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, 27.7.2020  
C(2020)  5270 final  
PUBLIC VERSION 
 
To the notifying party 
Subject : Case M. 9790 – Blackstone/KP1  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 19 June 2020, the European Commission received notification of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which the 
Blackstone Group Inc. (“Blackstone”, US) acquires within the meaning of 
Article  3(1)(b) of the Merger Regulation sole control of the whole of KP1 Services 
S.A.S. (“KP1”, France)  and its subsidiaries (hereafter, “KP1 Group”) , currently 
controlled by Doughty Hanson Private Equity  Partners , by way of purchase of 
securities3 (‘the Transaction’).  Blackstone and KP1 are designated hereinafter as  ‘the 
Parties ’. The entity resulting from the Transaction is hereinafter referred to as the 
‘Merged Entity’.  
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “ Merger Regulation ”). With effect from 1 December 2009,  the Treaty 
on the Functioning of the European Union ( “TFEU ”) has introduced certain changes, such as the 
replacement of  “Community ” by “Union”  and “common market ” by “internal market ”. The 
terminology of the TFEU will be used throughout this decision.  
2  OJ L  1, 3.1.1994, p. 3 (the “EEA Agreement”).  
3  Publication in the Official Journal of the European Union No C  216, 30.6.2020, p. 23. 
In the published version of this decision, 
some information has been omitted 
pursuant to Article 17(2) of Council 
Regulation (EC) No 139/2004 concerning 
non-disclosure of business secrets and other  
confidential information. The omissions are 
shown thus […] . Where possible the 
information omitted has been replaced by 
ranges of figures or a general description.  
 
 
2 1. THE PARTIES  
(2) Blackstone is a globa l asset manager operating as an investment management firm 
headquartered in the United States, with offices in Europe and Asia.  
(3) KP1 is active in the development, design, manufacture, and sale of construction 
materials for residential, commercial, and indus trial purposes in France.  
2. THE OPERATION  
(4) On 31 March 2014, KP1 entered into a trust deed (the “ Trust Deed ”) that entitled 
Blackstone to be the holder of […]  senior secured guaranteed notes of the KP1 
Group due 31 March 2021 (the “Notes”). [Details on KP1 financial situation] . 
Accordingly, KP1 and Doughty Hanson, the ultimate shareholder of KP1, 
commenced negotiations with Blackstone in early 2020 with a view to agreeing a 
consensual recapitalizati on and restructuring of KP1. On 15 May 2020, Doughty 
Hanson and Blackstone entered into a binding lock- up agreement and a term sheet, 
under which at the closing of the Transaction (i)  100% of the equity in KP1 will be 
transferred to Blackstone for […] ; and (ii)  Blackstone’s claims under the Trust Deed 
will be exchanged for reinstated debt in the amount of […]  of notes issued to 
Blackstone.  
(5) Following the implementation of the proposed Transaction, funds managed by 
affiliates of Blackstone will be come the sole shareholder of the KP1 Group. The 
proposed Transaction is therefore a concentration pursuant to Article 3(1)(b) of the 
Merger Regulation.  
3. EU DIMENSION  
(6) The undertakings concerned have a combined aggregate world -wide turnover of more 
than EUR 5 000 million4 (Blackstone : […], KP1:  […]). Each of them has an EU -wide 
turnover in excess of EUR  250 million ( Blackstone : EUR […] , KP1: 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 a Union 
dimension pursua nt to Article 1(2) of the Merger Regulation.  
4. RELEVANT MARKETS  
4.1. Introduction 
(7) The Transaction creates a vertical link in France between the activities of KP1 and 
Building Materials Europe (“BME”), a Blackstone controlled portfolio company  
active in the distribution of building materials in the Netherlands, Germany, 
Belgium, Austria, France, Portugal and Switzerland.  
                                                 
