narrowest plausible market) also covers the worldwide market definition. Therefore, 
since at EEA level,  the Transaction does not raise serious doubts,  it sh ould be considered that the 
worldwide corresponding market segment that is less affected and where the competition conditions are 
similar, will also not raise serious doubts.  
69  Form CO, paragraph 412.  
70  Form CO, paragraph 414.  
71  Form CO, paragraph 402.  
72  Form CO, paragraph 415.  
 
 
15 (B) The Commission's assessment  
(77) The market investigation confirmed that the Transaction is unlikely to substantially 
change the competitive dy namics in the market for air compressors, mainly given the 
presence of strong competitors , low barriers to entry and the competitive pressure 
exercised on specific types of air compressors ( even in a narrow product market) by 
other types of a ir compressor s. 
(a) The market investigation confirmed that a high number of competitors is 
active in the air compressor market. Competitors named various alternative 
suppliers for  air compressors  in addition to those listed in paragraph  (81), 
such as CVS, Rhiwo Star  and Mouvex Blackmer .73 Competitors also 
mentioned a number of recent entrants and potential future entrants (SCC 
Tolpac, Dalgakiran, Comprag, Hanbell and Shanghai Screw).74 This suggests 
that the presence of established competitors and market entry by new 
competitors poses signi ficant competitive constraints on any attempt by the 
Parties to raise prices, or lower quality, post -Transaction.  
(b) Replies by competitors to the market investigation suggest that market entry  
is difficult  due to the high number of players and the intense co mpetition .75 
As explained in the follow -up explanations , this does not suggest that entry 
barriers are high but rather that the market is highly competitive , so that  
profit margins are too low to attract new entrants.76 In the words of a 
competitor, the  “mature compressor market in EEA is already highly 
competitive with strong European suppliers like Atlas Copco, Kaeser, 
Aerzen, Boge etc. ”.77 This confirms the argument made by the Notifying 
Party in paragraph  (82). A majority of customers in the market investigation 
also confirmed they would have sufficient alternatives to switch in the event 
that the Parties raised prices post -Transaction.  
(c) The results of the market investigation are well represented by the  words of 
this competitor: “ qualified sales and [reliable ]/fast service is very important 
and has a strong influence on the decision for the supplier .” The market 
investigation confirmed that t he Parties have a strong sales and installation, 
as well as maintenance and repair network. However, these aspects are only 
one among many that  appear  decisive in the choice of a supplier . In the 
market investigation, c ustomers ranked “good maintenance and  repair 
network ” third and “good sales and installation network ” fourth, after 
“reliab le supplier ” and “high quality products ”. They are closely followed by 
“low price s” and “innovati ve products ”. 78 Whereas the Parties might have a 
competitive advantage given their sales and installation and maintenance and 
repair network, competitors with weaker networks would still be able to 
compete on other aspects.  Furthermore, a s discussed in recitals (29)-(30), the 
                                                 
73  Replies to question 28 -29 of Questionnaire to customers. Replies to question 30 of Questionnaire to 
competitors.  
74  Replies to question 38 of Questionnaire to competitors.  
75  Replies to question 31 of Questionnaire to customer s. Replies to question 34 -39 of Questionnaire to 
competitors.  
76  Replies to question 35.1 to Questionnaire to competitors.  
77  Reply to question 35.1 of Questionnaire to competitors.  
78  Replies to question 30 of Questionnaire to customers.  
 
