Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,  BELGIË 
 
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu . 
  EUROPEAN COMMISSION 
Brussels, 10.3.2021 
C(2021) 1731 final 
PUBLIC VERSION  
PPG Industries, Inc. 
One PPG Place PA 15272 Pittsburgh 
USA 
Subject: Case M.10123 – PPG / Tikkurila 
Commission decision pursuant to Arti cle 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam, 
(1) On 03 February 2021, the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which PPG 
Industries, Inc. (“PPG”, USA) acquires within the meaning of Article 3(1)(b) of the 
Merger Regulation control of Tikkurila Oyj (“Tikkurila”, Finland), (the “Transaction”). PPG is referred to as the “Notifying Party” and, together with Tikkurila, as the “Parties”. 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation”). With effect from 1 December 2009, the Treaty on 
the Functioning of the European Union (“TFEU”) has introduced certain changes, such as the 
replacement of “Community” by “Union” and “common market” by “internal market”. The terminology of the TFEU will be used throughout this decision. 
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”). 
 In the published version of this decision, 
some information has been omitted pursuant 
to Article 17(2) of Council Regulation (EC) 
No 139/2004 concerning non-disclosure of 
business secrets and other confidential information. The omissions are shown thus […]. Where possible the information 
omitted has been replaced by ranges of 
figures or a general description.
 
 
 
2 1. THE PARTIES AND THE OPERATION  
(2) PPG  is a publicly listed corporation traded on the New York Stock Exchange. It is 
active worldwide in the production and sale of coatings and specialty materials.  
(3) Tikkurila  is a publicly listed entity on the Helsinki Stock Exchange. It is mainly 
active in the production and sale of decora tive coatings and, to a lesser extent, 
industrial coatings. Tikkurila focuses its activities in Finland, Poland, Sweden and 
Russia, which account for over 80% of its worldwide turnover.  
(4) On 18 December 2020, PPG and Tikkurila entered into an agreement pursuant to 
which PPG will offer to acquire all of the shares of Tikkurila through a 
recommended voluntary public offer. Following completion of the Transaction, PPG 
will thus acquire sole control of Tikkurila. The Transaction is therefore a 
concentration within the meaning of Article 3(1)(b) of the EU Merger Regulation.  
2. EU DIMENSION  
(5) The notified operation has a Union dimension pursuant to Article 1(2) of the Merger 
Regulation, because (i) the undertakings concerned have a combined aggregate 
world-wide turnover of more than EUR 5 000 million (PPG: EUR 13 531 million: 
Tikkurila: EUR 564 million),3 (ii) each of them has a EU-wide turnover in excess of 
EUR 250 million (PPG: EUR […] million: Tikkurila: EUR […] million) and (iii) 
none of the undertakings concerned achieves more than two-thirds of its aggregate Union-wide turnover within one and the same Member State. 
3. R
ELEVANT MARKETS  
(6) Both Parties are active in the manufactur e and wholesale supply of decorative 
coatings.  
(7) The Parties are also active in the retail di stribution of decorative coatings through 
their own retail outlets. 
3.1. Market definitions 
3.1.1.  Manufacture and wholesale supply of decorative coatings 
(8) Decorative coatings cover various types of  coatings (such as paints, lacquer and 
varnish) normally used on-site both interna lly and externally during construction or 
refurbishment, to protect and decorate surfa ces of buildings such as walls, ceilings, 
doors, window frames and other surfaces. Decorative coatings include both paints and woodcare products.  
                                                 
3  Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission 
Consolidated Jurisdictional Notice (OJ C 95, 16.4.2008, p. 1).  
 
 
3 3.1.1.1.  Product market definition 
The Commission’s precedents 
(9) In previous decisions, the Commission concluded that decorative coatings form part 
of a distinct product market, separate from industrial coatings.4  
(10) In the market for decorative coatings, the Commission further considered 
distinctions between: (i) decorative paints and woodcare products;5 (ii) water-based 
and solvent-based decorative coatings;6 and (iii) decorative coatings sold through 
non-professional resellers (retail segment, wh ich usually consists of Do-It-Yourself 
outlets) and decorative coatings sold thro ugh professional resellers (trade segment).7 
Within the segment for decorative coatings sold through the retail segment, the 
Commission considered a distinction between branded and private label products.8 
Ultimately, the Commission left open wh ether each of these segments and sub-
segments would constitute a separate product market.  
The Notifying Party’s view 
(11) The Notifying Party submits that the relevant product market is the wholesale supply 
of decorative coatings without any fu rther segmentations. According to the 
Notifying Party, most suppliers produce all types of decorative coatings (i.e. 
decorative paints, woodcare products, water-b ased decorative coatings and solvent-
based decorative coatings) and can relativ ely easily switch production between these 
products as the raw materials and manufacturi ng processes are similar. In addition, 
all types of decorative coatings are deem ed interchangeable from a customer’s point 
of view.  
(12) The Notifying Party also submits that the potential segmentation by sales channels is 
not appropriate in view of the supply-side substitutability, as well as the lack of a clear distinction between retail and trade distribution channels (as all end-users are 
free to purchase from all resellers).
9  
The Commission’s assessment 
Segmentation between decorative paints and woodcare products   
(13) The market investigation provided mixed results as to whether decorative paints and 
woodcare products constitute distinct product markets. 
(14) First , the majority of competitors indicated that suppliers of decorative coatings 
manufacture both paints and woodcare products,10 and that there are no significant 
hurdles to switch from paints to woodcare products and vice versa .11 However, a 
                                                 
4  See cases M.8020 – Sherwin-Williams/Valspar , decision of 10 August 2016; M.6270 - Berkshire 
Hathaway/Lubrizol , decision of 24 August 2011; M.4779 AkzoNobel/ICI , decision of 13 December 2007; 
and M.4853 PPG/Sigmakalon , decision of 10 December 2007. 
5  See case M.1167 – ICI/Williams , decision of 29 April 1998. 
6  See case M.8020 – Sherwin-Williams/Valspar , decision of 10 August 2016. 
7  See case M.390 – Akzo/Nobel IndustrierCI/Williams , decision of 10 January 1994. 
8  See case M.4779 AkzoNobel/ICI , decision of 13 December 2007. 
9  Form CO, paragraphs 41-46. 
10  Question 6 of questionnaire Q2 to competitors.  
11  Question 7 of questionnaire Q2 to competitors. 
 
