Commission européenne, DG COMP ME RGER 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, 07.12.2020  
C(2020 ) 8877 final  
PUBLIC VERSION  
 
DIC Corporation  
DIC Building, 7 -20, Nihonbashi 3 -chome  
Chuo -ku, Tokyo 103 -8233  
Japan  
Subject : Case M.9677  — DIC/BASF Colors & Effects  
Commission decision pursuant to Article  6(1)(b) in conjunction with 
Article 6(2) of Council Regulation No  139/20041 and Article 57 of the 
Agreement on the European Economic Area2 
Dear Madam  or Sir , 
(1) On 16.10.2020 , the European Commission received notification of a proposed 
concentration pursuant  to Article 4 of the Merger Regulation by which  the DIC 
Corporation (together with the entities it directly or indirectly controls referred to as 
“DIC”) acquires within the meaning of Article 3(1)(b) of the Merger Regulation  sole 
control of the whole of BASF SE’s (“BASF”, Germany) BASF Colors & Effects 
(together with the entities it directly or indirectly controls referred to as “BCE”) , (“the 
Transaction”).3 DIC is designated hereinafter as the “Notifying Party” and, together 
with BCE, as the “Parties”.  
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation '). With effect from 1 Decemb er 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 decis ion. 
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  
3   Publication in the Official Journal of the European Union No C 358, 26.10.2020 , p. 10. 
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  confident ial 
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omitted has been replaced by ranges of 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) DIC is a publicly listed company headquartered in Japan, active in the production and 
sale of printing inks, organic pigments and synthetic resins. As regards pigments and 
other colour ants, DIC is mainly active through its wholly -owned subsidiary 
SunChemical Corporation (“SunChemical”, US ).  
(3) BCE ’s business  includes  the manufacture and sale of pigments and other colour ants. 
BASF is a publicly listed international chemical and industrial company 
headquartered in Ludwigshafen am Rhein, Germany. BCE re presented less than 
[small percentage]  of BASF’s worldwide turnover in 2018.  
2. THE OPERATION  
(4) In August 2019, DIC Corporation and BASF concluded a Sale and purchase 
Agreement setting out the terms of the Transaction, by which DIC will acquire the 
entirety of the shares of 19 individual entities as well as certain assets, jointly 
constituting BCE, from BASF. Following completion of the Transaction, DIC will 
thus acquire sole control of BCE. The Transaction is therefore a concentration within 
the meaning of Arti cle 3(1)(b) of the EU Merger Regulation.  
3. UNION D IMENSION  
(5) The undertakings concerned have a combined aggregate world -wide turnover of more 
than EUR 5 000 million  (DIC: EUR [...], BCE: EUR [...]).4 Each of them has an EU -
wide turnover in excess of EUR 250 m illion  (DIC: EUR [...], BCE: EUR [...]), 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.   
4. THE PROCEDURE  
(6)  The Transaction was previo usly notified on 15.05.2020  and subsequently withdrawn 
on 23.06.2020.  It was notified again on 16.10.2020.  
(7) As a consequence , the Commission’s market investigation was twofold, with one set 
of questionnaires sent on 15.05.2020, and an additional , more targ eted, set of 
questionnaires sent on 16.10.2020. The Commission considers that both sets of 
questionnaires constitute informative and relevant information for the purpose of 
assessing the present Transaction. As a result, both sets of questionnaires will be  
referred to in the present Decision, and both will be referred to under the terms “the 
Commission’s market investigation” or “the market investigation” . 
                                                 
4   Turnover calculated in accordance with Article 5 of the Merger Regulation . 
 
 
3 5. COMPETITIVE ASSESSMEN T 
5.1. Analytical framework  
(8) Under Articles 2(2) and 2(3) of the Merger Regulation, the  Commission must assess 
whether a proposed concentration would significantly impede effective competition 
in the internal market or in a substantial part of it, in particular through the creation or 
strengthening of a dominant position.  
(9) A merger can entai l horizontal effects. In this respect, the Commission Guidelines on 
the assessment of horizontal mergers under the Merger Regulation (“the Horizontal 
Merger Guidelines”)5 distinguish between two main ways in which mergers between 
actual or potential compet itors on the same relevant market may significantly impede 
effective competition, namely (a) by eliminating important competitive constraints on 
one or more firms, which consequently would have increased market power, without 
resorting to coordinated behav iour (non -coordinated effects); and (b) by changing the 
nature of competition in such a way that firms that previously were not coordinating 
their behaviour are now significantly more likely to coordinate and raise prices or 
otherwise harm effective compet ition. A merger may also make coordination easier, 
more stable or more effective for firms which were coordinating prior to the merger  
(coordinated effects).6  
(10) In addition, a merger can also entail vertical effects when it involves companies 
operating at d ifferent levels of the same supply chain. Pursuant to the Commission 
Guidelines on the assessment of non -horizontal mergers under the Council Regulation 
on the control of concentrations between undertakings (the “Non -Horizontal Merger 
Guidelines”),7 vertic al mergers do not entail the loss of direct competition between 
merging firms in the same relevant market and provide scope for efficiencies. 
However, there are circumstances in which vertical mergers may significantly impede 
effective competition. This is  in particular the case if they give rise to foreclosure.8 
The Non -Horizontal Merger Guidelines distinguish between two forms of foreclosure: 
input foreclosure, where the merger is likely to raise costs of downstream rivals by 
restricting their access to a n important input, and customer foreclosure, where the 
merger is likely to foreclose upstream rivals by restricting their access to a sufficient ly 
large  customer base.9   
5.2. Overview of affected markets  
(11) The Transaction combines the activities of two global su ppliers of (primarily organic) 
pigments . The focus of the Transaction is on combining the parties’ capabilities in the 
supply of certain types of pigments. Pigments are compounds that provide colour to a 
given material either by covering its surface (paint s, coatings, printing inks) or by 
mixing with it (plastic applications). Pigments are distinct from dyes, which engage 
in chemical reactions with the material they are supposed to colour.  
                                                 
5   Guidelines on the assessment  of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings, OJ C 31, 5.2.2004 p.5.  
6   Horizontal Merger Guidelines, paragraph 22.   
7   OJ C 265, 18.10.2008, p. 6.  
8   Non-Horizontal Merger Guidelines, para 1 8. 
9   Non-Horizontal Merger Guidelines, para 30.  

 
 
5 (downstream) . This relationship  is affected within the meaning of EU merger control14 
because upstream the Parties’ market shares would exceed 30% in the sales of certain 
pigment chemistries  which are used to produce printing inks . Moreover, the 
relationship  is also affected because DIC’s market share for the manufacture of 
printing inks downstream exceeds 3 0% in one potential sub -segment , namely the 
manufacture of gravure liquid inks in the EEA.  
5.3. Market definitions  
5.3.1.  Pigments  
(14) As explained above, a dis tinction can be drawn between organic pigments, whose 
chemical formula contain carbon atoms in covalent bonding, and inorganic pigments. 
Aside from these, effect pigments can be considered as forming a category of their 
own, in the sense that their main fu nction is not to provide a given colour , but rather 
an effect (such as a metallic or a pearlescent effect).   
(15) As shown  above in Table 1, the main overlaps between the Parties’ activities relate to 
organic pigments. T here are around 20 chemical classes of organic pigments, covering 
a range of  colour shades. Each chemical class of pigments requires a different 
manufacturing process and often requires dedicated equipment. Within a chemical 
class, there are typically seve ral different pigments, with different chemical 
composition, providing different colours and shades. For instance, the perylene class 
                                                 
complex processing steps from pigments. In addition, both activities are performed by both Parties as 
an ancillary complement to their pigment activities, in particular when end -customer require that 
additional finishing/dispersion steps are performed on the pigments which are manufactured by the 
Parties, in order for them to be able to use them more readily. Therefore, for the purposes of the present 
case, the Commission considers that the competitive dynamics of the pigment markets determine to a 
very large extent the competitive dynamics for preparations and masterbatches . As regards preparations 
in particular, the Notifying Party provided for each chemical class market shares for a hypothetical 
market encompassing all pigments sold in dry form as well as in mono -pigment preparations. These 
figures do not differ materially  for any chemical class compared to the figures for pigments per chemical 
class alone.  
14  An affected market consist of all relevant product and geographic markets, as well as plausible 
alternative relevant product and geographic markets, if in the EEA ter ritory (a) two or more of the 
parties to the concentration are engaged in business activities in the same relevant market (“horizontal 
relationships”) and where the concentration will lead to a combined market share of 20% or more; or 
(b) one or more of th e parties to the concentration are engaged in business activities in a relevant market, 
which is upstream or downstream of a relevant market in which any other party to the concentration is 
engaged (vertical relationships), and any of their individual or c ombined market shares at either level 
is 30% or more, regardless of whether there is or is not any existing supplier/customer relationship 
between the parties to the concentration. (See Section 6.3, Annex 1, Commission Regulation (EC) No 
802/2004 of 21 Apr il 2004 implementing the Merger Regulation). The Commission may presume that 
concentrations where the market share of the undertakings concerned does not exceed 25% either in the 
common market or in a substantial part of it are not liable to impede effecti ve competition and are 
compatible with the common market. (See recital 32 of the Merger Regulation and paragraph 18 of the 
Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings  (OJ C 31, 5.2.2004, p. 5). The Commission is unlikely to find 
concerns in non -horizontal mergers, be it of a coordinated or of a non -coordinated nature, where the 
market share post -merger of the new entity in each of the markets concerned is below 30% and  the 
post-merger HHI is below 2 000. Where a merged entity would have a market share just above the 30% 
threshold on one market but substantially below on other, related, markets competition concerns will 
be less likely. (See paragraph 25 of the Guidelines  on the assessment of non -horizontal mergers under 
the Council Regulation on the control of concentrations between undertakings (OJ C 265, 18.10.2008, 
p. 6).  
 
 
6 contains red, maroon, violet and black pigments.  These individual pigments are 
usually referred to using their so -called c olour index (for instance Pigment Red 179 – 
abbreviated PR179 – refers to a specific red shade within perylene pigments).  
However, some chemical classes, such as quinophthalone , only contain one colour 
index. Pigments can be mixed together (irrespective of  their chemical class) to obtain 
even more colours.  
5.3.1.1.  Product market definition  
Commission’s precedents  
(16) In Clariant/Hoechst ,15 the Commission considered organic and inorganic pigments as 
distinct product markets. In BASF/CIBA ,16 the Commission considered a fur ther 
potential sub -segmentation of organic and inorganic pigments by chemical class, and 
considered a potential further sub -segmentation into the following categories of 
pigment applications: (i) coatings, (ii) plastics and (iii) others, with the coatings 
category potentially split further into: (i) automotive, (ii) industrial and (iii) decorative 
coatings, ultimately leaving both questions open.  
(17) As regards pigments other than organic pigments, in BASF/CIBA ,17 the Commission 
treated bismuth vanadate and pear lescent effect pigments as separate chemical class es, 
and the potential segmentations by application described in paragraph (15) were also 
applied to them.  
(18) In more recent pigment -related cases ( Huntsman/Equity Interest s18 and 
Tronox/Cristal19), the Commissi on suggested further sub -segmentations of each of the 
three categories of pigment applications (coatings, plastics and others). More 
particularly, with respect to TiO2,20 the Commission also considered potential 
segmentation by crystalline form (rutile vs a natase), as well as production process 
(sulphate -based vs chloride -based). However, both these cases analysed the market 
for TiO2, which is a white inorganic pigment, and which  significantly differs from the  
broader range of  primarily organic  pigments being combined as a result of the 
Transaction in present case.  
The Notifying Party’s view  
(19) The Notifying Party submits that the appropriate market definition is by colour space, 
and that all red pigments, all blue pigments and all yellow pigments form three di stinct 
relevant product markets. The Notifying Party considers that pigments within these 
classes exhibit similar properties, and can be substituted without changing the final 
product’s features.21  
                                                 
15   See Case IV/M.911, Clariant/ Hoechst , decision of 10 June 1997 . 
16   See Case COMP/M.5355, BASF/ CIBA , decision of 12 March 2009.  
17   See Case COMP/M.5355, BASF/ CIBA , decision of 12 March 2009.  
18   See Case M.7061, Huntsman Corporation/ Equity Interests held by Rockwood Holdings , decision of 10 
September 2014 . 
19   See M.8451, Tronox/ Cristal , decision o f 4 July 2018.  
20   See M.8451, Tronox/ Cristal , decision of 4 July 2018.  
21   Form CO, paragraphs 230, as well as 232 -239. 
 
 
7 (20) First , the Notifying Party argues that it is colour rather  than the chemical composition 
of the pigment that is most important to customers, and that, with this respect, 
manufacturers can rely on different chemistries to meet the customers’ colour and 
property requirements.22 The Notifying Party submits that the c hemical classes can be 
categorised in colour spaces as indicated in Table 3 below and that the pigments 
categorised to each colour space have similar physical properties.  
(21) Second , the Notifying Party stresses that sw itching pigments/formulation while 
conserving the final product’s precise colour and characteristics has become 
increasingly easy thanks to the recent improveme nts of colour matching software.23  
(22) Third, the Notifying Party exhibits several examples of colou r points that can be 
attained through different alternative formulations, using pigments from different 
chemical classes, as well as a few examples of products (in automotive coating or 
consumer goods) for which the precise colour can be matched exactly us ing alternative 
pigments formulations, all approved by their owner company (for example the 
automotive manufacturer who sells the vehicle).24 The Notifying Party also provide s 
some examples of customers of the Parties switching between pigments belonging to  
different chemistries for the same application/need.25 
(23) With respect to the possibility of finding alternatives in different chemical class for a 
given pigment, the Notifying Party provides the specific example of lead chromate 
pigments, a class of yellow p igments that was progressively removed from the market 
from 2010 onwards, due to its toxicity. The Notifying Party explains that several 
alternatives/substitutes/replacement solutions for lead chromate pigments, based on 
different chemistries. While presen ting these elements, the Notifying Party however 
acknowledges that finding alternatives for lead chromates had been difficult and 
technically challenging due to these products’ high quality and cost -effectiveness.26 
(24) Fourth , the Notifying Party further expla ins that pigment finder tools on pigment 
manufacturer’s websites usually allow customers to filter the searches by colour and 
applications, but not by chemical class. The Notifying Party submits that these tools 
are designed to reflect the customer’s expec tations and criteria.27 
(25) Fifth , in relation to a potential sub -segmentation of each chemical class by colour 
index (see above paragraph (14)), the Notifying Party argues that there is enough 
supply -side substitution, within each chemical class , between diffe rent colour indic es, 
for them to be considered as forming part of the same product market, and that, despite 
requiring extensive washing of the production pipes, switching between colour indic es 
is feasible, [...].28 
(26) Finally , with respect to potential subst itution across applications, the Notifying Party 
considers that pigments within each chemical  class exhibit similar properties that 
make them suitable for use across applications, and that they are priced [...] across 
                                                 
22   Form CO, paragraphs 207 -208. 
23   Form CO, paragraphs 240 -305. 
24   Form CO, paragraphs 213 -216 and 223 -224. 
25   Form CO, paragraph 2 31. 
26   Form CO, paragraphs 225 -228. 
27   Form CO, paragraphs 217 -222. 
28   Form CO, paragraphs 306 -337. 

 
 
9 as important criteria.33 Therefore, in case of a SSNIP, only a small minority of 
customers would be able to substitute a pigment of anoth er chemical class in a short 
period of time . 
(31) Moreover, the majority of customers indicated that within chemical classes they 
cannot easily switch between pigment products within the same colour index, with the 
majority claiming that it is either not possib le or possible only for some applications, 
and indicating that testing and requalification would be required.34 Some  customer s 
point  out, that different products, even within the same colour index, can have different  
qualities and characteristics.35 One cust omer points out that generally, “ the more 
demanding the application, the harder it is to switch / qualify a new supplier ” for a 
given colour index.36  
(32) A majority of customers indicate they have used colour -matching  software in the past 
five years. While man y indicate that it can be helpful when selecting pigments or even 
replacing a pigment in an existing formulation, some say it is just a start as it only 
matches the colour. Significant qualification and testing processes may therefore still 
be required to confirm whether other technical specifications are met.37 One pigment 
competitor specifically  mentioned that colour matching is not particularly relevant for 
high-performance pigments.38 
(33) The same argument applies to pigment finder tools on supplier websites.  While these 
may give a general indication of colour and performance characteristics, it is not 
conclusive on whether a pigment meets a customer’s needs – particularly for 
demanding applications.  
(34) In summary, the market investigation provides evidence that there is only very limited 
demand -side substitutability between chemical classes, and even between different 
products within a colour index. In situations where substitution is possible, it is often 
a time -consuming and costly process.39  
(35) On the supply side , there appears to be very limited substitutability  between chemical 
classes and  even between colour indices within a chemical class.  A competitor 
indicates that each chemical class has dedicated production lines. As different process 
steps are involved fo r each chemical class, switching  will entail significant delays and 
investments and so it  is not typically possible  within the short period of time required  
to consider them to belong to the same relevant market from a supply side 
perspective .40 41  
(36) With reg ard to supply side substitutability between colour indices within a chemical 
class, the Notifying Party argues this is possible and [...] for certain colour indices 
within quinacridones and phthalocyanines. However , the results of the market 
                                                 
33   Responses to questions 30, 62, 94 of Q1 – Questionnaire to pigments customers.  
34   Responses to questions 13, 45, 78, 110 o f Q1 – Questionnaire to pigments customers.  
35   Responses to questions 13, 45, 78, 110 of Q1 – Questionnaire to pigments customers.  
36   Response to question 45 of Q1 – Questionnaire to pigments customers . 
37   Responses to question 5, 5.1, 5.2, 5.3, 5.4 of Q1 – Questionnaire to pigments customers . 
38   Non-confidential minutes of call with a pigments competitor dated 6 April 2020.  
39    Response s to questions 35, 67 , 99, 123, 147  of Q1 – Questionnaire to pigments customers . 
40   Non-confidential minutes of call  with a competitor dated 15 April 2020.  
41   Note [...]. 
 
 
10 investigation gave clear indications that supply side substitutability is only possible 
for some chemical classes, and within these chemical classes for some colour indices  
only. For perylenes, all competitors  indicate that switching production from one colour 
index to another within the chemical class costs considerable time and effort and 
constitutes a strategic decision.42 When asked for an example of such a switch for 
perylenes, one competitor notes: “ I have not seen a switch in colour index as it does 
not make busine ss sense. ”43 For quinacridones  and phthalocyanines , the vast majority 
of competitors indicate that switching production from one colour index to another 
within the chemical class costs considerable time and effort and constitutes a strategic 
decision.44 With  regard to quinacridones, a competitor states : “Quinacridones are 
manufactured via two different technologies, namely Acidic ring closure (PPA route) 
and Thermal ring closure (Solvent route). We can switch CI [colour index] from one 
to another if the techn ology used to make the final CI is the same .” As for 
phthalocyanines, a competitor explains that while it is possible to switch between 
blues  (i.e. various types of blue) , it is not possibl e to switch between a blue and a 
green.  
(37) A product market definition  by application, as has been considered in Commission 
precedents , appears to be less appropriate and  to yield a less clear market definition 
than a product market definition by chemical composition.  
(38) First, pigments can be used for multiple applications. Wh ile the more high 
performance chemical classes are typically used for more demanding applications, 
none of the chemical classes is only used for specific applications.45 Within the 
chemical class, while some products are particularly suited to a specific ap plication, 
individual products may also be suitable for multiple applications and are marketed as 
such.46 In the market investigation, customers explained that they used all chemical 
classes in a variety of applications.47 The majority of customers also agre ed that some 
applications may use the same pigments.48 
(39) Second, average price by application [...].49 
(40) In summary, the Commission considers it likely that the specific application matter s 
less than the  specific customer’s need in terms of product quality and c haracteristics  
(e.g. in terms of light fastness, weather fastness  and other characteristics ). While a 
correlation between specific applications (e.g. automotive) and specific product 
characteristics (e.g. light and weather fastness) can be observed, this d oes not mean 
that the market should necessarily be distinguished by application , rather than the 
characteristics  of the pigment . Indeed, p igments are distinguishable  by chemical class 
or even within class by narrower colour indices. Expensive and high perf ormance 
chemical classes , such as perylenes , will typically be used for  a variety of  demanding 
                                                 
42   Responses to question 7 of Q2 – Questionnaire to pigments competitors.  
43   Response to question 7 of Q2 – Questionnaire to pigments competitors.  
44   Responses to question 26 and 45 of Q2 – Questio nnaire to pigments competitors.  
45   Form CO, para graph  339. 
46   Form CO, paragraph 341 and Figure 95.  
47   Responses to questions 9, 41, 73, 105 of Q1 – Questionnaire to pigments customers . 
48   Responses to questions 11.3, 43.3, 75.3, 107.3 of Q1 – Question naire to pigments customers . 
49   Form CO, Figure 99 -101. 
 
