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, 29.11.2018  
C(2018 ) 8166 final  
 
 
 
 
To the notifying party  
 
Subject : Case  M.8951 - SUZANO PAPEL E CELULOSE / FIBRIA 
CELULOSE  
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 Sir or Madam,  
(1) On 9 October 2018,  the Commission received notification of a proposed 
concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 
(the 'Merger Regulation ')3 by which  Suzano Papel e Celulose S.A. ("Suzano") 
acquire s sole control over Fibria Celulose S.A. ("Fibria"). Suzano is hereafter 
referred to as the "Notifying Party" and together with Fibria as the "Parties".   
1. THE PARTIES  AND THE TRANSACTION  
(2) The Parties are both publicly traded companies registered in Brazil, active in the 
production of wood pulp from eucalyptus trees. Both are vertically integrated 
upstream, with limited activities in wood procurement in Brazil, and in the 
production and supply of eucalyptus pulp. In addition, Suzano is active 
downstream in the production and supply of p aper products.  
                                                 
1  OJ L 24, 29.1.2004 p. 1. 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 374, 16.10.2018, p. 11 . 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omitted has been replaced by ranges of figures or a 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.  PUBLIC VERSION  
 
2 (3) The controlling shareholders of Suzano entered into a Voting Agreement with 
Fibria's major shareholders in order to combine Suzano's and Fibria's operations 
and shareholdings by means of a corporate reorganisation (the "Transaction"). 
Upon completion of the Transaction, Suzano will own 100% of Fibria's shares 
and thereby acquire sole control over Fibria.  It follows that the Transaction is a 
concentration pursuant to  Article 3(1)(b) of the Merger Regulation.  
2. EU DIMENSION  
(4) The undertakings conc erned have a combined aggregate worldwide turnover of 
more than EUR  5 000 million.4 (Suzano: EUR  2 918 million; Fibria: EUR  3 256 
million). Each of them has an EU -wide turnover in excess of EUR 250 million 
(Suzano: EUR  […]; Fibria: 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  pursuant to Article 
1(2) of the Merger Regulation . 
3. MARKET DEFINITION  
(5) Suzano and Fibria are both mainly active in the manufacture and supply of wood 
pulp. In addition, Suzano is also active downstream in relation to the 
manufacture and supply of paper products.5 
3.1. Manufacture and supply of wood pulp  
(6) Wood pulp is a dry fibrous material made from wood, us ed to manufacture 
different paper products (tissue, writing paper, paperboard  etc.). It can be either 
used internally by vertically integrated companies for their paper production 
("integrated pulp"), or produced to be sold on the merchant market ("market 
pulp"). For the purpose of this decision, only the latter, market -facing activity 
will be considered.  
(7) Pulp is composed of cellulose fibres, which are either retrieved from wood 
("virgin fibres", "virgin fibre pulp") or from recycled paper ("recycled fibres ", 
"recycled fibre pulp"). Virgin fibres are the input to wood pulp ; recycled fibres 
to recycled pulp. In addition, pulp can also be composed of non -wood fibres 
(obtained from cotton, linen, bamboo, etc.). 
(8) Different types of wood pulp exist depending on th e production process used for 
the separation of the fibres ("chemical pulp" or "mechanical pulp"), finish 
("bleached pulp" or "unbleached pulp"), fibre length ("hardwood pulp" or 
"softwood pulp")  and type of wood.  
(9) Depending on the production process used f or the separation of the fibres, wood 
pulp can be either mechanical or chemical. Mechanical pulp is produced by 
                                                 
4  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
5  For completeness, the Parties also have marginal activities in the production and procurement of 
wood. More specifically, Suzano and Fibria sell their surplus wood production when their wood 
production exceeds their pulp production, or their wood production is unfit for pulp production. As 
these activities are in any case limited to Brazil, they will not be further discussed in this decision.  
 
3 weakening and separating fibres from wood via mechanical grinding or refining. 
Mechanical pulp is generally  used for lower grade papers , such as  newsprint and 
catalogues , since the fibres ' strength and the age resistance of the resulting pulp 
are low er than that of chemical pulp . Chemical  pulp is produced  either by using 
acid to extract the lignin from wood chips in large pressure vessels ( "sulphite 
process ") or by being cooked, bleached and dried ( "kraft process "). Chemical 
pulp is more suitable for bleaching as it contains significantly  less lignin than 
mechanical pulp .6 
(10) Pulp can be bleached or unbleached. The goal of bleaching pulp is to r emove all 
of the residual lignin, which lightens and whitens the pulp. This in turn gives the 
downstream paper products additional whiteness. Bleaching can be done using a 
number of molecules or compounds used in a sequence.  When hardwood pulp is 
bleached,  it is referred to as BHKP ("Bleached Hardwood Kraft Pulp"), when 
softwood pulp is bleached it is referred to as BSKP ("Bleached Softwood Kraft 
Pulp").  
(11) There also exist different types of wood pulp in terms of fibre length, namely 
hardwood pulp and softwoo d pulp. Hardwood pulp contains short , thick walled  
fibres and p rovides softness, smoothness,  brightness , opacity  and printability 
properties. Softwood pulp contains long fibres which mainly provide strength.  
(12) Hardwood pulp is produced from different floweri ng trees such as oak, ash,  
maple , eucalyptus, aspen, beech, birch and acacia. Softwood pulp is made from 
various conifers  such as pine and spruce.  
3.1.1.  Product market definition  
(13) The Parties are active in the manufacture and supply of Bleached Eucalyptus 
Kraft Pulp ("BEKP"), a hardwood pulp made from eucalyptus trees.  
The Notifying Party's view  
(14) The Notifying Party submits that chemical wood pulp (including both bleached 
and unblea ched wood pulp, fluff pulp7, and both softwood and hardwood pulp) 
constitutes a single relevant product market.8 The Notifying Party also submits 
that p ulp made from recycled fibres, mechanical pulp and dissolving pulp9 also 
exert a competitive constraint on chemical wood pulp while not forming part of 
the chemical wood pulp market.10  
(15) The Notifying Party claims that it is not appropriate to (i) further segment the 
market for chemical wood pulp, and in particular  (ii) to segment softwood and 
                                                 
6  Concretely , mech anical  pulp contains approximately 25% of lignin, whereas chemical pulp's lignin 
content is less than 5%.  
7  Fluff pulp is a type of chemical pulp characterised by its bulk and water absorbency features, used as 
a direct input in various consumer products such as diapers and medical patches.  
8  Paras.  106-139 of the Form CO . 
9  Dissolving pulp is bleached chemical wood pulp that has a high cellulose content (>90%). Dissolving 
pulp is so named because it is not made into paper, but dissolved either in a solvent or by 
derivatization into a homogeneous solution .  
10  Para. 371 of the Form C O. 
 
4 hardwood pulp, or (ii i) to consider within hardwood pulp a segmentation by 
individual type of hardwood pulp and thus a market limited to BEKP only, as 
customers are  not reliant on any fibre type, for the following reasons.  
(16) First, customers use a mixture of different types of wood pulp in their recipe and 
can use varying  dosages of varying  types of wood pulp , depending on their 
desired outcome. The exact proportion of the types of wood pulp used can be 
adjusted according to the market conditions.  
(17) Second , regardless of the  type of pulp used, customers can adjust their 
production lines through minor investments, such as including additives or 
modifying the refining process, allowing them to modify the pulp to enhance its 
properties by refining it according to their own and t heir respective customers' 
preferences, and as such , to achieve the desired characteristics with different 
types of fibres.  
(18) Third , pulp customers generally multi -source from a number of different pulp 
suppliers, and are not technically limited to using one  type of market pulp only.  
(19) As regards  softwood and hardwood pulp specifically , while there are physical 
differences between hardwood and softwood , the Notifying Party maintains that 
there are ample technical substitutability possibilities.  
(20) From a demand -side perspective , paper manufacturing requires a combination of 
hardwood and softwood pulp, whereby hardwood provides features such as 
smoothness and opacity , and softwood provides strength, and customers can 
allow some variance in their proportions of each  product. As such, customers 
can adjust their hardwood/softwood proportion based on the market conditions.  
(21) In terms of prices, softwood and hardwood pulp prices move in parallel for 
significant periods of time with softwood generally being more expensive,  and 
while they can diverge temporarily , they ultimately move back together.  
(22) As regards the supply side , there are pulp mills capable of producing either 
BHKP or BSKP, so called "flex mills" .11 In addition, the main production 
equipment is the same.  
(23) As for BEKP and other types of hardwood pulp , the Notifying Party submits 
that substitutability exists both from a demand - and supply -side point of view.  
(24) On the demand side , customers are not confronted by technical barriers when 
switching between BEKP and other hardwood fibres; they only need to adjust 
their refining process. In addition, since customers determine the exact 
proportion of the various types of pulp they will purchase on the basis of the 
applicable market conditions, all customer options are taken i nto account by 
pulp suppliers during negotiations.  
(25) As regards the supply side , the Notifying Party explains that while it is unlikely 
that the Parties would produce pulp using another type of wood in the near 
                                                 
11  The Notifying Party estimates that between 51.6% and 55% of the pulp mills in North  America and 
the EEA are flex mills. In Latin America, the degree of flexibility o f pulp mills is only  11.1%.  
 
5 future, there are no technical obstacles to switching between eucalyptus and 
other hardwoods.  
(26) The Notifying Party further mentions that certifications such as FSC, PEFC and 
Ecolabel may also influence EEA -customer choices.  
The Commission's assessment  
(27) In earlier decisions, the Commission has consider ed a single product market 
comprising all types of pulp.12 However, in more recent decisions, the 
Commission has considered a market for chemical pulp and assessed a potential 
segmentation between hardwood and softwood pulp , and bleached and 
unbleached pulp .13 It has also assessed whether , within hardwood pulp , a 
separate market for BEKP should be considered. The Commission has however 
generally left the market definition open.  
Virgin  fibre  vs recycled fibre pulp  
(28) As regards the demand -side substitutability between virgin fibre pulp and 
recycled fibre pulp, the market investigation indicated that recycled fibre pulp 
has an inferior quality, including a higher risk of impurities and poor absorbency 
and strength. In addition, it appears that most applications req uire at least some 
virgin fibre.14 As such, substitution appears not  possible, or only for certain end -
applications. The large majority of those considering the substitutability for 
certain end -applications also indicated a difference in technical character istics, 
price and end -use.15 
(29) With regard to the supply side , respondents indicated that not only the raw 
material is different but also the production process, and that machines used for 
the production of virgin fibre pulp would lose productivity if they ar e run with 
recycled fibres, as these fibres are less strong.16 
(30) In view of the above, the Commission considers that both demand - and supply -
side substitutability are limited, supporting the existence of distinct relevant 
product markets for each of recycled fibre pulp and virgin fibre pulp. 
Accordingly, and as neither of the Parties is active as regards recycled fibre 
pulp, the Commission will, for the purpose of this decision, assess the 
Transaction on a market excluding recycled fibre pulp.  
                                                 
12  M.166 Torras/Sarrio , para. 9; M.210 Mondi/Frantschach , para. 12; M.646 Repola/Kymmene , para. 
30; M.1356 Metsä -Serla/UK Paper , para. 11; M.4054 Koch Industries/Georgia -Pacific , para. 9; 
M.5150 UPM RUS/Brist/JV , para. 23; M.610 1 UPM/Myllykoski and Rhein Papier , paras. 235 -237. 
13  M.5477 Votorantim/Aracruz , paras. 11-19. 
14  Replies to questions 7 -8 of Questionnaire Q2 – to Customers; Internal document ID144 -1087 – BCG 
Powerpoint, pages 47, 62.  
15  Replies to questions 10 -11 of Questionnaire Q3 – to Competitors / Customers.  
16  This is confirmed by the Notifying Party, who explains that both entail  a different manufacturing 
process involving sorting used paper, removing inks and other undesirable material, converting paper 
into pu lp etc. See para. 385 of the Form CO and re plies to question 7.1 of Questionnaire Q2 – to 
Customer s. 
 