4 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 (8) In France, BME is only active within two regions, namely Ile -de-France and 
North/Normandie, through its own branded chains R aboni, acting as a general 
builders merchant5 (“GBMs”), and Busca, acting as a specialist builder merchant6 
(“SBMs” ). BME distributes (i) basic building materials to professional customers via  
Raboni and (ii) sanitary, heating and plumbing products via  Busca.7  
(9) KP1 is a French manufacturer of prefabricated concrete and non -concrete 
components, focusing on floors and structural systems for both residential and 
commercial buildings.8 KP1 sells its products in France to: (i) retailers, specifically 
to general builders’ merchants ( such as BME’s […]*  business);9 and (ii) directly to 
professional end -customers.10  
(10) The Transaction does not lead to horizontal overlaps. Firstly, BME does not supply 
building materials at wholesale level like KP1 does. Secondly, the products KP1 
sells directly to end -customers are for use in multi- dwelling houses and non-
residential constructions , whereas the similar products sold by GBMs (like BME’s 
[…]** business) at retail level are aimed for individual houses;11 hence, there is no 
competition between KP1 and BME  in sales to end -customers .12 
(11) Conversely , the Transaction gives rise to a vertical link between KP1 acting as a 
producer and wholesale supplier, on the one hand, and BME acting as a GBM (with 
its Raboni business) at retail level. 
4.2. Market definitions  
4.2.1. Upstream market: the wholesale supply of precast concrete components to retailers  
4.2.1.1. Product market definition  
(12) Precast concrete products are extremely diverse and comprise ready -made pillars, 
beams, joists, road barriers, containers, railway sleepers and blocks for house 
                                                 
5  GBMs p rovide their customers with a one -stop shopping facility and related advice for the entire 
range of different products .  
6  SBMs typically concentrate only on one product segment and they typically offer their c ustomers  
greater expertise in this segment than GBMs.  
7  BME does not operate DIY stores in France and sales to non -professional customers are immaterial 
(Form CO, paragraph 96).  
8  Form CO, paragraph 64.  
*  Should read: “Raboni”  
9  In France, the retail of  building materials has been defined as “ a traditional activity by which retailers 
sell on stock all the materials necessary for construction companies .” This activity consists in 
supplying a large assortment of materials which are often needed to undertak e a construction project. 
Building materials are intended mainly for professional customers, which implies specialization in the 
organization of the distribution of products, as well as in the width and depth of the ranges of 
materials offered. DIY stores by contrast are mainly aimed at non -professional customers. See 
decision from the French Minister of the Economy from 5 September 2002, Carmat -  Pinault Bois et 
Materiaux; Decision from the FCA, 15 -DCC -29, SAMSE / SC Inv, 19 March 2015.  
10  End-customers in clude “structural companies” (such as Eiffage, Bouygues) and  “contractors” (such as 
Lidl, Carrefour, Pomona, FM Logistic, Leroy Merlin) which represented 46% and 12% of KP1’s 
2019 turnover respectively.  
**  Should read: “Raboni”  
11   Form CO, paragraph 67.  
12   Form CO, paragraph s 96 and 98.  
 
 
4 construction.13 KP1 manufactures (i) standard concrete elements (such as 
pre-stressed floor beam s14, lintel and standard beams, lightweight PP infiller 
elements and insulating EPS infiller blocks15, and thermal bridge breakers,16); 
(ii) bespoke precast elements  (such as pre -stressed and reinforced pre -slabs, double 
walls, hollow -cores and pre -stressed beams)  and (iii) frameworks and pre -stressed 
concrete turnkey solutions . Specifically , BME sells through the Raboni chain  
standard concrete elements  manufactured by KP1 , primarily for residential use. For 
regulatory reasons, KP1’s infiller blocks and therm al bridge breakers can be used 
only in conjunction with KP1’s floor beams, though not all floor beams require such 
products.17 
(13) The Commission has previously assessed various product markets in the building 
materials sector such as masonry building materials,18 ready -mixed concrete,19 
mortar,20 aggregates,21 asphalt,22 concrete and precast concrete walling units.23 With 
respect to prefabricated (or precast) concrete components, the Commission has 
previously identified a relevant market for precast concrete products distinct from 
other construction materials such as ready -mixed concrete, aggregates, and cement. 
Specifically, the Commission analysed a potential market for precast concrete 
products noting that these products are extremely diverse and comprise ready -made 
pillars, beams, joists, road barriers, containers, railway sleepers, and blocks for house 
construction, but ultimately left the exact market definition open .24 
(14) In the wholesale segment, the Commission previously analysed the impact of various 
transactions on a product -by-product basis.25 However, the Commission left open the 
exact product market definition with respect to these products, while also noting that 
                                                 