 
4 third of the respondents considers that switching production between the two 
products would involve considerable time and resources and could even be 
uneconomical.12 
(15) Second , while virtually all customers purchase both decorative paints and woodcare 
products,13 they consider that these products cannot be used interchangeably by end-
customers.14 In this respect, one customer indicated that “ in general paints and 
woodcare products are used for different purpose of use. However, it is possible that some consumers use paints as a substitute  for woodcare products and vice versa in 
certain occasions”  and another one specified that “[w] hen it comes to paints and 
woodcare products, our customers buy them for different use ”.
15 
(16) Third , the market investigation did not provide any indication that any further 
segmentation of the (i) decorative paints and/or (ii) woodcare products segments was 
warranted.16  
(17) In any event, for the purpose of this d ecision, the question of whether decorative 
paints and woodcare products constitute distinct markets can be left open, as it has no impact on the Commission’s competitive assessment of the Transaction. 
Segmentation between water-based and solvent-based coatings   
(18) The results of the market investigation did not support the Notifying Party’s view 
and provided indications that water-based  coatings and solvent-based coatings 
constitute distinct product markets.  
(19) First , whilst the vast majority of competitors indicated that manufacturers of 
decorative coatings produce both wate r-based and solvent-based coatings,17 half of 
them consider that switching production between the two products would involve 
considerable time and resources or even be uneconomical.18 In that respect, one 
supplier explained that “ it would be quite time and resource consuming to change 
the production facility from water to solvent based (safety level of machines, air 
cleaning...) ”.19 
(20) Second , virtually all retailers (i.e. customers) purchase both water-based and solvent-
based coatings.20 The majority of retailers consid er however that these products are 
not purchased interchangeably by end-customers:21 more and more customers (and 
in particular DIY customers) choose wate r-based products because these are more 
environmentally friendly; conversely, some  customers appear to keep a preference 
                                                 
12  Question 7 of questionnaire Q2 to competitors. 
13  Question 3 of questionnaire Q2 to customers. 
14  Question 6 of questionnaire Q1 to customers. The Commission notes that wholesalers’ supply strategies 
are driven by end-customers’ preferences and expect ations. For this reason, the preferences of end-
customers appear relevant in the context of assessing the market definition at wholesale level. 
15  Question 6.1 of questionnaire Q1 to customers. 
16  Questions 6.2 and 6.3 of questionnaire Q1 to customers. 
17  Question 8 of questionnaire Q2 to competitors. 
18  Question 9 of questionnaire Q2 to competitors. 
19  Question 7.1 of questionnaire Q2 to competitors. 
20  Question 3 of questionnaire Q1 to customers. 
21  Question 7 of questionnaire Q1 to customers. 
 
 
5 for solvent-based products based on the perception that these are more efficient.22 In 
addition, professional painters may in so me instances favour solvent-based products 
because of their faster drying time, meaning that successive layers of paint can be 
applied faster, which increases the painters’ productivity.23 
(21) Third , the market investigation did not provide any indication that any further 
segmentation of the (i) water-based coatings and/or (ii) solvent-based segments was 
warranted.24  
(22) In any event, for the purpose of this decision, the question of whether water-based 
and solvent-based coatings constitute distinct  product markets can be left open, as it 
has no impact on the Commission’s competitive assessment of the Transaction. 
Segmentation by sales channels   
(23) The market investigation provided indications that a segmentation of the market for 
decorative coatings (and its sub-segments) by  sales channels is not appropriate in the 
present case. 
(24) First , virtually all competitors who responded to the market investigation confirmed 
that they sell their products through both sales channels.25 Conversely, the results of 
the market investigation confirmed the lack  of a clear distinction between retail and 
trade distribution channels from a customer’s point of view as end-users are 
increasingly free to purchase from all resellers.26 
(25) Second , while the market investigation provided mixed results on whether the price 
and packaging of decorative coatings sold to professional and non-professional 
resellers were the same,27 both suppliers and customers recognized that there is no 
meaningful or only a relatively small difference in terms of quality, and that end-
customers are free to choose e ither category of products.28 One customer indicated 
that “[a] ll products are usable by both user groups ” and another one added that 
“[t]here are no meaningful differences between professional and consumer products. 
In both channels, customers have options to  choose from a wide range of paints ”.29 
(26) In light of the above, the Commission considers that, for the purpose of this decision, 
the overall market for the manufacture and wholesale supply of decorative coatings 
and the possible narrower markets ( i.e. potential segmentations of the overall market 
for the manufacture and wholesale supply of decorative coatings, either between (i) 
decorative paints and (ii) woodcare products; or between (i) water-based decorative 
coatings and (ii) solvent-based decorative  coatings; or between (a) solvent-based 
                                                 
22  Question 7.1 of questionnaire Q1 to customers. 
23  Non-confidential minutes of a call with a decorative coatings competitor, dated 20 January 2021.  
24  Questions 6.2 and 6.3 of questionnaire Q1 to customers. 
25  Question 12 of Q2 to competitors. 
26  Question 12.1 of Q2 to competitors. 
27  Questions 10.1 and 10.2 of questionnaire Q1 to customers and questions 11.1 and 11.2 of Q2 to 
competitors. 
28  Question 10.3 of questionnaire Q1 to customers and question 11.3 of Q2 to competitors. 
29  Question 11.4 of Q2 to competitors. 
 