6 Chemical vs mechanical wood pulp  
(31) From a demand -side point of view, the market  investigation indicates that 
substitutability between chemical and mechanical wood pulp is non -existent or 
limited at most. The majority of all respondents, including both customers and 
competitors, stated that chemical wood pulp and mechanical wood pulp are not 
substitutable because of their different characteristics, with mechanical pulp 
being inferior in terms of resistance, softness, flexibility and printability, and 
considered less desirable as its higher lignin content causes yellowing of the 
final p roduct. Of those respondents that indicate  that substitution is possible for 
some end -applications, the vast majority indicate d that the technical 
characteristics of chemical wood pulp and mechanical wood pulp are different, 
as are their prices. In additio n, they also indicate d that the level of 
substitutability is limited, up to 10 -15% for printing and writing paper, and not 
more than 3% for tissue products.17  
(32) As regards the supply side , the market investigation confirmed the Notifying 
Party's view, that t he manufacturing of chemical pulp and mechanical pulp 
involves different equipment, technology and manufacturing processes.18 
Notably, w hile mechanical pulp is made by weakening and separating fibres via 
a mechanical action, chemical pulp is produced via either the sulphite process , 
or the kraft process.  
(33) In view of the above, the Commission considers that both demand - and supply -
side substitutability are limited, indicating  – in line with the Notifying Party's 
view  – distinct relevant product markets for eac h of chemical and mechanical 
wood pulp. The Commission therefore considers, for the purpose of this 
decision, that chemical and mechanical pulp belong to separate product markets.  
(34) The Commission notes that, in any case, as mechanical wood pulp accounts for  
less than 10% of the overall merchant market for pulp and neither of the Parties 
is active as regards mechanical wood pulp, the assessment would not 
significantly differ irrespective of whether mechanical wood pulp is considered 
separately or not.  
Dissol ving pulp vs other types of chemical wood pulp  
(35) From a demand -side point of view, respondents to the market investigation 
indicated that dissolving pulp is mainly used in the textile industry, and not for 
paper products.19 A respondent also stated that most of the dissolving pulp goes 
to China and other growing economies.20 
(36) As regards the supply side , the market investigation indicated that while the raw 
material and production equipment is the same  to a large extent, the temperature 
and chemicals used are dif ferent, so as to extract more hemicellulose when 
                                                 
17  Replies to questions 9 -10 of Questionnaire Q2 – to Customers; Replies to questions 12 -13 of 
Questionnaire Q3 – to Competitors / Customers.  
18  Replies to  question 13 of Questionnaire Q3 – to Competitors / Customers.   
19  Minutes of conference calls with competitors on 21 June, 25 June and 27 June  2018.  
20  Minutes of a conference call  with a competitor on 21 June 2018.  
 
7 producing dissolving pulp. Dissolving pulp has  a significantly lower 
hemicellulose content than pulp for paper products. In addition, a respondent 
mentioned that the chemicals used for the production process  of dissolving pulp 
(the "viscose process") are not used in the EEA anymore.21 
(37) In view of the above, the Commission considers  – in line with the Notifying 
Party's view – that a separate product market for dissolving  pulp should be 
considered . Accordingly, and as neither of the Parties are  active with regard to 
dissolving  pulp, the Commission will , for the purpose of this decision , assess the 
Transaction considerin g a market excluding dissolving pulp . 
Fluff pulp vs other types of chemical  wood pulp 
(38) As regard s the demand side , the market investigation showed that fluff pulp is 
mainly used for end-products that require strong absorption qualities such as 
diapers and feminine care products , but not for paper products.22 
(39) With regard to the supply side , respondents  to the market investigation indicated 
that the production process of pulp for paper products and fluff pulp is similar, 
but different in terms of drying (the humidity content of both is different) and 
manner of packaging, with pulp for paper products bein g transported in the form 
of bales and fluff pulp in rolls.23 
(40) In view of the above, the Commission considers a separate product market for 
fluff pulp. Accordingly, for the purpose of this decision, the Commission will 
assess the Transaction considering a ma rket excluding fluff pulp.  
Bleached vs unbleached wood pulp  
(41) From a demand -side point of view, respondents to  the market investigation 
indicated that bleached and unbleached pulp have different characteristics , and 
are used for different end-applications.  
(42) Generally, unbleached pulp ha s a brown colour be cause of the presence of 
lignin ,24 while bleached pulp is whiter as , through the bleaching process, lignin 
is extracted.25 Furthermore, as the Notifying Party acknowledges,26 bleached 
pulp is mainly used for wh ite printing and writing paper, tissue products, 
specialty products and some packaging  whereas unbleached pulp is primarily 
used for packaging , paper bags and envelopes  as it is brown in colour.27  
                                                 
21  Minutes of conference calls with competitors on 21 June and 25 June 2018.  
22  Minutes of a conference call with a competitor on 26 June 2018.  
23  Minutes of conference calls with competitors and customers on 21 June and 22 June 2018.  
24  Lignin is a constituent of the cell walls of almost al l dry land plants. It lends rig idity and does not rot 
easily. Lignin is generally e xtracted and burned for energy or modified to by -products during the 
chemical process.  
25  Minutes of conference call s with competitors and customers on 22 June, 25 June, 26 June and 6 July 
2018.  
26  Para. 181 of the Form CO . 
27  Minutes of conference calls with competitors on 2 6 June and 6 July 2018.  
 
8 (43) From a supply side  perspective, the Commission notes that t he production 
process es of bleached and unbleached pulp diff er only in the sense that for 
unbleached pulp, the bleaching step28 is skipped.  There is therefore no technical 
restriction for a producer  of bleached pulp to start produc ing unbleached pulp.  
Howev er, switching in the opposite directi on requires the purchase of chemicals 
and the addition of a bleaching section to the production line .29  
(44) The Commission notes that in any case, respondents to the market investigation 
indicated – in line with the Notifying Party – that the demand for unbleached 
pulp is very limited.30 Indeed, only a negligent amount  is sold on the merchant 
market .31  
(45) In view of  the above, it appears that substitutability, especially on the demand -
side, is limited, suggesting the existence of distinct product markets for bleached 
pulp and unbleached pulp. The Commission will therefore consider, for the 
purpose of this decision, b leached pulp and unbleached pulp as separate product 
markets. Since the Parties are only active in bleached pulp, unbleached pulp will 
not be discussed further in this decision.  
Hardwood vs softwood  pulp 
(46) With regard to the demand side , the vast majority of  all customers that replied 
indicated that hardwood and softwood pulp are not , or only to a limited extent , 
substitutable. For customers located within the EEA, substitutability appears 
even more limited; a large majority of those customers considers that hardwood 
and softwood pulp are not at all technically or economically substitutable.32  
(47) As regards technical substitutability, t he market  investigation suggests , as the 
Notifying Party describes,  that softwood pulp and hardwood pulp provide an 
end-product with different properties: softwood provides strength whereas 
hardwood provides soft ness, smoothness, opacity, etc. Only a very small 
minority of customers that replied indicated some characteristics as being 
similar, with the vast majority perceiving soft wood and hardwood pulp as 
different in terms of opacity, strength, bulk, smoothness, porosity, softness and 
absorbency.33  
                                                 
28  The bleaching is a step of the kraft process, a chemical process for the conversion of wood into wood 
pulp. It entails the treatment of wood chips with a hot mixture of water, sodium hydroxide (NaOH), 
and sodium sul phide (NaS2) under high pH conditions , which mainly consists of a wood cooking 
process, a bleaching stage and a drying stage.  During the bleaching stage, the unbleache d pulp is sent 
through the oxygen delignification process and the chemical bleaching process, traditionally using 
chlorine dioxide, ozone and hydrogen peroxide or chlorine dioxide, oxygen and hydrogen peroxide.  
See para. 191 of the Form CO.  
29  Paras. 194-196 of the Form CO; Minutes of a conference call with a competitor on 26 Ju ne 2018.  
30  Para. 197 of the Form CO; Minutes of conference calls with competitors on 22 June and 6 July 2018.  
31  Concretely, out of about 36  kT of unbleached pulp produced, only 2.2  kT are merchant sales. This 
represents 0.003% of all chemical wood pulp sales ( i.e. 70 156  kT in 2017). See also para. 197 of the 
Form CO.  
32  Replies to question 12 of Questionnaire Q2 – to Cust omers.  
33  Replies to question 11 , 11.1, 11.2  of Questionnaire  Q2 – to Cust omers; Minutes of a conference call 
with a competitor, on 24 August 2018; Minutes of a conference call with a customer on 25 June 2018.  
 
9 (48) Customers generally use a mix of both softwood and hardwood pulp, and the 
exact proportion of each type of pulp that is used will depe nd on the end-
product.34 While switch ing between hardwood and softwood pulp  is not 
excluded , any possibility of switch ing depends on the end-use, and appears in 
any case only possible to a limited extent. In addition, switching between 
hardwood and softwood pulp ultimately depends on the requirements of the final 
customer and takes time because it m ay require additional testing and validation 
proce sses.35  
(49) When asked about the exact extent to which one could technically substitute 
hardwood pulp by softwood pulp if at all, the replies to the market investigation 
were not conclusive with regard to printing and writing, tissue or paperboard 
products. Fo r specialty papers specifically, however, the possibility to substitute 
appears very limited or non -existent.36  
(50) Regarding economic substitutability, the market investigation shows that there is 
generally a price difference between softwood and hardwood pul p, with 
hardwood pulp typically being cheaper than softwood pulp.37 Customers explain 
that, in view of the price gap between softwood and hardwood, they have been 
trying to maximise their use of hardwood pulp but have reached their technical 
limitation of s ubstitution, so that substituting any more would reduce the quality 
of the end-product or would not be permitted  by end customers.38 Finally, a 
majority of customers indicated that, in case of a price increase of hardwood 
pulp by 5% to 10%, they would not s witch to using more softwood pulp even if 
softwood remained readily available at current prices.39  
(51) As regards the supply side , respondents to the market investigation indicated 
that, while the machinery needed , as well as the production process of softwood  
and hardwood pulp , is to a large extent the same,40 adjustments need to be made 
to the chemical recipe if one wants to switch from hardwood pulp to producing 
softwood pulp (or vice versa). The consumption of chemicals is, for example, 
higher when producing  softwood pulp as more extensive refining is needed, 
which also results in higher energy consumption.41 In addition, the growth cycle 
of softwood trees is considerably longer than that of hardwood trees, so that the 
                                                 
34  For example, paper bags will generally require more softwood as strength is crucial, while tissue 
producers consider softness to be crucial. See also Minutes of conference calls with competitors on 
3 July, 26 July and 24 August 2018; Minutes of a conferenc e call with a customer on 25 June 2018.  
35  Replies to questions 11 -14 of Questionnaire Q2 – to Custom ers; Minutes of conference calls with 
competitors on 25 June 2018, 3 July 2018 and 26 July 2018.  
36  Replies to question 12 of Questionnaire Q1 – to Compet itors; Replies to questions 13, 14, 14.1 of 
Questionnaire Q2 – to Custom ers. 
37  Replies to question 11 of Questionnair e Q2 – to Customers;  Minutes of a conference call with a 
competitor on 26 June  2018 . 
38  Replies to question 12.1 of Q uestionnaire Q 2 – to Customers; Minutes of conference calls  with 
competitor s on 26 June  and 24 August 2018 .  
39  Replies to question 14 and 14.1 of Questionnaire Q2 – to Customers.  
40  In fact, the majority of pulp suppliers that responded indicated that softwood and hardwood pu lp can 
be manufactured in the same production facility, and even on the same production line. See responses  
to question 9 of Questionnaire Q1 – to Competitors. See also Minutes of conference calls with 
competitors and customers on 22 June, 6 July and 31 Au gust 2018 . 
41  Minutes of conference calls  with customers  on 22 June and 26 June  2018 .  
 
10 raw material costs for softwood are highe r.42 Because of the higher energy 
consumption and raw material costs, the overall production costs of softwood 
pulp are significantly higher than those of hardwood pulp. Moreover, especially 
in South America, […]* is grown in large scale plantations, allowi ng for 
economies of scale. 43  
(52) A respondent explained that because of this difference in production costs and 
growth cycles, hardwood pulp mills are generally considerably bigger in size 
compared to softwood pulp mills, which limits the possibility of switc hing from 
producing hardwood to softwood pulp (or vice versa ) at a reasonable economic 
return; a supplier would then either have a pulp mill that is too big for the raw 
material available, or the mill would be too small to effectively compete.44 
(53) Furthermore , most pulp producers either produce softwood pulp or hardwood 
pulp, but not both. This is mainly due to the availability of the raw material; 
hardwood and softwood generally grow in different parts of the world.45 
(54) In view of the above, the market investiga tion in the present case appears to 
indicate that substitution, both on the demand and supply -side, between 
softwood and hardwood pulp is limited. The Commission therefore considers 
softwood pulp and hardwood pulp to form part of distinct product markets f or 
the purpose of this decision.  
BEKP vs other types of hardwood pulp  
(55) As regards the demand side , respondents to the market investigation indicated 
that although switch ing from  BEKP to other types of hardwood  pulp ( e.g. oak, 
ash, aspen, beech, birch and acacia ) is possible both from a technical and 
economical point of view, this can only be done to a limited extent and 
depending on the end-application . Some customers specified that they would not 
be able to switch at all .46 
(56) Among the various types of hardw ood pulp, Bleached Acacia Kraft Pulp 
("BAKP") appears to be technically the most similar to BEKP. This pulp, 
produced from acacia trees, is generally produced in Asia.  
(57) However, no sales of BAKP occur in the EEA. This is mainly due to the fact 
that European  customers require pulp to have a certification that guarantees it is 
produced in a sustainable and environmentally -friendly manner. The most 
                                                 
42  Concretely, the growth cycle of eucalyptus trees in Brazil is circa 7 years (in Chile it is 10 years and 
15 years in Iberia), while the growth cycle of softwood trees  is 80 -120 years. See also Minutes of a 
conference call with a customer on 25 July 2018; Minutes of a conference call with a competitor on 
24 August 2018.  
* Should read: "eucalyptus"  
43  Replies to question 8 of Questionnaire Q1 – to Competitors.  The differ ence in production costs is also 
set out in Internal document ID 411 -858, Suzano presentation, slide 15.  
44  Minutes of a conference call with a competitor on 26 July 2018.  
45  Replies to question 11 of Q uestionnaire Q1 – to Competitors; Minutes of conference calls with 
competitors on 6 July and 24 August 2018.  
46  Replies to question 16 of Questionnaire Q2  – to Customers; Replies to question s 23, 25 of 
Questionnaire Q3  – to Competitors  / Customers; Minutes of conference calls with customers on 
22 June and 28 June 2018.  
 