13  Commission decision of 7 August 2007, HEIDELBERGCEME NT/HANSON (M.4719), 
paragraph  24. 
14  Pre-stressed concrete is a form of concrete used in construction. It is substantially “pre -stressed” 
(compressed) during production, to strengthen it against tensile forces which it will experience when 
in service.  Pre-stressed beams allow the realization of a wide range of floors with various 
characteristics depending on the products which they are associated with.  
15  Polys tyrene (PP) and expanded polystyrene (EPS).  Infiller blocks are a layer of filler placed between 
the joists of a floor and serve as formwork for the floor. They are supported by beams and are covered 
with a welded mesh and a concrete compression slab.  
16  A thermal bridge breaker is a structural thermal insulation device specially designed to treat thermal 
bridges mainly at the slab / facade or slab / balcony junctions. The purpose of the product is to reduce 
heat leaks.  
17  The junction between the infiller block and the beam is essential to ensure that the beam and the 
compression slab “work together”. This junction is either defined in a lump sum (overestimated) or in 
the context of a technical notice. This is the case for KP1 solutions and certification of  KP1’s non 
concrete infiller blocks is linked to the profiles of its beams.  
18  Commission decision of 29 March 2017, Lone Star Fund/Xella International  (M.8341), 
paragraphs  15-29. 
19  Commission decision of 15 December 2014, HOLCIM/LAFARGE (M.7252) , paragraph 10 . 
20  Commission decision of 22 July 2015, COMPAGNIE DE SAINT GOBAIN/ SIKA (M.7498) , 
paragraph 28 . 
21  Commission decision of 15 December 2014, HOLCIM/LAFARGE (M.7252) , paragraphs 323- 333. 
22  Commission decision of 15 December 2014, HOLCIM/LAFARGE (M.7252) , paragraphs 379- 383. 
23  Commission decision of 26 June 2002, Haniel/Cementbouw/JV (M.2650), paragraphs 40- 81. 
24  Commission decision of 7 August 2007, HEIDELBERGCEME NT/HANSON (M.4719), 
paragraph  24. 
25  Commission decision of 5 May 2019, LONE STAR -  STARK GROUP /SAINT -GOBAIN BDD 
(M.9406) . 
 
 
5 the wholesale supply to retailers is upstream of the retail supply to professional 
custom ers and the retail supply to non- professional customers ,26 considering  three 
main segments: (i)  wholesale supply to retailers, (ii) retail supply to professional 
customers (“B2B”), and (iii) retail supply to non- professional customers (“B2C”, 
primarily thr ough do -it-yourself (“DIY”) stores).27  
(15) The Parties propose that the upstream market for present purposes should be the 
wholesale s upply  of precast concrete and non -concrete components to retailers.28 
The Parties confirm ed29 that, in view of regulatory considerations , both KP1 and its 
competitors who offer similar products to KP1's infiller blocks and thermal bridge 
breakers  (which are the non- concrete components) do not sell them on a standalone 
basis, but sell them also only in conjunction with their own bea ms. In view of this , 
the Commission’s assessment will focus specifically on the concrete components, in 
line with precedent . 
(16) The results of the market investigation  confirmed that “Poutrelles Hourdis ”, the 
local classification of infiller beams and blocks (pre -stressed concrete products) , can 
be considered as a separate product market: “En effet le marché de la poutrelle est un 
marché assez particulier ”.30 Also, a GBM retailer distinguished a “ pre-stressed 
concrete beams and infiller blocks ” market when he p rovided feedback on the 
impact of the Transaction .31 
(17) In any event, for the purpose of this Decision, it can be left open whether the market 
for the wholesale of precast concrete components to retailers may be  further  
segmented, as the Transaction does not g ive rise to serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement 
regardless of the precise product market definition.  
4.2.1.2. Geographic market definition  
(18) Regarding the wholesale supply  of precast concrete compon ents, the Commission 
has previously considered relevant markets to be national or regional in scope based 
on the catchment areas around the production plants of the products in question32.  
(19) In line with Commission’s precedents, the Parties agree that the upstream market is  
national in scope. H owever, given that KP1 sells its products at the wholesale level 
in France to GBMs nationally and to BME’s GBM chain, Raboni,  which is active 
solely in two French regions, Ile -de-France and N ormandie, the Parties submit that 
                                                 