 
6 products and (b) water-based products within each of (i) paints and (ii) woodcare 
products)  do not need to be further segmented by sales channels.30 
3.1.1.2.  Geographic market definition 
(27) In previous decisions, the Commission has left open whether the market for 
decorative coatings (and its sub-segments) is EEA-wide or national.31  
(28) The Notifying Party submits that the mark et for decorative coatings has a national 
dimension, although the competitive pressure from imports is relevant.  
(29) The market investigation was not conclusive as to whether the market for decorative 
coatings (and its sub-segments) is EEA-wide or national.32  
(30) In any event, for the purpose of assessing the Transaction, the exact scope of the 
geographic market definition can be left open since under all above-mentioned 
plausible alternative geographic market definitions (EEA-wide or national), the Transaction does not give rise to serious doubts as to its compatibility with the 
internal market. 
3.1.2.  Retail distribution of decorative coatings 
(31) The market for the retail distribution of decorative coatings is downstream from the 
market for the manufacture and wholesale supply of decorative coatings, and 
consists in the sale of decorative coatings to end-users by (specialised or not) shops.  
3.1.2.1.  Product market definition 
The Commission’s precedents 
(32) The Commission has previously examined the market for the retail of DIY products 
(including decorative coatings). The Commission considered whether the market should be further segmented between products sold including (i) decorative 
products, (ii) wall, floor and tile coatings, (i ii) tools, (iv) hardware and storage, (v) 
electricity and lighting, (vi) bathroom equipment, (vii) construction materials, (viii) woodwork and (ix) gardening.
33 The Commission also considered a segmentation of 
the markets between distribution channels including (i) Do-It-Yourself retail shops, 
(ii) large food retailers, (iii) mono-product specialised shops, and (iv) neighbourhood 
stores.34 In both instances the Commission ultimately left the market definition open. 
                                                 
30  As a consequence, there is no need to assess, for the purpose of this decision, the relevance of a further 
segmentation between branded products and private labels within the retail segment. 
31  See cases M.4779 AkzoNobel/ICI , decision of 13 December 2007; M.4853 PPG/Sigmakalon , decision of 
10 December 2007; and M.8020 – Sherwin-Williams/Valspar , decision of 10 August 2016. 
32  Questions 11-13 of questionnaire Q1 to customers and questions 13-15 of questionnaire Q2 to 
competitors. 
33  See cases M.2898 Leroy Merlin/Brico , decision of 13 December 2002 and M.2804 - Vendex KBB/Brico  
Belgium, decision of 17 July 2002. Also see referral cases M.7677 OBI/Baumax certain assets , decision 
of 4 August 2014 and M.7283 Kingfisher/Mr Bricolage , decision of 11 August 2014. 
34  See cases M.2898 Leroy Merlin/Brico , decision of 13 December 2002. Also see referral cases M.7677 
OBI/Baumax certain assets , decision of 4 August 2014 and M.7283 Kingfisher/Mr Bricolage , decision of 
11 August 2014. 
 
 
7  The Notifying Party’s view 
(33) The Notifying Party considers the retail distribution of decorative coatings to be the 
relevant product market, without the need for any further segmentations.35 
The Commission’s assessment  
(34) The market investigation did not indicate that the market for the retail distribution of 
decorative coatings should be further segmented. As a result, for the purposes of 
assessing the Transaction, the Commission will analyse the retail activities of the 
Parties on the basis of the narrowest plausible product market, namely the market for the retail distribution of decorative coatings. The Commission therefore considers 
that, for the purposes of assessing the Transaction, the retail distribution of 
decorative coatings constitutes a distinct product market, without the need for further 
segmentations. 
3.1.2.2.  Geographic market definition 
The Commission’s precedents 
(35) The Commission has previously considered  the market for the distribution of 
decorative, Do-It-Yourself and gardening products to be local in scope (within a 
20km radius), while acknowledging the relevance of national market positions and 
strategies.
36 
The Notifying Party’s view 
(36) The Notifying Party submits that the rele vant geographic market for the retail 
distribution of decorative coatings is national or local ( e.g. within a 30-50 km radius 
from a given store, depending on the country) in scope. The Notifying Party claims 
that prices do not vary significantly between different localities within the same 
country, inter alia  because wholesalers set uniform pric es over a national territory or 
because of competition from online resellers with such uniform pricing policies.37 
The Commission’s assessment  
(37) The market investigation did not provide any indications pointing towards either 
alternative potential geographic market definition ( i.e. national or local) for the 
resale of decorative coatings to end-users.  
(38) In any event, for the purpose of assessing the Transaction, the exact scope of the 
geographic market definition can be left open since under all above-mentioned 
plausible alternative geographic market definitions, i.e. whether markets are defined as national, regional or local (including either as a 20km or a 30-50 km radius 
around stores), the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market. 
                                                 
35  Form CO, paragraph 47. 
36  See cases M.2898 Leroy Merlin/Brico , decision of 13 December 2002. Also see referral case M.7677 
OBI/Baumax certain assets , decision of 4 August 2014. 
37  Form CO, paragraph 62. 
 
 
8 3.2. Competitive assessment   
3.2.1.  Introduction 
(39) Based on the Notifying Party’s market share estimates, the Transaction gives rise to 
horizontally affected markets in (i) the manufacture and wholesale supply of 
decorative coatings in Denmark, France, Hungary, Latvia, Lithuania, the 
Netherlands, Poland, Slovakia, and Sweden and (ii) the retail distribution of 
decorative coatings in Denmark.38, 39  
(40) The Transaction also gives rise to vertically affected markets as a result of the 
vertical link between the activities of the Parties as wholesalers of decorative 
coatings (upstream) and the retail distribution of decorative coatings to end-users (downstream) in Denmark, Hungary, th e Netherlands, Poland, Slovakia, and 
Sweden.  
3.2.2.  Horizontal non - coordinated effects 
3.2.2.1.  Legal framework 
(41) Article 2 of the Merger Regulation requires the Commission to examine whether 
notified concentrations are compatible with the internal market, by assessing whether 
they would significantly impede effective competition in the internal market or in a 
substantial part of it.  
(42) The Commission Guidelines on the assessment of horizontal mergers under the 
Merger Regulation (the "Horizontal Merger Guidelines")
40  distinguish between two 
main ways in which mergers between actual or potential competitors on the same relevant market may significantly impe de effective competition, namely non-
coordinated effects and coordinated effects.
  