 
16 market players consider that suppliers of compressors do not need their own 
distribution network as there are alternatives that can be used . 
(d) A majority of competitors who responded to the  market investigation 
consider that switching can be considered difficult.79 However, a lmost half of 
the customers  who replied  have switched supplier  in the past,80 in particular 
“to increase cost competitiveness. ”81 This suggests that the Parties would not 
be able to raise prices post -Transaction without losing at least some of their 
customers.  
(e) Overall, the combination of competitive constraints from the supply side, 
such as strong competitors, and from the demand side, such as switching, are 
overall sufficie ntly strong to limit any  ability to increase prices or any  
impacts on competition arising from the Transaction.  
(f) In any case, the overall view among the respondents of the market 
investigation suggests that the Transaction will not have an impact on the air  
compressor market. 82 
(78) For the reasons set out in paragraph  (85), the Transaction does not give rise to 
concerns in the air compressor market. Below the Commission examines the  specific 
market position of the Parties in all affected markets.  
(B.i) Medium -pressure  oil-free stationary air compressors  
(79) Due to the limited combined market shares of the Parties ( [20-30]%), the 
Transaction does not give rise to raise serious doubts as to it s compatibility with the 
internal market. The leader in the market will be Atlas Copco, with [40-50]% market 
share, followed by the Parties. Other competitors include Aerzen ( [5-10]% market 
share), PSG Dover ( [0-5]% market share), Fusheng , Kaeser , Samsung, Boge and 
Iwata  (each with [0-5]% market share), as well as a large number of smaller 
competitors , such as Junair, Dalgakiran, Alfons Haar, FNA, Renner, Almig and 
Bambi which each have [0-5]% market share . 
  
                                                 
79  Replies to qu estion 33 of Questionnaire to customers. Replies to question 40 of Questionnaire to 
competitors.  
80  Replies to question 32 of Questionnaire to customers.  
81  Reply to question 32 of Questionnaire to customers.  
82  Replies to question 55 of Questionnaire to customers. Replies to question 71 of Questionnaire to 
competitors.  The Commission did not receive any substantiated complaint . 




 
 
21 (B) The Commission's asse ssment  
(87) The market investigation confirmed that the Transaction is unlikely to substantially  
change the competitive dynamics in the vacuum pumps market, given IR’s limited 
activities in the EEA and the presence of strong competitors.  
(a) The market investigation confirms that a number of strong competitors is 
present in the EEA market for vacuum pumps. In addition to the competitors 
mentioned by the Notifying Party, c ompetitors who replied to the market 
investigation also named various alternative su ppliers for vacuum pumps, 
such as Becker, Aerzen, Rietschle, Leybold, Atlas Copco, Jurop, Moro 
Kaiser, CVS, Hertell S. coop, Pedro Gil, Edwards , TMC, and VMC .87 
According to most customers , these alternative suppliers , in particular Atlas 
Copco, Aerzen, Busch, and Kaeser, also  offer high quality products, large 
product range, known brands, are considered reliable suppliers, and offer a 
good sales and installation networks.88 In the words of a competitor, “[t]he 
competitiv e arena in Europe is quite wide. There are many competitors in the 
European market for vacuum pumps .”89 This suggests that competition in the 
market for vacuum pumps will not be affected by the Transaction.  
(b) Some replies to the market investigation suggest t hat market entry could be  
rather difficult , due to the high competition and the number of competitors .90 
Similarly to the air compressor market, potential new entrants seem to be 
discouraged by the high degree of competition in the EEA market for vacuum 
pumps. In the market investigation, several competitors noted that the EEA 
market for vacuum pumps is saturated. This appears to explain why  
manufacturers from outside the EEA have not entered the market, according 
to a competitor. In case the Parties tried t o raise prices, there would already 
be enough competitors in the market to compete for lower prices, while in 
addition, new entrants might be attracted.  
(c) Indeed, market entry does occur. A recent entrant in the market for vacuum 
pumps is German firm CVS Engineering.91 
(d) The market investigation confirmed the importance of brand loyalty and of a 
sales and maintenance network . While this might provide the Parties with an 
advantage over competitors without sales and maintenance networks, the 
market investiga tion showed that the Parties are not stronger than other 
players in these aspects. According to  competitors, the Parties are not 
considered as having a “ good maintenance and repair network ” nor a “ good 
sales and installation network ”92, and according to  custom ers, other suppliers 
                                                 
87  Replies to question 47 of Questionnaire to customers . Question 44 of Questionnaire to competitors.  
88  Replies to question 38 of Questionnaire to customers . Question 45 of Questionnaire to competitors.  
89  Minutes of a call with a customer , on 26 November 2019, paragraph 13.  
90  Minutes of a call with a competitor , on 5 November 2019, paragraph 7.  
91  Minutes of a call with a customer , on 26 November 2019, paragraph 16; minutes of a call with a 
competitor , on 5 November 2019, paragraph 9.  
92  Replies to question 45 of Questionnaire to competitors.  
 