26  Commission decision of 5 May 2019, LONE STAR -  STARK GROUP/ SAINT -GOBAIN BDD 
(M.9406), paragraph 19.  
27  Commission decision of 5 May 2019, LONE STAR -  STARK GROUP /SAINT -GOBAIN BDD 
(M.9406), paragraph 19;  Commissio n decision of 20 August 2015, PONTMEYER / DBS  (M.77 03), 
paragraph s 11-12. 
28   Form CO, paragraph 96.  
29   Response of 27 July 2020 to RFI 3.  
30 “Indeed, the beams  market is a rather specific market”; reply from 3 July 2020 to the Questionnaire to 
GBM retailers in France.  
31   Reply from 3 July 2020 to the Questionnaire to GBM retailers in France.  
32  Commission decision of 20 August 2015, PONTMEYER/DBS (M.7703), paragraph 17.  
 
 
6 the impact of the Transaction should be assessed at both the national level and in Ile -
de-France and Normandie.33 
(20) The results of the market investigation  confirmed that  the geographic market is 
regional in scope based on the catchment areas around the production plants, as one 
supplier stated: “ In our product range of similar products, we can see that they can 
be delivered in a distance up to about 250 km from our factories, at an acceptable 
cost”.34 
(21) In any event, the Commiss ion leaves the markets definition (whether national or 
regional) open, since even under the narrowest market definition, the Transaction 
does not give rise to serious doubts as to its compatibility with the internal market or 
the functioning of the EEA Agr eement.  
4.2.2. Downstream market: retail sales of building materials to professional end- customers  
4.2.2.1. Product market definition  
(22) At the downstream retail level, the Commission has previously distinguished 
between sales to professionals by generalist retailers, on the  one hand, and by 
specialist retailers, on the other hand , but left the precise market definition open35. 
KP1 does not sell its products to specialist retailers  (SBMs) in France as it doesn’t 
manufacture products that are inputs for S BMs. 
(23) Also, the Commission previously considered a  sub-segmentation by product group, 
including the specific product group of building materials.36 Within this product 
group, a segmentation of building materials by product has generally been 
considered relevant by the Comm ission in instances where there have been 
horizontal overlaps between the parties in relation to particular product groups.37 
(24) The Parties submit that the downstream relevant product market should be the retail 
sales of building materials to professional end- customers as KP1 sells its products in 
the retail channel only to GBMs.38  
(25) For the purpose of this Decision, it can be left open whether the market for retail 
sales of building materials to professional end- customers may be segmented based 
on sales to GBMs or sales to SBMs, or based on the specific product group of 
building materials, as the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement 
regardless of the precise prod uct market definition.   
(26) Finally, the Commission notes that as KP1 does not sell its products to specialist 
retailers (S BMs) in France39, the Transaction does not lead to any horizontal 
                                                 
33   Form CO, paragraph 96.  
34   Reply from 24 June 2020 to the Questionnaire to KP1 competitors in France.  
35  Commission decision of  28 April 2004, SAINT GOBAIN / DAHL (M.3407), paragraphs 12- 16. 
36  Commission decision of 11 August 2014, Kingfisher/Mr. Bricolage (M.7283), paragraph 13.  
37  Commission decision of 14 March 2018, LONE STAR/STARK (M.8733), paragraphs 10- 24; 
Commission decision of 5 May 2019, LONE STAR -  STARK GROUP/SAINT -GOBAIN BDD 
(M.9406), paragraph 54.  
38   Form CO, paragraph 96.  
 