 
11 applications . For the purposes of this decision , the Commission will therefore assess 
the ma rkets […] the level of chemical class and colour index.   
(41) In light of  the above, the Commission considers that , for the purposes of the present 
decision,  the appropriate definition of the relevant product market  for pigments  
corresponds to  at least the level of chemical class, and possibly to the narrower  level 
of the colou r index within each chemical class.  
(42) However , even within colour indices, products differ in their characteristics and are 
not easy to substitute. Therefore , the Commission considers that certain segmentations 
within colour indices  should be retained for t he purposes of the competitive analysis , 
as there may be significant product differentiation s. 
(43) Ultimately, the question whether the product market definition is by chemical class or 
colour index can be left open  for the purposes of the present decision , as it does not 
materially affect the Commission’s assessment  since serious doubts arise as to the 
compatibility of the Transaction with the internal market  due to horizontal effects in 
perylene and quinacridone pigments under any plausible product market def inition  
relating to colour index level and no serious doubts arise as to the compatibility of the 
Transaction with the internal market as a result of  non-horizontal effects or horizontal 
effects in chemical classes of pigments other than perylene and quina cridone under 
any plausible product market definition relating to colour index level . 
5.3.1.2.  Geographic market definition  
Commission’s precedents  
(44) The Commission has previously  considered that the relevant geographic market for 
pigments is at least EEA -wide and po ssibly worldwide in scope.   
(45) In case M.5355 – BASF / CIBA , the Commission’s market investigation showed that 
customers in the EEA were supplied from plants outside the EEA for pigments such 
as perylenes, suggesting a worldwide market.50 For some other pigme nts, such as 
bismuth vanadate, the Commission found that differences in regulation and prices 
suggested an EEA -wide market. Ultimately, the question was left open.  
 The Notifying Party’s view  
(46) The Notifying Party submits that the geographic scope of the pi gment sector is 
global.51 
(47) Firstly, the Notifying Party argues that the Parties and their competitors supply their 
customers globally from a limited number of production locations. For example, DIC 
produces perylene pigments [...] in its Bushy Park (South Ca rolina, US) plant, and 
sells it globally.52 
                                                 
   Should read: “at”  
50   See Case COMP/M.5355, BASF/ CIBA, decision of 12 March 2009, paragraph 116 . 
51   Form CO, paragraph 358.  
52   Form CO, paragraphs 35 9-364. 
 
 
12 (48) Secondly, the Notifying Party submits that the pigment sector is characterised by 
significant global trade flows, particularly from China and India into the Western 
hemisphere.53 By way of illustratio n, the Notifyi ng Party indicates that the volume of 
pigments imported into the EEA correspond to [80-90]% of the total estimated 
demand in the EEA. Out of these volumes imported into the EEA, [80-90]% originates 
in Asia, with China representing [40-50]% and India repres enting [30-40]%.54 Finally, 
the Parties stress that Chinese and Indian producers continue to expand production 
capacities and build distribution and warehousing facilities in the EEA to facilitate 
export and sales.55 
(49) Finally, the Notifying Party argues that the pigments sector is not subject to significant 
trans portation costs and not subject […] significant regulatory barriers. As an 
indication, the Parties submit that transportation and related costs, such as packaging 
and freight, represent well below [small percentage]  of total costs.56 In terms of 
regulation, the Notifying Party indicates that pigments are subject to the EU -wide 
REACH regulation.57 According to this regulation, manufacturers and importers of 
chemicals, including pigments, are obliged to re gister substances they produce and 
market. The Notifying Party considers that this does not form a barrier for non -EEA 
companies, evidenced by the significant amount of REACH registrations made by 
non-EU companies. The Notifying Party illustrates this furt her by supplying multiple 
examples of Chinese and Indian  pigment suppliers showcasing their REACH 
compliance.58 
The Commission’s assessment  
(50) The Commission’s market investigation gave sufficient evidence to conclude that the 
market for pigments  is global .  
(51) First, the market investigation confirmed the Notifying Party’s claim that pigments 
are non -hazardous and easy to transport materials, and that transports costs are low 
compared to pigments cost per unit of weight .59 
(52) Second, a majority of pigments manufactur ers either already supply their EEA 
customers from plants outside the EEA or consider that plants outside the EEA could 
credibly do so,60 and a majority of customer s either already purchase their pigments 
globally or would consider doing so in case of a SSN IP within the EEA.61 As such, it 
                                                 
53   Form CO, paragraph 36 7. 
54   Form CO, paragraph 37 1. 
55   Form CO, paragraph 36 9. 
   Should read: “to”  
56   Form CO, paragraph 37 5. 
57   EU Regulation (EC) No 1907/2006 . 
58   Form CO, paragraphs 37 7-382. 
59   Responses to question s 17, 49, 81, 112 and 136  of Q1 – Questionnaire to pi gments cust omers.  
60   Responses to questions 8, 7, 27, 28, 46, 47, 65, 66, 84 and 85 of Q2 – Questionnaire to pi gments 
competitors.  
61   Responses to questions 14, 15, 46, 47, 78, 79, 110, 111, 134 and 135 of Q1 – Questionnaire to pi gments. 
customers.  
 
 
13 does not appear important for customers that their supplier’s factory be close to their 
production plants.62 
(53) Third, a majority of customers consider non -EEA manufacturers to be credible 
alternatives for EEA customer s.63 This l ast element should however be considered in 
light of the mixed feedback from customers regarding the ability of Chinese and Indian 
suppliers to meet their requirements  for high quality pigments  or to match the Parties’ 
products in terms of quality and cons istency; especially for perylene pigments, as set 
out in section 5.4.1  below.  
(54) In light of the above , the Commission considers that, to the effect of the present 
decision , the relevant geographic market for pigmen ts is worldwide , however  with a 
geographic differentiation between Chinese and Indian suppliers and the rest of the 
world, in particular as regards perylene  and quinacridone . Accordingly , the 
Commission considers that the assessment of the Transaction woul d not change under 
a possible relevant geographic market definition as  EEA -wide.  
5.3.2.  Printing inks  
(55) Printing inks are mixtures of colourants (pigments, preparations or dyes), binders, 
solvents and additives for use in printing processes. Printing inks have nume rous 
applications, such as print media products, packaging products, newspaper and books.  
5.3.2.1.  Product market definition  
Commission’s precedents  
(56) In previous decisions, the Commission considered segmentations of printing inks both 
on the demand side, into public ation and packaging inks as well as on the supply side, 
into paste and liquid inks. The Commission noted that the majority of publication inks 
are paste inks and most packaging inks are liquid inks. The Commission found that on 
the demand side, there is li mited substitutability between liquid and paste inks and that 
on the supply side, different equipment is required for manufacturing of liquid inks 
and paste inks.64 
(57) The Commission has additionally considered a further segmentation of paste inks into 
heatset  ink, coldset ink and sheetfed ink, and of liquid inks into gravure and 
flexographic inks.65  
(58) The Commission concluded that a segmentation based on physical characteristics, i.e. 
liquid inks and paste inks, provides a clearer market delineation than a segme ntation 
based on application. However, finally it left the question open.66 
                                                 
62   Responses to  questions 14.1, 46.1, 78.1, 110.1 and 134.1 of Q1 – Questionnaire to pi gments customers.  
63   Responses to questions 16, 48 and 80 of Q1 – Questionnaire to pi gments customers.  
64  Case No. COMP/M.1742 – Sun Chemical / Totalfina / Coates, para graph  9; COMP/M .3564  – CV / Ani 
Printing Inks, paragraph 8; COMP/M.3886 – Aster 2 / Flint Ink, paragraph 8.  
65  Case No. COMP/M.3886 – Aster 2 / Flint Ink, paragraph 9.  
66  Case No. COMP/M.3886 – Aster 2 / Flint Ink, paragraph 12.  
 
 
14 The Notifying Party’s view  
(59) The Notifying Party submits that a segmentation based on the physical characteristics 
of the ink, i.e. liquid and paste inks, is sufficient an d no further  segmentation would 
be appropriate.67 
(60) The Notifying Party argues that there is a high degree of supply -side substitutability 
among different types of liquid and paste inks. It further argues that the main 
difference between paste and liquid inks is the pigm ent load, with paste inks having a 
higher proportion of pigments.68 Despite the differences in pigment loads, the 
Notifying Party submits that same results can be achieved with liquid inks and paste 
inks and that the only difference is the amount of ink req uired. As paste inks contains 
more pigment, a thinner layer will achieve the same result as a thicker layer of liquid 
ink.69 The Notifying Party finally submits that paste and liquid inks do not require 
different chemistries of pigments; all pigments are su ited for use in all types of printing 
inks.70 
(61) However, if a subdivision of printing inks based on their physical characteristics 
(liquid or paste) and their type (between heatset ink, coldset ink and sheetfed ink 
within paste inks, and  between gravure and flexographic inks within liquid inks) was 
to be applied, the Notifying Party submits that DIC produces a third type of liquid inks 
that was not examined under any Commission precedent, which is jet inks.71 
The Commission’s assessment  
(62) From a demand -side pers pective, the market investigation did not provide any 
indications suggesting that the Commission should depart from its past decisional 
practice.  
(63) From the supply -side, while the market investigation provided strong indications that 
switching between paste and liquid ink constitutes a major strategic decision, 
involving considerable costs and efforts,72 it was inconclusive as to whether printing 
inks manufacturers had the ability to switch easily and in a timely manner between 
heatset, coldset and sheetfed in ks within paste inks.73 In a similar fashion, the feedback 
received from the market investigation did not allow the Commission to form a 
conclusion as to whether there would be a sufficient degree of supply -side 
substitutability between gravure, flexographi c and jet inks within liquid inks to 
consider these three types of liquid inks as forming a single product market.74 
(64) In any event, the Commission considers that, for the purpose of the present case, the 
exact scope of the product market definition for print ing inks can be left open, since 
no serious doubts as to the compatibility of the Transaction with the internal market 
                                                 
67  Form CO, paragraph 98 2. 
68  The Notifyin g Party explains that in general, paste inks have a pigment load of approximately 10 -15%, 
while liquid inks have a pigment load of 8% or lower, with small variations between the different sub -
segments. See also footnote 672 of the Form CO.  
69  Form CO, para graph 97 9. 
70  Form CO, paragraph 9 80. 
71  Form CO, paragraph 982.  
72  Responses to question 6 of Q3 – Questionnaire inks competitors.  
73  Responses to question 7 of Q3 – Questionnaire inks competitors.  
74  Responses to question 8 of Q3 – Questionnaire inks com petitors.  
 
 
15 arise under any plausible product market definition (i.e. segmented between liquid and 
paste inks or further segmented between heatset, c oldset and sheetfed inks within paste 
inks and between gravure, flexographic and jet inks within liquid inks).  
5.3.2.2.  Geographic market definition  
Commission’s precedents  
(65) The Commission has previously  defined the market for printing inks as EEA -wide. 
The Commissi on found that transport costs are comparatively low, there is a 
significant level of cross -border trade and all major competitors have a multinational 
presence. Considering the minimal level of imports into the EEA, the Commission 
excluded a global market.75 
The Notifying Party’s view  
(66) The Notifying Party submits that the liquid and paste ink markets are global. It argues 
that the Commission established in its previous decisions that transportation costs are 
low, price levels in different continents are compa rable, major competitors have 
multinational presence and local production is not a prerequisite to compete and that 
those characteristics are indicative of a global market.76 
The Commission’s assessment  
(67) From a demand -side perspective, the market investigati on did not provide any 
indications suggesting that the Commission should depart from its past decisional 
practice.  
(68) From the supply -side, while the vast majority of printing inks manufacturers indicated 
that suppliers from outside the EEA could credibly sup ply customers within the 
EEA,77 the market investigation proved inconclusive as to whether the respondents 
themselves would have the ability to supply customers within the EEA from plants 
outside the EEA without incurring additional costs and efforts.78 Some  respondents, 
though a minority, even suggested that they primarily supplied their customers from 
manufacturing facilities close to their customer’s plant in South -West Europe or the 
Mediterranean area.79 Some respondents also suggested that the geographic market 
could be wider for paste inks than for liquid inks, since liquid inks are more 
voluminous and transport costs per unit of value would are more important.80 
(69) In any event, the Commission considers that, for the purpose of the present case, the 
exact sc ope of the geographic market definition for printing inks can be left open, 
since the Transaction does not raise serious doubts as to its compatibility with the 
internal market, regardless of the precise geographic market definition (i.e. EEA -wide 
or world wide).  
                                                 
75  Case No. COMP/M.3886 – Aster 2 / Flint Ink, paragraphs 13 -14. 
76  Form CO paragraph 98 4. 
77  Responses to question 10 of Q3 – Questionnaire inks competitors.  
78  Responses to question 9 of Q3 – Questionnaire inks competitors.  
79  Responses to ques tion 9 of Q3 – Questionnaire inks competitors.  
80  Responses to question 11 of Q3 – Questionnaire inks competitors.  


 
 
18 The Notifying Party’s view  
(76) The Notifying Party’s arguments are twofold : the Notifying Party first presents 
general arguments that apply to all categories of pigments  under review , and then 
moves on to presenting arguments which are specific to each of the three colour 
spaces , which  it submits should be considered as separate relevant product market s. 
In this section the Notifying Party’s general arguments will be presented first, 
followed by the arguments that apply more specifically to perylene pigments. In the 
following sections,  the Commission lays down the specific arguments relating  to each 
specific chemical class.  
General considerations on all chemical classes  
(77) With respect to all categories of pigments , the Noti fying Party first explains that the 
Parties as well as their western competitors face increased competitive pressure from 
Chinese and Indian pigment manufacturers, who have progres sively acquired 
sufficient know -how over the course of the years to be prese ntly in a situation to 
supply pigments belonging to all chemical classes at very competitive rates  thanks to 
cheap labour and lower investment in R&D,  and with a quality that matches 
customers’ requirements.82 The Notifying Party argues that, doing so, Chin ese and 
Indian pigments manufacturers have benefitted from the expertise of former 
employees from western pigment manufacturers,83 as well as government support,84 
allowing them to enter these markets without incurring the significant developments 
costs that  were necessary to develop the specifications used to manufacture the 
pigments, as well as the industrial production of these pigments,85 and to progressively 
commoditise all chemical classes of pigments, including high performance 
pigments.86 As an illustra tion, the Notifying Party indicates that after the expiration of 
the relevant patent in 2014, the average selling price of DPP pigments fell from EUR 
[...] / kg in 2005 to EUR [...] / kg as of today.87 The Notifying Party also provides 
extracts from communi cations made by Chinese and Indian suppliers on their strategy 
to expand their pigment portfolio from low -end markets and commodity pigments to 
specialised markets and speciality pigments, and to develop their footprint in western 
countries88, [...].89 
(78) The N otifying Party also emphasises the fact that Chinese and Indian manufacturers 
take advantage of their better cost position to increase their production capacity and 
capacity shares, to the effect that the market is currently characterised by over -capacity 
at worldwide level,90 and that these manufacturers expand in western markets .91 In 
support of this statement, the Notifying Party provides [...],92 [...].93 The Notifying 
                                                 
82   Form CO, paragraphs 384 – 390 and 442 – 457. 
83   Form CO, paragraph 42 9. 
84   Form CO, paragraphs 42 6 – 428. 
85   Form CO, paragraphs 391 – 393. 
86   Form CO, paragraphs 40 3 – 408. 
87   Form CO , paragraph 40 9. 
88   Form CO, paragraphs 4 10 – 413. 
89   Form CO, paragraphs 41 4 – 425. 
90   Form CO, para graphs 4 30 – 436. 
91   Form CO, para graphs 437 – 438, 440 – 441 and 458 – 463. 
92   Form CO, para graph  439. 
93   Form CO, para graphs 464 – 472. 

 
 
20 (81) The Notifying Party also explains that the Parties’ customers [...],102 [...].103 [...].104 
[...].105 
(82) Regarding closeness of competition , the Notifyin g Party explains that the Parties are 
not close competitors, given that for most chemical classes, either only BCE 
manufactures this product (DIC [...]) or the increment brought by the Transaction is 
small.106 The Notifying Party also explains that research and development is of limited 
importance  for pigments .107  
(83) In a paper  regarding the impact of COVID -19 on the competitive assessment of the 
Proposed Transaction, the Notifying Party also explains that the COVID -19 pandemic 
has drastically reduced the demand for pigments,108 mainly from coating 
manufacturers active in the automotive industry, because the production of cars was 
stopped in many plants throughout the world, and sales of cars have collapsed in 
particular in the EEA,109 as well as in the printing indus try, because advertising 
materials represent 40% of all printing products in Europe and companies have cut 
their advertising expenses because of the crisis.110 The Notifying Party further 
explains that as a result of this situation, [...],111 [...],112 [...],113 while Chinese pigments 
manufacturers have resumed operations thanks to the earlier improvement of the 
sanitary situation in China, and have taken advantage of this situation to further expand 
their operations.114  
(84) Finally, i n a paper on buyer power of the Par ties’ customers annexed to the Form CO, 
the Notifying Party provides additional argumentation on why buyer power would 
make attempted price increases unsuccessful. The Paper on Buyer Power describes 
that for perylene and quinacridone, [...].115[...].116 [...].117 [...].118 
Considerations specific to the perylene chemical class  
(85) More specifically with respect to perylene pigments , the Notifying Party argues that 
the Parties are facing increasingly aggressive competition119 from a number of strong 
Chinese and Indian su ppliers, such as LianGang, HongGang, Gaoyou, Pidilite, Trust 
                                                 
102   Form CO, para graphs 686 – 710. 
103   Form CO, para graphs 711 – 717. 
104   Form CO, para graphs 718 and 728 – 735. 
105   Form CO, paragraphs 71 9 – 727. 
106   Form CO, paragraphs 736 -754. 
107   Form CO, paragraphs 757 -762. 
108   Annex 32 to the Fo rm CO , page 2.  
109   Annex 32 to the Form CO , pages 3 -7. 
110   Annex 32 to the Form CO , pages 2 -3. 
111   Annex 32 to the Form CO , page 2.  
112   Annex 32 to the Form CO , page 2.  
113   Annex 32 to the Form CO , pages 7 – 8. 
114   Annex 32 to the Form CO , page 9.  
115   Anne x 33 to the Form CO , page 3. 
116   Annex 33 to the Form CO , page 4. 
117    Annex 33 to the Form CO , pages 5-8.  
118   Annex 33 to the Form CO,  page 9. 
119   Form CO, paragraph 43 8. 
 