11 common certifications are the Forest Stewardship Council ("FSC") certification, 
and the Programme for the Endorsem ent of Forest Certification ("PEFC") 
certification. BAKP that is being sold on the merchant market is generally not 
certified,47 and European customers only purchase wood pulp that is certified 
because their customers in turn require such a certification.48  
(58) Consequently, European customers indicated that they would not switch to non -
certified pulp even if the price of certified pulp increase d as certification is a 
prerequisite imposed by their customers .49 
(59) It follows that BAKP is not considered as an alternat ive for BEKP by European 
customers.  
(60) Next to BAKP, hardwood pulp can also be produced from , inter alia , oak, ash, 
maple, aspen, beech and birch . Hardwood pulp can also be the result of a mix of 
hardwood trees, resulting in the Northern or Southern mixed har dwood pulp 
(NBHK and SBHK, respectively). Respondents to the market investigation 
indicated that switching to these types is possible, though only to a limited 
extent and subject to testing.50 
(61) Furthermore, irrespective of any switching possibilities, the market investigation 
pointed out that, in comparison to these different grades of hardwood pulp, 
BEKP is considered preferable51 due to technical specifications that cannot be 
found in other types of hardwood pulp. Indeed, respondents indicated that, 
althou gh other hardwood trees such as oak, ash, maple, aspen, beech and  birch  
could be used, they negatively impact the quality of the end -product, providing 
it with less bulkiness, opacity, softness and porosity than if BEKP were used.52 
(62) In addition, it should b e noted that BEKP is the primary type of hardwood pulp; 
it represents roughly 80% of sales of hardwood pulp in the EEA. The 
availability of other types of hardwood pulp thus appears to be more limited, 
also impacting the possibility of switching supply.53 
(63) With regard to the supply side , while a majority of respondents indicated that 
different types of hardwood pulp can be produced in the same production 
facility and even on the same production line, they also noted that the 
                                                 
47  A 100% certified pulp certificate exists, though more commonly suppliers have a "mix" certified 
label, allowing suppliers to combine pulp produced from certified wood with pulp produced from 
non-certified wood, provided that the non -certified wood does not exceed 30% of the mix. See paras. 
224, 225 and 229 of the Form CO.  
48  Replies to questions 18-21 of Questionn aire Q 2 – to Custom ers; Replies to questions 33 , 35 and 36  of 
Questionn aire Q3 – to Competitors / Custom ers; Minutes of conference calls with customers on 
19 June, 22 June, 25 June, 27 June and 28 June 2018.  
49 Replies  to questions 18 and 20 of Questionnaire Q2 – to Customers; Replies to questions 33 , 35 and 
36 of Questionn aire Q3 – to Competitors / Custom ers. 
50  Replies  to questions 18.2 , 18.2.1  of Questionnaire Q 2 – to Customers.  
51  This is in particular the case i.a. for specialty papers (cigarette papers, bibles etc.). 
52  Replies  to question 16 of Questionnaire Q2  – to Customers; Minutes of conference calls with 
competito rs and customers on 22 June and 27 June 2018.  
53  This figure is based on a market reconstruction conducted by the Commission, which is based on the 
Parties' as well as their competitors' external sales volume data for 2017. See also Minutes of 
conference c alls with customers on 21 June, 22 June and 28 June 2018.  
 
12 availability of wood species in th e area of production constrains suppliers, 
limiting the switching possibilities.54  
(64) Furthermore, respondents indicated that, even if machinery and end -uses are 
often the same, production costs are lower for BEKP than for other types of 
hardwood pulp .55 This is mainly due to the fact that eucalyptus trees have a 
significantly shorter growth cycle than other hardwood trees.56  
(65) In view of the above, for the purpose of this decision, the Commission considers 
that the market for BEKP should be considered as the nar rowest plausible 
market, and will assess the Transaction accordingly. Given that the Parties are 
only active with regard to BEKP, other types of hardwood pulp shall not be 
further discussed in this decision.  
3.1.2.  Geographic market definition  
The Notifying Party 's view  
(66) The Notifying Party submits that the chemical wood pulp market is global in 
scope because (i) pulp is internationally traded and around 90% of the Parties ' 
production is exported, (ii) the price is strongly correlated on a global level, and 
(iii) there are no logistical barriers to  transporting around the world as transport 
costs represent  less than 10% of the total price of the product . 
The Commission 's assessment  
(67) In previous decisions, the Commission found  the market for wood  pulp to be  at 
least EEA -wide in scope, while ultimately leaving the exact geographic scope 
open.57 
(68) The market investigation confirmed that BEKP is supplied on a global scale. 
Customers indicated that, on average, they source 90% of their BEKP supply from 
producers located at a distance of 7  000 to 8 000 km .58 In addition, a majority of 
respondents, competitors and customers alike, indicated that prices of BEKP are 
                                                 
54  Replies to question 14, 15 of Questionnaire Q1 – to Competitors; Replies to question 27 of 
Questionnaire Q3 – to Competitors / Customers.  
55  Replies to question 13 of Questionnaire Q1  – to Competitors; Replies to question 27 of Questionnaire 
Q3 – to Competitors / Customers.  
56  Concretely, whereas the growth cycle of e ucalyptus trees in South America is 5-10 years  and on the 
Iberian Peninsula  eucalyptus trees have a growth cycle of 9 -15 years , other hardwood trees take more 
than 30 years and even up to 120 years to gro w fully. Minutes of conference calls with competitors on 
21 June, 26 June, 6  July, 12 July and 24 August 2018.  
57  M.6101 UPM/Myllykoski and Rhein Papier , paras. 238-239; M.5477 Votorantim/Aracruz , paras. 24-
27; M.4054 Koch Industries/Georgia Pacific , para. 101; M.2245 Metsä -Serla/Zanders , para. 16; 
M.2243 Stora Enso/Assidomän/JV , para. 21. 
58  Replies to questions 45 of Questionnaire Q 3 – to Competitors  / Customers;  Replies  to questions 2 7 of 
Questionnaire Q2 – to Customers .  
 
13 broadly the same worldwide.59 Transport costs, estimated at 5 -20% of the sales 
price of BEKP, were deemed to be not important by respondents.60 
(69) However, the results of the market investigation also highlighted  certain 
specificities differentiating the EEA from the global lev el. First, the two main 
competitors of the Parties in the EEA are located in the EEA and are only active 
within the EEA.61 Furthermore, the market investigation revealed that BEKP 
must have a certification (FSC or PEFC) in order for EEA customers to conside r 
purchasing it.62 In this respect, respondents to the market investigation 
consistently identified certification as a factor limiting the sourcing and 
supplying of wood pulp.63 As Asian suppliers generally do not offer certified 
pulp, given that this featur e is not a requirement for Asian customers,64 no Asian 
suppliers are present in the EEA. Lastly, it appears that North America is 
characterised, to a large extent, by local production and vertical integration, so 
that American producers only play a limited role on the merchant market outside 
of North America.65 
(70) In any case , given that the Transaction raises serious doubts as to its compatibility 
with the internal market irrespective of whether the relevant geographic scope is 
considered to be at least EEA -wide or global,66 the precise geographic market 
definition can be left open.   
(71) In view of the above, for the purpose of this decision , the Commission will assess 
the Transaction based on the narrowest plausible – at least EEA -wide – geographic 
market definition . 
3.2. Manufacture and supply of paper products  
(72) Paper products are downstream products manufactured from wood pulp. They 
are produced in a wide range of qualities and used for various end -applications, 
such as printing and writing, packaging, personal hygiene a nd other specialties.   
(73) While Fibria is not active with regard to the manufacture and supply of paper 
products, Suzano is a vertically integrated pulp and paper manufacturer. It 
operates mill s, producing (i) printing and writing paper, and, more specificall y, 
                                                 
59  Replies  to questions 30 and 30.1 of Qu estionnaire Q1 – to Competitors; Replies  to questions 28, 28.1 
and 28.2 of Questionnaire Q2 – to Customers . 
60  Replies  to questions 30 and 30.1 of Qu estionnaire Q1 – to Competitors; Replies  to question  33 of 
Questionnaire Q2 – to Customers ; Replies  to question  47 of Questionnaire Q 3 – to 
Customers  / Competitors.  
61  Replies  to question  1 of Qu estionnaire Q1 – to Competitors; Minutes of conference calls with 
custom ers and competitors on 18 June , 27 June and 4 July 2018. This is also apparent from the 
Notifying Party's market share figures, submitted in Annex 6.6 of the Form CO.  
62  Replies to question 19  of Questionnaire Q 3 – to Competitors  / Customers.  
63  Replies t o question 34  of Questionnaire Q2 – to Customers ; Replies  to question s 48 of Questionnaire 
Q3 – to Customers  / Competitors.  
64  Replies  to question s 33 and 35.1 of Questionnaire Q 3 – to Customers  / Competitors.  
65  Minutes of conference calls w ith customers on 18 June, 21 June, 26 June and 28 June 2018.  
66  In fact, the Parties' c ombined market share is higher on a global level than at an EEA -wide level.  
 
14 coated and uncoated wood -free paper and (ii) packaging paper, namely 
paperboard.67 
3.2.1.  Product market definition  
Notifying Party's view  
(74) Regarding printing and writing paper, the Notifying Party submits that the 
substitutability between coated and uncoated wood -free paper is rather high, so 
that producers can relatively easily switch from producing one to another, but 
that it is in any even t not necessary to reach a conclusion on a possible further 
segmentation of the market also considering its limited sales of printing and 
writing paper to the EEA.  
(75) In relation to packaging, the Notifying Party agrees with the Commission's past 
decisional p ractice, considering a separate product market for paperboard, and 
considers it unnecessary to reach a conclusion as to whether the paperboard 
market should be further segmented given the lack of competition concerns 
under any possible segment of the packa ging paper market.68  
Commission's assessment  
(76) The Commission has previously considered several separate markets for paper, 
depending on various aspects such as its category ( i.e. printing and writing, 
packaging, tissue etc.), features and end-usage . 
(77) As rega rds printing and writing paper, the Commission has defined a distinct 
market for printing and writing paper, and further segmented the market 
depending on paper features, into wood -containing paper, wood -free coated 
(WFC) and uncoated paper, magazine paper , newsprint paper and mechanical 
coated paper.69 The Commission has also considered separate markets according 
to whether the paper was supplied in reels or sheets, or depending on the 
distribution channel, i.e. paper sold directly from the manufacturers or  indirectly 
through merchants, but has ultimately left this open.70 
(78) For packaging paper, the Commission has defined separate product markets 
depending on the type of packaging paper involved, namely paperboard71, sack 
and kraft paper72, and corrugated case pa per.73 Within paperboard, the 
                                                 
67  See paras. 639 -648 of the F orm CO. For completeness, Suzano is also active in relation to tissue 
produc ts, though as it does not sell nor does it have plans to sell tissue products in the EEA, this will 
not be further discussed in this decision.  
68  See paras. 649 -655 of the F orm CO.  
69  M.5477 Votorantim/Aracruz , para. 20; M.4753 Antalis/MAP , para. 15; M.382 2 Stora 
Enso/SchneiderSöhne Papier , paras. 13 and 16; M.2498 UPM -Klmmene/Haindl , paras. 13 and 22; 
M.2245 Metsä -Serla/Zanders , para. 8; M.646 Repola/Kymmene , paras. 12 and 20; M.210  
Mondi/Frantschach , para. 14; M.166 Torras/Sarrio , para. 15.  
70  M.4513 Arjowiggins/M -Real Zanders Reflex , paras. 35 and 59; M.4753 Antalis/MAP  paras. 7 -13.  
71  M.8421 Westrock/MPS , para. 6. 
72  M.2243 Stora Enso/Assidomän/JV , para.14.  
73  M.549 Svenska Cellulosa/PWA , para. 19. 
 