(43) Non-coordinated effects may significant ly impede effective competition by 
eliminating the competitive constraint imposed by each merging party on the other, 
as a result of which the merged entity would have increased market power without 
resorting to coordinated behaviour. Acco rding to recital (25) of the Merger 
Regulation, a significant impediment to effective competition can result from the anticompetitive effects of a concentration even if the merged entity would not have a 
dominant position on the market concerned. In this regard, the Horizontal Merger 
Guidelines consider not only the direct loss of competition between the merging 
                                                 
38  As regards Czechia, given Tikkurila’s negligible amount of sales over the past years on the market for the 
manufacture and wholesale supply of decorative coatings ([…]) and the fact that, post-Transaction, the 
Parties will continue to face the competition of strong players, the Commission concludes that the Transaction does not give rise to competition concerns in Czechia. 
39  As regards the segmentation of paints and woodcare products by chemical composition, the Notifying 
Party confirmed that, based on the Parties’ best estimates, the Parties’ combined market shares for the supply of (i) water-based paints, (ii) solvent-based paints, on the one hand, and (iii) water-based 
woodcare products, and (iv) solvent-based woodcare products, on the other hand, in each of the relevant 
Member States examined in Section 3.2.2, would no t differ substantially from the Parties’ combined 
market shares for the supply of (i) paints, and (ii) woodcare products respectively in these countries. 
40  OJ C 31, 05.02.2004, p. 5. 


 
 
11 including Denmark.48 On the solvent-based market segment, the combined entity 
will continue to face strong players such as Flügger, and Hempel, with shares 
exceeding the Tikkurila’s pre-Transaction, as  well as Jotun with a similar share as 
the Tikkurila ([5-10]% in value and [5-10]% in value), and AkzoNobel, B&J and 
WOCA.  
(52) Second , the results of the market investigation confirmed that the Parties are not 
particularly close competitors. The vast majority of retailers who replied to the 
market investigation identified only PPG among the top five suppliers of decorative 
coatings in Denmark.49 They explained that while PPG supplies well-known brands 
in the Danish market, Tikkurila is perceive d by the Parties’ customers as a very 
small player (some of them not having heard of the company before).50 Overall, it 
appears that each of the Parties compete more closely with other suppliers, rather 
than between themselves, both in relation to decorative coatings and in relation to its 
sub-segments.51  
(53) Third, the market investigation revealed that it is relatively easy for retailers to 
change suppliers since (i) retailers usually have more than one supplier,52 and (ii) 
contracts have a limited duration of 1-3 years.53 Half of the Danish retailers who 
responded to the market investigation had switched suppliers over the past 3 years.54 
In addition, retailers confirmed that neithe r PPG nor Tikkurila have products in their 
portfolio that are not offered by rivals.55 Therefore, there are limited barriers to 
switching. 
(54) Fourth , the vast majority of respondents to th e market investigation confirmed that 
they would continue to have a sufficient number of alternative suppliers from which 
to procure decorative coatings, includi ng woodcare products and solvent-based 
coatings in Denmark post-Transaction.56 None of them expects the Transaction to 
bring about any negative changes on the market.57 This was also confirmed by 
competitors.58 
(55) In light of the above, the Commission concludes that the Transaction does not raise 
serious doubts as to its compatibility with the internal market in relation to the 
supply of decorative coatings (or any plausible sub-segmentation thereof) in Denmark.  
                                                 
48  Non-confidential minutes of a call with a decorative coatings competitor, dated 20 January 2021. 
49  Question 14 of questionnaire Q1 to customers.  
50  Questions 15.1 and 15.2 of questionnaire Q1 to customers. 
51  Questions 16 and 17.3 of questionnaire Q1 to customers.  
52  Question 19 of questionnaire Q1 to customers. 
53  Question 20.2 of questionnaire Q1 to customers. 
54  Question 20 of questionnaire Q1 to customers. 
55  Question 18 of questionnaire Q1 to customers. 
56  Question 22 of questionnaire Q1 to customers.  
57  Question 24.3 of questionnaire Q1 to customers.  
58  Question 21.1 of questionnaire Q2 to competitors. 
 
 
12 (B) Retail distribution of decorative coatings in Denmark  
(56) According to the Notifying Party, PPG and Tikkurila have a combined market share 
of [20-30]% (PPG: [10-20]% and Tikkurila: [5-10]%)59 in volume in 2019 on the 
market for the retail distribution of deco rative coatings in Denmark. The Notifying 
Party was not able to provide market shares at local level but provided the below 
map showing the localities where the Parties’ direct resale outlets overlap. The Notifying Party also confirmed that, based on the Parties’ best estimates, their 
combined market share for the supply of decorative coatings at retail level (i) at 
regional level, (ii) in any 20km radius catchment area around each of their store and 
(iii) in any 30-50km radius catchment ar ea around each of their store would not 
differ substantially from the Parties’ co mbined market share for the supply of 
decorative coatings at retail level in Denmark. 
 