 
21 Chem, Union Colours, Anshan Hifi, as well as others,120 including in the most 
demanding applications such as automotive coating applications121 and that Chinese 
manufacturers are able to match the qu ality offered by western producers.122 The 
Notifying Party explains that both Liaoning Lian Gang’s and Liaoning Hong  Gang’s 
production capacity for  perylene pigments [...], and will continue to increase in the 
future due to planned capacity expansions . Due  to these capacity expansions, the 
Parties’ global capacity share for perylene pigments decreased [...], from [40-50]% to 
[30-40]%.123  
(86) In addition, the Notifying  Party provides a list of recent entries in the perylene market, 
mainly from the two Chinese manuf acturers : Riwa (who claims to export 80% of its 
pigment production) and Anshan Hifi, both vertically integrated with respect to 
napht halic anhydride (see paragraph (87) below), as well as the Czech manufacturer 
Synthesia.124 The Notifying Party submits that Chinese companies that entered into 
the perylene market benefitted in doing so from the support of Chinese governmental 
bodies such as the Shenyang Institute of Chemical Engineering and the Tianjin 
University Chemical Engineering Institute.125 
(87) In order to il lustrate the aggressiveness of Chinese competition with respect to [...],126 
[...].127 [...]. Finally, the Notifying Party explains that DPP pigments, for which  prices 
have decreased sharply over the past years (see paragraph (61) above) represent a very 
attractive alternative to perylenes and quinacridones pigments.128  
(88) The Notifying Party also emphasises the importance of napht halic anhydride as an 
input for the production of perylene pigments (see paragraph (63) above), a product 
which is only produced in Chin a, for which some  of the Parties’ largest Chinese 
competitors for perylene products (Liaoning Lian Gang, Liaoning Hong  Gang and 
Anshan Hifi) are vertically integrated, and in relation to which the 25% import tariffs 
imposed by the American administration o n several products imported from China 
puts DIC at a further [...] disadvantage compared to its Chinese competitors.129 
(89) The Notifying Party also points out that [...]. [...].130 The Notifying Party explains that 
this provides its customers with countervailing buying power, [...]. 
(90) Finally, in the Notifying  Party’s paper  regarding the impact of COVID -19, [...].131 
                                                 
120   Form CO, paragraphs 412 and 777.  
121   Form CO, paragraph 43 9. 
122   Form CO, parag raph 442.  
123   Form CO, paragraphs 433, 438 and 440.  
124   Form CO, paragraph 7 80. 
125   Form CO, paragraph 42 8. 
126   Form CO, paragraph 425.  
127   Form CO, paragraph 43 9. 
128   Form CO, paragraph 45 6. 
129   Form CO, paragraphs 39 4, 398, 477 and 4 80. 
130   Form CO, para graphs 69 1, 703 and 79 2-795. 
131   The Notifying Party’s submission regarding the impact of COVID -19, page 2.  
 
 
22 The Commission’s assessment  
(91) For the reasons set out in this section, the Commission considers that the Transaction 
raises serious doubts as to its compat ibility with the internal market with respect to 
perylene pigments. The Commission considers that serious doubts would also arise if 
the product market were instead considered at colour index level, as set out below.  
(92) First , as regards the Notifying Party’s  claim that Chinese and Indian competitors 
represent a significant competitive pressure on the Parties’ activities, while this 
argument was partly confirmed by the market investigation with respect to several 
other chemical classes, it was strongly contrad icted by the results of the market 
investigation with respect to perylene pigments. In particular, despite the fact that a 
small  majority of EEA customers would consider switching to a non -EEA supplier in 
case of a price increase for perylenes in the EEA,132 less than half of the EEA 
customers that expressed a view consider that Chinese and Indian suppliers are 
credible for the supply of perylene pigments to EEA customers.133 Moreover, a 
majority of customers procure their perylene pigments exclusively from ins ide the 
EEA .134  When asked to rate perylene manufacturers according to their competitive 
strength for the supply of perylene pigments in the EEA, customers respond in such a 
way that no Indian or Chinese manufacturer ranks among the top 5 suppliers.135 When 
asked to perform the same exercise for the supply of perylene pigments worldwide, 
only one Chinese or Indian  perylene pigments manufacturer ranks among the top 5 
suppliers worldwide, as number 5.136 These elements should be read in conjunction 
with the fact t hat virtually all  customers consider that there are less than 5 credible 
suppliers for perylenes  overall ,137 and, based on customers’ comments , it is likely that 
there  is in fact an even more  limited number of close competitors to the Parties for 
perylenes, at least for the highest quality grades .138  
(93) Beyond the average  rating received by each competitors, the Commission also 
considered the number of time s they were rated. Since customers only rated 
competitors they are aware of, have looked into in the past, o r have considered as 
potential suppliers  in the past, this is also a good indication of the degree of 
information customers have regarding the existence of various perylene suppliers, 
from around the world . While DIC, BCE and Clariant all get above 45 rati ngs, the 
number four supplier, Synthesia, gets rated 27 times, and the number one Chinese 
supplier, Liaoning LianGang, only 24 times.139  
(94) The fact that a majority  of perylene suppliers that the Commission asked customers to 
rate (based on a list of top peryl ene competitors provided by the Parties, a majority of 
which were Chinese suppliers) were unknown to customers is also reflected in the 
customers’  comments.  As one customer explains, “ As a customer it is very 
intransparent whether the a.m. suppliers are re ally producers. ” Another top customer 
                                                 
132   Responses to question 15 of Q1 – Questionnaire to pigments customers.  
133   Responses to question 16 of Q1 – Questionnaire to pigments customers.  
134   Responses to question 14 of Q1 – Questionnaire to pigments customers.  
135   Responses to question 24 of Q1 – Questionnaire to pigments customers.  
136   Responses to question 25 of Q1 – Questionnaire to pigments customers.  
137   Responses to question 21 of Q1 – Questionnaire to pigments customers.  
138   Responses to questions 24 and 25 of Q1 – Questionnaire to pigments customers.  
139   Responses to question 25 of Q1 – Questionnaire to pigments customers.  
 
 
23 of the Parties states that “ [Customer]  is generally aware that Clariant has limited 
participation in perylenes, but does not purchase perylene from Clariant and is not in 
a position to comment on its competitive streng th. [Customer]  does not have 
information on the competitive strength of any of the other suppliers listed and does 
not purchase perylene from any of them. ” A Japan -based top customer of the Parties 
also mentions that “ we don't know about such many supplier s mentioned above besides 
BCE, Clariant and DIC, we don't hear so much about reputation or evaluation about 
such non -traditional suppliers in our Japanese market. ”140  
(95) It should also be noted, in addition, that while the volume of pigments imported into 
the EEA correspond s to [80-90]% of the total estimated demand in the EEA  (with 
Chinese and Indian suppliers representing [80-90]% of the se imports – see also 
paragraph (77) above), this proportion is significantly lower for perylene pigments, 
namely around [30-40]% in volume and [20-30]% in value. Perylene is in fact, with 
azo condensation and pyrazoloquinazolone, among the chemical classes for which 
imports into the EEA represent the smallest fraction of EEA consumption  of all 
organic pigments . Given the appar ent lack of obstacles to trade pigments around the 
world, as well as the fact that [80-90]% of all pigment imports to the EEA are from 
Asia, this would seem  to indicat e that a substantial proportion of non -EEA competition 
for perylenes is considered a less credible source of supply by EEA customers. As 
such, these elements indicate that there is a degree of geographic differentiat ion in the  
market , where Chinese and Indian pigments manufacturers are more distant 
competitors that do not exert a strong compet itive pressure on the Parties’ perylene 
activities.   
(96) Second , with respect to the Parties’ arguments that their perylene customers can an d 
do switch [...]141 [...] while the result of the market investigation clearly evidenced the 
fact that the most demanding  applications for perylene are automotive coating 
applications, and in particular automotive refinish applications, which are mainly 
driven by western customers .142 This distinction is important inasmuch as the 
Commission considers  this to be a heterogeneous  product market, where the specific 
demands of customers will dictate the characteristics of products supplied and the 
proximity of suppliers in competitive terms.  [...]143 [...].144   
(97) The fact that the Notifying Party was not in a position to provide multiple  and 
meaningful examples of EEA customers switching away their perylene business to 
Chinese or Indian pigments manufacturers is suggestive of the fact that perylene 
products manufactured by suppliers other than the Parties are not considered  either 
close o r as credible alternatives as the Parties’ own perylene products.  
(98) In addition, while the Commission acknowledges that [...]145 [...]146. [...] results of the 
market investigation, evidencing that a majority of perylene customers consider that 
prices have incr eased by 5% or more in the last 5 years relative to the raw materials 
                                                 
140   Responses to question 25 of Q1 – Questionnaire to pigmen ts customers.  
141   Form CO, paragraph 439.  
142   Responses to question 11 of Q1 – Questionnaire to pigments customers.  
143   Form CO, paragraph 439.  
144   Form CO, paragraph 439.  
145   Form CO, paragraph 425.  
146   Form CO, paragraph 425.  
 
 
24 used for their production.147 Observing a [...] and increase in sales price suggests that 
while some of the Parties’ less demanding customers, accounting for roughly [...]% of 
the Parties’  sales, were able to switch away from them, the vast majority of the Parties’ 
customers had no choice [...] over the period. This is supported by results of the market 
investigation, evidencing the fact that virtually none of the Parties’ customers have 
qualified a new supplier for their perylene pigments over the past three years,148 as 
well as the fact virtually none of the Parties’ customers have switched supplier for 
their perylene pigments over the past three years.149 
(99) Third , as regards the Notifying Party ’s arguments that the perylene market is 
characterised by overcapacity, the Commission acknowledges the fact that the figures 
provided by the Notifying Party can indeed be considered as indicative of a situation 
of over -supply for perylene pigments overall . However, according to the information 
provided by the Notifying Party, the vast majority of this overcapacity is due to 
capacity expansions by Chinese perylene pigments manufacturers,150 which  cannot be 
considered close competitors to the Parties. As a res ult, such over -capacity is likely to 
have little bearing on the Parties’ activities and competitive interactions.  
(100)  Fourth , with respects to the Notifying Party’s arguments on the importance of 
naphthalic anhydride, which is only produced in China by some of  the Parties’ largest 
perylene competitors, as an input for the production of perylene pigments, the 
Commission notes that the fact that one of the major inputs for perylene production is 
controlled by Chinese competitors of the Parties does not appear to put the Parties, or 
their EEA competitors, at a disadvantage compared to other perylene manufacturers. 
As mentioned above in paragraph (91), when asked to rate perylene manufacturers 
according to their competitive strength for the supply of perylene pigmen ts in the EEA, 
customers respond in such a way that no Indian or Chinese manufacturer ranks among 
the top 5 suppliers in terms of average rate;151 and when asked to perform the same 
exercise for the supply of perylene pigments worldwide, only one Chinese or Indian  
perylene pigments manufacturer ranks among the top 5 suppliers worldwide, as 
number 5.152 Moreover, [...] data [...]153 [...]. It therefore appears quite clearly that, 
even assuming that the current supply situation with respects to naphthalic anhydride  
is putting the Parties at a [...] disadvantage compared to their Chinese competitors, the 
Parties’ position, as well as the performance and uniqueness of the products they 
manufacture, [...]. 
(101)  Fifth , as regards the constraints posed to the Parties by EU an d US manufacturers , the 
Commission notes that when asked to rate perylene manufacturers according to their 
competitive strength for the supply of perylene pigments either in the EEA, or 
worldwide, customers respond in such a way that BCE and DIC are consis tently 
ranked number one and number two respectively.154 A competitors also comments in 
this respect that “BCE and DIC are the leaders, others like Clariant are distant 
                                                 
147   Responses to question 31  of Q1 – Questionnaire to pigments customers.  
148   Responses to question 33 of Q1 – Questionnaire to pigments customers.  
149   Responses to question 34 of Q1 – Questionnaire to pigments customers.  
150   Form CO, paragraphs 430 – 436. 
151   Responses to question 2 4 of Q1 – Questionnaire to pigments customers.  
152   Responses to question 25 of Q1 – Questionnaire to pigments customers.  
153   Form CO, Annexes 18.1, 18.2 and 18.3.  
154   Responses to questions 24 and 25 of Q1 – Questionnaire to pigments customers.  
 
 
25 seconds.”155 This conclusion would apply to competition from both EEA and non -
EEA perylene pigments manufacturers.  
(102)  Sixth , as regards the Parties’ arguments regarding the ab sence of barriers to enter the 
perylene market, the Commission notes that the manufacturing process described by 
the Notifying Party for the synthesis of perylene pigments fr om naphthalic anhydride 
involves seven different steps, and the Notifying Party acknowledges that the 
production process is “ comparably complex ”.156 Moreover , the vast majority of 
customers and competitors w ere unable to name perylene manufacturers who had 
recently entered (in the past 5 years)157 or were intending to enter (in the next 2 years) 
the market for perylenes.158 Therefore, contrary to what the Notifying Party submits, 
barriers to enter the perylene market appear to exist.  
(103)  Seventh , as regards the Parti es’ argument [...] customers, who enjoy significant 
bargaining power, this argument was largely contradicted by the market investigation, 
that evidenced that the majority of customers consider that they have either little or 
very little bargaining power co mpared to the strongest suppliers for perylenes.159 
[...].160 [...]161 [...]. 
(104)  Eight h, as regards the Notifying Party’s arguments that they are not close competitors 
in perylene pigments, when asked specifically to name who DIC’s top competitors are 
on the one si de, and who BCE’s top competitors are on the other side, while other 
EEA competitors such as Clariant and DCC are mentioned a number of times, the 
Parties are by far more often mentioned to be each other’s closest competitors.162 
Moreover, in relation to the  potential impact of the Transaction, several customers 
suggest that the perylene market is already, as of today, rather concentrated, with very 
few alternative suppliers. One customer states: “ Actual number of EEA suppliers are 
reduced, so additional redu ction will bring to even less competition ”.163 Another 
comments : “The choice was already limited ”.164 A third one explains: “ Not enough 
serious competitioners  (sic) for BCE/DIC left in the market, just 1 or 2 ”.165 In 
summary, as a customer of the Parties puts it , “Alternative suppliers with a quality 
level of BASF and DIC/Sun are very rare. ”166 These elements support the conclusion 
that, contrary to what the Notifying Party claims, DIC and BCE are closely competing 
in the perylene market.  
(105)  Ninth , as regards the impa ct of the COVID -19, the Commission acknowledges the 
scale and importance of the very serious disruptions the COVID crisis created in the 
automotive industry as well as the printing industry, and estimates that in all likelihood  
                                                 
155   Respons es to question 16 of Q2 – Questionnaire to pigments competitors.  
156   Form CO, paragraph 156.  
157   Responses to question 36 of Q1 – Questionnaire to pigments customers and question 21 of Q2 – 
Questionnaire to pigments competitors.  
158   Responses to question 3 7 of Q1 – Questionnaire to pigments customers and question 22 of Q2 – 
Questionnaire to pigments competitors.  
159   Responses to question 27 of Q1 – Questionnaire to pigments customers.  
160   Form CO, paragraphs 691, 693 and 698.  
161   Form CO, paragraphs 693 and  698. 
162   Responses to question 26 of Q1 – Questionnaire to pigments customers.  
163   Responses to question 38 of Q1 – Questionnaire to pigments customers.  
164   Responses to question 38 of Q1 – Questionnaire to pigments customers.  
165   Responses to question 3 8 of Q1 – Questionnaire to pigments customers.  
166   Responses to question 13 of Q1 – Questionnaire to pigments customers.  
 
 
26 this crisis may indeed have lasting consequences in these industries, thus affecting the 
demand for pigments in general, and perylene pigments in particular  in the short and 
even medium terms . Nevertheless, in its assessment, the Commission also needs to 
take into account the fact th at a merger creates a structural changes in a market, which 
are likely to have long -lasting consequences. In addition, the Commission’s  initial  
market investigation was carried out between May -June 2020 and the market 
investigation following re -notificatio n in October -November 2020 , at a time when the 
COVID -19 and its potential consequences were already known to all market players. 
The Commission therefore  considers that the impact of this crisis taken into account 
by respondents, in particular when answeri ng questions about the effects of the 
Transaction and its impact on prices, quality, choice of products and innovation.  
(106)  Finally , and consistent with all of the above, the results of the market investigation 
showed that customers were concerned about the im pact of the Transaction. While a 
small  majority of customers considered that there would remain a sufficient number 
of suppliers post -Transaction,167 a significant majority considered that either slight or 
significant price increases were likely.168 Moreover, close to half of the customers that 
expressed a view expected either a small or a large decrease in the choice of products 
available to them.169 This is indicative of the fact that a majority of perylene customers 
expect a significant negative impact of the Transaction.  
(107)  In conclusion , based on the above findings, the Commission considers that the 
Transaction raises serious doubts as to its compatibility with the internal market in 
respect of perylene pigments.  
(108)  If the relevant product market were instead cons idered to be at colour index level, only 
two colour ind ices would be affected at worldwide level, namely PR179 and PV29 . 
The findings set out above in paragraphs (90) to (106) hold true for PR179 and PV29 
individually as well.  
(109)  In the first market investiga tion, the majority of concerns voiced by respondents that 
were specific to a single colour index pertained t o PR179. PV29, which is a smaller 
product  market  in terms of volume, was mentioned less frequently. Therefore, 
following the second notification of the Transaction, the Commission performed a 
targeted market investigation on, among others, perylene colour index PV29. This 
targeted market investigation further confirmed that the findings for perylene apply to 
PV29 as well . In particular, the lack of cr edible alternative suppliers for perylene 
pigments would appear to be even more critical  for PV29 (in addition to PR179) .  
(110)  The main competitors for PR179 and PV29 identified by the Parties are Chinese 
companies Liaoning Hong Gang  and Liaoning Liang Gang, w hich in fact appear to 
belong to the same group, Liaoning Companies  according to some respondents . The 
large majority of respondents to the market investigation indicated that they are not 
familiar with either of the Liaoning Companies . 170  Those that did i ndicate to be 
                                                 
167   Responses to question 38 of Q1 – Questionnaire to pigments customers.  
168   Responses to question 39 of Q1 – Questionnaire to pigment s customers.  
169   Responses to question 39 of Q1 – Questionnaire to pigments customers.  
170  See question 3 of Q6 – Questionnaire to pigments customers and question 3 of Q7 – Questionnaire to 
pigments competitors.  