 
7 overlaps or vertical links between the Parties on the market for the who lesale supply 
of precast concrete components  to SBMs . Therefore, the SBM segment and the 
overall SBM and GBM segment (as it coincides with the GBM segment) are not 
discussed further in this decision. 
4.2.2.2. Geographic market definition  
(27) The Commission has previous ly considered that the geographic scope of  the markets 
for retail sales of building materials to professional end -customers  could be national, 
regional or local depending on the segment and the relevant catchment area but has 
ultimately left the question open.40 
(28) The Parties state that the market for the retail supply of building materials to 
professional end -customers could be defined as national in scope given that 
competition on this market is driven by national elements (e.g., the main retailers 
compete nationally in terms of presentation, coverage, product offering, marketing 
and general policy). However, given that BME is active in only two regions of 
France, Ile -de-France and Normandie, the Parties agree that the Transaction should 
be assessed both at the national level and at regional level, for Ile -de-France and 
Normandie.41 Given that the average radius in which BME customers typically 
source “Poutrelles Hourdis” is approximately 100 km, the Parties submit that the 
region is the appropriate geographic al level to consider BME’s position in the 
downstream market for the distribution of building materials in France.  
(29) The results of the market investigation  confirmed that the relevant geographic 
market is regional in scope and is limited at around 100 km fr om the delivery site, as 
a GBM retailer stated: “ as a general rule, the delivery distance from these platforms 
and branches does not exceed 100km (1h30 of driving for a standard delivery 
truck) ”42. 
(30) In any event, for the purpose of this Decision, it can be l eft open whether the market 
for the  retail s upply  of building materials to professional end -customers is regional 
in scope , at the level of Ile -de-France and Normandie , or a 100 km radius from the 
delivery site,  as the Transaction does not give rise to ser ious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement 
regardless of the precise product market definition.  
5. COMPETITIVE ASSESSMEN T 
5.1. Market structure in upstream markets  
(31) The Parties estimate KP1’s share in 2019 in the upstream markets for the wholesale 
supply of precast concrete components in France to be low ( [5-10]% in value, 
[0-5]% in volume).43 
                                                                                                                                                      
39   Form CO, paragraph 99.  
40  Commission decision of 11 August 2014, Kingfisher /Mr. Bricolage (M.7283) , paragraphs 17 -22. 
41  Form CO, paragraph 96.  
42  Reply from 29 June 2020 to the Questionnaire to GBM retailers in France.  
43  Form CO, paragraph 104.  
 
 
8 (32) Within the narrower possible market for the wholesale of “Poutrelles Hourdis”  to 
retailers , KP1 is estimated to have a value share of [20- 30]% and a volume share of 
[10-20]% in France.44  
(33) KP1 competes in the wholesale supply of precast concrete components in France 
with a number of other manufacturers. KP1’s competitors in France include 
manufactu rers of precast concrete components such as Rector Lesage, SEAC, 
Fabemi, NEO  Planchers , Alkern, Spurgin Leonhart, and Strudal. From KP1’s best 
estimates of shares for these competitors, Rector Lesage is the number 1 player with 
an approximately [20- 30]% va lue share in  the “ Poutrelles / H ourdis” segment, 
followed by KP1 ( [20-30]%), SEAC ( [5-10]%), and Fabemi ( [5-10]%). Other 
competitors together represent a [30- 40]% share.45 KP1’s competitors also have 
production sites that aim to cover wholesales to retailer s at a national level: Rector 
Lesage has 12 production sites, Fabemi has 13 production sites, SEAC has 
25 produc tion sites, NEO Planchers has 7 production sites, Alkern has 50 production 
sites, Spurgin Leonhart  has 5 production sites.46  
(34) At a regional level , the Parties estimate KP1 to have a market share in value for 
“Poutrelles Hourdis” sold to retailers of [30- 40]% in the region of Ile -de-France and 
of [30- 40]% in the region of North/Normandie.47  
5.2. Market structure in the downstream market  
(35) In the downstream  market for retail sales  of building materials to professional end-
customers, BME’s market share in value on the French GBM market is estimated by 
the Parties at  [0-5]% in 2018.48 At the regional level, BME’s value share in the GBM 
market in 2018 is estimated at  [5-10]% in Ile -de-France and [0 -5]% in 
North/Normandie. Saint Gobain/Point P is the clear market leader in both regions 
with over [30- 40]% market share.  
5.3. Vertical assessment  
5.3.1. Input foreclosure  
(36) The Parties submit that KP1’s share on the upstream market for the wholesale of 
precast concrete components  to retailers  is too small to sustain an input foreclosure 
strategy.49 At the wholesale level, the Parties estimate KP1’s market sh are for the 
wholesale supply of precast concrete components to retailers, in particular for 
“Poutrelles Hourdis” , at approximately [20- 30]%. 
(37) On the two affected regional markets  (wholesale of precast concrete components in 
Ile-de-France and Normandie) , KP1 ’s market shares for “Poutrelles Hourdis” sold to 
retailers also remain moderate: [30- 40]% in the region of Ile -de-France and 
[30-40]% in the region of North/Normandie. There are alternative suppliers of 
precast concrete beams and infiller blocks in France, including in particular Rector 
                                                 