 The Notifying Party’s view  
(57) The Notifying Party submits that (i) the Part ies’ combined market share at national 
level remains limited and many other players will remain active on the market and that (ii) in the localities where the parties’ direct resale outlets overlap, there are a 
large number of both independent resale  outlets and outlets owned by competing 
decorative coatings manufacturers.
60 
The Commission’s assessment  
(58) The Commission considers that the Transact ion does not give rise to competition 
concerns on the Danish market for the retail distribution of decorative coatings for 
the following reasons.  
(59) First, at national level,  the combined market share of PPG and Tikkurila remains 
limited (below 25%), a level below whic h transactions are unlikely to impede 
                                                 
59  Market shares have been estimated on the basis of the paint association data and have been 
complemented by PPG's own estimates. Should the market shares be computed based on the Parties’ 
sales (EUR), the market for the retail distribution of decorative coatings in Denmark would not be 
affected (PPG: [5-10]% and Tikkuri la: [0-5]% in 2019). The market  shares of the Parties did not 
substantially differ in 2017, 2018 and 2020 (based on the Notifying Party’s estimates for 2020).   
60  Form CO, paragraph 122. 


 
 
14 The Notifying Party’s view  
(64) The Notifying Party submits that (i) Tikkurila is an insignificant player in France, so 
that the Transaction will not result in anything but a negligible change in the market 
structure, (ii) the combined entity will continue to face strong competition from a 
large number of players, and that (iii)  the Parties’ customers are strong and 
sophisticated resellers and retail stores , who multi-source and can switch supplier 
with no efforts and possess significant bargaining power.64  
The Commission’s assessment  
(65) The Commission considers that the Transact ion does not give rise to competition 
concerns on the French market for the manufacture and wholesale supply of 
decorative coatings.  
(66) As can be seen from Table 2 above, the Transaction will only lead to a negligible 
increment on the market for the manufacture and wholesale supply of decorative 
coatings and its sub-segments (in any event significantly below [0-5]%) and the 
ensuing HHI delta is less than 150. Post-Transaction, the combined entity will continue to face significant competition from a number of strong rivals in the manufacture and wholesale supply of decora tive coatings and its sub-segments in 
France, including from Cromology, AkzoNobel, V33, Unikalo, and STO. Each of 
these players has a market share higher than Tikkurila on the decorative coatings 
market and all relevant sub-segments in France. In addition, the vast majority of retailers considers that there would still remain a sufficient number of companies 
active in the wholesale supply of decorative coatings in France.
65 None of them 
expects the Transaction to bring about any negative changes on the market.66 This 
was also confirmed by competitors.67 
(67) In light of the above, the Commission concludes that the Transaction does not raise 
serious doubts as to its compatibility with the internal market in relation to the 
supply of decorative coatings (or any plausible sub-segmentation thereof) in France.  
3.2.2.5.  Hungary  
(68) The Notifying Party’s estimates of the Parties’ and their competitors’ market shares 
in the affected markets and sub-segments ba sed on the value and volume of sales for 
2019 in Hungary are as follows.68 
                                                 
64  Form CO, paragraph 129. 
65  Question 22 of Q1 to customers.  
66  Question 24.4 of Q1 to customers. 
67  Question 21.5 of questionnaire Q2 to competitors. 
68  The Notifying Party confirmed that these shares did not evolve significantly in the course of the past 
three years. 

 
 
16 in the Hungarian market, Tikkurila is not particularly well-known.71 Overall, it 
appears that each of the Parties compete more closely with other suppliers, rather 
than between themselves, both in relation to decorative coatings and in relation to its 
sub-segments.72  
(73) Third, the market investigation revealed that it is relatively easy for retailers to 
change suppliers since (i) retailers usually have more than one supplier,73 and (ii) 
contracts have a limited duration of 1-3 years.74 In addition, retailers confirmed that 
neither PPG nor Tikkurila have products in their portfolio that are not offered by 
rivals.75 Therefore, there are limited barriers to switching. 
(74) Fourth , the vast majority of respondents to the market investigation active in 
Hungary confirmed that they will continue to have a sufficient number of alternative 
suppliers from which to procure all types of decorative coatings in Hungary post-
Transaction.76 None of them expects the Transaction to bring about any negative 
change on the market.77 This was also confirmed by competitors.78 
(75) In light of the above, the Commission concludes that the Transaction does not raise 
serious doubts as to its compatibility with the internal market in relation to the supply of decorative coatings (or any plausible sub-segmentation thereof) in Hungary.  
3.2.2.6.  Latvia  
(76) According to the Notifying Party’s estimates, PPG and Tikkurila have combined 
market shares of 20% or more only on the market segment for the manufacture and 
wholesale supply of woodcare product in Latvia. On this market segment, the Parties had a combined market share of [20-30]% in value (PPG: [0-5]% and Tikkurila: [10-
20]%) and [20-30]% in volume (PPG: [5 -10]% and Tikkurila: [10-20]%) in 2019.
79 
The Notifying Party’s estimates of the Parties’ and their competitors’ market shares 
in woodcare products based on the value and volume of sales for 2019 in Latvia are 
as follows.80 
                                                 
71  Questions 15.1 and 15.2 of questionnaire Q1 to customers. 
72  Questions 16 and 17.5 of questionnaire Q1 to customers.  
73  Question 19 of questionnaire Q1 to customers. 
74  Question 20.2 of questionnaire Q1 to customers. 
75  Question 18 of questionnaire Q1 to customers. 
76  Question 22 of questionnaire Q1 to customers.  
77  Question 24.4 of questionnaire Q1 to customers.  
78  Question 21.2 of questionnaire Q2 to competitors. 
79  The Notifying Party confirmed that these shares did not evolve significantly in the course of the past 
three years.  
80  The Notifying Party confirmed that these shares did not evolve significantly in the course of the past 
three years.  