15 Commission considered a distinction between four main categories of boards, 
namely (i) solid bleached sulphate (SBS), (ii) coated natural kraft (CNK), (iii) 
folding box board (FBB) and (iv) white lined chipboard (WLC) , but has 
ultimately left this open.74  
(79) The market investigation in the present case did not provide any indications that 
would contradict the Commission 's previous findings, neither with regard to 
wood -free coated and uncoated paper, nor in relation to paperboard.  
(80) In any event, for the purpose of this decision the exact scope of the product 
market can be left open, as the Transaction does not raise serious doubts as to its 
compatibility with the internal market in this regard , irrespective of the exact 
market defini tion. 
3.2.2.  Geographic market definition  
Notifying Party's view  
(81) The Notifying Party submits  that the geographic market for wood -free coated 
paper and uncoated paper and paperboard is EEA -wide, in view of the diversity 
of demand patterns for paper across various regions.75 
Commission's assessment  
(82) In previous decisions, the Commission has considered the relevant geographic 
market for wood -free coated and uncoated paper is EEA -wide.76 As to 
paperboard, the Commission has considered the market to be at least EEA -wide, 
but ultimately leaving the exact geographic market definition open.77 
(83) The market investigation did not raise any issues that would contradict the 
Commission's earlier findings.  
(84) In any case, the precise definition of the geographic markets concerning wood -
free coated and uncoated paper and paperboard can be left open, as the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market concerning the production of paper products , irrespective of the exact 
market definition.  
                                                 
74  M.8421 Westrock/MPS , paras. 6 -8; M.4057 Korsnas/Assidoman Cartonboard , paras. 13 and 22; 
M.1225 Enso/Stora , paras. 18, 42 and 43.  
75  See paras. 656 -660 of the Form CO.  
76  M.6682 Kinnevik/Billerud/Korsnas , para. 53; M.5283 Sappi/M -Real, paras. 21-28; M.210 
Mondi/Frantschach , para. 21; M.166 Torra s/Sarrio , para. 34.  
77  M.8421 Westrock/MPS , paras. 26 -28. 
 
16 4. COMPETITIVE ASSESSMEN T 
4.1. Analytical framework  
(85) Under Article 2(2) and (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 o f it, in particular 
through the creation or strengthening of a dominant position.  
(86) In this respect, a merger may entail horizontal and/or non -horizontal effects. 
Horizontal effects are those deriving from a concentration where the 
undertakings concerned are  actual or potential competitors of each other in one 
or more of the relevant markets concerned. Non -horizontal effects are those 
deriving from a concentration where the undertakings concerned are active in 
different relevant markets.  
(87) As regards non -horizo ntal mergers, two broad types of such mergers can be 
distinguished: vertical mergers and conglomerate mergers.78 Vertical mergers 
involve companies operating at different levels of the supply  chain.79 
Conglomerate mergers are mergers between firms that are i n a relationship 
which is neither horizontal (as competitors in the same relevant market) nor 
vertical (as suppliers or customers) .80 
(88) A case where a merger entails both horizontal and non -horizontal effects may 
for instance be when the merging  firms are not  only in a vertical or 
conglomerate relationship, but are also actual or potential competitors of each 
other in one or more of the relevant markets concerned. In such a case, the 
Commission will appraise horizontal, vertical and/or conglomerate effects in 
accordance with the guidance set out in the relevant notices.81 
(89) The Commission appraises horizontal effects in accordance with the guidance 
set out in the relevant notice, that is to say the Horizontal Merger Guidelines.82 
Additionally, the Commission apprai ses non -horizontal effects in accordance 
with the guidance set out in the relevant notice, that is to say the Non -Horizontal 
Merger Guidelines.83 
4.1.1.  Horizontal effects  
(90) The Horizontal Merger Guidelines distinguish between two main ways in which 
mergers between actual or potential competitors on the same relevant market 
may significantly impede effective competition, namely non -coordinated and 
coordinated effects.  
                                                 
78  Non-Horizontal Merger Guidelines, recital 3.  
79  Non-Horizontal Merger Guidelines, recital 4.  
80  Non-Horizontal Merger Guidelines, recital 5.  
81  Non-Horizontal Merger Guidelines, recital 7.  
82 Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings ("Horizontal Merger Guidelines"), OJ C 31, 05.02.2004.  
83  Guidelines on the assessment of non -horizontal mergers under the  Council Regulation on the control 
of concentrations between undertakings ("Non -Horizontal Merger Guidelines"), OJ C 265, 
18.10.2008.  
 
17 (91) As regards horizontal non -coordinated effects , under the substantive test set out 
in Article 2(2) an d (3) of the Merger Regulation, mergers that do not lead to the 
creation or the strengthening of the dominant position of a single firm may still 
be incompatible with the internal market. Indeed, the Merger Regulation 
recognises that in oligopolistic marke ts, it is all the more necessary to maintain 
effective competition.84 This is in view of the more significant consequences 
that mergers may have on such markets. For this reason, the Merger Regulation 
provides that " under certain circumstances, concentratio ns involving the 
elimination of important competitive constraints that the merging parties had 
exerted upon each other, as well as a reduction of competitive pressure on the 
remaining competitors, may, even in the absence of a likelihood of coordination 
between the members of the oligopoly, result in a significant impediment to 
effective competition ".85 
(92) The Horizontal Merger Guidelines list a number of factors which may influence 
whether or not significant horizontal non -coordinated effects are likely to res ult 
from a merger, such as the large market shares of the merging firms, the fact that 
the merging firms are close competitors, the limited possibilities for customers 
to switch suppliers, or the fact that the merger would eliminate an important 
competitiv e force. That list of factors applies equally regardless of whether a 
merger would create or strengthen a dominant position, or would otherwise 
significantly impede effective competition due to non -coordinated effects. 
Furthermore, not all of these factors  need to be present to make significant non -
coordinated effects likely and it is not an exhaustive list.86 Finally, the 
Horizontal Merger Guidelines describe a number of factors, which could 
counteract the harmful effects of a merger on competition, includi ng the 
likelihood of buyer power, entry and efficiencies.  
(93) A merger in a concentrated market may also significantly impede effective 
competition due to horizontal coordinated effects  where, through the creation or 
the strengthening of a collective dominant position, it increases the likelihood 
that firms are able to coordinate their behaviour and raise prices, even without 
entering into an agreement or resorting to a concerted practice within the 
meaning of Article 101 TFEU. A merger may also make coordinati on easier, 
more stable or more effective for firms that were already coordinating before the 
merger, either by making the coordination more robust or by permitting firms to 
coordinate on even higher prices.87 
(94) To assess whether a merger gives rise to horizon tal coordinated effects, the 
Commission should examine, first, whether it would be possible to reach terms 
of coordination and, second, whether the coordination would be likely to be 
sustainable.88  
                                                 
84 Merger Regulation, recital 25.  
85 Merger Regulation, recital 25. Similar wording is also found in para. 25 of the Horizon tal Merger 
Guidelines. See also M.7018 Telefónica Deutschland/E -Plus, para. 113; M.6992 Hutchison 3G 
UK/Telefónica Ireland , para. 179; M.6497 Hutchison 3G Austria/Orange Austria , para. 88.  
86 Horizontal Merger Guidelines, para. 26.  
87 Horizontal Merger Guide lines, para. 39.  
88  Horizontal Merger Guidelines, para. 42.  
 
18 4.1.2.  Vertical effects  
(95) A merger is said to result in foreclosure  where actual or potential rivals' access 
to supplies or markets is hampered or eliminated as a result of the merger, 
thereby reducing these companies' ability and/or incentive to compete.89 Such 
foreclosure may discourage entry or expansion of rivals or en courage their exit. 
Such foreclosure is regarded as anti -competitive where the merged entity — 
and, possibly, some of its competitors as well — are as a result able to profitably 
increase the price charged to consumers.90 
(96) Two forms of vertical foreclosure c an be distinguished. The first is where the 
merger is likely to raise the costs of downstream rivals by restricting their access 
to an important input (input foreclosure). The second is where the merger is 
likely to result in foreclosure of upstream rivals  by restricting their access to a 
sufficiently large customer base (customer foreclosure).  
4.2. Introduction  
(97) Both Parties are active in the manufacture and supply of BEKP. In addition, 
Suzano is active in the downstream market of the manufacture and supply of 
paper products.  
(98) The Transaction will give rise to a horizontal ly affected market in the 
manufacture and supply of BEKP, and a vertically affected relationship as 
regards the manufacture and supply of BEKP (upstream) and Suzano's activities 
in relation to the manufacture and supply of paper products (downstream).  
4.3. Horizontal non -coordinated effects: Manufacture and supply of BEKP  
The Notifying Party's view  
(99) The Notifying Party submit s that the Transaction will not give rise to a 
significant impediment to eff ective competition on the market  of BEKP, or 
under any alternative hypothetical market definition , for the following reasons.91  
(100)  First , both globally and in the EEA , the pulp market is too fragmented for the 
combined entity to have market power post -Transac tion. On the narrowest 
market segment (BEKP), the Parties ' combined market share will be moderate 
and well below levels that are capable of raising competition concerns.  
(101)  Second , the Parties ' customers will have a wide range of alternatives that they 
could rely on should their sourcing  conditions worsen post -Transaction. In 
particular, a number of internationally active pulp manufacturers ( e.g. 
International Paper, Asia Pulp and Paper ("APP") , April, UPM, Metsä, Stora 
Enso and SCA) will remain.  
                                                 
89  Non-horizontal Merger Guidelines, para. 29.  
90  Non-horizontal Merger Guidelines, para. 29. 
91  Paras. 523-557 of the Form CO.  
 
19 (102)  Third , wood pulp customers are large and sophisticated buyers , and many of 
them can credibly threaten to self -supply and effectively bypass pulp suppliers.  
(103)  Fourth , vertically integrated paper producers constrain the Parties ' pricing. A 
potential increase in prices wo uld likely make the product of non -integrated 
customers (which have to heavily rely on supply from third parties ) less 
competitive and lead them to lose market share to integrated rivals. The Parties ' 
sales would fall as a result and this would lower the i ncentives to raise price s 
post-Transaction.  
(104)  Finally, this is a cyclical market where production generally responds to changes 
in expected demand. Recently , the demand for BEKP has increased and 
suppliers have already started to increase capacity  as a respo nse. 
The Commission's assessment  
(105)  The Transaction will further increase the concentration and allow the merged 
entity to control the largest capacity on the market for BEKP (combining 
Suzano, Fibria and Klabin's volumes outside South America, as explained below 
– see paragraphs (109)  to (113) ), a market on which the Parties (in cluding 
Klabin) are close competitors, with capacity constraints and high barriers to 
entry and expansion, and limited countervailing buyer power of the customers. 
The Commission considers that the Transaction will likely increase the ability 
and the incen tive of the merged entity to raise prices and maintain high prices of 
BEKP by keeping capacity on the market tight. The Commission therefore 
considers that the Transaction raises serious doubts as to its compatibility with 
the internal market with regard t o the manufacture and supply of BEKP as set 
out below.   
Market structure  
(106)  On the market for BEKP , the Parties are number 1 and 2 , in an industry with a 
long and fragmented tail  of competitors.  
(107)  In terms of sales of the Par ties, the combined share would be [30-40]% globally 
and [30-40]% in the EEA. However, t he next strongest competitor will only 
have approximately a [5-10]% share on a global market ( CMPC ) and [10-20]% 
in the EEA ( Ence ). In terms of capacity, the Parties combine almost [30-40]% of 
the overall global capacity for BEKP.92 When excluding integrated capacity, 
their combined global BEKP capacity share increases to [30-40]% on the 
merchant market.93 
                                                 
92  See Annex 6.6 of the Form CO,  these shares of the Parties' includ e, as part of Fibria's shares, sales of 
a third supplier of BEKP, Klabin S.A. ("Klabin"), in view of the offtake agreement concluded 
between them, as explained in paragraphs (109)  to (113) . If Klabin's  volumes are excluded, t he 
combined sales market share s of the Parties would be [30-40]% globally and [30 -40]% in the EEA, 
and the combined global capacity market shares would be [20 -30]% and [30 -40]%, excluding 
integrated capacity.  
93  See submission of the Notifying Party of 1 November 2018.  
 
20 (108)  Globally , the combined entity is more than 4 times larger than the next 
competitor in terms of both sale s and capacity of BEKP. On an EEA -level, the 
combined entity is almost 3 times larger than the next competitor in terms of 
sales of BEKP.  
 