 
 
29 (117)  As mentioned above in section 5 .4.1, the Notifying Party  argues that all red pigments  
with similar physical properties  form a single product market. Quinacridone pigments 
would be part of this hypothetical combined market. In this combined market, the 
Parties’ combined market shares amounts to [20-30]% worldwid e (with a [5-10]% 
increment from DIC). The Notifying Party’s estimates of the Parties’ and their largest 
competitors’ market shares for red pigments overall worldwide  are as laid out above 
in Table 7. 
The Notifying P arty’s view  
(118)  As described in section 5 .4.1, the Notifying Party presents arguments in its 
competitive assessment that apply broadly to all pigments, as well as arguments 
specific to quinacridone. Arguments that apply to all pigments have been laid out in 
section 5.4.1; arguments specific to quinacridones are presented in this section.  
(119)  The Notifying Party submits that quinacridone customers have significant 
countervailing buyer power. To evidence this, [...].178 The Notifying Party also 
submits that customers h ave plenty of credible alternative suppliers of quinacridone 
they can switch to, as will be detailed below.  
(120)  The Notifying Party indicates that [...].179 [...].180 
(121)  As described in paragraphs  (76) and (77), the Notifying Party argues that the Parties 
experience  significant competition , particularly  from Chinese and Indian entrants for 
all pigments. For quinacridones specifically, the Notifying Party submits that the 
Parties’ global capacity shares are falling due to capacity expansions of competitors, 
from [20-30]% in 2017 to [20-30]% in 2020. By way of illustration, the Notifying 
Party mentions a capacity expansion [...] by Pidlite [...], as well as capacity expansions 
[...] by Ami Pigments [...], [...] by Gharda [...] and [...] by Sudarshan [...].181 The 
Notifyin g Party’s estimates of global quinacridone production capacities are provided 
in Table 12, and show that according to the Notifying Party, six out of the top 
manufacturers are from China or India.182 
(122)  The Notifying Party indicates that because of the capacity  expansions, global 
production capacities exceeded demand by [more than 20] % in 2018, putting pressure 
on prices.183 Additionally, it indicate s that DPP, since its patent expiry, has become a 
lower -cost alternative to quinacridone, putting further downward p ressure on prices.184 
                                                 
178   Form CO, paragraph 796 -797. 
179   Form CO, paragraph 79 8. 
180   Form CO, Figure 105.  
181   Form CO, paragraph 43 4. [...]. 
182   Form CO, para graph 45 4. 
183   Form CO, paragraph 455.  
184   Form CO, paragraph 456.  

 
 
31 EEA. A small majority of customers indicate that they already source part of their 
quinacridones from Chinese and Indian suppliers today.190 
(129)  Despite these results , a majo rity of customers indicated there are barriers for suppliers 
from outside the EEA to supply EEA customers. One of the barriers named most 
frequently are regulatory barriers, notably REACH certification.191 However, as the 
Notifying Party indicates, a signifi cant number of non -EEA pigments suppliers  have 
obtained  REACH certification.192 These non -EEA suppliers include Chinese and 
Indian suppliers of quinacridone pigments.193 
(130)  Nevertheless, overall, a majority of customers and competitors expect no impact on 
their b usiness with respect to quinacridones in general as a result of the Transaction. 
Some mention that if the merged entity rationalises its product portfolio post -
Transaction, this may lead to requalification cost and effort.194 Notably, one customer 
states: “The situation with [q]uinacridones is much better than with the perylenes. 
Especially because Clariant remains as second market leader and there are already 
existing alternative capacities in Asia.”195 
(131)  However, w ith regard to specific colour indices within qu inacridone , some customers 
mention that competition is less credible for specific colour indices  because 
competitors to the Parties do not meet the required quality standards . Notably, one 
large customer states: “PR 202 in suitable qualities is currently o nly offered by the 
two parties, a Chinese manufacturer is currently developing an alternative product, 
PR 122 today available qualities from Chinese and Indian suppliers can substitute the 
products of the parties, for PV 019 substitution is difficult as ea ch product vary in its 
content of beta - and gamma crystal phase which leads to different technical 
performance” .196 
(132)  Contrary to the Notifying  Party’s claim that customers exercise significant 
countervailing buyer power, the majority of customers indicate tha t they experience 
their buyer power as equal or lower than that of the Parties. This includes large 
customers, one of which indicates that bargaining power is specifically low for colour 
indices for which there are few or no alternatives to the Parties, su ch as PR 202: “ For 
P R 122 bargaining power is significant. For P R 202 and For P V 019 lower 
bargaining power. ” Another customer points to the difficulty to substitute pigments: 
“Main reason for low negotiation power rate is the difficulty to substitute a  pigment 
by an other one from a competitor. We often are in a kind of "captive" commercial 
situation. ” 197 
(133)  Both customers and competitors consider Clariant as the strongest player in 
quinacridone pigments. The Parties are considered as the second and third s trongest, 
                                                 
190   Responses to question 46 of Q1 – questionnaire to pigments customers.  
191   Responses to question 49 of Q1 – questionnaire to pigments customers.  
192   See Form CO, paragraph 3 80. 
193   See Form CO, paragraph  382.  
194   Responses to question 72 of Q1 – questionnaire to pigments customers and question 43 of Q2 – 
questionnaire to pigments competitors.  
195   Responses to question 70 of Q1 – questionnaire to pigments customers.  
196   Responses to question 48 of Q1 – questionnaire to pigments customers.  
197   Responses to question 59 of Q1 – questionnaire to pigments customers.  
 
 
32 followed by Sudarshan of India.198 However, one competitor indicates the picture is 
different for some colour indices, indicating that PR202 is only supplied by the 
Parties.199 
(134)  Finally, the large majority of customers consider that sufficient supplie rs of 
quinacridone pigments in general remain post -Transaction.200 A small majority of 
customers expect a small increase in price, while most expect quality and innovation 
to be unaffected. Results on product choice are inconclusive, with no strong majority 
for any option.201 The majority of competitors expect no impact on price, quality or 
product innovation and a slight decrease in choice.202 However, some customers 
mention that too few alternative suppliers would remain for colour index PR202.203  
(135)  Because of the  mixed feedback on quinacridone colour indices PR202 and PV19 in 
the initial market investigation, the Commission focused, among others, specifically 
on these two colour indices in its targeted market investigation following re -
notification of the Transact ion. 
(136)  For PR202 , the only competitors identified by the Notifying Party, are Wenzhou 
Jinyuan and Zhejiang Yongquan of China . The majority of the respondents to the 
targeted market investigation following re -notification indicated not to be familiar 
with eit her of those competitors. The large majority of those that were familiar with 
them, indicated not to consider either of them as a credible PR202 supplier that is able 
to meet quality requirements. 204 Additionally, r espondents were not familiar with 
alternat ive suppliers of PR202 besides the Parties, Wenzhou Jinyuan and Zhejiang 
Yongquan.205  
(137)  Customers indicated it is difficult to switch from PR202 to an alternative supplier of 
PR202 quickly and without significant cost .206 As a result, the majority of customers 
consider that insufficient suppliers remain post -Transaction and that the Transaction 
will have a negative impact on price.207 
                                                 
198   Responses to question 57 of Q1 – questionnaire to pigments customers and question 36 of Q2 – 
questionnaire to pigments competitors.  
199   Respons es to question 36 of Q2 – questionnaire to pigments competitors.  
200   Responses to question 70 of Q1 – questionnaire to pigments customers and question 36 of Q2 – 
questionnaire to pigments competitors.  
201   Responses to question 71 of Q1 – questionnaire to p igments customers.  
202   Responses to question 42 of Q2 – questionnaire to pigments competitors.  
203   Responses to question 70 of Q1 – questionnaire to pigments customers.  
204  For example, on the customer side one explained that  explained that “ …. For "ideolo gical" reasons we 
prefer to avoid any supplies from Chinese suppliers  - potential troubles with quality standards, no trust 
in their declarations, governmental influence on their business ….”, another said that “ The quality of 
this products is not accepta ble. And the delivery time is very long.  Don't have any profesional technical 
support. ”; while a competitor said that “.. Wenzhou Jinyuan is mainly focussed on China in general and 
regarding PR 202, they are small.  Zhejiang Yongquan is not known to us as a  PR 202 producer …”, 
while another one said that “ … As per best of our knowledge only Wenzhou Jinyuan is producing PR202 
in smaller quantities. Zhejiang Yongquan is not known as a manufacturer of PR202 ...”. 
205   Responses to questions 13, 14, 16 and 17  of Q6 – Questionnaire to pigments customers  and responses 
to questions 11, 12, 13 and 14 of Q7 – Questionnaire to pigment competitors . 
206   Responses to question 19 of Q6 – Questionnaire to pigments customers . 
207   Responses to questions 20 and 21  of Q6 – Questi onnaire to pigments customers . 



 
 
36 (151)  The Notifying Party argues that the Parties’ customers [...] have countervailing buyer 
power [...].214 
 
The Commission’s assessment  
(152)  For the reasons set out in this section, the Commission considers that serious doubts 
can be excluded for phthalocyanine pigments (in case o f a product market definition 
by chemical class, with product differentiation within the product market) as well as 
for colour indices within the phthalocyanines chemical class (in case of a product 
market definition by colour index).  
(153)  If the product market  for phthalocyanine pigments was considered at chemical class 
level, the Parties’ combined market shares for phthalocyanine pigments would be [10-
20]% worldwide, well below the 20% threshold for a market to be considered as 
affected.  
(154)  If the product market for phthalocyanine pigments was  further segmented by colour 
indices, it would be affected only for the colour indices PB15 -4 and PG36.  
(155)  For PG36, the increment from the Transaction would remain marginal ( [0-5]%) with 
a HHI increment of <150. Therefore, in t he absence of any additional specific motive 
for concern (see also paragraph (136) below), the Commission considers that the 
Transaction does not raise competition concerns in relation to the market for PG36.  
(156)  For PB15 -4, the Parties’ combined market shares  are [20-30]% worldwide, with a [10-
20]% increment from BCE  and an HHI increment of [390-400]. However, the market 
investigation didn’t reveal any general concerns with respect to phthalocyanine 
pigments, nor did it reveal any specific concern with respect  to the PB15 -4 colour 
index.  
(157)  With respect to phthalocyanine pigments overall, which is not an affected market, the 
market investigation confirmed the Notifying Parties’ claim that the phthalocyanine 
pigments are a commoditised class of pigments, with a co mpetitive market as well as 
strong and credible competitors. A vast majority of respondents consider that there 
will remain a sufficient choice of credible phthalocyanine suppliers post -Transaction 
at both EEA and worldwide level,215 and the majority of cust omers expected either no 
impact or a decrease in the price of phthalocyanine pigments as a result of the 
Transaction at both worldwide and EEA level.216  
(158)  PB 15 -4 specifically is mentioned on very few occasions by either customers or 
competitors. While a numb er of customers emphasised for instance the very specific 
tint and properties of PB15 -1 and PB15 -6,217 this was not the case for PB15 -4. One of 
the very few occasions where PB15 -4 are mentioned explicitly is to emphasise the 
ability of switching supplier for  this particular colour index: “ Changing the supplier 
for PB15:4 gave remarkable savings ”218 For these reasons, the Commission considers 
                                                 
214  Form CO, paragraph 823-826. 
215  Responses to  question  102 of Q1 – Questionnaire to pi gments customers.  
216  Responses to question  103 of Q1 – Questionnaire to pi gments customers.  
217  Responses to question  84 of Q1 – Questionnaire to pi gments customers.  
218  Responses to question  91 of Q1 – Questionnaire to pigments customers.  

 
 
38 The Notifying Party’s view  
(163)  In addition to the general arguments (applying to all pigments) summarised in 
paragraphs (75) - (80) of the present decision, the Notifying Party submits that the 
increment brought by the Transaction i s minimal,219 that the Parties are facing the 
competition of several strong suppliers, including Chinese and Indian suppliers, such 
as Clariant, Anshan Hifi, Cinic, Sudarshan, Baihe/Lily,220 but also Vijay and Trust 
Chem,221 and that, as a result of the fierce c ompetition in the isoindoline market, 
[...].222  
(164)  The Notifying Party also emphasises the importance of o -phthalodinitrile, gaseous 
ammonia, solvents, diiminoisoindoline, methylene compounds and acids that are used 
as inputs for the production of isoindoline pigments. The Notifying Party claims that 
these products are controlled by Chinese manufacturers, including some of the Parties’ 
Chinese competitors for isoindoline products.223 
(165)  The Notifying Party also points out that both Parties’ customer base s for isoind oline 
pigments [...]. [...].224 The Notifying Party explains that this provides its customers 
with countervailing buying power, [...].225 
The Commission’s assessment  
(166)  For the reasons set out in this section, the Commission considers that serious doubts 
can be e xcluded for isoindoline pigments (in case of a product market definition by 
chemical class, with product differentiation within the product market) as well as for 
colour indices within the isoindolines chemical class (in case of a product market 
definition  by colour index).  
(167)  If the product market for isoindoline pigments w ere considered at chemical class level, 
the Parties’ combined market shares for isoindoline pigments would be [20-30]% 
worldwide, just over the 20% threshold for a market to be considered a s affected. The 
increment from DIC would be marginal, at [0-5]%, with a HHI increment of less than 
150. 
(168)  If the product market for isoindoline pigments were to be  further segmented by colour 
indices, it would be affected only for the colour index PY185, for  which the Parties’ 
combined market shares are [40-50]% worldwide (with a [0-5]% increment from 
DIC).  It should be noted that the other colour index within isoindolines, PY139, 
represents [high percentage]  of all isoindoline pigments, and is not affected. As for 
PY185, the Commission notes that the increment from DIC would be marginal, at [0-
5]%, with a HHI increment of less than 150. 
                                                 
219  Form CO, paragraphs 73 7-740 as well as paragraph 83 3. 
220  Form CO, paragraph 83 9. 
221  Form CO, paragraphs 41 1 and 41 2. 
222  Form CO, paragraphs 41 6, 419, 425 and 46 9. 
223  Form CO, paragraphs 477 – 479. 
224  Form CO, paragraph  845. 
225  Form CO, paragraph 84 7. 

 
 
40 The Notifying Party’s view  
(174)  In addition to the general arguments (applying to all pigments) summarised in 
paragraphs (75) - (80) of the present decision, the Notifying Party submits that the 
increment brought by the Transaction is minimal,229 that the Parties a re facing the 
competition of several strong Chinese and Indian suppliers, such Gharda, Trust Chem, 
Vijay -Digichem, Atul and Mallak,230 and that, as a result of the fierce competition in 
the quinophthalone market, [...].231  
(175)  In addition, the Notifying Party str esses the fact that [...].232 
(176)  The Notifying Party also points out that part of the competition it faces results from 
recent entries on the quinophthalone market, such as the entry of Vijay in 2015,233 and 
that the quinophthalone market is nowadays characterise d by overcapacity.234 
The Commission’s assessment  
(177)  For the reasons set out in this section, the Commission considers that serious doubts 
can be excluded for quinophthalone pigments (in case of a product market definition 
by chemical class, with product differ entiation within the product market) as well as 
for colour indices within the quinophthalone chemical class (in case of a product 
market definition by colour index).  
(178)  If the product market for isoindoline pigments was considered at chemical class level, 
the Parties’ combined market shares for quinophthalone pigments would be [30-40]% 
worldwide, with only a small increment from DIC ( [0-5]%). Moreover, account 
should be taken of the fact that [...]. The same argument also holds true if the product 
market for q uinophthalone pigments was  further segmented by colour indices , 
considering that there is only one colour index within quinophthalones (PY138) . 
(179)  Most importantly, a vast majority of respondents consider that there will remain a 
sufficient choice of credible  quinophthalone suppliers post -Transaction,235 and the 
majority of customers expected either no impact or a decrease in the price of 
quinophthalone pigments as a result of the Transaction.236 Similarly, a majority of 
customers expect either no impact or an inc rease in the quality, choice and innovation 
for quinophthalone pigments as a result of the Transaction.237 These elements also 
hold true at colour index level, as the Commission specifically asked respondents to 
the market investigation for every question to  explain whether their reply would 
change based on a narrower market definition.  
(180)  In light of the above, the Commission considers that the Transaction does not raise 
serious doubts as to its compatibility with the internal market on the market for 
quinophth alones  due to non -coordinated horizontal effects , irrespective of whether the 
                                                 
229  Form CO, p aragraphs 73 7-740 as well as paragraph 867. 
230  Form CO, paragraph 880. 
231  Form CO, paragraphs 42 5 and 883. 
232  Form CO, paragraphs 868, 876 and 877.  
233  Form CO, paragraph 882.  
234  Form CO, paragraph 884.  
235  Responses to question  150 of Q1 – Questionnaire to pigments customers.  
236  Responses to question  151 of Q1 – Questionnaire to pi gments customers.  
237  Responses to question 151 of Q1 – Questionnaire to pi gments customers.  

 
 
42 (see paragraph (78) above).245 In addition the Notifying Party explains that [...],246 that 
BCE is facing significant comp etitive pressure, noticeably from Anshan, […],247 
[...].248 
(186)  For isoindolinone,  the Notifying Party submits that isoindolinone is among the 
products [...],249 that [...],250 and that the isoindolinone market is characterised by 
overcapacity.251 
(187)  For pyrazoloquinazolon e, the Notifying Party does not mention any other argument, 
either as an addition or as a complement, to the ones summarised in paragraphs (75) - 
(80) of the present decision, beside the fact that [...] and that the isoindolinone market 
is characterised by  overcapacity.252 
(188)  For bismuth vanadate pigments, the Notifying Party submits that that [...].253 
Moreover, the Notifying Party explains that [...], to such an extent that these would 
now be qualified as commoditised pigments.254 
The Commission’s assessment  
(189)  For a ll five chemical classes considered under section  5.4.6 , market shares estimates 
of the Parties, as well as their competitors, allowed the Commission to compute HHI 
as well as HHI increment estimates in support of its assessment.  
(190)  For DPP, at worldwide leve l, the Parties’ combined market share in the overall market 
for DPP in 2019 was [20-30]%, with a small increment of [0-5]% from DIC, and a 
HHI increment of less than 150. The Parties’ shares in each of the potential sub -
segments are also modest. Moreover, the Commission’s assessment should take into 
account the fact that [...]. Finally, no material concerns were raised in the course of 
the market investigation regarding the Parties’ horizontal overlap in DPP. In light of 
the above, the Commission considers that the Transaction does not raise serious doubts 
as to its compatibility with the internal market  due to non -coordinated horizontal 
effects  in relation to the market for DPP.  
(191)  For azo condensation, at worldwide level, the Parties’ combined market share in  the 
overall market for azo condensation in 2019 was [20-30]%, with a negligible 
increment of [0-5]% from DIC, and a HHI increment of less than 150. The Parties’ 
shares in each of the potential sub -segments are also modest. Moreover, the 
Commission’s asses sment should take into account the fact that [...]. Finally, no 
material concerns were raised in the course of the market investigation regarding the 
Parties’ horizontal overlap in azo condensation. In light of the above, the Commission 
considers that the Transaction does not raise serious doubts as to its compatibility with 
                                                 
245  Form CO, paragraph 39 5. 
246  Form CO, paragraph 73 8. 
247  Form CO, paragraphs 41 6 and 419. 
248  Form CO, parahraph 42 5. 
249  Form CO, paragraph 4 20. See also Annex A of Form CO, paragraph 24. 
250  Form CO, paragraph 73 8. See also Annex A of Form CO, paragraph 13. 
251  Annex A of Form CO, paragraph 25. 
252  Annex A of Form CO, paragraph 35. 
253  Form CO, paragraph 73 8. See also Annex A of Form CO, paragraph 59. 
254  Annex A of Form CO, paragraph 66. 
 