44  Form CO, paragraph 104.  
45  Form  CO, paragraph 108.  
46  Form CO, paragraph 108.  
47  Form CO, paragraph 110.  
48  The Parties submit that 2019 shares will not differ significantly from 2018 shares.  
49  Form CO, paragraph 120.  
 
 
9 Lesage  ([20-30]%), SEAC  ([5-10]%), Fabemi ( [5-10]%), Alkern, NEO Planchers 
and others have a combined market share of about [30- 40]%. Most of KP1’s 
competitors have manufacturing plants in or near the regions  of Ile-de-France and 
Normandie and are able to supply retailers that compete with BME in these regions. 
This is the case in particular of Alkern, which has 9 manufacturing plants in or near 
Normandie and Ile -de-France, SEAC with 3 manufacturing plants in Ile -de-France 
and 4 other plants nearby; Rector Lesage with one plant in Normandie and one near 
the region Ile -de-France. BME currently also purchases products of the type 
manufactured by KP1 from Rector Leage, SEAC, and NEO Planchers.50 
(38) According to the Parti es, KP1’s products are not “must -have” and not even a 
significant input for retailers of building materials.51 The Parties submit that KP1’s 
products do not constitute an important input for BME or Raboni. Specifically, KP1 
products accounted for less than […] % of Raboni’s sales in 2019 (approximately 
EUR […]  out of EUR […]  ). The Parties further submit that KP1’s products 
represent a similarly low share of sales of BME’s competitors and, generally, that 
KP1 products are not “must have” products for GBMs. Further, the Parties submit 
that architects and builders that specify KP1 products in their building plans 
frequently also specify products of KP1’s rivals. As architects and builders aim to 
serve their final customers at competitive prices, they would like ly switch to more 
readily available products if the Merged Entity were to restrict its sales to BME.52 
(39) Also, the Parties state that it is important for GBMs to have in their portfolios a wide 
range of products to fulfill all of their customers’ requirements  and allow one -stop-
shopping. Builders typically purchase a wide range of products from GBMs such as 
BME over the course of building a house for the simple reason that house 
construction requires a large variety of products.53 In 2019, BME generated a 
turnover of €[…]  from the retail sales of building materials through its Raboni 
network, but less than €[…]  (i.e., less than […]%) from precast concrete components 
as a whole and less than € […] from precast concrete components from KP1.54 
(40) In addition, as BME’s s hare of the downstream market for the distribution of 
building materials to professional end- customers in France is de minimis  – less 
than [0-5]% at the national level, KP1 currently relies significantly more on 
downstream distributors other than BME for the sale of its products. BME alone 
(€[…]) currently represents less than […] % of KP 1’s overall sales and less 
than […] % of KP1’s sales to retailers.55 Stopping its sales to other GBMs and selling 
exclusively to BME is likely to drastically reduce the sales  of KP1’s products as it 
seems unlikely that BME could take over a large part of the sales of its competitors 
due to such strategy, and sell all these products in only two regions of France. For 
the same reasons, it is unlikely that KP1 would have the abil ity or the incentive to 
successfully raise rivals’ costs in relation to the products supplied by BME.  
                                                 
50  Form CO, paragraph 111.  
51  Form CO, paragraphs 124- 126. 
52  Reply of 13 July 2020 to RFI 2.  
53  Form CO, paragraph 125.  
54  Form CO, paragraph 124.  
55  Form CO, paragraph 133.  
 
