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, 17.4.2020  
C(2020 ) 2581 final  
PUBLIC VERSION  
To the notifying part y 
Subject : Case M.9592 –FREUDENBERG / LOW & BONAR  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Ag reement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 10 March 2020, the European Commission received notification of a proposed 
concentration (the “ Transaction ”) pursuant to Article 4 and following a referral 
request pursuant to Article 4(5) of the  Merger Regulation, by which Freudenberg & 
Co. KG, (“Freudenberg”, Germany; the “Notifying Party”) intends to acquire 
within the meaning of Article 3(1)(b) of the Merger Regulation sole control of Low 
& Bonar PLC, (“Low & Bonar”, United Kingdom). Freudenbe rg and Low & Bonar 
are designated hereinafter as the “Parties”.  
1. THE PARTIES  
(2) Freudenberg is a family -owned company headquartered in Germany and the parent 
company of a group active globally in four primary business areas: (i) seals and 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union (“TFEU”) has introduced certain changes, such as the replacement of 
“Community” by “Union” and “co mmon market” by “internal market”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).  
 In the published version of this decision, 
some information has been omitted pursuant 
to Article 17(2) of Council Regulation (EC) 
No 139/2004 concerning non -disclosure of 
business secrets and other  confidential 
information. The omissions are shown thus 
[…]. Where possible the information 
omitted has been replaced by ranges of 
figures or a general description.  
 
2 vibration control tec hnology, (ii) nonwovens and filtration, (iii) household 
products, and (iv) specialties and other products.  
(3) Low & Bonar is a UK company listed on the London Stock Exchange, active as 
global manufacturer and supplier of advanced, high -performance materials created 
from polymer -based yarns and fibres which are used in a wide range of 
applications.  
2. THE CONCENTRATION  
(4) The Transaction consists of the indirect acquisition by Freudenberg of the entire 
ordinary share capital of Low & Bonar.  
(5) The directly acquiring c ompany will be FV Beteiligungs -GmbH ("FV", Germany), 
an entity indirectly fully owned and controlled by Freudenberg. Following a sale 
process, on 19 July 2019 FV issued an indicative offer for Low & Bonar. The 
Parties, subsequently, agreed to implement a s cheme of arrangement under which 
Low & Bonar will be acquired by FV and under which a cancellation of the listing 
of Low & Bonar shares on the London Stock Exchange shall be implemented. On 
20 September 2019, FV and Low & Bonar announced the recommended of fer from 
FV, thereby commencing a public bid process for the entire issued ordinary share 
capital of Low & Bonar. Following completion of the Transaction, Low & Bonar 
will be solely controlled by Freudenberg.  
(6) The Transaction, therefore, constitutes a conce ntration pursuant to Articles 3(1)(b) 
of the Merger Regulation.  
3. UNION DIMENSION  
(7) The Transaction does not have a Union dimension as it does not meet the 
thresholds set under Article 1(2) of the Merger Regulation, since Low & Bonar’s 
EU turnover amounted to EUR […]. The Transaction also does not meet the 
turnover thresholds of Article 1(3) of the Merger Regulation.  
(8) On 30 October 2019, the Commission received, by means of a reasoned 
submission, a referral request pursuant to Article 4(5) of the Merger Regulati on 
with respect to the Transaction based on the consideration that the Transaction 
would otherwise be subject to review under the national merger control regimes of 
Germany, Austria, Poland and the United Kingdom. A copy of this submission was 
transmitted to the Member States on 30 October 2019.  
(9) The case fulfils the two conditions set out in Article 4(5) of the Merger Regulation, 
since (i) the Transaction is a concentration within the meaning of Article 3 of the 
Merger Regulation, and (ii) the Transaction is capable of being reviewed under the 
national competition laws of at least three Member States.  
(10) As none of the Member States competent to review the Transaction or the United 
Kingdom expressed its disagreement as regards the request to refer the case to the 
Commission, the Transaction falls within the jurisdiction of the Commission 
pursuant to the Article 4(5) referral request filed by the Parties.  
 