 
22 seem to provide better maintenance and repair as well as sales and 
installation networks.93  
(e) A competitor also added that as an alternative to service networks by the 
vacuum pump suppliers themselves, “[t] here are a few companies acting  as 
freelancers providing aftermarket services next to the product manufacturers. 
They are usually only active at regional or local level, providing 24h 
maintenance and repair services to customers within a radius of 50km .”94 
Therefore sufficient alternativ es exist  and even competitors without 
distribution and maintenance networks are able to compete in the vacuum 
pump market.  
(f) Indeed, a  majority of competitors who responded to the market investigation 
consider that switching is easy .95 The market investigatio n has shown that a 
majority of competitors have had experience of their customers'  sometimes 
switch ing supplier.96 Almost half of customers have switched supplier in the 
past, “ due to price and quality reasons ”97 or because a competitor offered 
more “[i] nnovative products ”.98 One customer that never switched gave the 
explanation that it was satisfied with the current supplier . This illustrate that 
switching seems possible, if some customers have not had this experience, it 
is likely that they have not need ed to switch so far.   
(g) In addition, a majority of customers has been able to negotiate price 
concessions from their suppliers99 and both customers and competitors 
consider that “[p] rice negotiations and price concessions are part of the daily 
business. ”100 
(h) This shows that competitive constraints from the supply side, such as entry of 
new competitors, and from the demand side, such as switching, are overall 
sufficiently strong to limit any impacts on competition arising from the 
Transaction.  
(i) In any case, the ove rall view among the respondents of the market 
investigation suggests that the Transaction will not have an impact on the 
vacuum pumps market.101 
(88) For the reasons set out in paragraph  (95), the Transaction does not give rise to 
concerns in the vacuum pumps market. Below the Commission examines the market 
position  of the Parties in all affected markets.  
                                                 
93  Replies to question 42.1 of Questionnaire to costumers.  
94  Minutes of a call with a competitor , on 22 November 2019, paragraph 12.  
95  Replies to question 55 of Questionnaire to competitors.  
96  Repl ies to question 54 of Questionnaire to competitors.  
97  Reply to question 41.1 of Questionnaire to costumers.  
98  Reply to question 41.1 of Questionnaire to costumers.  
99  Replies to question 34 of Questionnaire to costumers.  
100  Reply to question 56.1 of Ques tionnaire to competitors.  
101  Replies to question 58 to 60 of Questionnaire to costumers . Replies to question 73 to 74.1 of 
Questionnaire to competitors.  The Commission did not receive any substantiated complaint . 


 
 