 
 
21 The Notifying Party’s view  
(92) The Notifying Party submits that the Transaction does not raise competition 
concerns because (i) the combined entity will continue to face strong competition 
from a large number of competitors with production capacities in Poland, (ii) the 
Parties are not close competitors as Tikkurila is perceived as a high-quality/high cost 
supplier on the market, while PPG is instead  perceived as supplier of intermediate 
quality and cost, and (iii) the Parties’ cust omers are strong and s ophisticated resellers 
and retail stores, who multi-source and can switch supplier with no efforts and 
possess significant bargaining power.96 
The Commission’s assessment  
(93) The Commission considers that the Transact ion does not give rise to competition 
concerns on the Polish market for the manufacture and wholesale supply of 
decorative coatings for the following reasons.  
(94) First, as can be seen from Table 7 above, the combined entity will continue to face 
strong players in the wholesale supply of decorative coatings (and its sub-segments) 
in Poland, including from AkzoNobel, Sniezka, Kabe, Flügger and Caparol.97 This is 
in line with the views expressed by respondents to the market investigation active in Poland, one of them explaining that “Poland is a very competitive market with many 
players.”
98 
(95) Second,  the market investigation confirmed to some extent the Notifying Party’s 
claim that the Parties do not compete closely on the Polish market. Only around half 
of Polish retailers place both Parties among the top 5 competitors in Poland.99 
Similarly, when asked specifically about each of the Parties’ closest competitors on 
the Polish market, only around half of retailers consider either PPG to be among 
Tikkurila’s top 5 competitors (or vice versa ) in Poland.100 The difference between 
the Parties’ offering is highlighted by a customer of the Parties in Poland, in the 
following terms: “Tikkurila offers adequate price for all the products, high quality, 
strong brand position, wide range of products, positive existing relatioship [sic] with 
supplier, manufacturing located in Poland what follows easy acces [sic] to the 
products. PPG average quality and prices of the products, poor range of products, 
not existing business relationship, manufac turing located in Poland, insignificant 
position on the market.”101 The fact that Tikkurila’s brands and products compete in 
the premium segment of the market, while PPG’s are perceived as brands and 
products of more intermediate quality and cost is confirmed by another customer of 
the Parties in Poland: “In Poland, PPG has strong brands (Bondex and Dekoral) 
which are well-seen both by professional  and DIY customers. Drewnochon is also 
perceived as popular: a mid-quality product at an affordable price. In Poland, 
                                                 
96  Form CO, paragraphs 161-167. 
97  In addition, as mentioned in footnote 95 above, these competitors have been responsible, in the course of 
the past four years, for the progressive decline of PPG’s (and subsequently the Parties’ combined) market 
shares.  
98  Non-confidential minutes of a call with a decorative coatings competitor, dated 20 January 2021. See also 
the same competitor’s response to question 17.1 of Q2 – Questionnaire to decorative coatings 
competitors: “Poland is a competitive market with a number of players.” 
99  Question 14 of Q1 – Questionnaire to decorative coatings customers. 
100  Question 17.2 of Q1 – Questionnaire to decorative coatings customers. 
101  Question 13.1 of Q1 – Questionnaire to decorative coatings customers. 
 
 
22 Tikkurila and Beckers products (Tikkurila brands) are positioned at a higher 
(medium/high price) price point than Dekoral (PPG brand) - they are premium products.”
102 Retailers confirmed that this analysis would not differ depending on 
any potential sub-segments within decorative coatings.103 
(96) In addition, the vast majority of both retailers and competitors consider that PPG and 
Tikkurila compete in Poland equally with several other suppliers.104 T h i s  v i e w  i s  
confirmed by a customer of the Parties in Poland, commenting “in Poland […] both 
manufacturers compete between themselves  as well as with a number of other 
suppliers.”105 Finally, according to an overwhelming majority of both retailers and 
competitors, none of PPG or Tikkurila have any particular product not offered by 
other players or offered by fewer than two other suppliers.106 Again, both retailers 
and competitors confirmed that their opinion would not differ depending on any 
potential sub-segments within decorative coatings.107  
(97) Third , the market investigation also confirmed to some extent the validity of the 
Notifying Party’s argument about the sophistication and bargaining power of the 
Parties’ customers. Half of responding Polish retailers considers that they have equal bargaining power with the strongest supplie rs when negotiating their purchases of 
decorative coatings (irrespective of the type of decorative coating)
108. The other half 
considers that they have either strong or very strong bargaining power, and none of 
the Polish retailers considers that it has either little or very little bargaining power 
compared with the strongest suppliers when negotiating their purchases of decorative 
coatings.109 By contrast, a majority of competitors, including large players, generally 
consider they have little or very little bargaining power compared to large retailers when negotiating their supply of decorative coatings.
110 As an illustration of this 
bargaining power, a Polish customer of the Parties explains: “My company has a 
long lasting presence on the local market […] if any new supplier is about to 
establish in the area, it is known that it rather needs to establish a contract with my company.”
111 
(98) This element is reinforced by the multi-sourcing strategies put in place by retailers, 
and their ease to switch suppliers. The vast majority of Polish retailers have more 
than five different suppliers of decorative coatings.112 A customer of the Parties in 
Poland mentions “We work in Poland with various supplier for paint coatings 
(Sniezka, Akzo Nobel, PPG, Tikkurilla, Syntilor, V33 the main one[s])”,113 while 
another explains that it has “more than 5 suppliers of deco rative coatings in all of 
                                                 
102  Question 15.3 of Q1 – Questionnaire to decorative coatings customers. 
103  Question 14.1 and 17.6 of Q1 – Questionnaire to decorative coatings customers. 
104  Question 16 of Q1 – Questionnaire to decorative coatings customers and question 17 of Q2 – 
Questionnaire to decorative coatings customers. 
105  Question 16.1 of Q1 – Questionnaire to decorative coatings customers. 
106  Questions 18 and 18.2 of Q1 – Questionnaire to decorative coatings customers and questions 19 and 19.2 
of Q2 – Questionnaire to decorative coatings customers. 
107  Question 16.1 of Q1 – Questionnaire to decorative coatings customers and question 17.1 of Q2 – 
Questionnaire to decorative coatings customers. 
108  Question 21.1 of Q1 – Questionnaire to decorative coatings customers. 
109  Question 21 of Q1 – Questionnaire to decorative coatings customers. 
110  Question 20 of Q2 – Questionnaire to decorative coatings competitors. 
111  Question 21.1 of Q1 – Questionnaire to decorative coatings customers. 
112  Question 19 of Q1 – Questionnaire to decorative coatings customers. 
113  Question 19.1 of Q1 – Questionnaire to decorative coatings customers. 