3 4. RELEVANT MARKETS  
(11) The Parties are active in several product areas and overlap in the production and 
supply of  nonwoven fabrics. Moreover, the products that they manufacture are used 
as inputs for the manufacture of throw -in-mats, where only Freudenberg is also 
active. This section will discuss the relevant product and geographic market 
definitions for the nonwove ns sector (and for each possible sub -segments where the 
Parties have relevant activities for the purposes of the present decision) (section 
4.1) and for throw -in-mats (section 4.2).  
4.1. Nonwoven and other fabrics  
4.1.1.  Introduction  
(12) Nonwoven fabrics are a specific ty pe of technical textile, broadly defined as sheet 
or web structures bonded together by entangling fibres or filaments mechanically, 
thermally or chemically. Nonwovens are generally manufactured as “roll goods”, 
i.e., as a roll of nonwoven material. These r oll goods are primarily sold by the 
producers of nonwovens downstream to “converters”, who convert the nonwoven 
fabric rolls into an end -product with further industrial applications.  
(13) Converters make modifications to the nonwoven materials, such as cutting , slitting, 
coating, embossing, laminating, printing and winding. Such end -products are 
usually made for the downstream manufacturers of semi -finished, prefabricated 
and finished parts which are then typically further processed, assembled or 
combined to pr oduce end -user (industrial) or consumer products. For each different 
end-use applications, other materials can also be used to manufacture the end -
product, alternatively to nonwoven fabrics. These materials include woven and knit 
fabrics, paper products, f iberglass, plastic sheet and foam. The scope for 
substitution with nonwoven fabrics should therefore be assessed within each 
relevant application.  
(14) The Parties' activities overlap in two applications, namely: (i) floor coverings and 
(ii) building/roofing ap plications.  
Floor coverings applications  
(15) Floor coverings products include underlays and backings, for household, industrial 
and car applications.  
(16) A carpet backing is the material which holds the yarns together of which the tufted 
carpet is made. Tufted ca rpet manufacturers can choose between a range of 
different materials when deciding on the carpet backing for a particular carpet, in 
particular PET3 nonwoven, PET woven and woven polypropylene (“PP”)4.  
(17) Carpet backings are thus made out of nonwovens or, de pending on the application, 
out of woven, composite materials using natural (jute) or man -made materials. The 
carpet maker chooses the material to use as a carpet backing on the basis of a 
number of different considerations that include the backing's price , weight, 
                                                 
3  Polyethylene Terephthalate.  
4  A woven fabric is made by weaving or knitting yarns.  
 
4 thickness, processability (i.e., how the material performs during the tufting 
process), tuftability and dimensional stability.  
(18) In this respect, PET woven fabrics are deemed to have superior technical properties 
compared to PET nonwovens that are  relevant for carpet tile manufacturers. The 
Notifying Party considers that PET woven is currently approximately […]% more 
expensive than PET nonwoven. PET woven fabrics have also a greater pile hold 
performance and a greater dimensional stability. Carpet backings may also be made 
out of PP woven. PP woven backings have the advantage of quickly repairing 
themselves after the needle threads yarn through the material and departs, which 
allows for higher machine speed during the tufting process, providing a co st 
advantage to carpet manufacturers. This material however also presents a lower 
dimensional stability with respect to PET nonwovens. By comparison, PET 
nonwoven backings have a lower ability to repair themselves after each needle 
puncture during the tuft ing process. y.  
(19) The Parties produce tuft PET nonwovens primary carpet backing,5 a product that 
can be found in carpet backings for (i) construction and (ii) automotive 
applications.  
(20) Tuft PET nonwovens primary carpet backings in construction applications ca n 
mainly be found in carpet tiles in which the carpet backings need to have different 
properties compared to standard broadloom carpets (in particular with respect to 
the dimensional stability). Within primary carpet backings for construction 
applications,  both Parties predominantly sell their carpet backings to manufacturers 
of carpet tiles.  
(21) Tuft PET nonwovens primary carpet backings in automotive flooring applications 
can be found in so -called automotive flooring systems (AFS) and throw -in mats. 
AFS are c arpets that have been formed or “moulded” to the needs of a particular 
vehicle. Carpets used for AFS are either made out of tufted carpets, for which a 
(tuft PET) primary carpet backing is necessary, or out of needle -punched 
nonwoven carpets, which do not require a primary backing. Throw -in mats are 
products that protect the automotive flooring system of a passenger car and 
facilitate the cleaning of the interior of the car. They are made out of different 
materials (including rubber, PVC and tufted carpets) . 
Building/Roofing applications  
(22) Building/Roofing applications include flat roofing bituminous membranes and 
other types of building insulation, house -wraps, (non -apparent wall covering), etc. 
This segment also includes nonwovens which serve as carriers for  bituminous 
waterproofing membranes in roofing.  
                                                 
5  Most carpets ha ve a double backing: the primary backing, where the yarn is tufted into, and the secondary 
backing which is the outer material. The main purpose of the primary backing is to provide a base to hold 
the carpet yarn in place. Secondary backing helps hold the carpet yarns in place, as it reinforces the carpet 
piece and gives it some dimensional stability. To be noted that both Parties have also minor activities in 
secondary backings for tufted carpets (in particular for automotive applications). The parties’ sa les in 
these products are, however, negligible (in the EEA 2018:  Freudenberg:  € […] million; Low & Bonar:  € 
[…] million). Therefore, secondary backing will not be considered further in this decision.  
 