Table 1:  Market shares – BEKP  – Global (2017)94 95 
BEKP  Parties' estimates  
Capacity  Sales  
Company  kT Market 
Share  kT Market 
Share  
Suzano  […] [10-20]% […] [10-20]% 
Fibria  […] [10-20]% […] [20-30]% 
Combined  […] [20-30]% […] [30-40]% 
Klabin   […] [0-5]%  […] [0-5]% 
Combined Including Klabin  […] [20-30]% […] [30-40]% 
CMPC  […] [5-10]% […] [5-10]% 
Eldorado  […] [0-5]% […] [5-10]% 
Arauco  […] [0-5]% […] [5-10]% 
April/Lwarcel  […] [0-5]% […] [5-10]% 
UPM  […] [0-5]% […] [0-5]% 
Cenibra  […] [0-5]% […] [0-5]% 
Stora Enso  […] [0-5]% […] [0-5]% 
Ence  […] [0-5]% […] [0-5]% 
Altri  […] [0-5]% […] [0-5]% 
APP/Paper Excellence  […] [5-10]% […] [0-5]% 
Mondi  […] [0-5]% […] [0-5]% 
The Navigator Company  […] [0-5]% […] [0-5]% 
Others  […] [20-30]% […] [5-10]% 
Total  42 693  100%  26 138  100%  
Source: Form CO  
 
  
                                                 
94  The market shares of BEKP at global level in 2017 do not differ sig nificantly from the market shares 
in 2016 and 2015.  
95  The Commission carried out a market reconstruction  in the context of the market investigation, 
whereby market players, accounting for more than 90% of sales in the BEKP market at both global 
and EEA level, were contacted and they provided their relevant sales and capacity data. The market 
reconstruction br oadly confirms the market shares submitted by the Notifying Party.  
 
21 Table 2: Market shares – BEKP – EEA (2017)96 
BEKP  Parties' estimates  
Capacity  Sales  
Company  kT Market 
Share  kT Market 
Share  
Suzano   0 0.0%  […] [10-20]% 
Fibria   0 0.0%  […] [20-30]% 
Combined   0 0.0%  […] [30-40]% 
Klabin   0 0.0%  […] [0-5]% 
Combined including Klabin   0 0.0%  […] [30-40]% 
Ence   […] [20-30]%  […] [10-20]% 
Altri    […] [20-30]%  […] [5-10]% 
CMPC   0 0.0%   […] [5-10]% 
UPM   0 0.0%   […] [5-10]% 
Stora Enso   0 0.0%   […] [5-10]% 
Cenibra   0 0.0%   […] [5-10]% 
Eldorado   0 0.0%   […] [5-10]% 
The Navigator Company  […] [30-40]%  […] [0-5]% 
Arauco   0 0.0%   […] [0-5]% 
April/Lwarcel   0 0.0%   […] [0-5]% 
Lecta    […] [5-10]%  […] [0-5]% 
International Paper   0 0.0%   […] [0-5]% 
Others    […] [0-5]%  […] [0-5]% 
Total  3 786  100%  7 791  100%  
Source: Form CO  
(109)  In addition to Suzano and Fibria's capacity, Fibria also has additional volumes 
of BEKP at its disposal sourced from another Brazilian producer, Klabin, by 
way of an exclusive offtake agreement (the "Offtake Agreement").  
(110)  In […], Fibria and Klabin entered into an Offtake Agreement pursuant to which 
Fibria purchases a minimum of […] tonnes per year of BEKP produced by 
Klabin to sell outside of South America, including in the EEA. The Offtake 
Agreement started operating in 2016, an d includes an exclusivity clause by 
which only Fibria can sell Klabin's BEKP outside South America, excluding the 
possibility for any other competitor, or Klabin itself, from selling it. Given that 
all sales of Klabin's BEKP outside South America are contr olled by Fibria, 
Klabin was not able to develop a sales force, customer contacts and all the 
logistics needed to sell outside South America, and was thus effectively 
foreclosed from entering the EEA market.  
(111)  The initial term of the  Offtake Agreement is […] years ( […]), with the option to 
renew it. The agreed volumes cover a minimum of […] tonnes of BEKP for […] 
years and a gradual reduction there after. In 2018, after Fibria concluded the 
qualification process of Klabin's BEKP with European customers, it sold  […] 
tonnes in the EEA (to date).  
                                                 
96  The market shares of BEKP at EEA level in 2017 do not differ significantly from the market shares in 
2016 and 2015.  
 
22 (112)  Klabin is an integrated producer of pulp and paper that is also located in Brazil. 
It has therefore a similar cost structure to the Parties and is one of the low cost 
producers of BEKP. In addition, it owns a newly built plant where it produces 
both BEKP and softwood pulp.97 Klabin started selling pulp when its mill 
started operating in 2016 and  entered into the Offtake Agreement with Fibria 
because it did not have, as a new entrant, the capability of serving the global 
market at that time.  
(113)  The Transaction therefore accumulates not only Suzano and Fibria's sales, but 
also Klabin's, in view of the Offtake Agreement in place between Fibria and 
Klabin . 
Closeness of competition  
(114)  The market investigation has confirmed that the Pa rties, as well as Klabin , are 
close competitors. Both Parties and Klabin are based in Brazil and produce the 
same type of pulp.  
(115)  The Parties also share a significant number of customers. For example, in the 
EEA, Suzano's top four customers in 2017 are also  customers of Fibria and two 
of them, […] and […], are among Fibria's top three customers. In addition, out 
of the top four customers Fibria and Suzano have in common, two of them are 
supplied by Fibria both with its own pulp as well as Klabin's. Of Suzano 's EEA 
customers, [a significant proportion]  of them are also customers of Fibria ; [a 
significant proportion]  of Fibria's EEA customers are also customers of Suzano.  
(116)  In addition, the vast majority of competitors responding to the market 
investigation have indicated that the Parties are each other's closest competitors 
in terms of price, quality and volumes. Also customers noted closeness, 
especially in terms of quality and volumes.98  
(117)  Furthermore, Suzano and Fibria as well as Klabin have a similar cost struc ture. 
The Parties acknowledge that there is a high degree of cost asymmetry across 
countries. In particular, hardwood pulp producers in Brazil, such as the Parties 
and Klabin , tend to have lower cost structures compared to competitors in Asia, 
Europe and N orth America.99 
Capacity   
(118)  The market investigation confirmed  that production capacity  for BEKP  is 
constrained , with suppliers operating at high rates, close to their full capacity.100 
                                                 
97  Klabin's plant producing BEKP became operational in 2016.  
98 Repl ies to question s 35 and 36  of Questionnaire Q1 – to Competitors ; Replies to questions 40, 41  of 
Questionnaire Q 2 – to Customers . 
99 See Form CO, Figure 23 – Geographic distribution of cash costs (USD/tonne) and capacity ('000 
tonnes) for BHKP, December 2017.  
100 Replies to question 6 of Questionnaire Q1 – to Competitors ; Replies  to question 58 of Questionnaire 
Q2 – to Customers.  
 
23 At the same time,  prices have been increasing  steadily  since 2016  in Europe and 
elsewhere , notably  due to growing demand in China.101  
(119)  However, even though demand is on the rise and prices are high, the results of 
the market investigation revealed that t here will be no significant capacity 
expansions of BEKP producers unt il 2021.102 Aside from debottlenecking plans 
accounting for limited capacity increases,  the only significant expansion  that is 
confirmed, concerns  a plant to be built  by Arauco  with a capacity of over 
1 500 kT that will start operating in 2021 .103 Beyond 2021 capacity expansions 
are not confirmed and therefore uncertain.  
(120)  Expansion prospects for Iberian or other European producers have additional 
limitations compared to South American producers. First, they cannot benefit 
from industrial plantations given that land and eucalyptus forests are limited, 
and the climate in Europe leads to longer growth cycles for trees and thus a 
lower productivity compared to Brazil. Second, regulatory limitations exist, 
notably in Portugal, where the amount of land used to grow eu calyptus trees is 
capped to that which is already in use.104 As a result, it would not make 
economic sense for suppliers to build new mills in Portugal.  
(121)  In addition, i ntegrated  players selling part of their production to the merchant 
market  also operate  close to full capacity, which would prevent them from 
starting  to sell additional  volumes even if prices of BEKP w ere to  increase by 
5% to 10%. Neither would they internalise more of their BEKP consumption.105 
Therefore, no integrated producers could increase vo lumes to counter a potential 
price increase. This evidence supports the view that, in this case, market shares 
including integrated capacity do not accurately reflect the volumes of BEKP 
available for customers and underestimate the market share of the Par ties. 
Entry  
(122)  In addition to the existing capacity on the market being constrained, barriers to 
entry are high, encompassing, inter alia , administrative authorisations and 
environmental licences, and the costs and time incurred in building a new 
mill.106 
(123)  In the market investigation, competitors confirmed that the cost of building a 
mill with an annual production capacity of 1.5 to 2 million tonnes  is more than 
USD  2 billion .107 Furthermore, according to market investigation respondents, it 
takes up to two ye ars to obtain  the necessary permits and licenses .108 Moreover, 
                                                 
101 Replies to que stion 83  of Questionnaire Q 3 – to Competitors  / Customers; Minutes of conference calls 
with competitors on 4 July and 3 1 August 2018.  
102 Replies to question 62 of Questionnaire Q1 – to Competitors . 
103 Replies to question 62 of Questionnaire Q1 – to Competitors, also available from public sources, 
see: https://www.arauco.cl/na/arauco -approves -the-construction -of-mapa -the-largest -investment -in-
the-companys -history/  (last visited on 19 November 2018 at 15:02).  
104 Minutes of a conference call with a com petitor on 31 August 2018.  
105 Replies to questions 96 and 97 of Questionnaire 3 – to Competitors / Customers.  
106 Repl ies to question 53 of Questionnaire Q 1 – to Competitors.  
107 Repl ies to question 55 of Questionnaire Q1 – to Competitors . 
108 Repl ies to question 56 of Questionnaire Q1 – to Competitors . 
 
24 internal documents of the Parties confirm that,  even after a new pulp mill is 
approved , it takes up to three  years before volumes hit the market .109 
(124)  Hence, it can be concluded that the vast majorit y of respondents believe that no 
entry will take place on the market for the production of BEKP  in the next three 
years.110 There is also a general view in the industry that the market should be 
more disciplined so that capacity expansions are controlled in order to prevent 
price wars and maintain the current high […]*  This is also reflected in several 
internal documents of the Parties, […].111 
(125)  In addition,  the growth cycle of the tree largely depends on the type of tree and 
the region in which it grows , which benefits production in regions where growth 
is faster . In particular, it takes eucalyptus trees approximately seven  years to 
grow in Brazil, ten years in Chile and Uruguay and fifteen  years in Spain. This 
facilitates entry as well as expansion of Brazilian producers compared  to others  
as long lead times are necess ary before beginning operations, and productivity is 
lower outside Brazil.112  
(126)  This is compounded by the amount of forest necessary for a mill: approximately 
150 000 hectares of planted fore sts are needed to supply an average mill of a 
capacity of 1.5 million tonnes.113 Hence, producers in Brazil, such as the Parties 
and Klabin, are better placed to expand capacity. The market investigation has 
confirmed that eucalyptus trees, being the raw mat erial, are not a constraint in 
Brazil,114 contrary to other places in the world as explained above (see 
paragraph (120) ). 
Buyer power  
(127)  With regard to the Notifying Party's argument in relation to buyer power, the 
Commission notes that i n addition  to the Parties' high margins ( [50-60]% for 
Suzano and [40-50]% for Fibria in 2017 ),115 prices have been rising for the past 
two years , without any decrease or re action on the demand side, which is 
evidence that customers have limited bargaining power and cannot counter a 
price increase.  
(128)  Customers responding to the market investigation believe that negotiating power 
will diminish further as a result of the Transact ion. They indicate d that, in 
particular, Suzano and Fibria would be able to impose BEKP prices and 
dominate the market in view of the large capacity that they would control.116  
                                                 
109 [Internal document name] (ID 411 -622) 
110 Replies to question 87 of Questionnaire Q3  – to Competitors / Customers ; Replies  to question 80 of 
Questionnaire 2 – to Customers.  
* Should read: "prices ." 
111  [Internal document name]  (ID405 -928); [Internal document name]  (ID411 -216); [Internal document 
name]  (ID405 -108).  
112 Replies  to question 38 of Questionnaire Q1 – to Competitors.  
113 Replies  to question 13 of R FI 5 (Parties).  
114 Minutes of a conference call w ith a wood supplier on 5 October 2018.  
115 Even taking return on invested capital (ROIC) as a metric, the Parties' ROIC was more than 10% on 
average from 2015 to 2017.  
116 Minutes of conference call s with customers  on 18 and 25 June and 31 August  2018.   
 