25 3.2.1.3.  Air ends  
(93) The Parties ’ activities give rise to affected market s in the EEA102 on three plausible  
market segments (i) the overall market for air compressor air ends, (ii) the overall 
market for medium -pressure oil-lubricated air compressor air ends, ( iii) the market 
for medium -pressure  oil-lubricated air ends for rotary  screw compressors.  
(A) The Notifying Party's view  
(94) The Notifying Party argues that their activities in the market for air ends  only give 
rise to an overlap in the market for medium -pressure oil-lubricated air ends for 
compressors. [Confidential information related to internal sales strategy] .103 IR 
Industrials has only a small market share in medium -pressure oil-lubricated 
compressor air  ends in the EEA ( [5-10]% in 2018). If further segmenting the air end 
market by technologies, the only overlap would occur in  medium -pressure oil-
lubricated air ends for rotary screw air compressors with an increment of under [0-
5]% in 2018. The Notifying Party also confirms that the combined entity will not be 
the market leader.104 
(B) The Commission's assessment  
(95) The market investiga tion confirmed that the Transaction is unlikely to substantially 
change the competitive dynamics  in the market for air ends  given the  limited market 
shares of the Parties  and the presence of strong competitors in the EEA and potential 
entrants facing low e ntry barriers.  
(a) Competitors who replied to the market investigation also named various 
alternative suppliers for  air ends: Atlas Copco, Aerzen, Kaeser, 
Termomeccanica, Kobe, Fusheng, B oge, Cobelco, Iwata, Sullair Hitachi, 
Pedro Gil, Rotorcomp, TMC, VMC and CVS.105 Similar to the market for 
compressors, market participants consider the air end market a “ mature 
market, with destructive competition .”106 Therefore, if the Parties tried to 
raise prices post -Transaction, competitors could retaliate and extend their 
market share . 
(b) Replies to the market investigation regarding the ease of  market entry  are 
inconclusive.  As in the case for air compressors and vacuum pumps, some 
see market saturation as the reason:  “The mature air end market in EEA is 
already highly competitive with strong European suppliers. ”107 While 
currently incentives seem to be low given the level of competition, new 
entrants could find it interesting to enter the market in case the Parties 
increased prices.  
                                                 
102  Reply to RFI 10, question 2 : the Notifyi ng Party confirmed that w orldwide market shares for the air -ends 
markets, including any potential sub -segments, would remain below 20%. Therefore, as any potential 
market for air-ends remains not affected at worldwide level, this geographic market segmentation will not 
be further discussed in the Decision . 
103  Form CO, paragraph 488.  
104  Form CO, paragraph 32.  
105  Replies to question 47 of Questionnaire to customers. Replies to question 5 8 of Questionnaire to 
competitors.  
106  Reply to question 62 of Questionnaire to competitors.  
107  Reply to question 63.1 of Questionnaire to competitors.  
 
 
26 (c) In such a scenario , there are a number  of new suppliers that might enter the 
EEA market or have done so recently . Competitors named several recent  
entrants that include Fusheng, Hanbell (both from Taiwan) and Elgi (from 
India) and potential future entrants Baosi and Torin Drive (both from 
Chin a).108 
(d) Conditions for market entry seem favourable. As the market investigation 
confirmed, t here seem to be no regulatory requirements constituting entry 
barriers to the EEA (“ For air ends, CE mark is the only purposeful 
requirement ”109). 
(e) An additional advantage facilitating entry of the air end market is the fact that  
sales and maintenance network seems to be less relevant than in the markets 
for air compressors . The market investigation confirmed that a  local presence 
for sales is less important as a compressor air end “ is a part that can easily be 
imported .”110 As for the importance of a “ maintenance repair network or 
sales organisation, [these are]  less important because disfunctions are not 
covered by the supplier but by the assembler of compressor pac kages .” 
Rather, “ high quality of products and reliability of supplier is important. ”111 
The market investigation confirmed this : the most important selection criteria 
for a supplier are high quality products, reliability, low prices, a large product 
range, i nnovation, followed by a good maintenance and repair network and a 
good sales and installation network .112 It can thus be concluded that market 
entry is easy and that the possibility of entry by new competitors poses a 
considerable competitive constraint.  
(f) The market investigation was inconclusive as to whether switching to another 
air end producer is common and easy. A majority of competitors who 
responded to the market investigation consider that switching is easy , and a 
minority of customers confirmed it has actually switched supplier for air 
ends.113 
(g) In comparison to the air compressor and vacuum pump market, p rice 
concessions  are less common  in the air end market. O nly half of the 
customers who participated in the market investigation have negotiated lower 
prices, as competition is less fierce in this smaller market.114 
(h) Nevertheless, although  the competitive constraints on the demand side are 
weaker than in the markets for air compressors and vacuum pumps, 
competitive constraints on the supply side are particu larly strong . The 
Commission considers them sufficient to ensure that the Transaction will not 
                                                 
108  Replies to question 66 of Questionnaire to competitors.  
109  Reply to question 28.1 of Questionnaire to  competitors.  
110  Reply to question 64.1 of Questionnaire to competitors.  
111  Reply to question 50.1 of Questionnaire to customers.  
112  Replies to question 50 of Questionnaire to customers. Replies to question 60 of Questionnaire to 
competitors.  
113  Replies to  questionnaire 52 of Questionnaire to customers. Replies to question 68 of Questionnaire to 
competitors.  
114  Replies to question 54 of Questionnaire to customers.  