 
43 the internal market due to non -coordinated horizontal effects in relation to the market 
for azo condensation.  
(192)  For isoindolinone, at worldwide level, the Parties’ combined market share i n the 
overall market for isoindolinone in 2019 was [30-40]%, with a small increment of [0-
5]% from DIC, and a HHI increment of less than 150. The Parties’ shares in each of 
the potential sub -segments are also modest. Moreover, the Commission’s assessment 
should take into account the fact that [...]. Finally, no material concerns were raised in 
the course of the market investigation regarding the Parties’ horizontal overlap in 
isoindolinone. In light of the above, the Commission considers that the Transactio n 
does not raise serious doubts as to its compatibility with the internal market  due to 
non-coordinated horizontal effects  in relation to the market for isoindolinone.  
(193)  For pyrazoloquinazolone, at worldwide level, the Parties’ combined market share in 
the o verall market for pyrazoloquinazolone in 2019 was [30-40]%, with a small 
increment of [0-5]% from DIC, and a HHI increment just above  150 ( [150-160]). The 
Parties’ shares in each of the potential sub -segments are also modest. Moreover, the 
Commission’s ass essment should take into account the fact that [...], DIC is likely to 
have a market power even lower than suggested by its (already modest) market shares. 
Finally, no material concerns were raised in the course of the market investigation 
regarding the Pa rties’ horizontal overlap in pyrazoloquinazolone. In light of the above, 
the Commission considers that the Transaction does not raise serious doubts as to its 
compatibility with the internal market due to non -coordinated horizontal effects in 
relation to t he market for pyrazoloquinazolone.  
(194)  For bismuth vanadate pigments, at worldwide level, the Parties’ combined market 
share in the overall market for bismuth vanadate pigments in 2019 was [20-30]%, with 
a negligible increment of [0-5]% from DIC, and a HHI inc rement of less than 150. At 
EEA level, the Parties’ combined market share in the overall market for bismuth 
vanadate pigments in 2019 was [20-30]%, with a negligible increment of [0-5]% from 
DIC, and a HHI increment of less than 150. The Parties’ shares in  each of the potential 
sub-segments are also modest. Moreover, the Commission’s assessment should take 
into account the fact that [...], DIC is likely to have a market power even lower than 
suggested by its (already modest) market shares at both EEA and wo rldwide level. 
Finally, no material concerns were raised in the course of the market investigation 
regarding the Parties’ horizontal overlap in bismuth vanadate pigments. In light of the 
above, the Commission considers that the Transaction does not raise s erious doubts as 
to its compatibility with the internal market  due to non -coordinated horizontal effects  
in relation to the market for bismuth vanadate pigments.  
5.5. Competitive assessment of the vertical relationships  
5.5.1.  Pigments (upstream) with printing inks (d ownstream)  
(195)  Both Parties are active in the manufacture of pigments. Only DIC is active in the 
manufacture of printing inks. The link is vertically affected because the Parties’ 
combined market shares in the sales of certain pigments (namely perylenes, 
quina cridones, pyrazoloquinazolone, isoindolinone, quinophthalone, azo 
condensation, bismuth vanadate and DPP) and certain colour indexes are above 30% 
(see Section 5.4 above).  

 
 
45 (199)  The Notifying Party also submits that there is no risk of customer foreclosure given 
DIC’s reasonable market shares downstream (except in gravure liquid inks), as well 
as the fact that colourants have multiple uses other than the manufacture of print ing 
inks, so that colourant manufacturers have multiple customers outside the printing 
industry.260 
The Commission’s assessment  
(200)  As regards a potential input foreclosure strategy,  the Commission first notes that 
the Parties’ ability to put in place such an in put foreclosure strategy should be put into 
perspective in light of the significance  of resales between pigments competitors in the 
industry, as is evidenced by the significant number of purchases, resales and even 
contractual relationships among pigment m anufacturers.261 This is also evidenced by 
the fact that for five classes of pigments among the ten  chemical classes that are 
affected as a result of the Transaction, [...] (see Table 20 above). The relatively high 
number of pigment distributors active on the market262 further enriches the picture, to 
such an extent that customers are often not aware of whether the pigment they 
purchase from a given supplier was actually manufacture d by that supplier or not. As 
an illust ration, only a small minority of customers that responded to questions 
regarding  quinophthalones were aware of the fact that [...].263 For all these reasons, it 
appears unlikely that the Parties would have the ability to put in place a foreclosure 
strategy t hat would enable them to target printing ink manufacturers specifically, 
because any product they sell to a distributor or a competitor, as a result of a supply 
agreement for instance, might end up eventually being sold to any end -customer, 
including print ing ink manufacturers.  
(201)  Moreover, the Commission notes that given the worldwide nature of the market for 
pigments, the Parties would most likely lack the ability to put in place such an input 
foreclosure strategy for any pigment for which their combined mar ket share 
worldwide is lower than 30%. This leaves only perylenes, quinophthalones, 
isoindolinones and pyrazoloquinazolone, as well as some colour indices within these 
chemical classes, as potential candidates for input foreclosure. These represent only 
four chemical classes out of over twenty, and, as the Notifying Party sets out, less than 
[small percentage]  in volume of all of DIC’s sales of pigments to printing inks 
manufacturers, and [small percentage]  in volume of all BCE’s sales of pigments to 
printi ng inks manufacturers (see paragraph (195) above). As such, the Parties would 
therefore assuredly lack the ability to foreclose access to all pigments that are used as 
an input for the manufacture of printing inks.  
(202)  Most importantly, even for pigment classe s where the Parties’ combined market share 
level is above 30% at worldwide level, a majority of printing inks manufacturers that 
expressed a view consider that there would remain sufficient sources of pigments for 
them to manufacture printing inks if the c ombined entity decided to stop supplying 
this input product to them.264  
                                                 
260  Form CO, paragraphs 99 7-1 001. 
261  Responses to question  2 of Q2 – Questionnaire to pigments competitors.  
262  Responses to question  1 of Q1 – Questionnaire to pigments customers.  
263  Responses to questions 129 – 152 of Q1 – Questionnaire to pigments customers.  
264  Responses to question  21 of Q3 – Questionnaire to inks competitors.  
 
 
46 (203)  For the reasons set out above, the Commission concludes that the Parties would lack 
the ability to foreclose access to pigments as an input for the manufacture of printing 
inks.  
(204)  As regards incentive and effects  of a potential input foreclosure strategy , it is not 
necessary for the Commission to conclude on whether the Parties would have an 
incentive to engage in a potential input foreclosure strategy aiming at foreclosing 
access to pigme nts or whether such a foreclosure strategy would have effects, as the 
lack of ability would already prevent the Parties to engage in such a potential 
foreclosure strategy in the first place.   
(205)  As regards potential customer foreclosure, the Commission first notes that DIC’s 
ability to engage in such a foreclosure strategy does not change because of the 
Transaction, since only DIC is active in the manufacture of printing inks. It is recalled 
that DIC’s market share in printing inks overall is moderate (below t he 30% 
threshold), and only exceeds the 30% threshold for gravure inks in the EEA. However, 
the potential sub -divisions of printing inks do not appear to be relevant for the analysis 
of potential customer foreclosure, given that all pigments are suited to be used in all 
types of printing inks and that the manufacture of different types of printing inks do 
not require significantly different amount s of pigments. Therefore, any upstream 
competitor of the Parties in the market for pigments would likely be indi fferent to 
whether DIC is stronger in the production of certain types of printing inks rather than 
others, because their main interest with respect to potential customer foreclosure 
would be whether DIC is an important buyer of pigments for the manufacture  of inks 
overall. In a similar way, the fact that DIC’s market share for printing inks exceed the 
30% threshold only for gravure inks in the EEA, but not at worldwide level does not 
appear to be relevant in the context of the analysis of potential customer  foreclosure, 
given the worldwide nature of the market for pigments. Therefore, any upstream 
competitor of the Parties in the market for pigments would likely be indifferent to 
whether DIC is stronger in the production of printing inks in certain geographi c areas 
rather than others, because their main interest with respect to potential customer 
foreclosure would be whether DIC is an important buyer of pigments at worldwide 
level for the manufacture of inks overall.  
(206)  As a consequence, the most relevant metri c to assess the Parties’ ability to foreclose 
access to DIC as a customer for pigments for the manufacture of printing inks appears 
to be DIC’s market share in printing inks overall, at worldwide level, insofar as this 
market share is indicative of DIC’s i mportance as a purchaser of pigments for the 
manufacture of inks. This market share being relatively low ( [20-30]%), it would 
therefore appear unlikely that the Parties would have the ability to foreclose access to 
DIC as a customer for pigments for the ma nufacture of printing inks.  
(207)  This is even more the case in view of the fact that DIC’s market share downstream in 
the manufacture of printing inks overall, at worldwide level actually provide an over -
estimated indication of DIC’s importance as a purchaser of pigments for the 
manufacture of inks, given that DIC is already at least partially vertically integrated 
with respect to its needs for pigments in the manufacture of inks, and that part of the 
pigments used in the manufacture of that [...]. Finally, pig ments have a number of uses 
other than the manufacture of inks, which is an additional reason why DIC’s market 
share downstream in the manufacture of printing inks overall, at worldwide level 
actually provide an over -estimated indication of DIC’s importanc e as a purchaser of 
pigments overall.  
 
 
47 (208)  For the reasons set out above, the Commission concludes that the Parties would lack 
the ability to foreclose access to DIC as a customer for pigments for the manufacture 
of printing inks.  
(209)  As regards incentive and effec ts of a potential customer foreclosure strategy , it is not 
necessary for the Commission to conclude on whether the Parties would have an 
incentive to engage in a potential customer foreclosure strategy aiming at foreclosing 
access to DIC as a pigment custo mer active in the manufacture of inks, or whether 
such a foreclosure strategy would have effects, as the lack of ability would already 
prevent the Parties to engage in such a potential foreclosure strategy in the first place.  
(210)  In light of the above, taking account of the results on the market investigation and of 
all the evidence available to it, the Commission considers that the Transaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
the vertical link betwee n pigments (upstream) and printing inks (downstream).  
6. PROPOSED REMEDIES  
6.1. Framework for the assessment of the commitments  
(211)  Where a concentration raises serious doubts as regards its compatibility with the 
internal market, the merging parties may undertake to modify the concentration to 
remove the grounds for the serious doubts identified by the Commission. Pursuant to 
Article 6(2) of the Merger Regulation, where the Commission finds that, following 
modification by the undertakings concerned, a notified concent ration no longer raises 
serious doubts, it shall declare the concentration compatible with the internal market 
pursuant to Article 6(1)(b) of the Merger Regulation.  
(212)  As set out in the Commission Notice on remedies acceptable under Council 
Regulation (EC) No  139/2004 and under Commission Regulation (EC) No 802/2004 
(the “Remedies Notice”) ,265 the commitments have to eliminate the competition 
concerns entirely, and have to be comprehensive and effective from all points of 
view.266  
(213)  In assessing whether commitments  will maintain effective competition, the 
Commission considers all relevant factors, including the type, scale and scope of the 
proposed commitments, with reference to the structure and particular characteristics 
of the market in which the transaction is l ikely to significantly impede effective 
competition, including the position of the parties and other participants on the 
market.267 
(214)  In order for the commitments to comply with those principles, they must be capable 
of being implemented effectively within a s hort period of time. Concerning the form 
of acceptable commitments, the Merger Regulation gives discretion to the 
Commission as long as the commitments meet the requisite standard. Structural 
commitments will meet the conditions set out above only in so fa r as the Commission 
is able to conclude with the requisite degree of certainty, at the time of its decision, 
                                                 
265  OJ C 267, 22.10.2008, p. 1.  
266  Paragraph 9 of the Remedies Notice.  
267  Paragraph 12 of the Remedies Notice.  
 
 
48 that it will be possible to implement them, and that it will be likely that the new 
commercial structures resulting from them will be sufficiently workable and lasting to 
ensure that serious doubts are removed.268 Divestiture commitments are normally the 
best way to eliminate competition concerns resulting from horizontal overlaps.  
6.2. Proposed commitments  
(215)  On 16 November 2020, the Notifying Party submitted  a set of commitments under 
Article 6(2) of the Merger Regulation (the “ Initial Commitments ”), in order to render 
the concentration compatible with the internal market.  
(216)  The Commission market tested the Initial Commitments  to assess whether they are 
suffici ent and suitable to remove the serious doubts identified in Section 5 of this 
decision. The feedback received from customers and competitors during the market 
test confirmed that the Initial Commitments  could in principle remedy the serious 
doubts identifi ed by the Commission, subject to modifications to address a number of 
specific issues described below in Section 6.2.2 of this decision. On 3 December  2020, 
the Parties submitted revised Commitments under Article 6(2) of the Merger 
Regulation (the “ Final C ommitments ”) that aim to address the issues identified by 
the Commission.  
6.2.1.  Description of the Initial Commitments  
(217)  In order to address the competition concerns identified by the Commission and render 
the Transaction compatible with the internal market, the Notifying Party submitted 
commitments consisting of the divestiture to a suitable purchaser (the “ Purchaser ”) 
of DIC’s manufacturing facility located in Bushy Park (US)  (the “ Divestment 
Business ”). 
(218)  The Commitments provide for a so -called “upfront buyer pro vision” pursuant to which 
the Transaction cannot be implemented before the Notifying Party has entered into a 
final binding sale and purchase agreement for the sale of the Divestment Business and 
the Commission has approved the Purchaser and the terms of s ale. T he Purchaser shall 
be an industry participant with experience in the pigment or colourants business.  
6.2.1.1.  Scope of the Divestment Business  
(219)  The Divestment Business consists of DIC’s global business for:  
 the Divestment Products , comprising of  
(i) Perylene pigm ent products under the colour indices PR179, PV29, 
PR123, PR190 and PR224 manufactured at the Bushy Park Facility 
and sold by DIC globally (“ Bushy Park Perylene Products ”); 
(ii) Quinacridone pigment products under the colour indices PR122, 
PR202,  PV19 and PV55  manufactured at the Bushy Park Facility and 
sold by DIC globally (“ Bushy Park Quinacridone Products ”);  
                                                 
268  Paragraph 10 of the Remedie s Notice.  
 
 
49 
 the Bushy Park Other Products , comprising of  
(i) Isoindoline (colour index PY139);  
(ii) Azo (colour index PR188); and  
(iii) Carbon Black (PBl7) pigment products  
manu factured at the Bushy Park Facility and sold by DIC globally (“ Bushy 
Park Other Products ”); 
(220)  The Divestment Business will contain the following tangible assets:  
 the Bushy Park Facility , including, but not limited to:  
- all tangible manufacturing assets owned by DIC, regardless of location, 
used to manufacture or contributing to the manufacture of the Divestment 
Products and the Bushy Park Other Products in the Bushy Park Facility, 
[...]; 
- the real estate owned by DIC and housing , the tangible manufacturing 
assets used for the manufacturing of the Divestment Products and the 
Bushy Park Other Products, as well as the related ground leases at the 
Bushy Park Facility;   
 any inventory  of Divestment Products and Bushy Park Other Products, raw 
materials used in the pro duction of the Divestment Products and Bushy Park 
Other Products, and the Divestment Products and Bushy Park Other Products;  
 the transfer  of all advertising, marketing, sales, publicity and presentational 
materials designed for and used in connection with  the Divestment Products 
and Bushy Park Other Products, or copies of any such materials designed for 
and used in connection with the Divestment Products and Bushy Park Other 
Products for a time period to be agreed by DIC and the Purchaser, subject to 
repri nting the Purchaser’s name, and any copyrights owned by DIC in such 
materials;  
(221)  The Divestment Business will contain the following intangible assets:  
 the assignment of all of DIC’s know -how and intellectual property rights, if 
any, that is used by DIC excl usively or primarily  to develop, manufacture, test, 
market the Divestment Products and Bushy Park Other Products at the Bushy 
Park Facility , 
 an indefinite, royalty -free, irrevocable, non -exclusive, global license under 
DIC’s other intellectual property rig hts, if any, to use all know -how and other 
intellectual property rights not exclusively or primarily used by DIC to 
develop, manufacture, test, market the Divestment Products and Bushy Park 
Other Products at the Bushy Park Facility ; 
 to the extent it concer ns solely or predominantly the Divestment Products or 
the Bushy Park Other Products, the Parties shall transfer all R&D and pipeline 
projects and related information existing at the Effective Date to the Purchaser. 
To the extent they do not concern solely or predominantly the Divestment 
Products or the Bushy Park Other Products, the Parties will provide a royalty -
 
 
50 free, irrevocable, non -exclusive, global license to these R&D and pipeline 
projects;  
 all historic production and quality control data gathered by DIC and held by 
DIC of the Divestment Products and Bushy Park Other Products and historic 
records on compliance with applicable regulations; provided, however, that 
any parts of such records that do not relate to the Divestment Products and 
Bushy Park Othe r Products may be redacted from the records delivered to the 
Purchaser ;   
 the QuindoTM and PerrindoTM brand and any associated trademarks and 
product names;  
 at the option of the Purchaser, a transitional, non -exclusive, royalty -free 
licence for the tradem arks SunPlastTM, SunBriteTM and FanchonTM for a 
transitional period up to [...]. 
(222)  The Divestment Business will contain the following contracts, agreements, 
commitments and understandings:  
 where applicable, and to the extent  contractually possible, the trans fer of any 
supply arrangement, customer contracts, contract rights, commitments, and 
customer orders of the Divestment Products and Bushy Park Other Products 
which contribute to the current operation or are necessary to ensure the 
viability and competitive ness of the Divestment Business  and all related 
prepayments, prepaid expenses, credits, etc. ; for contracts that are legally not 
transferable (if any), DIC will undertake its best efforts to novate written 
contracts for the supply of the Divestment Product s; DIC will take 
commercially reasonable steps to encourage Customers to move their 
Divestment Products and Bushy Park Other Products purchasing volumes to 
the Purchaser;  
 where applicable, and to the extent contractually possible, the transfer of any 
contr acts, agreements commitments and understandings with the Divestment 
Business’ suppliers for the period of time between 2015 and closing;  
 for the contracts where DIC will be a counterparty, DIC commits to give the 
option to the Purchaser [...]. 
(223)  The Divestm ent Business will include the following customer, credit and other 
records:  
 the transfer of a list of all customers for the Divestment Products and Bushy 
Park Other Products, including pending contacts or negotiations with potential 
new Customers, provided , however, that DIC may continue to use such lists to 
the extent they relate to its retained businesses ; 
 where applicable, the transfer of any customer records and transactional data 
which contribute to the current operation or are necessary to ensure the 
viability and competitiveness of the Divestment Business, provided, however, 
that DIC may continue to use such records and transactional data to the extent 
they relate to its retained businesses; and provided further, that any parts of 
such documentation t hat do not relate to the Divestment Business may be 
redacted from the versions delivered to the Purchaser; and provided further, 
 
 
51 that to the extent that DIC is obliged to retain such documents in support of 
legal obligations, DIC shall be entitled to do so ; and, provided further, that 
DIC shall not be required to transfer any such customer records and 
transactional data that do not relate to the Divestment Business; where third -
party consent is required for customer documentation to be transferred, DIC 
unde rtakes to make all best efforts to obtain such consent;  
 a list of all current suppliers of raw materials for the production of the 
Divestment Products and Bushy Park Other Products . 
(224)  The Divestment Business includes the relevant personnel, i.e. [...] employ ees, 
currently employed at the Bushy Park Facility to the extent engaged in operations 
relating to the Divestment Products, subject to employee consent and applicable 
labour laws and other relevant legislation, that are necessary to ensure the viability 
and competitive ness of the Divestment Business.  
(225)  The Divestment Business includes, to the extent transferable, all licences, permits and 
authorisations specific to the Bushy Park Facility which contribute to the current 
operation or are necessary to ensure th e viability and competitive ness of the 
Divestment Business.  
6.2.1.2.  Other elements of the Initial Commitments  
(226)  To reinforce the structural effect of the Initial Commitments , the Notifying Party  
commit s not to reacquire influence over the Divestment Business for a p eriod of [...] 
as from Closing.  
(227)  Furthermore, with the aim of ensuring a smooth transfer of the Divestment Business, 
the Notifying Party committed to provide transitional services (the “ Transitional 
Services Agreement ”), for a period of up to [...] after Cl osing at [...], extendable for 
[...], for the supply of services necessary for the viability and competitiveness of the 
Divestment Business to the Purchaser. The transitional services include , subject to the 
Purchaser’s requirements, IT, HR and payroll, fi nance, purchasing, supply chain, 
customer service, treasury, regulatory, EHS, IP, insurance services and tax.  
(228)  The Initial Commitments  also provide that the Notifying Party should enter into 
related commitments, inter alia  regarding the separation of the D ivestment Business 
from its retained businesses, the preservation of the viability, marketability and 
competitiveness of the Divestment Business, including the appointment of a 
monitoring trustee and, if necessary, a divestiture trustee.  
6.2.1.3.  Notifying Party’s views  
(229)  The Notifying Party argues that the Initial Commitments  would eliminate the 
Commission’s serious doubts as to the compatibility of the Transaction with the 
internal market . In particular, the Notifying Party is of the view that:  
 The Initial Commitmen ts would address the Commission’s concerns as they: 
(i) remove the large majority of the overlap between the Parties for all perylene 
pigments  (ii) remove the large majority of the overlap between the Parties 
quinacridone colour index PR202 ; 
 