25 (129)  The market investigation revealed that customers generally multi -source from 
various BEKP suppliers in order to secure their supply of BEKP.117 However, 
although switching suppliers is not uncommon in the market,118 it is limited. 
More specifically, switching suppliers requires a qualification of the pulp by the 
customers beforehand.119 This involves trials and testing, which can take up to 
six months.120  
Likely effects of the Transaction  
(130)  As a result, the merger would increase consolidation  to a significant extent, 
considering it combines Suzano and Fibria as well as Klabin's volumes outside 
of South America, and capacity expansions and entry are unlikely in the next 
three years. The Transaction is likely to  increase  the ability of a large player to 
adjust capacity in order to maintain prices high by controlling a large share of 
capacity, especially compared  to its competitors.  
(131)  In the long run, the market price for BEKP is determined by the amount of 
available capacity and by demand. The lower the available capacity, the higher 
the market price. While all suppliers profit from higher market prices, larger 
suppliers reap a higher proportion of that benefit. Since the proposed merger 
increases the largest suppliers' – i.e. the Parties' – market share, the incentive to 
slow down capacity expansion in order to keep market prices high also increases 
as a result of the Transaction.  
(132)  Howe ver, e ven a supplier with a high market share only has a limited incentive 
to slow down capacity expansions if other suppliers are likely to expand their 
capacity instead. Since the construction of additional production capacity for 
BEKP requires a signifi cant investment and takes at least two years, only large 
competitors would be able to expand in case the merged entity slows down its 
expansion plans. Therefore, in the absence of clear plans to expand capacity by 
existing players, the Transaction would si gnificantly increase the incentive for 
the merged entity to limit its own capacity expansions. This is exacerbated when 
considering that Klabin, a third important competitor of the Parties with a 
similar cost structure, is limited in its sales, and thus in  its incentives to expand, 
by way of the Offtake Agreement.  
(133)  Also, in the short run, prices for BEKP are determined in bilateral negotiations 
between suppliers and customers. By contrast, prices for some other 
commodities are determined by the interaction o f demand and supply on a 
commodities exchange. All buyers then pay the same price. In the case of 
BEKP, larger customers tend to be able to negotiate lower prices than smaller 
customers. It seems likely that larger suppliers are also able to obtain more 
favourable results in these negotiations. Moreover, the number of competing 
                                                 
117 Repl ies to question s 42 and 43 of Questionnaire Q1 – to Competitors . 
118 Repl ies to question 6 1 of Questionnaire Q2 – to Customers . 
119 The market investigation revealed that supplier qualification is very important for customers. The vast 
majority of the customers t hat replied to the market investigation indicated that they cannot switch 
suppliers to a supplier that they have not previously qualified.  See Replies to question 66 of 
Questionnaire Q2 – to Customers.  
120 Repl ies to question 62 of Questionnaire Q2 – to Cust omers . 
 
26 suppliers, as well as their cost structure, likely has an effect on the prices for 
which BEKP customers end up paying.  
(134)  Therefore, the Transaction eliminates an important low -cost sup plier that is also 
a close competitor to the Notifying  Party in terms of prices and quality , and 
increases the market share of Suzano, not only with the sales of Fibria but also 
Klabin's. The newly emerging market leader would not only have by far the 
largest market share but also some of the lowest production costs. The likely 
result would be that the emerging market leader will be able to negotiate higher 
prices while also having little incentive to expand its capacity in order to keep 
these prices high – to the detriment of BEKP customers.  
Conclusion on horizontal non -coordinated effects  
(135)  In view of the above, the Commission considers that the Transaction raises 
serious doubts as to its compatibility with the internal market with regard to the 
production a nd supply of BEKP at least in the EEA.  
4.4.  Horizontal coordinated effects  
The Notifying Party's view  
(136)  The Parties claim that the Transaction will not lead to competitive concerns as a 
result of coordinated effects, as (i) there are a large number of market pla yers, 
(ii) prices are not transparent – while price indices and market prices are 
published, invoice and volume discounts are applied and those are the result of 
bilateral negotiations, and (iii) contracts are annual, and several negotiations are 
ongoing s imultaneously.  
The Commission's assessment  
(137)  The Commission considers, contrary to the view of a number of market 
participants, that, as regards potential coordinated effects on the market for the 
production of BEKP, the Transaction does not raise serious do ubts as to its 
compatibility with the internal market for the reasons set out below.  
(138)  First , the Commission notes that the number of suppliers and their asymmetries 
in size renders coordination unlikely. As shown in Tables 1 and 2 above , there is 
a signific ant gap between the merged entity and their next competitor, and 
between the next large producers of BEKP , and a long and fragmented tail of 
smaller competitors. A strategy of coordination would likely not be successful 
under those conditions as monitoring  deviation would be very difficult.  
(139)  Second , cost structures of suppliers vary significantly depending on  mainly  their 
location, but also their degree of vertical integration. As a result, the incentives 
to curtail capacity in order to increase prices is no t equal among producers, 
which prevents market players from reaching terms of coordination that would 
be profitable for all.  
 
27 (140)  Third , considering the high investment costs that characterise the industry, it is 
likely not economical for producers to cut prod uction but rather to produce at 
full capacity to amortise investments.  
(141)  Fourth , even though prices are based on an index, bilateral negotiations take 
place between suppliers and customers to agree on the discount and the final 
price to be paid. Those negotiations are confidential and competitors do not have 
visibility on the final agreed price, which would easily allow for deviation while 
making retaliation difficult. This was confirmed by the market investigation.121 
Conclusion on coordinated effects  
(142)  In view of the above, the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal market as regards 
potential horizontal coordinated effects.  
4.5. Vertical non -coordinated effects : Manufacture and supply o f BEKP 
(upstream) and manufacture and supply of wood -free coated and uncoated 
paper, and paperboard  (downstream)  
(143)  As Suzano is also active downstream, with regard to the manufacture and supply 
of wood -free coated and uncoated paper as well as paperboard, th e Transaction 
leads to vertical overlaps with regard to these downstream markets.  
The Notifying Party's view  
(144)  The Notifying Party submits that the merged entity will not have the ability nor 
the incentive to engage in  input or customer foreclosure, in view of the minor 
sales achieved on the various paper markets in the EEA, the number of 
alternative sources of supply available for paper suppliers, the fact that the 
merged entity has no spare capacity downstream, as well as the competitive 
environment in down stream paper markets.  
The Commission's assessment  
(145)  The Commission considers that the Notifying Party  will neither have the ability 
nor the incentive post-Transaction to  engage in either input foreclosure or 
customer foreclosure.   
(146)  Regarding  input foreclosure , the Commission takes the view that, even if the 
combined entity were to  have the ability to foreclose paper producers, by 
foreclosing them from the supply of BEKP, given that the merged entity has a 
significant degree of market power on the upstream mark et (as explained above 
in Section 4.3), it will  not have any incentive to foreclose paper producers.  
                                                 
121 Replies to question 52 of Q uestionnaire 2 – Customers.  
 
28 (147)  Given that Suzano's share in the various downstream markets in the EEA is de 
minimis122, and that  it has no spare capacity  on its  paper production lines, it 
would  not be able to expand its downstream market share  to recoup the losses 
derived from cutting sales of BEKP upstream.  
(148)  In any event, the Commission notes that the merged entity will also face 
competition from a significant n umber of  vertically integrated paper producers 
that do not rely on the combined entity  for BEKP, so that any input foreclosure 
strategy would have limited effects on them . 
(149)  Concerning customer foreclosure, Suzano already pre -Transaction does not 
purchase BE KP for its paper production but uses only pulp  produced  internally; 
therefore the Transaction is unlikely to result in customer foreclosure.  
(150)  Furthermore, no vertical concerns were raised in this regard during the market 
investigation.  
(151)  In view of the above , the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal market as regards 
potential vertical non -coordinated effects.                                                                                                                         
4.6. Conclusion  
(152)  The Commission considers that the Transaction raises serious doubts as to its 
compatibility with the internal market with regard to the manufacture and supply 
of BEKP as a result of non -coordinated h orizontal effects.  
5. PROPOSED REMEDIES  
(153)  In order to render the concentration compatible with the internal market, the 
undertakings concerned have modified the notified concentration by entering 
into the following commitments, which are annexed to this decisio n and form an 
integral part thereof.  
5.1. Procedure  
(154)  On 8 November 2018, the Notifying Party formally submitted commitments in 
order to alleviate the Commission's concerns with regard to the Transaction 
("the Commitments").  
(155)  The results of the market test were po sitive in that most respondents agreed that 
the Commitments would remedy the Commission's serious doubts.123 
(156)  The Commission informed the Notifying Party of the outcome of the market test 
during a conference call on 16 November 2018.  
                                                 
122 The Notifying Party submits that its 2016 market share would be 0.07% and 0.2% on an EEA -wide 
market for cartonboard and printing & writing paper respectively.  
123 Replies to question 1 of Que stionnaire 5 – to Customers ; Replies to  question 1 of Questionnaire 4 – to 
Competitors.  
 
29 (157)  The Notifying Party submi tted the final version of the Commitments on 
19 November 2018.124 
5.2. Description of the Commitments  
(158)  The Commitments proposed by the Notifying Party consist o f (a) Fibria 
terminating  the Offtake Agreement , which it entered into with Klabin in […] 
and (b) transfer ring or making  available to Klabin , on terms approved by the 
Commission , all tangible and intangible assets  necessary to allow Klabin to 
independently  sell BEKP  to any customer in the EEA and in other regions 
outside South America in a competitive manner  ("the Divestment Business").  
(159)  Through the Commitments, the Offtake Agreement would be terminated, 
thereby allowing Klabin to sell BEKP worldwide. In addition, with the aim of 
facilitating the entry of Klabin into the EEA, it  will obtain or make use , at cost , 
of a range  of tangible and intangible assets included in the Divestment Business. 
These include:  
a) Personnel;  
b) Storage capacity  for a transitional period of […]; 
c) Shipping contracts and thus access to ports for a transitional period of 
[…]; 
d) Customer, credit and other records ; 
e) Technical support and assistance in qualification of Klabin BEKP to 
maintain or obtain acceptance by EEA customers  for a transitional period 
of […] months . 
(160)  Suzano has made a commitment to not implement the Transaction until it has  
concluded the agreement to terminate the Offtake Agreement (the "Termination 
Agreement ") with Klabin ("upfront buyer") and it has been approved by the 
Commission.  
(161)  The draft Termination Agreement was s ubmitted to the Commission on 
13 November 2018.125 As per  the Termination Agreement, which will be subject 
to approval by the Commission at a later stage, the transfer of (or access to) the 
assets mentioned above and notably storage will not be limited to the EEA but 
will be global in scope, in order to enable K labin to sell globally and become an 
effective competitor to the Parties, thereby contributing to the viability of the 
Commitments.  
                                                 
124  Only the clause allowing monitoring of the Commitments by the Commission was slightly amended. 
Such clause is included pursuant to para. 128 of the Commission notice  on remedies acceptable under 
Council Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004, 
(2008/C 267/01), ("the Remedies Notice"). The aim of para. 128 of the Remedies Notice is to enable 
the Commission to monitor the effective i mplementation of the Commitments.  
125  Reply  to RFI 12  (Parties) . 
 