 
 
26 Flügger, AkzoNobel, Jotun, Caparol and Teknos. Each of these players has a higher 
share than PPG in the market for the whol esale supply of decorative coatings in 
Sweden.  
(110)  Second , the results of the market investigation confirmed that the Parties are not 
particularly close competitors. The majority of retailers responding to the market 
investigation identified either PPG or Tikkurila among the top five suppliers of decorative coatings in Sweden.
128 They explained that while Tikkurila sells well-
known brands in the Swedish market, PPG has a limited presence in the country 
(some retailers are not able to name a brand owned by PPG).129 Overall, it appears 
that each of the Parties compete more closely with other suppliers, rather than 
between themselves, both in relation to decorative coatings and in relation to its sub-segments.
130  
(111)  Third, the market investigation revealed that it is relatively easy for retailers to 
change suppliers since (i) retailers usually have more than one supplier,131 and (ii) 
contracts have a limited duration of 1-3 years.132 The majority of Swedish retailers 
who responded to the market investigation had switched suppliers over the past 3 years.
133 In addition, retailers confirmed that neither PPG nor Tikkurila have 
products in their portfolio that are not offered by rivals.134 Therefore, there are 
limited barriers to switching. 
(112)  Fourth , all retailers active in Sweden who responded to the market investigation 
confirmed that they will continue to have a sufficient number of alternative suppliers 
from which to procure all types of decorative coatings in Sweden post-
Transaction.135 None of them expects the Transaction to bring about any negative 
changes on the market.136  
(113)  In light of the above, the Commission concludes that the Transaction does not raise 
serious doubts as to its compatibility with the internal market in relation to the 
supply of decorative coatings (or any plausible sub-segmentation thereof) in 
Sweden.  
3.2.3.  Vertical non—coordinated effects 
3.2.3.1.  Legal framework  
(114)  The Commission’s Guidelines on the assessment of non-horizontal mergers under 
the Merger Regulation (the "Non-Horizontal Merger Guidelines") distinguish 
between two main ways in which vertical mergers may significantly impede 
effective competition, namely input foreclosure and customer foreclosure.137 
                                                 
128  Question 14 of questionnaire Q1 to customers.  
129  Questions 15.1 and 15.2 of questionnaire Q1 to customers. 
130  Questions 16 and 17.4 of questionnaire Q1 to customers.  
131  Question 19 of questionnaire Q1 to customers. 
132  Question 20.2 of questionnaire Q1 to customers. 
133  Question 20 of questionnaire Q1 to customers. 
134  Question 18 of questionnaire Q1 to customers. 
135  Question 22 of questionnaire Q1 to customers.  
136  Question 24.2 of questionnaire Q1 to customers.  
137  OJ L 24, 29.1.2004, p. 1. 
 
 
27 (115)  For a merger to raise input foreclosure competition concerns, the merged entity must 
have a significant degree of market power upstream.138 In assessing the likelihood of 
an anticompetitive input foreclosure strategy, the Commission has to examine 
whether (i) the merged entity would have the ability to substantially foreclose access 
to inputs; (ii) whether it would have the incentive to do so; and (iii) whether a 
foreclosure strategy would have a significant detrimental effect on competition downstream.
139 
(116)  For a merger to raise customer foreclosure competition concerns, the merged entity 
must be an important customer with a significant degree of market power in the 
downstream market.140 In assessing the likelihood of an anticompetitive customer 
foreclosure strategy, the Commission has to examine whether (i) the merged entity would have the ability to foreclose access to downstream markets by reducing its 
purchases from its upstream rivals; (ii) whether it would have the incentive to do so; 
and (iii) whether a foreclosure strategy would have a significant detrimental effect 
on consumers in the downstream market.
141 
3.2.3.2.  Overview of the Parties’ and th eir competitors’ market shares 
(117)  Decorative coatings manufacturers supply their products at the wholesale level to 
retailers (upstream market). Retailers then sell decorative coatings to end-users, 
through their retail outlets or DIY stores. (downstream market). 
(118)  Most decorative coatings manufacturers are, at least to a certain extent, vertically 
integrated at retail level. Depending on the EEA country, the level of integration of 
the various manufacturers can be very different.  
(119)  An overview of the vertically affected markets arising from the Transaction is 
provided in the table below. 
                                                 
138  Non-horizontal Merger Guidelines, paragraph 35. 
139  Non-horizontal Merger Guidelines, paragraph 32. 
140  Non-horizontal Merger Guidelines, paragraph 61. 
141  Non-horizontal Merger Guidelines, paragraph 59.  