 
52 
 The Divestment  Business is comprehensive and effective, allow ing the 
Purchaser  to compete effectively in the relevant markets on a lasting basis; and  
 The other elements of the Initial Commitments  ensure that the Commitments 
are capable of being implemented effectively w ithin a short period of time.  
6.2.2.  Assessment of the Initial Commitments  
(230)  The Commission conducted a market test of the Initial Commitments  to investigate 
the scope and effectiveness of the Commitments, the viability and competitiveness of 
the Divestment Busines s, and the appropriateness of the Purchaser Requirements. The 
Commission’s assessment of each of these elements in light of the results of the market 
test is as follows.  
6.2.2.1.  Suitability of the Initial Commitments to remove serious doubts   
(231)  As explained in Secti on 5 above, the Commission finds that the Transaction gives rise 
to serious doubts as to the compatibility of the concentration with the internal market 
in respect of each of: (i) perylene pigments overall and specifically perylene pigments 
colour indices PR179 and PV29, and (ii) quinacridone pigment colour index PR202.  
(232)  For each pigment , the Initial Commitments  entail the divestment of (at least) the vast 
majority of the overlap in the markets in which serious doubts result from the 
Transaction. The Initial  Commitments  would therefore ensure that in each of these 
markets the Transaction maintains effective competition at the level in effect pre -
Transaction. More specifically:  
 For perylenes overall , the Divestment Business comprises a volume of [...], 
with a value of EUR [...] in 2019. This represents almost the entirety ( [high 
percentage] ) of DIC’s sales of perylenes , and therefore removes almost the 
entire overlap between the Parties. [...]. 
 For PR179 , the Divestment Business comprises a volume of [...] with a value 
of [...] in 2019. This represent almost the entirety ( [high percentage] ) of DIC’s 
sales of PR179 , and therefore removes almost the entire overlap between the 
Parties. [...]. 
 For PV29, the Divestment Business comprises a volume of [...], with a val ue 
of EUR [...] in 2019. This represents the entirety of DIC’s sales of PV29 , and 
therefore removes entire overlap between the Parties. [...]. 
 For PR20 2, the Divestment Business comprises a volume of [...] with a value 
of EUR [...] in 2019. This represent almost the entirety ( [high percentage] ) of 
DIC’s sales of PR202 , and therefore removes almost the entire overlap 
between the Parties.  
(233)  The market test confirmed the suitability of the Initial Commitments  to address the 
Commission’s serious doubts.  
(234)  The vast  majority of customers and competitors that expressed a view considered that 
the Initial Commitments  are suitable to effectively remove the competitive concerns 
 
 
53 relating to the overall perylenes’ market , 269 as well as for the markets for perylene 
colour ind exes PR179270 and PV29271 and for quinacridone colour index PR202 272.  
(235)  Responses of competitors of the Parties , overall  indicate that the Initial Commitments  
contain all the necessary tangible and intangible assets to restore effective competition 
in all market s under consideration  and that Bushy Park is considered as an efficient 
and cost competitive facility.273  
6.2.2.2.  Viability and competitiveness of the Divestment Business  
(236)  Customers overwhelmingly indicate that the Divestment Business constitutes an 
effective setup  allowing for the emergence of a viable alternative supplier for 
customers274 for perylenes overall, as well as for perylene colour indexes PR179 and 
PV29  and for quinacridone colour index PR202. They also confirm to a great extent 
that the Divestment Busin ess is likely to retain the current customers of DIC served 
from Bushy Park for all of these products .275 Moreover, the majority of customers of 
the Divestment Business indicated that the change of ownership of the Divestment 
Business would not force them to  requalify the products they procure from the 
Divestment Business.276 Among the customers who mentioned that they would have 
to requalify the products they procure from the Divestment Business , the vast majority  
nonetheless indicated that they were either very likely, or likely to do so.277 In the 
same v ein, customers of  DIC, BCE or both, indicated to a great extent that they would 
consider the Divestment Business as a suitable alternative supplier to the merged 
entity DIC/BCE, 278 but also that the Divestment B usiness is likely to find suitable 
new customers to sell its products to.279  
(237)  However, the Commission notes that some respondents indicate d that additional 
assets280 would need to be included in the Divestment Business assets because they 
are deemed necessary to ensure the viability of the divestment business . These include 
innovations / development products,281 as well as personnel which is not transferred 
with the Divestment Business  under the text of the Initial Commitments ,282 such as 
personnel exclusively or p redominantly involved in the sales of, or with production 
and management expertise in , the products of the Divestment Business. Additionally, 
                                                 
269   See question 2, Questionnaire R1 Market test to pigments customers  and question 2 Questionnaire R2 
Market test to pigments c ompetitor s. 
270  See question 3, Questionnaire R1 Market test to pigments customers and question 3 Questionnaire R2 
Mark et test to pigments competitors.  
271  See question 4, Questionnaire R1 Market test to pigments customers and question 4 Questionnaire R2 
Market test to pigments competitors.  
272  See question 5, Questionnaire R1 Market test to pigments customers and question 5 Questionnaire R2 
Market test to pigments competitors.  
273  See questions 6 - 15, Questionnaire R 2 Market test to pigments c ompetito rs. 
274  See question s 6-9, Questionnaire R1 Market test to pigments customers . 
275  See questions 10-13, Questionnaire R1 Market test to pigments customers.  
276  See question 15, Questionnaire R1 Market test to pigments customers.  
277  See question 15 .1 Questionnaire R1 Market test to pigments customers.  
278  See question 17 Questionnaire R1 Market test to pigments customers . 
279  See quest ion 1 8 Questionnaire R1 Market test to pigments customers.  
280  See question  8, Questionnaire R2 Market test to pigments competitors.  
281  See questions 8 & 9 , Questionnaire R2 Market test to pigments competitors.  
282  See question s 8, 12 & 13 , Questionnaire R2 Market test to pigments competitors.  
 
 
54 the market test indicated283 that a broadening of the scope of the intangible assets 
transferred to the Divestment B usiness (customer records, licencing agreements) 
would be necessary. Finally, c ompetito rs indicated that a broadening of the scope and 
of the services included in the Transitional Services Agreement would be necessary 
as well.  284 
6.2.2.3.  Purchaser Requirements and potential purchasers  
(238)  Customers and competitors clearly indicated that the purchaser criteria were sufficient 
to guarantee that the Divestment Business would  attract credible purchasers.285  
However, both customers and competitors strongly opposed286 the idea t hat a potential 
buyer could have experience only in colourants  but not in pigments  (see paragraph  
(216) above) .  
6.2.2.4.  Conclusion on the Initial Commitments  
(239)  In light of the above, the Commission informed the Notifying Party that the Initial 
Commitments  needed to  be improved along the lines described above, in order to be 
considered  adequate in scope and suitable to address the serious doubts the 
Transaction would otherwise give rise to, and to ensure that the Divestment Business 
will be an effective competitor for each of the relevant markets in the hands of a 
suitable Purchaser.  
6.2.3.  Description of the Final Commitments  
(240)  In response to the Commission's feedback regarding the outcome of the market test 
and its preliminary assessment, the Parties submitted the Final Comm itments on 3 
December  2020. The Final Commitments represent an amended version of the Initial 
Commitments , with the following changes.287 
(241)  The customer  records and transactional data pertaining to the Divestment Business 
provided to the purchaser shall cover  the time period from [...] to present, instead of 
only from [...] to present , as was provided by the Initial Commitments. In addition this 
information will be extended to “potential new  or targeted ” customers (instead of only 
“potential new customers ”). In a similar fashion, the transfer to the purchaser of 
contracts, agreements , commitments and understandings with the Divestment 
Business’ suppliers will be extended to cover the time period from [...] to present , 
instead of only from [...] to present as was  provided by the Initial Commitments.  
(242)  The transitional, non -exclusive, royalty -free licence for the trademarks SunPlastTM, 
SunBriteTM and FanchonTM will be offered to the purchaser for a period  […] [...], 
extendable for [...], instead of [...] as initial ly foreseen . 
                                                 
283  See questions 8 & 15, Questionnaire R2 Market test to pigments competitors.  
284  See questions 24 & 2 5, Questionnaire R2 Market test to pigments competitors.  
285  See question s 19 & 21  Questionnaire R1 Market test to pig ments customers  and questions 19 & 22, 
Questionnaire R2 Market test to pigments competitors.  
286  See question 22 Questionnaire R1 Market test to pigments customers  and question  23, Questionnaire 
R2 Market test to pigments competitors.  
287  The Final Commitmen ts also included certain clarifications and other modifications that are not of 
major significance and are not discussed in this decision.  
   Should read: “of”  
 
 
55 (243)  The non -solicit clause was extended to all of the p ersonnel being transferred to the 
Divestment Business (instead of being applicable to Key Personnel only), and its 
duration was extended to [...] after closing (instead of [...]). 
(244)  As regards t he transferred personnel, the Final Commitments provide that it shall also 
include (i) any sales personnel predominantly or entirely dedicated to the Divestment 
Business, even if not working in the Bushy Park Facility and (ii)  any product 
management and pr oduct expert roles predominantly or exclusively dedicated the 
Divestment business.  
(245)  The suitable purchaser criteri on in the Final Commitments now exclude s industry 
participants with experience in colourants but no t in pigments . Therefore only  industry 
participants with experience in the pigment business  can be considered as  a suitable 
purchaser . 
(246)  Innovations and development products shall be transferred along with R&D pipeline 
projects.  
(247)  The Transitional Services A greement shall cover in addition (i) sales & m arketing 
support and (ii) technical services (e.g. product experts and product management). 
Moreover, it was clarified that with respect to supply chain considerations, the 
Transitional Services Agreement shall cover among other warehousing and logistics.  
(248)  DIC proposes to include the entire  water management facilities288 which belong to 
DIC and are adjacent to the Divestment Business  within the scope of the Divestment 
Business . 
(249)  All of these changes have been incorporated into and form an integral part of the F inal 
Commitments annexed to this decision.  
6.2.4.  Assessment and conclusion on the Final Commitments  
(250)  The amendments introduced by the Parties into the Final Commitments resolve all of 
the concerns raised in the course of the market testing of the Initial Commitme nts. 
Accordingly, based on the information available to it, the Commission is satisfied that 
the Final Commitments are capable of eliminating the competition concerns entirely ; 
are comprehensive and effective from all points of view ; proportionate ; and cap able 
of being implemented effectively within a short period of time . 
(251)  In particular , for the reasons outlined above, and in view of the results of the market 
test, the Commission concludes that the Final Commitments entered into by the 
undertakings concerne d and as submitted to the Commission on 3 December  2020 are 
sufficient to eliminate the serious doubts as to the compatibility of the concentration 
with the internal market in respect of each of: (i) perylene pigments overall and 
specifically perylene pigm ents colour indices PR179 and PV29, and (ii) quinacridone 
pigment colour index PR202.  
6.3. Conclusion on remedies  
(252)  Under the first sentence of the second subparagraph of Article 6(2) of the Merger 
Regulation, the Commission may attach to its decision conditions  and obligations 
                                                 
288  Including a [...].  
 
 
56 intended to ensure that the undertakings concerned comply with the commitments they 
have entered into vis -à-vis the Commission with a view to rendering a notified 
concentration compatible with the internal market.  
(253)  The achievement of the m easure that gives rise to the structural change of the market 
is a condition, whereas the implementing steps which are necessary to achieve this 
result are generally obligations on the Parties. Where a condition is not fulfilled, the 
Commission’s decision declaring the concentration compatible with the internal 
market no longer stands. Where the undertakings concerned commit a breach of an 
obligation, the Commission may revoke the clearance decision in accordance with 
Article 8(6) of the Merger Regulation. The undertakings concerned may also be 
subject to fines and periodic penalty payments under Articles 14(2) and 15(1) of the 
Merger Regulation.  
(254)  In accordance with the distinction described in the previous paragraph, the decision in 
this case is conditioned  on the full compliance with the requirements set out in Section 
B of the Final Commitments (including the Schedule), which constitute conditions. 
The remaining requirements set out in the other Sections of the Final Commitments 
constitute obligations,  as they concern the implementing steps that are necessary to 
achieve the modifications sought in a manner compatible with the internal market .  
(255)  The full text of the Final Commitments is annexed to this decision and forms an 
integral part thereof.  
7. CONCLUSION  
(256)  For the above reasons, the Commission has decided not to oppose the notified 
operation as modified by the commitments and to declare it compatible with the 
internal market and with the functioning of the EEA Agreement, subject to full 
compliance with the co nditions in Section B (including the Schedule)  of the 
Commitments  annexed to the present decision and with the obligations contained in 
the other sections of the said commitments. This decision is adopted in application of 
Article 6(1)(b) in conjunction wi th Article 6(2) of the Merger Regulation and Article 
57 of the EEA Agreement.   
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executive Vice-President  
 
 
   
  
 
 
 
 
 
 
 
COMMITMENTS TO THE EUROPEAN COMMISSION  
CASE COMP/M.9677 – DIC / BASF COLORS & EFFECTS  
  
 
 
 
 
3 December 2020  
 
 
 
 
 
 
 
 
 
 
 
 2  
 Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “ Merger Regulation ”), 
DIC Corporation (“ DIC” or the “ Notifying Party ”) hereby enters into the following Commitments 
(the “ Commitments ”) vis -à-vis the European Comm ission (the “ Commission ”) with a view to 
rendering the acquisition of BASF Colors & Effects (“ BCE ”) by DIC (the “ Concentration ”) 
compatible with the internal market and the functioning of the EEA Agreement.  
This text shall be interpreted in light of the Co mmission’s decision pursuant to Article 6(1)(b) of 
the Merger Regulation to declare the Concentration compatible with the internal market and the 
functioning of the EEA Agreement (the “ Decision ”), in the general framework of European Union 
law, in particul ar in light of the Merger Regulation, and by reference to the Commission Notice on 
remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission 
Regulation (EC) No 802/2004 (the “ Remedies Notice ”). 
[…]. 
 
  
 
 
 3  
 SECTION A DEFINITIONS  
1. For the purpose of the Commitments, the following terms shall have the following 
meaning:  
Affiliated Undertakings : undertakings controlled by the Parties and/or by the ultimate 
parents of the Parties, whereby the notion of control shall be interpreted pursuant to 
Article  3 of the Merger Regulation and in light of the Commission Consolidated 
Jurisdictional Notice under Co uncil Regulation (EC) No 139/2004 on the control of 
concentrations between undertakings (the “ Consolidated Jurisdictional Notice ”). 
Assets : the assets that contribute to the current operation or are necessary to ensure the 
viability and competitiveness of the Divestment Business as indicated in Section B, 
paragraph 6 and described more in detail in the Schedule.  
BCE : BASF Colors & Effects, a group of companies and selected assets jointly 
constituting BASF SE’s global pigment business and which is the target  of the 
Concentration (precise scope of the target described in Annex 5  to the Form CO).  
Bushy Park Other Products : isoindoline (C.I. P.Y.139), azo (C.I. P.R.188) and carbon 
black (C.I. P.Bl.7) pigment products manufactured at the Bushy Park Facility and s old by 
DIC globally (in order of appearance each individually referred to as the “ Bushy Park 
Isoindoline Products ”, “Bushy Park Azo Products ” and the “ Bushy Park Carbon 
Black Products ”). 
Bushy Park Facility: Sun Chemical’s pigment manufacturing facility lo cated at 1506 
Bushy Park Road, Goose Creek, SC 29445, South Carolina, U.S.  
C.I.: Colour Index.  
Closing : the transfer of the legal title to the Divestment Business to the Purchaser.  
Closing Period : the period of […] from the approval of the Purchaser and t he terms of sale 
by the Commission.  
Confidential Information : any business secrets, know -how, commercial information, or 
any other information of a proprietary nature that is not in the public domain.  
Conflict of Interest : any conflict of interest that imp airs the Trustee’s objectivity and 
independence in discharging its duties under the Commitments.  
Customers : DIC’s customers that have purchased the Divestment Products and the Bushy 
Park Other Products from DIC at any time between 2010 and the Closing.  
DIC: DIC Corporation, incorporated under the laws of Japan,  with its registered office at 
35-58, Sakashita 3 -chome, Itabashi -ku, Tokyo 103 -8233, Japan and registered under no. 
0114 -01-003807 including its Affiliated Undertakings.  
Divestment Business : the bus iness or businesses as defined in Section B and in the 
Schedule which the Notifying Party commits to divest.  
 
 
 4  
 Divestment Products : perylene pigment products under the C.I.s P.R.179, P.V.29, 
P.R.123, P.R.190 and P.R.224 manufactured at the Bushy Park Facilit y and sold by DIC 
globally (“ Bushy Park Perylene Products ”); quinacridone pigment products under the 
C.I.s P.R.122, P.R.202, P.V.19 and P.V.55 manufactured at the Bushy Park Facility and 
sold by DIC globally (“ Bushy Park  Quinacridone Products ”).  
Divestitu re Trustee: one or more natural or legal person(s) who is/are approved by the 
Commission and appointed by DIC and who has/have received from DIC the exclusive 
Trustee Mandate to sell the Divestment Business to a Purchaser at no minimum price.  
Effective Dat e: the date of adoption of the Decision.  
First Divestiture Period: the period of […] from the Effective Date.  
Hold Separate Manager : the person appointed by DIC for the Divestment Business to 
manage the day -to-day business under the supervision of the Moni toring Trustee.  
Inventory: DIC’s inventory of Divestment Products and Bushy Park Other Products, raw 
materials used in the production of the Divestment Products and Bushy Park Other 
Products, and the Divestment Products and Bushy Park Other Products in pro duction at the 
time of Closing . 
Key Personnel : all personnel necessary to maintain the viability and competitiveness of 
the Divestment Business, as listed in the Schedule, including the Hold Separate Manager.  
Monitoring Trustee : one or more natural or lega l person(s) who is/are approved by the 
Commission and appointed by DIC, and who has/have the duty to monitor DIC’s 
compliance with the conditions and obligations attached to the Decision.  
Parties : DIC and BCE and their Affiliated Undertakings.  
Personnel : all staff currently employed by the Divestment Business, including staff 
seconded to the Divestment Business.  
Purchaser : the entity approved by the Commission as acquirer of the Divestment Business 
in accordance with the criteria set out in Section D.  
Purch aser Criteria : the criteria laid down in paragraph 17 of these Commitments that the 
Purchaser must fulfil in order to be approved by the Commission.  
Schedule : the schedule to these Commitments describing more in d etail the Divestment 
Business.  
Sun Chemical : Sun Chemical Group Coöperatief U.A., Leeuwenveldseweg 3 -t, 1382 LV 
Weesp, the Netherlands.  
Transitional Agreements: Transitional Services Agreement.  
Trustee(s) : the Monitoring Trustee and/or the Divestiture Trus tee as the case may be.  
Trustee Divestiture Period : the period of […] from the end of the First Divestiture Period.   
 