30 6. ASSESSMENT OF THE PRO POSED REMEDIES  
(162)  The Commission launched the market test of the Commitments on 9 November  
2018. The resul ts of the market test indicated that the Commitments are  
sufficient to remove the competition concerns raised by the Transaction.  
(163)  First, the Commitments are in line with paragraph 58 of the Remedies Notice in 
that it removes " links between the parties and  competitors in cases where these 
links contribute to the competition concerns raised by the merger ".126 
(164)  Second , the Commitments eliminate the Commission's concerns both with 
respect to long -term and short -term effects of the Transaction . The 
Commitments  ensure that Klabin's volumes of BEKP, which are sold by Fibria 
in the EEA, are no longer under the control of the Parties. At the same time, the 
remedy facilitates  the ent ry of a new  competitor for BEKP  with a global 
presence . This new competitor already oper ates a newly built pulp mill in 
Brazil, where the cost of producing BEKP is the lowest. Moreover, Klabin is a 
large company  with the financial shoulders  required for further expansion .127  
(165)  The Commitments ensure that Klabin will quickly and easily gain access to 
markets outside of Brazil and in particular  in the EEA.  Gaining direct access to 
BEKP customers in the EEA and across the world increases Klabin's incentives 
to expand its capacity in t he long -run. As a result, the Commitments  also reduce 
the probability that the Parties  would slow down expansion plans given that 
Klabin, a new entrant with low costs  and […], will be present in the market. The 
market test has confirmed that Klabin is cons idered by customers as an 
alternative supplier of BEKP from which they would  consider purchasing 
BEKP .128 
(166)  The Commitments allow the entry of a low -cost supplier of BEKP that is a close 
competitor of the Parties in Brazil, as it has a similar cost structure a nd would 
thus be able to sell at similar prices . Moreover, the Commitments reduce the 
amount of BEKP sold by the Parties, thus reducing their clout in price 
negotiations. Indeed, in terms of production capacity and sales of BEKP, 
implementation of the Comm itments will result in the merged entity reducing its 
total capacity and sales outside South America by  […] tonnes.129 As a result, the 
Commitments  also eliminate  the Commission's concerns regarding short -term 
price negotiations , as set out in paragraph (133)  above . 
(167)  As regards the EEA, Fibria's sales of Klabin's BEKP in the EEA increased from 
[…] tonnes in 2017 to approximately […] tonnes in the period January to 
September 2018, as a result of Klabin's BEKP being qualified by customers, 
which reinforces the effectiveness and viability of the Commitments.  
                                                 
126 Para.  58 of the R emedies Notice.  
127  Concretely, Klabin has a t otal of 17 plants in Brazil and one in Argentina, of which 1 is the newly 
built mill to which the Offtake Agreement applies ; 4 are integrated mills producing pulp and paper 
and the rest are paper conversion plants producing packaging and paper sacks.  
128 Replies to question 8 of Questionnaire 5 – to Customers.  
129  For completeness, the volume of sales of BEKP produced by Klabin under the Offtake Agreement in 
2017 was […] tonnes.  
 
31 (168)  The Commitments provide for a transitional period of […] months to phase out 
the Offtake Agreement between Klabin and Fibria. After this phase out, Klabin 
will be able to independently sell BEKP outside of South America, in particular 
in the EEA, and will be fully operational as it will have access to all logistical 
needs and custome r contacts. The market test has confirmed that the Divestment 
Business is viable.130 No significant risks or uncertainties were identified.131 
(169)  To the contrary, without the remedy the Offtake Agreement would run until 
[…], except if Klabin chose to exercise the  change of control clause for its 
termination at the closing of the Transaction. However, even if the change of 
control clause was triggered, Klabin would need to set up all the infrastructure, 
logistics and customer contacts, which would delay its entry s ignificantly.  
(170)  Furthermore, Klabin has indicated its willingness to increase its sales of BEKP 
to the EEA. Based on its contacts with customers at this point, it estimates that it 
will sell approximately […] tonnes in the EEA in 2019.  
(171)  In terms of capacity,  Klabin  currently operates one plant in Brazil with a 
capacity of 1.5  million tonnes, mostly used for the production of BEKP. In 
addition, it will conduct […]. Klabin also explained that it has the ability and 
necessary resources to carry out further capac ity expansions if it decided to do 
so. The Commission considers that the Commitments will increase Klabin's 
incentive to expand given it will gain access to a significantly wider market than 
it had previously.  
(172)  In view of the above, it can be concluded that  the Commitments will resolve the 
serious doubts raised by the Transaction as it will enable the entry of a credible 
competitor into the EEA in the short term, competing on prices with the Parties, 
and it will also incentivise capacity expansions by Klabin  by increasing its sales 
in the EEA and worldwide, preventing the delay of capacity expansions on the 
market. This is also supported by respondents to the market test, a majority of 
which consider that the Commitments will resolve any competition concern t he 
Transaction may have raised.132 
(173)  For the reasons outlined above, the Commitments entered into by the 
undertakings concerned are sufficient to eliminate the serious doubts as to the 
compatibility of the Transaction with the internal market.  
(174)  The Commitments  in Section B of the Annex constitute conditions attached to 
this decision, as only through full compliance therewith can the structural 
changes in the relevant markets be achieved. The other commitments set out in 
the Annex constitute obligations, as they  concern the implementing steps which 
are necessary to achieve the modifications sought in a manner compatible with 
the internal market.  
                                                 
130 Replies to question 2 of Questionnaire 5 – to Customers ; Replies to  question 2  of Questionnaire 4 – to 
Competitors.  
131 Replies to question 5 of Questionnaire 5 – to Customers ; Replies to  question 5  of Question naire 4 – to 
Competitors.  
132 Replies to question 1 of Questionnaire 5 – to Customers ; Replies to  question 1 of Questionnaire 4 – to 
Competitors.  
 
32 7. CONCLUSION  
(175)  For the above reasons, the Commission has decided not to oppose the notified 
operation as modified by the c ommitments and to declare it compatible with the 
internal market and with the functioning of the EEA Agreement, subject to full 
compliance with the conditions in section B of the commitments annexed to the 
present decision and with the obligations containe d in the other sections of the 
said commitments. This decision is adopted in application of Article 6(1)(b) in 
conjunction with Article 6(2) of the Merger Regulation  and Article 57 of the 
EEA Agreement . 
For the Commission  
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission
 
  
 
   19 November 2018  
   
Case M.8951 – SUZANO PAPEL E CELULOSE / FIBRIA CELULOSE  
 
COMMITMENTS TO THE EUROPEAN COMMISSION  
 
Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the Merger 
Regulation ), Suzano Papel e Celulose S.A. ( Suzano ) hereby enters into the following 
Commitments (the Commitments ) vis-à-vis the European Commission (the Commission ) 
with a view to rendering Suzano’s acquisition of sole control over Fibria Celulose S.A. 
(Fibria ) (the Concentration ) compatible with the internal market and the functioning of 
the EEA Agreement.  
 
This text shall b e interpreted in light of the Commission’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 E uropean Union law, in particular 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 ). 
 
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 unde r Council 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 7 and described more in detail in the Schedule.  
 
BEKP : bleached eucalyptus kraft pulp.  
 
Closing : the transfer of the legal title to the Divestment Business to the Purchaser, 
and/or to the extent applicable, to make available to the Purchaser the right to use the 
Assets.  
 
2  
Closing of the Concentration : the period of up to […] calendar da ys from the 
Effective Date or any other date agreed between Suzano and the Commission, subject 
to satisfaction of paragraph 3 below .  
 
Closing Pe riod: the period of up to […] from the approval by the Commission of the 
terms of the agreement for the transfer of the Divestment Business, or from the 
Closing of the Concentration, whichever is later.  
 
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 impairs the Trustee's objectivity and 
independence in discharging its duties under the Co mmitments.  
 
Divestment Business:  the business of marketing, selling and distributing Klabin 
Produced BEKP as more particularly described in Section B and in the Schedule.  
 
Divestiture Period: the period of […] from the Effective Date.  
 
Effective Date : the date of adoption of the Decision.  
 
Fibria : Fibria Celulose S.A., a public -held company organised and existing under the 
laws of Brazil, with its head office at Fidêncio Ramos Street, No. 302, Edifício Vila 
Olímpia Corporate, 3rd and 4th floors, Towe r B, 04551 -010, Vila Olímpia, São Paulo, 
State of São Paulo, Brazil, and registered with the Brazilian Company Register under 
number 60643228/0001/21, and its Affiliated Undertakings.  
 
Klabin : Klabin S.A., a public -held company organised and existing under  the laws of 
Brazil, with its head office at AV. Brig. Faria Lima, 3600, 3rd, 4th and 5th floors, São 
Paulo, State of São Paulo, Brazil, and registered with Brazilian Company Register 
under number 89637490/0001/45, and its Affiliated Undertakings.  
 
Klabin  Commercial Data:  information relating to the Klabin Produced BEKP sold 
by Fibria […].  
 
Klabin Produced BEKP : BEKP produced at Klabin’s production facility located in 
the city of Ortigueira, Paraná, Brazil.  
 
Monitoring Trustee : one or more natural or lega l person(s) who is/are approved by 
the Commission and appointed by Suzano, and who has/have the duty to monitor 
Suzano’s compliance with the conditions and obligations attached to the Decision.  
 
Off-take Agreement: the eucalyptus pulp offtake agreement bet ween Fibria 
International Trade GmbH and Klabin S.A. and Fibria Celulose S.A. as intervening 
party and guarantor dated 4 May 2015, as amended and provided in Schedule 2 . 
 
 
3 Parties:  Suzano Papel e Celulose S.A. and Fibria Celulose S.A. and their respective 
Affiliated Undertakings.  
 
Personnel : up to […] of the Parties’ sales personnel located in Europe having 
experience in selling BEKP in the EEA, […] as further described in the Schedule, in 
order to maintain the viability and competitiveness of the Divestmen t Business.  
 
Purchaser : Klabin, as approved by the Commission as acquirer of the Divestment 
Business.  
 
Relevant Customers : customers to which Fibria has supplied, or is currently 
supplying Klabin Produced BEKP.  
 
Schedule:  the schedule to these Commitments describing in more detail the 
Divestment Business.  
 
Transitional Period: the period of […] commencing on the  first day following the 
end of the Closing Period.  
 
Trustee : the Monitoring Trustee.   
 
Suzano:  Suzano Papel e Celulose S.A., a public -held company organised and 
existing under the laws of Brazil, with its head office at  Av. Professor Magalhães 
Neto, 1752, 10th floor, CEP 41810 -012 Salvador, BA, Brazil, and registered with the 
Brazilian Company Register under numb er 16404287/0001/55, and its Affiliated 
Undertakings.  
 
Section B.  The commitment to divest and the Divestment Business  
 
Commitment to divest  
 
2. In order to maintain effective competition, the Parties commit that (a) Fibria will 
terminate the Off -take Agreement; and (b) the Parties will divest the Divestment 
Business to Klabin on terms approved by the Commission in accordance with the 
procedure des cribed in paragraph 17 of these Commitments. To carry out the 
divestiture, the Parties commit to enter into an agreement with Klabin for the 
purposes of implementing these Commitments within the Divestiture Period.  
 
3. The Concentration shall not be implemented before the Parties  have entered into a 
final binding agreement for the transfer of the Divestment Business and the 
Commission has approved the terms of the final and binding agreement referred to in 
paragraph 17. 
 
4. The Parties shall be deemed to have complied with this commitment if:  
a) By the end of the Divestiture Period, the Parties have entered into a final 
binding agreement with Klabin and the Commission approves the  terms of 
 
4 such agreement as being consistent with the Commitments in accordance with 
the procedure described in paragraph 17; and  
b) Closing takes plac e within the Closing Period.  
 
5. In order to maintain the structural effect of the Commitments, the Parties shall, for a 
period of 10 years after Closing, not acquire, whether directly or indirectly, the 
possibility of exercising influence (as defined in para graph 43 of the Remedies 
Notice, footnote 3) over the whole or part of the Divestment Business that has been 
transferred to Klabin, and, subject to paragraphs 10 below , not to […] unless, 
following the submission of a reasoned request from the Notifying Party showing 
good cause and accompanied by a report from the Monitoring Trustee (as provided in 
paragraph 37 of these Commitments), the Commission finds that the structure of the 
market has changed to such an extent that the absence of influence over the 
Divestment Business is no longer necessary to render the Concentration compatible 
with the internal market.  
 
6. The Parties shall not enforce any provision(s) of the Off -take Agreement, to the 
extent that such provision(s) would contravene compliance with these Commitments.  
 
Structure and definition of the Divestment Business  
 
7. The Divestment Business consists of all  tangible and intangible assets, necessary to 
allow Klabin to independently sell Klabin Produced BEKP to any customer in the 
EEA, and other regions outside of South America. The object of these Commitments 
is to ensure that following Closing of the Concent ration Klabin is able to act 
independently of the Parties, and to introduce Klabin as a direct and independent 
supplier of BEKP in the EEA, and other regions outside of South America, and that 
the Parties do not directly or indirectly control or influence the supply of Klabin 
Produced BEKP through any arrangements with, or any practices with respect to, 
Klabin which are aimed at or have the effect of restricting Klabin’s ability or 
incentive to compete effectively with the Parties in the supply of BEKP in t he EEA 
and other regions outside of South America.  This is, in particular, to improve the 
overall structure of supply of BEKP in the EEA and in other regions outside of South 
America. The scope of the Divestment Business is described in the Schedule. The 
Divestment Business, described in more detail in the Schedule, includes all assets and 
personnel, that contribute to the current operation or are necessary to ensure the 
viability and competitiveness of the Divestment Business.  
 
8. In order to enable Klabin t o act independently of the Parties, the Parties undertake to 
transfer to Klabin all Klabin Commercial Data within […] following the Effective 
Date, […]. 
 
  
 
5 Transitional Period  
 
9. During the Transitional Period the Offtake Agreement will be amended as follows . 
The Offtake Commitment as defined in the Offtake Agreement shall be replaced by 
the following commitment  so that Klabin shall, over the Transitional Period reduce 
the Klabin Produced BEKP supplied to Fibria, as follows:  
a)  
[…] 
 
10. […].  
 