 
 
29 serious doubts as to its compatibility with the internal market relative to customer 
foreclosure risks. 
3.2.3.4.  Input foreclosure  
The Notifying Party’s views 
(124)  In relation to Hungary, Netherlands, Poland and Slovakia, the Notifying Party 
submits that input foreclosure is unlikely to  materialize because (i) Tikkurila is not 
(or barely) active in the retail distribution of decorative coatings to end-users and (ii) 
PPG is already active at both upstream and downstream level pre-Transaction. As 
such, the Transaction would not create any shift in PPG’s incentives to engage in 
potential input foreclosure strategies.143 
(125)  As regards Denmark and Sweden, the Notifying Party submits that input foreclosure 
is unlikely to materialize since (i) the Parties’ main competitors upstream are suppliers of decorative coatings which are themselves vertically integrated 
downstream, (ii) PPG (for Denmark) and Tikkurila (for Sweden) are already today 
active at both upstream and downstream  levels (and not engaging in any input 
foreclosure practice), (iii) the incremen t brought by Tikkurila at downstream for 
Denmark and by PPG for Sweden is too small to create a significant shift in the combined entity’s incentives to engage in potential input foreclosure strategies, and 
(iv) any foreclosure strategy of independent resale outlets would likely divert the 
wholesale purchases of these resale outlets towards rival suppliers.
144 
The Commission’s assessment 
(126)  The Commission considers that the Transaction would not give rise to any 
significant input foreclosure for the following reasons. 
(127)  First , the Commission considers that the combined entity would not have the ability 
to foreclose its rivals in the downstream market for the retail supply of decorative 
coatings in Denmark, Hungary, the Netherlands, Poland, Slovakia and Sweden due to the presence of a substantial number of  decorative coatings suppliers to which 
independent resale outlets could turn to . The vast majority  of retailers who 
responded to the market investigation confirmed that there would remain a sufficient 
number of alternative suppliers they could to turn to if the combined entity decided 
to stop selling them decorative coatings.
145 This is further corroborated by the fact 
that, as explained in Section 3.2.2 above, the majority of retailers have more than 
five different suppliers,146 switching suppliers is relatively easy,147 and contracts 
generally have a limited duration of 1-3 years.148 Over half of the retailers who 
responded to the market investigation swit ched suppliers over the past 3 years. 
Therefore, there are limited barriers to sw itching and, post-Transaction, a sufficient 
number of decorative coatings suppliers wi ll remain on the market. In addition, the 
                                                 
143  Form CO, paragraphs 136, 155, and 172. 
144  Form CO, paragraphs 124 and 187. 
145  Question 23 of questionnaire Q1 to customers. 
146  Question 19 of questionnaire Q1 to customers. 
147  Question 20 of questionnaire Q1 to customers. 
148  Question 20.2 of questionnaire Q1 to customers. 
 
 
30 vast majority of competitors149 and retailers150 confirmed that neither PPG not 
Tikkurila have a unique type of decorative coatings in their portfolio that could not 
be offered by rival suppliers. 
(128)  Second, the Commission considers that the combined entity would not have the 
incentive to foreclose its downstream rivals in the resale of decorative coatings to 
end-users in Denmark, Hungary, the Netherlands, Poland, Slovakia and Sweden, by 
restricting access to its decorative coatings to independent resellers.151 The 
Commission finds that any foreclosure stra tegy would likely divert wholesale sales 
towards rival manufacturers while only leading to marginal benefits at the retail level 
due to the Parties’ limited market share downstream, and the competition they face 
in every relevant market. The market investigation indeed confirmed that retailers can easily switch suppliers within a short period of time (and the vast majority has 
done so in the past), in particular due to the fact that the vast majority of retailers 
rely on multi-sourcing strategies.
152 Retailers usually carry multiple brands from 
different manufacturers, which allows them to supply and reallocate their respective 
shares of wallet within a short period of time, should supply conditions from the combined entity deteriorate post-Transaction.  
(129)  In addition, the Commission notes that the vertical link between the wholesale 
provision of decorative coatings in Denmark and the resale of decorative coatings to 
end-users in Denmark is pre-existing, as both Parties are active both upstream and 
downstream, with a limited increment brought about by Tikkurila (both upstream 
and downstream). Thus, the Commission considers that the incentives of the 
combined entity will not change significantly  as a result of the Transaction. This is 
all the more true in Hungary, the Netherlands,Poland and Slovakia, where PPG is 
strong at both upstream and downstream leve l and Tikkurila is not or barely active at 
downstream level. 
(130)  Similarly, the vertical link between the w holesale provision of decorative coatings in 
Sweden and the resale of decorative coatings to end-users in Sweden is also pre-existing, as both Parties are active both upstream and downstream, with a limited 
increment brought about by PPG (both upstream and downstream). Thus, the 
Commission considers that the incentives of the combined entity will not change 
significantly as a result of the Transaction.  
(131)  Third , the Commission considers that any input foreclosure strategy is unlikely to 
have a significant detrimental impact on competition in the resale of decorative 
coatings to end-users in Denmark, Hungary, the Netherlands, Poland, Slovakia and 
Sweden. The Commission notes that retailer s responding to the market investigation 
                                                 
149  Question 19 to questionnaire Q2 to competitors. 
150  Question 18 to questionnaire Q1 to customers. 
151  As regards Denmark and Sweden, the Parties’ main competitors upstream are suppliers of decorative 
coatings which are themselves vertically integrated downstream, and only sell their own products in their 
branded stores. This would be true as well in other countries (Hungary, the Netherlands, Poland and Slovakia); however, the limited importance of branded outlets compared to independent resellers in these 
countries makes this argument less relevant in the context of input foreclosure scenarios. At any rate, the 
Commission notes that in all countries considered in this section, input foreclosure could only apply to independent resellers (and not branded outlets). 
152  Questions 19 and 20 of Q1 – Questionnaire to decorative coatings customers. 
 
 
31 did not raise concerns as to the risk of a foreclosure strategy or its potential impact 
on their business or on the market.153  
(132)  In light of the above, the Commission concludes that the Transaction is unlikely to 
raise serious doubts as to its compatibility with the internal market in relation to the 
vertical link between the wholesale supply of decorative coatings and the retail of 
decorative coatings in Denmark, Hungary, the Netherlands, Poland, Slovakia and Sweden. 
4. C
ONCLUSION  
(133)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.  
For the Commission 
  
(Signed) 
Margrethe VESTAGER 
Executive Vice-President 
 
                                                 
153  Question 25 of questionnaire Q1 to customers.