5 (23) Within building/roofing applications, the Parties overlap in possible narrower 
market for nonwovens carriers for bitumen membranes. The PET nonwovens 
produced by the Parties serve as “reinforcing” materials t hat act as “carriers” for 
bitumen as it is manufactured into a membrane.  
4.1.2.  Product market definition  
4.1.2.1.  The Notifying Party’s view  
(24) The Notifying Party submits that the relevant market should include all 
nonwovens, without any further segmentation. It argues tha t nonwovens can be 
used for a variety of applications, such as baby diapers, surgical gowns, wound 
dressing or bituminous roofing membranes. The Notifying Party acknowledges that 
the industry tends to segment the market for nonwovens based on the end -use 
application of the products, including hygiene, medical/surgical, wipes for personal 
care, wipes -other, cotton pads, garments, interlinings, shoe/leather goods, coating 
substrates, floor coverings (including carpet backings for cars), 
upholstery/household, wall covering, table linen, air & gas filtration, liquid 
filtration, building/roofing, underground applications/civil engineering, automotive 
(excluding fabrics for filtration and floor covering), agriculture, electronic 
materials, food & beverage and othe rs. 
(25) In addition, the Notifying Party submits that, in many of their end -use applications, 
nonwoven fabrics compete with a variety of other materials, including woven and 
knit fabrics, paper products, fiberglass, plastic sheet and foam. The Notifying Party  
explains that nonwovens present certain specific characteristics that make them 
cost-efficient, high performance alternatives to traditional woven textiles and 
provide specific functional benefits over competing materials, such as softness, 
tensile streng th, a smaller pore size or lighter weight. Nonetheless, despite these 
specific features, the Notifying Party submits that there is scope for substitution  
between nonwoven fabrics and those other materials within different end -use 
applications.  
(26) However, th e Notifying Party also submits that the product market should not be 
segmented on the basis of end -uses due to strong supply -side substitution. It 
explains that most companies (including the Parties) produce nonwovens for a wide 
variety of applications and  do not sell their products directly to end -users (as 
nonwovens are typically intermediate products). It also submits that nonwoven 
manufacturing equipment and technologies can be switched rapidly and 
inexpensively to produce different types of nonwoven fa brics.  
(27) Similarly, the Notifying Party submits that other conceivable segmentations of the 
relevant market (according to raw materials used or manufacturing processes)6 
would not be relevant because, with few exceptions, fabrics produced with 
different raw materials or based on different manufacturing process or bonding 
technology, would be regarded by customers as fully interchangeable since they 
                                                 
6  Such as (i) by raw material used (Polyethylene Ter ephthalate (“PET”), Polypropylene (“PP”) or other 
polymers such as Polyamid 6 (also referred to as Nylon) (“PA6”)), (ii) by the web -forming process (also 
described as “formation”) in drylaid, spunmelt, wetlaid and airlaid nonwovens, as well as (iii) by the  
technology used for bonding. Further, another possible approach to distinguish nonwovens is by the type 
of fibres (staple fibres or continuous filaments) or the thickness of fibres (fine denier or coarse denier 
fibres).  
 
6 serve the same function and tend to display similar properties, performances and 
price.  
4.1.2.2.  The Commission’s  assessm ent 
(A) Market segmentation by applications  
(28) In a previous decision, the Commission considered the market for nonwovens and 
contemplated defining a narrower market for nonwovens for hygiene applications.7 
The Commission considered such segmentation because the market investigation 
suggested that nonwovens for hygiene applications had specific characteristics that 
differentiated them from nonwovens for other applications. On the other hand, the 
Commission noted that certain of these characteristics were also rele vant for other 
applications. In addition, many of the respondents to the market investigation 
considered it possible to switch production. Ultimately, the Commission left the 
definition of the relevant market open.8 
(29) In the present case, the results of the market investigation contradicted the 
Notifying Party’s view that the nonwovens market should be considered as a 
whole, without separating different types of nonwovens. On the contrary, the vast 
majority of respondents to the market investigation, both cus tomers and 
competitors, considered that the market should be further segmented.9 In particular, 
from a demand -side perspective the majority of respondents confirmed that the 
market should be segmented by applications, as each application require different 
characteristics and specifications.10 
(30) From the supply -side, respondents also indicate that defining separate markets 
according to applications would be relevant because specific end -uses require 
different production characteristics that not all suppliers ha ve. Accordingly, the 
same production line cannot generally be used for different products, except in 
specific circumstances.11 The absence of supply -side substitution was further 
illustrated by the failed attempt by a major global nonwoven manufacturer to e nter 
the construction and automotive segments due to its inability to obtain the technical 
characteristics required of primary carpet backings for these specific products. In 
essence, customers and suppliers, in their vast majority, endorsed distinguishing  
relevant markets by applications, indicating that each application requires different 
specifications, technical requirements and performances, that not all suppliers are 
able to meet. For instance, nonwovens used in filtration application would be 
entirel y different from those used for flooring and, therefore, not substitutable from 
a supply or demand -side perspective.  
(31) Some respondents to the market investigation also indicated that other 
characteristics (raw material used, web forming process, technology ) can be 
relevant to identify distinct relevant markets.12 However, other respondents 
                                                 