11. […].    
 
12. For the avoidance of doubt, these Commitments shall not prevent purchases by the 
Parties of products from Klabin other than Klabin Produced BEKP.  
 
Section C.  Related commitments  
 
Preservation of viability, marketability and competitiveness  
 
13. From the Effective Date  until Closing, the Parties shall preserve the economic 
viability, marketability and competitive of the Divestment Business, in accordance 
with good business practice, and shall minimise as far as possible any risk of loss of 
competitive potential of the D ivestment Business. In particular, the Parties undertake:  
 
a) Not to carry out any action that might have a significant adverse impact on the 
value, management or competitiveness of the Divestment Business or that 
might alter the nature and scope of activity,  or the industrial or commercial 
strategy or the investment policy of the Divestment Business;  
 
b) To make available, or procure to make available, sufficient resources for the 
development of the Divestment Business;  
 
c) To take all reasonable steps, or procure that all reasonable steps are being 
taken, including appropriate incentive schemes (based on industry practice), 
to encourage all Personnel identified pursuant to paragraph 14 below  to 
remain with the Divestment Business, and not to solicit or move any such 
Personnel to the Parties’ remaining business. Where, nevertheless, individual 
members of such Personnel exceptional ly leave the Divestment Business, the 
Parties shall provide a reasoned proposal to replace the person or persons 
concerned to the Commission and the Monitoring Trustee. The Parties must 
be able to demonstrate to the Commission that the replacement is well suited 
to carry out the functions exercised by those individual members of the 
Personnel. The replacement shall take place under the supervision of the 
Monitoring Trustee, who shall report to the Commission.  
  
 
6 Hold separate obligations and ring fencing  
 
14. Klabin shall notify the Parties within a period of […] from the date of execution of 
the agreement referred to in paragraph 17 below  of the identi ty of the Personnel that 
Klabin wishes to transfer to Klabin from the list of Personnel candidates that the 
Parties would present to Klabin following the process described in the Schedule.   
 
15. Following conclusion of an agreement between Klabin and such Per sonnel and until 
Closing, the Parties commit to ensure that the Personnel chosen by Klabin under 
paragraph 14 above  have no involvement in any bu siness retained by the Parties.  
 
Non-solicitation clause  
 
16. The Parties undertake, subject to customary limitations, not to solicit, and to procure 
that Affiliated Undertakings do not solicit, the Personnel transferred with the 
Divestment Business for a period of […] after Closing.  
 
Section D.  The Purchaser  
 
17. The final binding agreement (as well as ancillary agreements) relating to the 
implementation of these Commitments shall be conditional on the Commission’s 
approval. When the Parties have reached an agreement with the Purchaser, they shall 
submit a fully docume nted and reasoned proposal, including a copy of the final 
agreement(s), within one week to the Commission and the Monitoring Trustee. The 
Parties must be able to demonstrate to the Commission that the Divestment Business 
is being transferred, and the Off -take Agreement is being terminated, in a manner 
consistent with the Commission's Decision and the Commitments. For the approval, 
the Commission shall verify that the Divestment Business is being transferred, and 
the Off -take Agreement is being terminated, i n a manner consistent with the 
Commitments including their objective to bring about a lasting structural change in 
the market and the introduction of Klabin to the market as an independent supplier of 
BEKP. The Commission may approve the transfer of the Di vestment Business 
without one or more Assets 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 t he Divestment 
Business after the sale.  
 
Section E.  Trustee  
 
 I. Appointment procedure  
 
18. Suzano shall appoint a Monitoring Trustee to carry out the functions specified in 
these Commitments for a Monitoring Trustee. Suzano commits not to close the 
Concentration before the appointment of a Monitoring Trustee.  
  
 
7  
19. The Trustee shall:  
 
a) At the time of appointment, be independent of the Notifying Party and their 
Affiliated Undertakings;  
 
b) Possess the necessary qualifications to carry out its mandate, for example 
have sufficient relevant experience as an investment banker or consultant or 
auditor; and  
 
c) Neither have nor become exposed to a Conflict of Interest.  
 
20. The Trustee shall be remunerated by the Notifying Party in a way that does not 
impede the independent and effective fulfilment of its mandate.  
 
  Proposal by Suzano  
 
21. No later than two weeks after the Effective Date, Suzano shall submit the names of 
three or more natural or legal persons whom Suzano proposes to appoint as the 
Monitoring 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 19 and shall include:  
 
a) The full terms of the proposed mandate, which shall include all provisions 
necessary to enable the Trustee to fulfil its duties under these Commitments;  
 
b) The outline of a work plan which describes how the Trustee intends to carry 
out its assigned tasks;  
 
  Approval or rejection by the Commission  
 
22. 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, Suzano  shall appoint or cause 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, Suzano  shall be free to choose the Truste e to be 
appointed from among the names approved. The Trustee shall be appointed within 
one week of the Commission’s approval, in accordance with the mandate approved 
by the Commission.  
 
  New proposal by the Suzano  
 
23. If all the proposed Trustees are rejecte d, Suzano  shall submit the names of at least 
two more natural or legal persons within one week of being informed of the rejection, 
in accordance with paragraphs 18 and 22 of these Commitments.  
 
 
8   Trustee nominated by the Commission  
 
24. If all further proposed Trustees are rejected by the Commission, the Commission 
shall nominate a Trustee, whom Suzano  shall appoint, or cause to be appointed, in 
accordance with a trustee mandate approved by the Commission.  
 
 II. Functions of the Trustee  
 
25. The Trustee shall assume its specified 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 Suzano, give any orders or instructions to the Trustee in 
order to ensure compliance with the conditions and obligations attached to the 
Decision.   
 
  Duties and obligations of the Monitoring Trustee  
 
26. The Monitoring Trustee shall:  
 
a) Propose in its first report to the Commission a detailed work plan describing 
how it intends to monitor compliance with the obligations and conditions 
attached to the Decision;  
 
b) Oversee, the on -going management of the Divestment Business with a view to 
ensuring its continued economic viability, marketability and competitiveness 
and monitor  compliance by the Parties 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;  
 
(ii) with resp ect to Confidential Information:  
 
 determine all necessary measures to ensure that the Parties do not 
after Closing obtain any Confidential Information relating to the 
Divestment Business;  
 make sure that any Confidential Information relating to the 
Divestme nt Business obtained by the Parties before Closing is 
eliminated and will not be used by the Parties; and  
 decide whether such information may be disclosed to or kept by 
the Parties as the disclosure is reasonably necessary to allow the 
Parties to carry ou t the divestiture or as the disclosure is required 
by law.  
 
(iii) Monitor the splitting of assets and the allocation of Personnel 
between the Divestment Business and the Parties or Affiliated 
Undertakings;  
 
 
9 c) Propose to the Parties such measures as the Monitoring Trustee considers 
necessary to ensure the Parties’  compliance with the conditions and 
obligations attached to the Decision, in particular the maintenance of the full 
economic viability, marketability or competitiveness of the Divestment 
Business, the hold ing separate of the Divestment Business and the non -
disclosure of competitively sensitive information;  
 
d) Provide to the Commission, sending Suzano 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 divestiture;  
 
e) Promptly report in writing to the Commission, sending Suzano a non -
confidential copy at the same time, if it concludes on reasonable grounds that 
Suzano is failing to comply with these Commitments; and  
 
f) Assume the other functions ass igned to the Monitoring Trustee under the 
conditions and obligations attached to the Decision.  
 
 III. Duties and obligations of the Parties  
 
27. the Parties shall provide and shall cause its advisors to provide the Trustee with all 
such co -operation, assistance and information as the Trustee may reasonably require 
to perform its tasks. The Trustee shall have full and complete access to any of the 
Parties’ books, records, documents, management or other personnel, facilities, sites 
and technical informat ion necessary for fulfilling its duties under the Commitments 
and the Parties shall provide the Trustee upon request with copies of any document. 
The Parties shall make available to the Trustee one or more offices on their premises 
and shall be available f or meetings in order to provide the Trustee with all 
information necessary for the performance of its tasks.  
 
28. The Parties shall indemnify the Trustee and its employees and agents (each an 
“Indemnified Party ”) and hold each Indemnified Party harmless agains t, and hereby 
agrees that an Indemnified Party shall have no liability to the Parties 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 defau lt, 
recklessness, gross negligence or bad faith of the Trustee, its employees, agents or 
advisors.  
 
29. At the expense of Suzano, the Trustee may appoint advisors (in particular for 
corporate finance or legal advice), subject to Suzano’s approval (this approva l 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 that any fees and other expenses incurred by 
the Trustee are reasonable. Should Suzano refuse to approve the advisors proposed by 
the Trustee the Commission may approve the appointment of such advisors instead, 
 
10 after having heard Suzano. Only the Trustee shall be entitled to issue instructions to 
the adv isors. Paragraph 28 of these Commitments shall apply mutatis mutandis .  
 
30. The Parties agree that the Commission may share Confidential Information 
proprietary to the Parties 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 muta tis mutandis .  
 
31. The Parties agree that the contact details of the Monitoring Trustee are published on 
the website of the Commission's Directorate -General for Competition and they shall 
inform interested third parties, in particular any potential purchasers , of the identity 
and the tasks of the Monitoring Trustee.  
 
32. For a period of 10 years from the Effective Date the Commission may request all 
information from the Parties that is reasonably necessary to monitor the effective 
implementation of these Commitmen ts.  Such information may consist of the 
following: volume and value of sales of BEKP sold by the Parties, BEKP capacity of 
the Parties, identity and location of the Parties’ customers, general market data 
regarding volume, price and capacity of the wood p ulp market available to the Parties 
via industry and market intelligence reports, covering a period of 5 years prior to the 
Effective Date and 10 years from the Effective Date.  If such information is 
requested, it shall be provided yearly on a monthly bas is.  
 
 IV. Replacement, discharge and reappointment of the Trustee  
 
33. 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:  
 
a) The Commission may, after hearing the Trustee and Suzano, require Suzano 
to replace the Trustee; or  
b) Suzano may, with the prior approval of the Commission, replace the Trustee.  
 
34. If the Trustee is removed according to paragraph 33 of these Commitments, the 
Trustee may be required to continue in its function 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 
18-24 of these Commitments.  
 
35. Unless removed according to paragraph 33 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 implemented.  
 
 
11 Section F.  The review clause  
 
36. The Commission may extend  the time periods foreseen in the Commitments  in 
response to a request from Suzano or, in appropriate cases, on its own initiative. 
Where Suzano requests an extension of a time period, it shall submit a reasoned 
request to the Commissi on 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 
report to Suzano. Only in exceptiona l circumstances shall Suzano be entitled to 
request an extension within the last month of any period.  
 
37. The Commission may further, in response to a reasoned request from the Notifying 
Parties  showing good cause waive, modify or substitute, in exceptional  
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 the Notifying Party. The request 
shall not have 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  
 
38. The Commitments shall take effect upon the date of adoption of the Decision.  
 
……………………………………    
duly authorised for and on behalf of   Suzano Papel e Celulose S.A.  
………………………………………………….  
duly authorised for and on behalf of Fibria Celulose S.A.   
 
  
 
12 SCHEDULE  
 
1. In accordance with paragraph 7 of these Commitments, the Divestment Business 
includes:  
 
a) The Personnel : […]Fibria and/or Suzano personnel as follows:  
[…].   
b) The following  main tangible assets : transfer Suzano and/or Fibria storage 
capacity in the destination ports in the EEA […]; 
 
c) The following  main contracts and agreements : Transfer […] shipping 
contract […]; 
 
d) The following […]records : Transfer, within a period of […].   
 
The Divestment Business will also make available on a temporary transitional basis:  
 
e) The arrangements for the supply of the following services : provide (for a 
period up to […] starting on the first day of the Transitional Period) technical 
support and ass istance in technical qualification of Klabin Produced BEKP to 
maintain or obtain the acceptance of Klabin Produced BEKP by customers in 
the EEA.   
 
Strict firewall procedures will be adopted so as to ensure that any competitively sensitive 
information rela ted to, or arising from the compliance with any of the provisions listed 
above, including the transitional services will not be shared with, or passed on to, anyone 
other than the limited personnel tasked with performing the tasks and transitional 
services  referred to above.  
 
2. Save for the terms of paragraphs 1b) and 1c) above, the Divestment Business is 
limited to the tangible and intangible assets currently used or owned by Fibria to 
market the 900,000 tons of Klabin Produced BEKP.   
 
3. In order to implement the transfers set forth in paragraphs 1b) and 1c) above, the 
Parties shall with in […].  
 
4. […].      
 
5. […].  
 
13 ANNEX 1  
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ANNEX 2  
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ANNEX 3  
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