 
 
29 3.2.2.  Vertical relationships  
3.2.2.1.  Air ends ( upstream ) for air compressors ( downstream ) 
(101)  The Parties ’ activities result in vertical links between the upstream production of air 
ends of a specific technology and the downstream compressors of the corresponding  
technology. This is the case for oil -lubricated rotary screw air compressor, oil -free 
dry screw air compressor, and rota ry lobe blowers.116 In the case of oil -lubricated 
rotary screw air compressor and rotary lobe blowers, the market shares of the Parties 
remain below 30% in both upstream and downstream markets.117  
(102)  It should be noted that neither party purchases air ends  (the input)  from the other  
one, so there is no actual vertical link between them  currently .118 Moreover, an air 
end from a specific technology should fit the same technology of air compressors, as 
a mix of technologies between the upstream and downstream le vels is not possible 
technically. In short, this means that the only vertically affected market is  the 
plausible  market for medium -pressure two -stage119 oil-free dry screw air ends 
(upstream) and the plausible  market for medium -pressure oil-free dry screw ai r 
compressors (downstream).  
(103)  Upstream, o nly IR Industrials is active in the air end market  for medium -pressure 
two-stage oil -free dry screw compressor air ends , with an EEA market share of 
roughly [50-60]%.120 Competitors in this market in the EEA are Aerzen with [20-
30]%, Kobelco with [10-20]% and Sullair with [10-20]%.121  
(104)  Downstream, both Parties are active in the market for medium -pressure air dry screw 
compressors, but their combined market share remains belo w 30% (at [20-30]% in 
2018 and [20-30]% in 2016 and 2017 respectively).  
(A) No input foreclosure  
(105)  The "Non -horizontal Guidelines"122 provide that input foreclosure " arises where, 
post-merger, the new entity would be likely to restrict access to the products and 
services that it would have otherwise supplied absent the merger, thereby raising its 
downstream rivals' costs by making it harder for them to obtain supplies of the input 
under the similar prices and conditions absent the merger ".123 
(106)  The Commission has asse ssed whether post -Transaction, the merged entity is likely 
to successfully restrict access to IR's medium -pressure two -stage oil -free dry screw 
                                                 
116  As explained in paragraph (55), compressors must use an air end with the same t echnology they are based 
on.  
117  Form CO, paragraph 515.  
118  Form CO, paragraph 508.  
119  As explained in paragraph  (54), the so -called two -stage technology is used in medium pressure oil -free 
dry screw air ends.  
120  At a worldwide level, IR Industrials has an approximate market share of [30-40]% along with Sulla ir, 
followed by Kobelco with [20-30]%, Aerzen with [10-20]% and Elgi with [10-20]%. 
121  [Confidential information related to internal sales strategy ].  
122  The Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control  
of concentrations between undertakings , (2008/C 265/07).  
123  Non-horizontal Guidelines, paragraph 31.  
 