7  Case M.5958 – Goldman Sachs/TPG/ Ontex , 30 September 2010.  
8 Case M.5958 – Goldman Sachs/TPG/Ontex , 30 September 2010, paragraphs 34 to 37.  
9  Questionnaires Q1, replies to questions 5 and 5.1; Q2, replies to questions 5 and 5.1; Q3, replies to 
questions 6 and 6.1.  
10  Questionnaires Q1, r eplies to questions 6 and 6.1; Q2, replies to questions 6 and 6.1.  
11  Questionnaire Q3, replies to question 7.2. See also reply of Milliken to questionnaire Q1, question 5.1.  
12  Questionnaires Q1, replies to questions 7 and 7.1; Q2, replies to questions 7 and 7.1; Q3, replies to 
questions 8 and 8.1.  
 
7 submitted that applications should serve as the main defining criterion, as different 
nonwovens belong to the same market as long as the end -use application is the 
same (f or instance, floor coverings).13 
(32) Finally, the Notifying Party’s internal documents contain reports of each Parties’ 
supply negotiations with customers. These reports show that customers determine 
the types of fabrics that they use for specific applications,  such that any scope for 
substitution between nonwoven and other types of fabrics (in particular PP or PET 
woven fabrics) should be assessed within each main application.14 
(33) Therefore, given the Parties' overlaps, the Commission will examine the 
Transaction' s effects on the markets for (i) fabrics for floor coverings applications  
and (ii) fabrics for building/roofing applications . In addition, the Commission has 
investigated whether, within each general application, nonwoven fabrics and other 
types of fabrics  used for specific industrial applications or end -uses were 
substitutable with other fabrics.  
(34) Furthermore, given the Parties' specific areas of overlap, the market investigation 
considered (i) within floor covering applications, a distinction between prima ry 
carpet backings used in construction applications and in automotive applications, 
and (ii) within building/roofing applications, a possible separate market for 
bitumen membranes.  
(B) Possible further segmentations in fabrics for floor coverings applications  
(B.i) Segmentation by industrial applications  
(35) From a demand -side perspective, the majority of respondents submitted that, within 
floor coverings applications, fabrics used for different industrial applications could 
not be substituted, such that separate market s should be distinguished according to 
the specific applications concerned. Accordingly, customers cannot substitute 
primary carpet backings for construction applications with primary carpet backings 
for automotive applications.15  
(36) Furthermore, the Commissi on notes that carpet backings for both constructions and 
automotive applications can be manufactured out of nonwoven fabrics and other 
fabrics, in particular woven fabrics.  
(37) Although the majority of customers that responded to the market investigation 
indicated that, in general, technical differences between the nonwoven and woven 
fabrics limit their substitution, […] provide evidence of effective substitution 
between nonwoven and woven fabrics .16 In the course of the market investigation, 
                                                 
13  Reply of Tarkett to questionnaire Q1, question 5.1.  
14  See below sections 5.3.2 and 5.3.3.  
15  Questionnaires Q1, replies to questions 8 and 8.1; Q2, replies to questions 7 and 7.1; Q3, replies to 
questions 8 and 8.1.  
16    See the Parties' internal documents listed below, footnotes 63 and 64. In addition, see A […] customer 
visit report dated […] 2018 indicating that “ […]". […] customer visit report dated […] 2018 indicated 
that,  “ […] […] has offers on the tab le of a WPP product from Propex […] […] is looking into it and they 
don’t want to move, but the market is crazy and OEM’s are embracing lower priced, lower quality option 
mats so […] may be forced to move. For 2018 there is no threat, maybe for 2019. This is nothing new and 
we see this at […] as well ” (Form CO, annex 7.4).  
 