 
10 (41) The market investigation revealed that  only one of the responding BME competitors 
has specific concerns related to the Transaction. This competitor operat es GBM 
stores in the Ile -de-France and Normandie regions , as well as in other regions of 
France. It states that with respect to precast concrete, KP1 is  currently  its sole 
supplier56 in the Ile -de-France and Normandie regions. Its concern is that post -
Trans action, the Merged Entity may charge higher prices to it than to its own GBM 
branch (BME), making it impossible for the competitor to still profitably sell precast 
concrete components in the two regions in question.  
(42) While the competitor states that other GBM chains work with products from KP1 
competitors, it also submits that it could not readily switch from KP1 products to 
competing products, referring to the necessity for investments and staff training.  
(43) The Commission considers that it is unlikely that the Merged Entity would have the 
ability or incentive to engage in input foreclosure strategies on any of the plausible 
markets concerned.  
(44) First, the Merged Entity would likely not have the ability to engage in such a 
practice. Firstly, KP1’s market share s on the upstream market for the wholesale 
supply of  precast concrete components are relatively limited and thereby limiting its 
ability  to sustain an input foreclosure strategy .  
(45) Second, t he Merged Entity would likely not have the incentive to engage in such a 
practice. KP1 achieves the majority of its sales to retailers in French regions other 
than Ile -de-France and Normandie ( […]%). It is therefore unlikely that the Merged 
Entity would risk KP1’s sales to GBMs outside of Ile -de-France and Normandie by 
refusing sales or offering disadvantageous conditions for any  third -party GBMs 
inside these regions. Ultimately , GBMs with stores inside and outside of the Ile -de-
France and Normandie regions co uld start switching away from KP1 products across 
France, if KP1 were to discriminate against their stores inside of the Ile -de-France 
and Normandie regions. Also, it can be noted that BME’s market share on the retail 
market for building materials to profe ssional end -customers in Ile -de-France and 
Normandie is limited  (with [5-10]% and [0-5]% respectively), indicating that a 
possible input foreclosure strategy might not be profitable.  
(46) In any event, the outcome of the market investigation indicates that there are 
generally no significant differences in “Poutrelles Hourdis” products sold by KP1 
and its competitors. While for a GBM some investment or staff training may be 
necessary to start selling “Poutrelles Hourdis” from another manufacturer, this is 
unlikely to represent a prohibitive hurdle to switching away from KP1 products in 
case of a price increase or in case they were to become unavailable to a GBM.57 As 
there are no barriers to entry in this market and  there  are enough competitors, even at 
regiona l level, it is unlikely that the M erged Entity would be able to raise prices in 
the downstream market thereby significantly impeding effective competition.  
(47) Therefore, it is unlikely that the Merged Entity would have the ability or incentive to 
foreclose competitors to BME from input products. In particular , it is also unlikely 
                                                 
56  Reply from 14 July 2020 to the Questionnaire to GBM retailers in France.  
57  Reply from 29 June 2020 to the Questionnaire to GBM retailers in Fran ce.  
 