 
30 compressor air ends  to the Parties' competitors in the medium -pressure oil -free dry 
screw air compressors  downstream  in an anti -competitive manner . 
(107)  The Notifying Party argues that the presence of credible competitors on the upstream 
market, as described in paragraph  (103) , provides sufficient competitive constraints, 
so that the Parties would therefore have no ability to foreclose access to air ends for 
its customers.124  
(a) Atlas Copco would remain the market leader downstream, with 43% market 
share. Both Atlas Copco and Aerz en, the Parties’ main competitors , are 
vertically integrated and self -supply air ends for their production of medium -
pressure dry screw air compressors. Therefore, there exist s no ability from 
the merged entity post -Transaction to foreclose input to these downstream 
rivals that are self -sufficient.  This means that [50-60]% of the downstream 
market, the Parties competitors on that level, would still be able to maintain 
competition conditions as they are before the Transaction, effectively 
defeating any attempt from the merged entity to recoup any potential gains 
from foreclosure.  
(b) Second, I R Industrials supplies [number]  downstream customers : [name of 
customers ], who together account for only [proportion] % of the downstream  
market.  These two downstream ri vals are the only one that could be 
foreclosed post -Transaction as other downstream rivals already source their 
input from alternative upstream competitors from the Parties.  
(c) Third, this shows that in practice, the merged entity could only have the 
ability to foreclose [5-10]% of the market . This is not sufficient to lead to 
significant gains that would make such a strategy profitable.  
(d) Finally, as shown by the fact that the merged entity would only supply the 
inputs to [5-10]% of the downstream customers, th ere are enough alternative 
suppliers, used by other downstream rivals that would readily defeat any such 
attempt by providing an alternative source of supply to the merged entity.  
(108)  The Commission  agrees with thi s reasoning . It notes, in particular, that on top of the 
facts which the Notifying Party relies on, its analysis  is further supported by the 
replies to the market investigation.  
(a) A majority of customers who responded to the market investigation explained 
that the Parties would not have an incentive to  stop selling air ends to third 
parties and only to sell compressors and blowers with an integrated air end.125 
(b) As a customer explained, “[t]here is market potential. Both parties know, if 
they will not sell air ends separately, there will be other/new manuf acturers 
                                                 
124  Reply to question 1 of RFI 9 of 16 January 2020.  
125  Replies to question 46 of Questionnaire to customers.  Minutes of a call with a competitor , on 12 
November 2019, paragraph 23.  GDI does not sell compressor air ends to third parties, but IR sells both 
oil-lubricated and oil -free compressor air ends to third parties under its brand GHH (based in China).  
 
 
31 focussing on this market [s]egment. The entry barriers are not high enough to 
[k]eep other manufacturers out. ”126  
(c) Another customer found that the competitors present in the market would act 
as a sufficient constraint so that selling only compressors with integrated air 
ends would not  “make sense. Too much competitors on a market for them. ”127  
(109)  Therefore, the Commission considers that the merged entity will not have the ability 
to engage in  a foreclosure attempt and that any such attempt by the merged entity 
would not be successful.  
(B) No customer foreclosure  
(110)  The "Non -horizontal Guidelines"128 provide that customer foreclosure " may occur 
when a supplier integrates with an important customer in the downstream market. 
Because of the downstream presen ce, the merged entity may foreclose access to a 
sufficient customer base to its actual or potential rivals in the upstream market 
(input market) and reduce their ability or incentive to compete ".129 
(111)  The Commission has assessed whether post -Transaction, the merged entity would be 
able to stop or reduce its sourcing from other upstream suppliers, therefore denying 
them the customer base that the merged entity was representing.  
(112)  It should be noted that both GDI and IR source from their upstream divisions.  
Therefore, even absent the merger, the Parties cannot be considered as "an important 
customer" on the downstream market.  
(113)  Moreover, a s the Parties only represent a small share of the customer base in any  
case (only [20-30]% of the downstream market), denying access to the merged entity 
as a potential customer for upstream rivals is unlikely to deprive upstream rivals 
from a significant customer base.  
(114)  Therefore, the Commission considers that the merged en tity will not have the ability 
to engage in a foreclosure attempt and that any such attempt by the merged entity 
would not be successful.  
  
                                                 
126  Reply to question 46.1 of Questionnaire to cust omers.  
127  Reply to question 46.1 of Questionnaire to customers.  
128  The Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control 
of concentrations between undertakings , (2008/C 265/07).  
129  Non-horizontal Guidelines , paragraph 158.  
 
 
32 4. CONCLUSION  
(115)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and to de clare it compatible with the internal market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President