 
 5  
 SECTION B THE COMMITMENT TO DIV EST AND THE DIVESTMENT BUSINESS  
1.1 Commitment to divest  
2. In order to maintain effective competition, DIC commits  to divest, or procure the 
divestiture of the Divestment Business by the end of the Trustee Divestiture Period as a 
going concern to a purchaser and on terms of sale approved by the Commission in 
accordance with the procedure described in paragraph 18 of these Commitments. To carry 
out the divestiture, DIC commits to find a purchaser and to enter into a final binding sale 
and purchase agreement for the sale of the Divestment Business within the First Divestiture 
Period.  If DIC ha s not entered into such an agreement at the end of the First Divestiture 
Period, DIC shall grant the Divestiture Trustee an exclusive mandate to sell the Divestment 
Business in accordance with the procedure described in paragraph 30 during the Trustee 
Divestiture Period.  
3. The proposed concentration shall not be implemented before DIC or the Divestiture 
Trustee has entered into a final binding sale and purchase agreement for the sale of the 
Divestment Business and the Commission ha s approved the purchaser and the terms of sale 
in accordance with paragraph 18.  
4. DIC shall be deemed to have complied with this commitment if:  
 by the end of the Trustee Divestiture Period, DIC or the Divestiture Trustee has 
entered into a final binding sale and purchase agreement and the Commission 
approves the proposed purchaser and the terms of sale as being consistent with the 
Commitments in accordance with the procedure described in paragraph 18; and 
 the Closing of the sale of the Divestment Business to the Purchaser takes place 
within the Closing Period.  
5. In order to maintain the structural effect of the Commitments, DIC shall, for a period of 
ten (10) years after Closing, not acquire, whether direc tly or indirectly, the possibility of 
exercising influence (as defined in paragraph 43 of the Remedies Notice, footnote 3) over 
the whole or part of the Divestment Business, unless, following the submission of a 
reasoned request from DIC showing good cause  and accompanied by a report from the 
Monitoring Trustee (as provided in paragraph 44 of these Commitments), the Commission 
finds that the structure of the market has changed to such an extent that the absence of 
influence over t he Divestment Business is no longer necessary to render the Concentration 
compatible with the internal market.  
1.2 Structure and definition of the Divestment Business  
6. The Divestment Business consists of DIC’s global business for:  
 
 
 
 
 6  
 
 the Divestment Products , comp rising:  
(i) Perylene pigment products under the C.I.s P.R.179, P.V.29, P.R.123, 
P.R.190 and P.R.224 manufactured at the Bushy Park Facility and sold by 
DIC globally (“ Bushy Park Perylene Products ”); 
(ii) Quinacridone pigment products under the C.I.s P.R.122, P.R.20 2, P.V.19 
and P.V.55 manufactured at the Bushy Park Facility and sold by DIC 
globally (“ Bushy Park Quinacridone Products ”);  
 the Bushy Park Other Products , comprising:  
(i) Isoindoline (C.I. P.Y.139),  
(ii) Azo (C.I. P.R.188) and  
(iii) Carbon black (C.I. P.Bl.7) pigment p roducts  
manufactured at the Bushy Park Facility and sold by DIC globally; and  
 the Bushy Park Facility, where the Divestment Products and the Bushy Park Other 
Products are manufactured, described in more detail in the Schedule, including, but 
not necessari ly limited to:  
(i) all tangible assets owned by DIC and used to manufacture the Divestment 
Products and the Bushy Park Other Products at the Effective Date (including 
manufacturing assets, the buildings housing these assets and the related 
ground leases at the  Bushy Park Facility);  
(ii) any Inventory;  
(iii) all intangible assets (including Exclusively Used Technology, Primarily 
Used Technology and Licensed Technology as defined in the Schedule, 
R&D);  
(iv) the QuindoTM and PerrindoTM brands and any associated trademarks and 
product names;  
(v) at the option of the Purchaser, a transitional, non -exclusive, royalty -free 
licence for the trademarks SunPlastTM, SunBriteTM and FanchonTM for a 
transitional period of up to […] from Closing, extendable for […] periods 
(i.e., up to a maximum l icence duration of […] in total);  
(vi) all contracts, leases, commitments and Customer orders of the Divestment 
Business; all Customer, credit and other records of the Divestment 
Business;  
(vii) all licences, permits and authorisations issued by any governmental 
organisation for the benefit of the Divestment Business;  
(viii) the Personnel  currently employed at the Bushy Park Facility to the extent 
engaged in operations relating to the Divestment Products and Bushy Park 
 
 
 7  
 Other Products, as well as any sales personnel, product management, and 
product expert roles, and any other personnel exclusively or predominantly 
dedicated to the Divestment Business (if any), even if not located at the 
Bushy Park Facility, subject to employee consent and applicable labour 
laws and other relev ant legislation, who are necessary to ensure the viability 
and competitiveness of the Divestment Business as described in the 
Schedule;  
(ix) the Key Personnel  currently employed at the Bushy Park Facility to the 
extent engaged in operations relating to the Dive stment Products and Bushy 
Park Other Products, subject to employee consent and applicable labour 
laws and other relevant legislation;  
(x) a Transitional Services Agreement (“ TSA ”) for a transitional period of up 
to […] after Closing at […], extendable for […] periods at […], as described 
in the Schedule.  
7. Strict firewall procedures will be adopted so as to ensure that any competitively sensitive 
information related to, or arising from these Transitional Agreements (for example, product 
roadmaps) will not be shar ed with, or passed on to, anyone, outside the DIC business unit 
providing the relevant services.  
8. The legal and functional structure of the Divestment Business as operated to date is 
described in the Schedule.  
SECTION C RELATED COMMITMENTS  
1.3 Preservation of viability, marketability and competitiveness  
9. From the Effective Date until Closing, DIC shall preserve or procure the preservation of 
the economic viability, marketability and competitiveness of the Divestment Business, in 
accordance with good business pra ctice, and shall minimise as far as possible any risk of 
loss of competitive potential of the Divestment Business. In particular, DIC undertakes:  
 not to carry out any action that might have a significant adverse impact on the value, 
management or competiti veness of the Divestment Business (including regarding 
manufacturing activity, inventory management, and sales volumes and prices) or 
that might alter the nature and scope of activity, or the industrial or commercial 
strategy or the investment policy of th e Divestment Business;  
 to make available, or procure to make available, sufficient resources for the 
development of the Divestment Business, on the basis and continuation of the 
existing business plans;  
 to take all reasonable steps, or procure that all re asonable steps are being taken, 
including appropriate incentive schemes (based on industry practice), to encourage 
all Key Personnel to remain with the Divestment Business, and not to solicit or 
 
 
 8  
 move any Personnel to DIC’s remaining business. Where, nevert heless, individual 
members of the Key Personnel exceptionally leave the Divestment Business, DIC 
shall provide a reasoned proposal to replace the person or persons concerned to the 
Commission and the Monitoring Trustee. DIC must be able to demonstrate to t he 
Commission that the replacement is well suited to carry out the functions exercised 
by those individual members of the Key Personnel. The replacement shall take 
place under the supervision of the Monitoring Trustee, who shall report to the 
Commission.  
1.4 Hold-separate obligations  
10. The Notifying Party commits, from the Effective Date until Closing, to procure that the 
Divestment Business is kept separate from the business(es) that the Notifying Party will be 
retaining and, after closing of the notified transa ction to keep the Divestment Business 
Separate from the business that the Notifying Party is retaining and to ensure that unless 
explicitly permitted under these Commitments: (i) management and staff of the business 
retained by DIC have no involvement in t he Divestment Business; (ii) the Key Personnel 
and Personnel of the Divestment Business have no involvement in any business retained 
by DIC and do not report to any individual outside the Divestment Business.  
11. Until Closing, DIC shall assist the Monitoring Trustee in ensuring that the Divestment 
Business is managed as a distinct and saleable entity separate from the business which DIC 
is retaining. Immediately after the adoption of the Decision, DIC shall appoint a Hold 
Separate Manager. The Hold Separate Ma nager, who shall be part of the Key Personnel, 
shall manage the Divestment Business independently and in the best interest of the business 
with a view to ensuring its continued economic viability, marketability and 
competitiveness and its independence from  the businesses retained by DIC. The Hold 
Separate Manager shall closely cooperate with and report to the Monitoring Trustee and, 
if applicable, the Divestiture Trustee. Any replacement of the Hold Separate Manager shall 
be subject to the procedure laid do wn in paragraph 9(c) of these Commitments. The 
Commission may, after having heard DIC, require DIC to replace the Hold Separate 
Manager.  
1.5 Ring -fencing  
12. DIC shall implement, or procure to implement, all n ecessary measures to ensure that it does 
not, after the Effective Date, obtain any Confidential Information relating to the 
Divestment Business and that any such Confidential Information obtained by DIC before 
the Effective Date will be eliminated and not be used by DIC, unless required for financial 
reporting purposes until Closing. This includes measures vis -à-vis DIC’s representatives 
on any supervisory or management bodies of the Divestment Business. In particular, the 
participation of the Divestment Bu siness in any central information technology network 
shall be severed to the extent possible, without compromising the viability of the 
Divestment Business. DIC may obtain or keep information relating to the Divestment 
 
 
 9  
 Business which is reasonably necessar y for the divestiture of the Divestment Business or 
the disclosure of which to DIC is required by law.  
1.6 Non-solicitation clause  
13. The Parties undertake, subject to customary limitations, not to solicit, and to procure that 
Affiliated Undertakings do not soli cit, the Key Personnel or Personnel transferred with the 
Divestment Business for a period of […] after Closing.  
1.7 Due diligence  
14. In order to enable potential purchasers to carry out a reasonable due diligence of the 
Divestment Business, DIC shall, subject to  customary confidentiality assurances and 
dependent on the stage of the divestiture process:  
 provide to potential purchasers sufficient information as regards the Divestment 
Business; and  
 provide to potential purchasers after the Effective Date, a version of the 
Commitments (including the Schedule and its Annexes) without undue delay and 
no later than at the signing of a Non -Disclosure Agreement by the potential 
purchaser, or at the opening a data -room, whichever is earlier. Any redaction to the 
Commitments  should be agreed in advance with the Commission and  
 provide to potential purchasers sufficient information relating to the Personnel and 
allow them reasonable access to the Personnel.  
1.8 Reporting  
15. DIC shall submit written reports in English on potential pu rchasers of the Divestment 
Business and developments in the negotiations with such potential purchasers to the 
Commission and the Monitoring Trustee no later than 10 days after the end of every month 
following the Effective Date (or otherwise at the Commis sion’s request). DIC shall submit 
a list of all potential purchasers having expressed interest in acquiring the Divestment 
Business to the Commission at each and every stage of the divestiture process, as well as a 
copy of all the offers made by potential purchasers within five days of their receipt.  
16. DIC shall inform the Commission and the Monitoring Trustee on the preparation of the 
data room documentation and the due diligence procedure and shall submit a copy of any 
information memorandum to the Commissi on and the Monitoring Trustee before sending 
the memorandum out to potential purchasers.  
SECTION D THE PURCHASER  
17. In order to be approved by the Commission, the Purchaser must fulfil the following criteria:  
 
 
 10  
 
 The Purchaser shall be independent of and unconnec ted to DIC and its Affiliated 
Undertakings (this being assessed having regard to the situation following the 
divestiture).  
 The Purchaser shall have the financial resources, proven expertise and incentive to 
maintain and develop the Divestment Business as a  viable and active competitive 
force in competition with the Parties and other competitors.  
 The Purchaser shall be an industry participant with experience in the pigment 
business.  
 The Purchaser shall have the ability to distribute the Divestment Products a nd 
Bushy Park Other Products globally and in the EEA or to have procured such 
services from a third party.  
 The acquisition of the Divestment Business by the Purchaser must neither be likely 
to create, in light of the information available to the Commission , prima facie  
competition concerns nor give rise to a risk that the implementation of the 
Commitments will be delayed. In particular, the Purchaser must reasonably be 
expected to obtain all necessary approvals from the relevant regulatory authorities 
for the acquisition of the Divestment Business.  
18. The final binding sale and purchase agreement (as well as ancillary agreements) relating to 
the divestment of the Divestment Business shall be conditional on the Commission’s 
approval. When DIC has reached an agr eement with a purchaser, it shall submit a fully 
documented and reasoned proposal, including a copy of the final agreement(s), within one 
week to the Commission and the Monitoring Trustee. DIC must be able to demonstrate to 
the Commission that the purchase r fulfils the Purchaser Criteria and that the Divestment 
Business is being sold in a manner consistent with the Commission's Decision and the 
Commitments. For the approval, the Commission shall verify that the purchaser fulfils the 
Purchaser Criteria and t hat the Divestment Business is being sold in a manner consistent 
with the Commitments including their objective to bring about a lasting structural change 
in the market. The Commission may approve the sale of the Divestment Business without 
one or more Ass ets or parts of the Personnel, or by substituting one or more Assets or parts 
of the Personnel with one or more different assets or different personnel, if this does not 
affect the viability and competitiveness of the Divestment Business after the sale, ta king 
account of the proposed purchaser.  
SECTION E TRUSTEE  
1.9 Appointment procedure  
19. DIC shall appoint a Monitoring Trustee to carry out the functions specified in these 
Commitments for a Monitoring Trustee. DIC commits not to close the Concentration 
before the  appointment of a Monitoring Trustee.  
 
 
 11  
 20. If DIC has not entered into a binding sale and purchase agreement regarding the 
Divestment Business one month before the end of the First Divestiture Period or if the 
Commission has rejected a purchaser proposed by DIC  at that time or thereafter, DIC shall 
appoint a Divestiture Trustee. The appointment of the Divestiture Trustee shall take effect 
upon the commencement of the Trustee Divestiture Period.  
21. The Trustee shall:  
 at the time of appointment, be independent of the  DIC and its Affiliated 
Undertakings;  
 possess the necessary qualifications to carry out its mandate, for example have 
sufficient relevant experience as an investment banker or consultant or auditor; and  
 neither have nor become exposed to a Conflict of Inte rest. 
22. The Trustee shall be remunerated by DIC in a way that does not impede the independent 
and effective fulfilment of its mandate. In particular, where the remuneration package of a 
Divestiture Trustee includes a success premium linked to the final sale value of the 
Divestment Business, such success premium may only be earned if the divestiture takes 
place within the Trustee Divestiture Period.  
1.9.1 Proposal by DIC  
23. No later than two weeks after the Effective Date, DIC shall submit the name or names of 
one or m ore natural or legal persons whom DIC proposes to appoint as the Monitoring 
Trustee to the Commission for approval. No later than one month before the end of the 
First Divestiture Period or on request by the Commission, DIC shall submit a list of one or 
more persons whom DIC proposes to appoint as Divestiture Trustee to the Commission for 
approval. The proposal shall contain sufficient information for the Commission to verify 
that the person or persons proposed as Trustee fulfil the requirements set out in paragraph 
21 and shall include:  
 the full terms of the proposed mandate, which shall include all provisions necessary 
to enable the Trustee to fulfil its duties under these Commitments; and  
 the outline of a work plan which describ es how the Trustee intends to carry out its 
assigned tasks;  
 an indication whether the proposed Trustee is to act as both Monitoring Trustee and 
Divestiture Trustee or whether different trustees are proposed for the two functions.  
1.9.2 Approval or rejection by t he Commission  
24. The Commission shall have the discretion to approve or reject the proposed Trustee(s) and 
to approve the proposed mandate subject to any modifications it deems necessary for the 
Trustee to fulfil its obligations. If only one name is approved,  DIC shall appoint or cause 
 
 
 12  
 to be appointed the person or persons concerned as Trustee, in accordance with the mandate 
approved by the Commission. If more than one name is approved, DIC shall be free to 
choose the Trustee to be appointed from among the nam es approved. The Trustee shall be 
appointed within one week of the Commission’s approval, in accordance with the mandate 
approved by the Commission.  
1.9.3 New proposal by DIC  
25. If all the proposed Trustees are rejected, DIC shall submit the names of at least two m ore 
natural or legal persons within one week of being informed of the rejection, in accordance 
with paragraphs 19 and 24 of these Commitments.  
1.9.4 Trustee nominated by the Commission  
26. If all further propose d Trustees are rejected by the Commission, the Commission shall 
nominate a Trustee, whom DIC shall appoint, or cause to be appointed, in accordance with 
a trustee mandate approved by the Commission.  
1.10 Functions of the Trustee  
27. The Trustee shall assume its spe cified duties and obligations in order to ensure compliance 
with the Commitments. The Commission may, on its own initiative or at the request of the 
Trustee or DIC, give any orders or instructions to the Trustee in order to ensure compliance 
with the condi tions and obligations attached to the Decision.  
1.10.1  Duties and obligations of the Monitoring Trustee  
28. The Monitoring Trustee shall:  
 propose in its first report to the Commission a detailed work plan describing how it 
intends to monitor compliance with the oblig ations and conditions attached to the 
Decision.  
 oversee, in close co -operation with the Hold Separate Manager, the on -going 
management of the Divestment Business with a view to ensuring its continued 
economic viability, marketability and competitiveness an d monitor compliance by 
DIC with the conditions and obligations attached to the Decision. To that end the 
Monitoring Trustee shall:  
(i) monitor the preservation of the economic viability, marketability and 
competitiveness of the Divestment Business, and the ke eping separate of 
the Divestment Business from the business retained by the Parties, in 
accordance with paragraphs 9-10 of these Commitments.  
(ii) supervise the management of the Divestment Business as a di stinct and 
saleable entity, in accordance with paragraph 11 of these Commitments;  
(iii) with respect to Confidential Information:  
 
 
 13  
 (A) determine all necessary measures to ensure that DIC does not after 
the Effective Date obtain any Confide ntial Information relating to 
the Divestment Business, unless required for financial reporting 
purposes until Closing,  
(B) in particular strive for the severing of the Divestment Business’ 
participation in a central information technology network to the 
extent  possible, without compromising the viability of the 
Divestment Business,  
(C) make sure that any Confidential Information relating to the 
Divestment Business obtained by DIC before the Effective Date is 
eliminated and will not be used by DIC, unless required u nder 
applicable records retention laws, and  
(D) decide whether such information may be disclosed to or kept by DIC 
as the disclosure is reasonably necessary to allow DIC to carry out 
the divestiture or as the disclosure is required by law;  
(iv) monitor the splittin g of assets and the allocation of Personnel between the 
Divestment Business and DIC or Affiliated Undertakings;  
 propose to DIC such measures as the Monitoring Trustee considers necessary to 
ensure DIC’s compliance with the conditions and obligations attach ed to the 
Decision, in particular the maintenance of the full economic viability, marketability 
or competitiveness of the Divestment Business, the holding separate of the 
Divestment Business and the non -disclosure of competitively sensitive 
information;   
 review and assess potential purchasers as well as the progress of the divestiture 
process and verify that, dependent on the stage of the divestiture process:  
(i) potential purchasers receive sufficient and correct information relating to 
the Divestment Business  and the Personnel in particular by reviewing, if 
available, the data room documentation, the information memorandum and 
the due diligence process, and  
(ii) potential purchasers are granted reasonable access to the Personnel;  
 act as a contact point for any requ ests by third parties, in particular potential 
purchasers, in relation to the Commitments;  
 provide to the Commission, sending DIC a non -confidential copy at the same time, 
a written report within 15 days after the end of every month that shall cover the 
operation and management of the Divestment Business as well as the splitting of 
assets and the allocation of Personnel so that the Commission can assess whether 
the business is held in a manner consistent with the Commitments and the progress 
of the divestit ure process as well as potential purchasers;  
 
 
 14  
 
 promptly report in writing to the Commission, sending DIC a non -confidential copy 
at the same time, if it concludes on reasonable grounds that DIC is failing to comply 
with these Commitments;  
 within one week a fter receipt of the documented proposal referred to in paragraph 
18 of these Commitments, submit to the Commission, sending DIC a non -
confidential copy at the same time, a reasoned opinion as to the suitability and 
independence of the proposed purchaser and the viability of the Divestment 
Business after the divestiture and as to whether the Divestment Business is sold in 
a manner consistent with the conditions and obligations attached to the Decision, 
in particular, if relevant, whether the divestiture of the Divestment Business without 
one or more Assets or not all of the Personnel affects the viability of the Divestment 
Business after the divestiture, taking account of the proposed purchaser;  
 assume the other functions assigned  to the Monitoring Trustee under the conditions 
and obligations attached to the Decision.  
29. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the 
Monitoring Trustee and the Divestiture Trustee shall cooperate closely with e ach other 
during and for the purpose of the preparation of the Trustee Divestiture Period in order to 
facilitate each other's tasks.  
1.10.2  Duties and obligations of the Divestiture Trustee  
30. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell  at no minimum 
price the Divestment Business to a purchaser, provided that the Commission has approved 
both the purchaser and the final binding sale and purchase agreement (and ancillary 
agreements) as in line with the Commission's Decision and the Commitm ents in 
accordance with paragraphs 17 and 18 of these Commitments. The Divestiture Trustee 
shall include in the sale and purchase agreement (as well as in any ancillary agreements) 
such terms and condi tions as it considers appropriate for an expedient sale in the Trustee 
Divestiture Period. In particular, the Divestiture Trustee may include in the sale and 
purchase agreement such customary representations and warranties and indemnities as are 
reasonably  required to effect the sale. The Divestiture Trustee shall protect the legitimate 
financial interests of DIC, subject to DIC’s unconditional obligation to divest at no 
minimum price in the Trustee Divestiture Period.  
31. In the Trustee Divestiture Period (or otherwise at the Commission’s request), the 
Divestiture Trustee shall provide the Commission with a comprehensive monthly report 
written in English on the progress of the divestiture process. Such reports shall be submitted 
within 15 days after the end of every month with a simultaneous copy to the Monitoring 
Trustee and a non -confidential copy to DIC.  
 