 
11 that it would have the ability or incentive to do so selectively inside of the Ile -de-
France and Normandie regions.  
(48) Overall, t he outcome of the market investigation shows that the r isk of input 
foreclosure through the notified concentration appears limited. It seems unlikely that, 
post-merger, KP1 would restrict access to its products by other GBMs and the 
outcome of the market investigation indicates that the Transaction in general does 
not seem to raise any input foreclosure concerns, as a GBM states: “Regarding our 
relationships with KP1, the envisaged acquisition should not have any impact either, 
provided that in Ile -de-France and Normandie, the new partnership between KP1 
and BM E does not impact the balance of powers between the different actors 
operating on these markets in these specific geographic areas ”58. 
(49) In view  of the above considerations and the information available to it and the results 
of the market investigation, the C ommission considers it unlikely that , post -
Transaction,  the Merged Entity would have the ability or the incentive to 
successfully engage in input foreclosure strategies in relation to the products 
supplied by KP1.  
5.3.2. Customer foreclosure  
(50) The Parties submit that there is no risk of customer foreclosure resulting from the 
Transaction as the Merged Entity  resulting from the Transaction will not have the 
ability to foreclose competing upstream suppliers from access to customers active on 
the downstream market.59 
(51) The Commission considers that it is unlikely that the Merged Entity would have the 
ability or incentive to engage customer foreclosure practices.  
(52) Firstly, the Parties state that BME’s market share on the two affected regional 
markets remains low, at [5 -10]% in Ile -de-France and [0 -5]% in Normandie and 
BME’s importance for reaching end- customers in these regions is not significant. In 
particular, BME will continue to face competition from Saint Gobain/Point P (which 
has more than [30- 40]% share in each regio n); Tout Faire Materiaux ( [0-5]% in Ile -
de-France and [10- 20]% in Normandie) which belongs to the purchasing group 
CMEM; BigMat ( [5-10]% in Normandie and BigMat is also present in Ile -de-
France); and Gedex (Gedimat) ( [0-5]% share in Ile- de-France and [10-20]% in 
Normandie).60 
(53) As BME does not have any significant  market power in the downstream m arket, it is 
unlikely that the Merged E ntity would be able to increase the cost of its upstream 
competitors to access downstream customers or restrict access to a significant 
customer base. Rather, restricting BME to selling only KP1’s products would put 
BME at a competitive disadvantage to its downstream rivals, which would be able to 
offer customers a broader range of precast concrete products.61 
                                                 
58  Reply from 29 June 2020 to the Questionnaire to GBM retailers in France.  
59  Form CO, paragraphs 141 -  146. 
60  Form CO, paragraph 143.  
61  Form CO, paragraph 145.  
 
 
12 (54) The outcome of th e market investigation reveals that w hile one competitor to KP1 
explains that the Transaction could incentivise BME to shift more of its offtake to 
KP1, the other competitors to KP1 that responded to the market investigation submit 
that they do not expect the Transaction to have an impact on the market or their 
business.62 
(55) Specifically, o ne competitor to KP1 mentions that it expects to continue selling its 
product to BME, as BME likely has to sell more than one brand. I t further  notes that 
it is confident th at it could also deliver its product via other retailers if it were to 
encounter difficulties selling through BME : “I do not see any major impact:  (a) on 
our business, we will still sell our products to Raboni and Busca as we specify our 
products and it is  difficult to change such technical specifications; I suppose also 
that they need to sell more than one brand only; (b) no major issue as the market is 
quite fragmented and we could always deliver our product via other distribution 
network in case of diffi culties to keep on selling via BME ”63. 
(56) Therefore,  and in particular also due to the small market share of BME in the Ile -de-
France and Normandie regions, the Merged Entity appears  unlikely to be able  or to 
have the incentive  to engage in customer foreclosur e for the wholesale supply of 
precast concrete components to retailers in Ile -de-France and Normandie.  
(57) In view  of the considerations in paragraphs ( 48) to (54) above and all evidence 
available to it, the Commission considers that it is unlikely that customer foreclosure 
will arise from the T ransaction .  
(58) In light of the considerations included in paragraphs (35) to (5 5) above and  all 
evidence available to it, the Commission considers that the Transaction will not give 
rise to serious doubts as to its compatibility with the internal market or the 
functioning of the EEA Agreement due to vertical non- coordinated effects under any 
plausible market definition.  
6. CONCLUSION  
(59) 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  
                                                 
62  Reply from 24 June 2020 to the Questionnaire to KP1 competitors in France. , Reply from 
30 June 2020 to the Questionnaire to KP1 competitors in France.  
63  Reply from 24 June 2020 to the Questionnaire to KP1 competitors in France.