 
 
 
 15  
 1.11 Duties and obligations of the Parties  
32. DIC shall provide and shall cause its advisors to provide the Trustee with all such co -
operation, assistance and inform ation as the Trustee may reasonably require to perform its 
tasks. The Trustee shall have full and complete access to any of DIC’s or the Divestment 
Business’ books, records, documents, management or other personnel, facilities, sites and 
technical informat ion necessary for fulfilling its duties under the Commitments and DIC 
and the Divestment Business shall provide the Trustee upon request with copies of any 
document. DIC and the Divestment Business shall make available to the Trustee one or 
more offices on  their premises and shall be available for meetings in order to provide the 
Trustee with all information necessary for the performance of its tasks.  
33. DIC shall provide the Monitoring Trustee with all managerial and administrative support 
that it may reasona bly request on behalf of the management of the Divestment Business. 
This shall include all administrative support functions relating to the Divestment Business 
which are currently carried out at headquarters level. DIC shall provide and shall cause its 
advisors to provide the Monitoring Trustee, on request, with the information submitted to 
potential purchasers, in particular give the Monitoring Trustee access to the data room 
documentation and all other information granted to potential purchasers in the du e 
diligence procedure. DIC shall inform the Monitoring Trustee on possible purchasers, 
submit lists of potential purchasers at each stage of the selection process, including the 
offers made by potential purchasers at those stages, and keep the Monitoring T rustee 
informed of all developments in the divestiture process.  
34. DIC shall grant or procure Affiliated Undertakings to grant comprehensive powers of 
attorney, duly executed, to the Divestiture Trustee to effect the sale (including ancillary 
agreements), the  Closing and all actions and declarations which the Divestiture Trustee 
considers necessary or appropriate to achieve the sale and the Closing, including the 
appointment of advisors to assist with the sale process. Upon request of the Divestiture 
Trustee, DIC shall cause the documents required for effecting the sale and the Closing to 
be duly executed.  
35. DIC shall indemnify the Trustee and its employees and agents (each an “ Indemnified 
Party ”) and hold each Indemnified Party harmless against, and hereby agree s that an 
Indemnified Party shall have no liability to DIC for, any liabilities arising out of the 
performance of the Trustee’s duties under the Commitments, except to the extent that such 
liabilities result from the wilful default, recklessness, gross neg ligence or bad faith of the 
Trustee, its employees, agents or advisors.  
36. At the expense of DIC, the Trustee may appoint advisors (in particular for corporate finance 
or legal advice), subject to DIC’s approval (this approval not to be unreasonably withheld  
or delayed) if the Trustee considers the appointment of such advisors necessary or 
appropriate for the performance of its duties and obligations under the Mandate, provided 
 
 
 16  
 that any fees and other expenses incurred by the Trustee are reasonable. Should DI C refuse 
to approve the advisors proposed by the Trustee the Commission may approve the 
appointment of such advisors instead, after having heard DIC. Only the Trustee shall be 
entitled to issue instructions to the advisors. Paragraph 35 of these Commitments shall 
apply mutatis mutandis . In the Trustee Divestiture Period, the Divestiture Trustee may use 
advisors who served DIC during the Divestiture Period if the Divestiture Trustee considers 
this in the best interest of an expedi ent sale.  
37. DIC agrees that the Commission may share Confidential Information proprietary to DIC 
with the Trustee. The Trustee shall not disclose such information and the principles 
contained in Article 17 (1) and (2) of the Merger Regulation apply mutatis m utandis .  
38. DIC agrees that the contact details of the Monitoring Trustee are published on the website 
of the Commission's Directorate -General for Competition and shall inform interested third 
parties, in particular any potential purchasers, of the identity and the tasks of the 
Monitoring Trustee.  
39. For a period of […] from the Effective Date the Commission may request all information 
from DIC that is reasonably necessary to monitor the effective implementation of these 
Commitments.  
1.12 Replacement, discharge and reappointment of the Trustee  
40. If the Trustee ceases to perform its functions under the Commitments or for any other good 
cause, including the exposure of the Trustee to a Conflict of Interest:  
 the Commission may, after hearing the Trustee and DIC, require D IC to replace the 
Trustee; or  
 DIC may, with the prior approval of the Commission, replace the Trustee.  
41. If the Trustee is removed according to paragraph 40 of these Commitments, the Trustee 
may be required to continue in its func tion until a new Trustee is in place to whom the 
Trustee has effected a full hand over of all relevant information. The new Trustee shall be 
appointed in accordance with the procedure referred to in paragraphs 19-26 of these 
Commitments.  
42. Unless removed according to paragraph 40 of these Commitments, the Trustee shall cease 
to act as Trustee only after the Commission has discharged it from its duties after all the 
Commitments  with which the Trustee has been entrusted have been implemented. 
However, the Commission may at any time require the reappointment of the Monitoring 
Trustee if it subsequently appears that the relevant remedies might not have been fully and 
properly imple mented.  
 
 
 17  
 SECTION F THE REVIEW CLAUSE  
43. The Commission may extend the time periods foreseen in the Commitments in response to 
a request from DIC or, in appropriate cases, on its own initiative. Where DIC requests an 
extension of a time period, it shall submit a reasoned request to the Commission no later 
than one month before the expiry of that period, showing good cause. This request shall be 
accompanied by a report from the Monitoring Trustee, who shall, at the same time send a 
non-confidential copy of the re port to DIC. Only in exceptional circumstances shall DIC 
be entitled to request an extension within the last month of any period.  
44. The Commission may further, in response to a reasoned request from DIC showing good 
cause waive, modify or substitute, in exce ptional circumstances, one or more of the 
undertakings in these Commitments. This request shall be accompanied by a report from 
the Monitoring Trustee, who shall, at the same time send a non -confidential copy of the 
report to DIC. The request shall not hav e the effect of suspending the application of the 
undertaking and, in particular, of suspending the expiry of any time period in which the 
undertaking has to be complied with.  
SECTION G ENTRY INTO FORCE  
45. The Commitments shall take effect upon the date of ad option of the Decision.  
 
[…] […] 
duly authorised for and on behalf of DIC   
 
 
 18  
 SCHEDULE  
1. The Divestment Business as operated to date has the following legal and functional 
structure: the Divestment Business is currently owned and operated by DIC’s Affiliated 
Undertaking Sun Chemical and is not incorporated separately.  
2. The Divestment Business, described and specified in more detail in the Schedule of the 
Commitments, consists of DIC’s global business for:  
 the Divestment Products , comprising:  
(i) Perylene pigment pro ducts under the C.I.s P.R.179, P.V.29, P.R.123, 
P.R.190 and P.R.224 manufactured at the Bushy Park Facility and sold by 
DIC globally (“ Bushy Park Perylene Products ”); 
(ii) Quinacridone pigment products under the C.I.s P.R.122, P.R.202, P.V.19 
and P.V.55 manufac tured at the Bushy Park Facility and sold by DIC 
globally (“ Bushy Park Quinacridone Products ”);  
 the Bushy Park Other Products , comprising:  
(i) Isoindoline (C.I. P.Y.139),  
(ii) Azo (C.I. P.R.188) and  
(iii) Carbon black (C.I. P.Bl.7) pigment products  
manufactured at the Bushy Park Facility and sold by DIC globally (“ Bushy Park 
Other Products ”); and  
 the Bushy Park Facility,  where the Divestment Products and Bushy Park Other 
Products are manufactured, representing the entirety of DIC’s production capacity 
for the Divestment  Products and Bushy Park Other Products, as described in more 
detail below . 
3. The Divestment Business includes:  
 the following main tangible assets :  
(i) the Bushy Park Facility , including, but not limited to:  
(A) all tangible manufacturing assets owned by DIC used t o 
manufacture or contributing to the manufacture of the Divestment 
Products and the Bushy Park Other Products in the Bushy Park 
Facility, […];  
(B) the real estate owned by DIC and housing the tangible 
manufacturing assets used for the manufacturing of the Dive stment 
Products and the Bushy Park Other Products, as well as the related 
ground leases at the Bushy Park Facility (a map showing the 
 
 
 19  
 location of buildings of the Bushy Park Facility to be divested is 
included in Annex C1 ); 
(ii) any Inventory ;  
(iii) the transfer of all advertising , marketing , sales , publicity  and 
presentational materials  designed for and used in connection with the 
Divestment Products and Bushy Park Other Products, or copies of any such 
materials designed for and used in connection with the Divestmen t Products 
and Bushy Park Other Products for a time period to be agreed by DIC and 
the Purchaser, subject to reprinting the Purchaser’s name, and any 
copyrights owned by DIC in such materials;  
 the following main intangible assets:   
(i) the assignment of all of  DIC’s know -how and intellectual property rights, 
if any, that is used  by DIC exclusively to develop , manufacture , test, 
market  the Divestment Products and Bushy Park Other Products at the 
Bushy Park Facility (the “ Exclusively Used Technology ”); for the 
avoidance of doubt, following the assignment, DIC will be able to use 
know -how and other intellectual property rights used by BCE in connection 
with BCE’s products;  
(ii) if applicable, the assignment of all of DIC’s know -how and intellectual 
property rights, if a ny, that is used  by DIC primarily to develop , 
manufacture , test, market  the Divestment Products and Bushy Park Other 
Products at the Bushy Park Facility (the “ Primarily Used Technology ”); 
the purchaser of the Divestment Business shall grant back to DIC an 
indefinite, royalty -free, irrevocable, non -exclusive, global licence  to use 
all know -how and other intellectual property rights related to the Primarily 
Used Technology;  
(iii) if applicable, an indefinite , royalty -free, irrevocable , non-exclusive , 
global licence  under DIC’s other intellectual property rights, if any, to use 
all know -how and other intellectual property rights not exclusively or 
primarily used  by DIC to develop , manufacture , test, market  the 
Divestment Products and Bushy Park Other Products at the Bushy Park 
Facility, in each case solely for the development, manufacture, testing and 
marketing of the Divestment Products or Bushy Park Other Products (the 
“Licensed Technology ”); 
(iv) to the extent it concerns solely or predominantly  the Divestment Products 
or the Bushy Park Other Products, the Parties shall transfer all R&D and 
pipeline projects (including innovations and development products), and 
related information existing at the Effective Date to the Purchaser. To the 
extent they do not concern solely o r predominantly the Divestment Products 
or the Bushy Park Other Products, the Parties will provide a royalty -free, 
irrevocable, non -exclusive, global licence  to these R&D and pipeline 
projects;  
 
 
 20  
 (v) all historic production  and quality control  data  gathered by D IC prior to 
Closing and held by DIC of the Divestment Products and Bushy Park Other 
Products and historic records on compliance with applicable regulations; 
provided, however, that any parts of such records that do not relate to the 
Divestment Products and  Bushy Park Other Products may be redacted from 
the records delivered to the Purchaser ; 
(vi) the QuindoTM and PerrindoTM brand and any associated trademarks and 
product names;  
(vii) at the option of the Purchaser, a transitional, non -exclusive, royalty -free 
licence for the trademarks SunPlastTM, SunBriteTM and FanchonTM, in 
each case solely for the marketing of the Bushy Park Quinacridone Products 
or Bushy Park Other Products for which they are currently used, for a 
transitional period up to […] from Closing to allow  the Purchaser to re -
brand the relevant products to one of its other brands. This […] transitional 
period can be extended […];  
 the following contracts, agreements, commitments  and understandings : 
(i) where applicable, and to the extent  contractually possible, the transfer of 
any supply arrangement , Customer contracts , contract rights , 
commitments , and Customer orders  of the Divestment Products and 
Bushy Park Other Products which contribute to the current operation or are 
necessary to ensure the viability and co mpetitiveness of the Divestment 
Business; for contracts that are legally not transferable (if any), DIC will 
undertake its best efforts to novate written contracts for the supply of the 
Divestment Products; DIC will take commercially reasonable steps to 
encourage Customers to move their Divestment Products and Bushy Park 
Other Products purchasing volumes to the Purchaser;  
(ii) where applicable, and to the extent contractually possible, the transfer of 
any contracts, agreements commitments and understandings  with the 
Divestment Business’ suppliers for the period of time between 2010 and 
Closing;  
(iii) all prepayments , prepaid  expenses , credits,  etc. relating to 3(c)(i); and  
(iv) for the contracts where DIC will be a counterparty, DIC commits to give 
the option to the Purcha ser […];  
 the following customer, credit  and other records : 
(i) the transfer of a list of all Customers  for the Divestment Products and 
Bushy Park Other Products, including pending contacts or negotiations with 
potential new Customers, provided, however, that D IC may continue to use 
such lists to the extent they relate to its retained businesses ( Annex C6 ); 
(ii) where applicable, the transfer of any Customer records  and transactional 
data  which contribute to the current operation or are necessary to ensure 
 
 
 21  
 the viabil ity and competitiveness of the Divestment Business, provided, 
however, that DIC may continue to use such records and transactional data 
to the extent they relate to its retained businesses; and provided further, that 
any parts of such documentation that do  not relate to the Divestment 
Business may be redacted from the versions delivered to the Purchaser; and 
provided further, that to the extent that DIC is obliged to retain such 
documents in support of legal obligations, DIC shall be entitled to do so; 
and, provided further, that DIC shall not be required to transfer any such 
customer records and transactional data that do not relate to the Divestment 
Business; where third -party consent is required for customer documentation 
to be transferred, DIC undertakes  to make all best efforts to obtain such 
consent;  
(iii) a list of all current suppliers  of raw materials for the production of the 
Divestment Products and Bushy Park Other Products (listed in Annex C2 );  
 the Personnel  currently employed at the Bushy Park Facilit y to the extent engaged 
in operations relating to the Divestment Products and Bushy Park Other Products, 
as well as any sales personnel, product management, and product expert roles, and 
any other personnel exclusively or predominantly dedicated to the Div estment 
Business (if any), even if not located at the Bushy Park Facility, subject to employee 
consent and applicable labour laws and other relevant legislation, who are 
necessary to ensure the viability and competitiveness of the Divestment Business 
(including employees listed in Annex  C3); 
 the Key Personnel  currently employed at the Bushy Park Facility to the extent 
engaged in operations relating to the Divestment Products and Bushy Park Other 
Products, subject to employee consent and applicable labour la ws and other 
relevant legislation (including employees listed in Annex  C4); 
 to the extent transferable, the transfer of all licences , permits  and authorisations 
specific to the Bushy Park Facility which contribute to the current operation or are 
necessary to ensure the viability and competitiveness of the Divestment Business 
(listed in Annex C7 ); and  
 to facilitate the efficient and smooth transfer of the Divestment Business to the 
Purchaser a Transitional Services Agreement , for a period of up to […] after 
Closing at […], extendable for […], for the supply of services necessary for the 
viability and competitiveness of the Divestment Business to the Purchaser. 
Transitional services include, to the extent technically feasible, IT, purchasing, 
sales and marketi ng, technical services (e.g., product experts and product 
management), supply chain (e.g., warehousing and logistics) and customer service 
(as further described in Annex C8 ). 
4. The Divestment Business shall not include:  
 any rights to the phthalocyanine pigme nt products manufactured at assets operated 
by third parties and sold by DIC globally (“ Bushy Park Phthalocyanine 
Products ”) as defined and further described in Annex C9 ;  
 
 
 22  
 
 any rights to the Ultra Fine Preparation Skid Equipment, Products and Technology 
as defined and further described in Annex C9 ; 
 any rights to the Nano -Silver Skid Equipment, Products and Technology as defined 
and further described in Annex C9 ; 
 any rights to the non -pigment materials manufactured at the Bushy Park Facility 
[…] as defined an d further described in Annex C9 ; 
 certain personnel currently employed at the Bushy Park Facility listed as excluded 
personnel in Annex C10  […] that are not necessary for the viability and 
competitiveness of the Divestment Business;  
 any right to DIC’s manu facturing or other facilities or equipment not described 
above and not necessary for the Divestment Business’ viability and 
competitiveness.  
5. The Divestment Business shall not include any divestiture of BCE’s tangible or intangible 
assets.  
6. If there is any asset or personnel which is not covered by paragraph 2 of this Schedule but 
which is both used (exclusively or not) in the Divestment Business and is necessary for the 
continued viability and competitiveness of the Divestment Bu siness, that asset or adequate 
substitute will be offered to potential purchasers.  

 
 
   
  
ANNEX  C1 
Overview of the Bushy Park Facility  
[…] 
ANNEX  C2 
List of suppliers of raw materials to the Divestment Business  
[…] 
ANNEX  C3 
List of Personnel in the Divestment Business  
[…] 
ANNEX  C4 
List of Key Personnel in the Divestment Business  
[…] 
ANNEX  C5 
List of brands and trademarks  
[…] 
ANNEX  C6 
List of current customers of the Divestment Business  
[…] 
ANNEX  C7 
List of key licences, permits and author isations required for the Divestment Business  
[…] 
 
 
   
 ANNEX  C8 
List of transitional services under the TSA  
[…] 
ANNEX  C9 
Excluded Assets  
[…] 
ANNEX  C10 
Excluded Personnel  
[…]