8 it was confirmed t hat backings materials are chosen in view of the characteristics 
required of the end -product. In this respect, certain customers recognize that a 
degree of competition will remain between backings made out of different 
materials.17 Accordingly, for the purp ose of the competitive assessment, the 
Commission will take into account the availability of woven fabrics as alternatives 
to the Parties’ nonwoven fabrics. The assessment will also take into account the 
competitive constraints that these products can exer cise on the Parties in light of 
the scope of substitution that can be expected due to their different technical 
characteristics.18 
(38) From the supply -side, the result of market investigation was mixed, with 
respondents emphasizing both differences and similari ties between the 
technologies and processes used to make primary carpet backings for both 
automotive flooring and construction applications.19 However, commonalities in 
the production of both products appear prevalent, as the Parties use the same 
machines a nd processes to produces all types of carpet backings.20 Similarly, 
customers that responded to the market investigation indicated that the main 
difference between carpet backings for construction and automotive applications is 
their weight,21 thus further s upporting the Parties' argument that there is a degree of 
supply -side substitutability between primary carpet backings for construction and 
automotive applications, subject to specific technical adjustments.  
(39) In any event, the Commission considers that the question whether the market for 
floor covering applications should be further segmented on the basis of the 
industrial applications using specific fabrics, thus distinguishing (i) primary carpet 
backings for construction applications and (ii) primary carpe t backings for 
automotive applications,  can be left open for the purpose of this Decision as the 
Transaction does not raise serious doubts on any plausible alternative market 
definition.  
(B.ii) Segmentation by end -use 
(40) Respondents to the market investigation cons idered distinguishing separate markets 
for fabrics for floor coverings applications based on the final end -use. That 
approach would lead to defining distinct relevant markets (i) within primary carpet 
backings for construction applications, by distinguishi ng between backings for 
carpet tiles and backings for broadlooms, and (ii) within primary carpet backings 
for automotive, by distinguishing between backings for moulded carpets and 
backings for throw -in-mats.  
(41) Regarding a possible distinction in constructio n applications between primary 
backings for carpet tiles and for broadlooms, most respondents explained that 
different products are used for each end -use and thus do not appear substitutable 
from the demand -side.22 The Notifying Party explained that both Pa rties 
predominantly sell their carpet backings to manufacturers of carpet tiles as the 
                                                 
17  Minutes of conference call with Balta Group of 19 December 2019; .  
18  Questionnaire Q1, replies to questions 9 and 12.  
19  Questionnaire Q3, replies to question 9.1.  
20  Form CO, paragra phs 116 -117 and paragraph 338.  
21  Questionnaires Q1, replies to question 8.1.  
22  Questionnaires Q1, replies to questions 10 and 10.1.  
 
9 specific products they manufacture, tuft PET primary backings, are popular 
backings in the carpet tile industry.23 
(42) However, a number of broadloom carpet manufacturers als o use tuft PET primary 
carpet backings for certain broadloom carpet products24 and several manufacturers 
of carpet tiles use other materials, i.e., woven PP backings, also used for 
broadlooms to manufacture carpet tiles.25 The Notifying Party indicates that PET 
woven is thus increasingly used to manufacture carpet tiles.26 Furthermore, the 
supply -side substitution considerations set forth above at paragraph 38 necessarily 
apply to the manufacture of primary carpet backings for different end -uses within 
constru ction applications. Therefore, considering separate relevant markets for 
primary carpet backings for carpet tiles and for other carpets does not appear 
warranted.  
(43) In automotive, with respect to a possible distinction between primary backings for 
moulded c arpets and primary backings for throw -in-mats, the Notifying Party 
explained that customers procure carpet backings for moulded carpets and carpet 
backings for throw -in mats separately. However, at the same time, the Notifying 
Party does not distinguish in ternally between sales for these different products.27  
(44) The market investigation confirmed that primary backings for moulded carpets are 
technically more sophisticated, because the stress that is being applied to the tufted 
carpet for automotive during the moulding process28 requires a particular strength 
in the carpet backing.29 However, from a supply -side perspective, the Parties and 
their main competitors manufacture backings for both end -uses, if necessary with 
different specifications. Therefore, no furth er distinction of the market of primary 
carpet backings for automotive applications appears necessary in this respect.  
(C) Possible further segmentations in building/roofing applications  
(45) With respect to the market for building/roofing applications, the majorit y of 
respondents to the market investigation submitted that a separate market should be 
identified for nonwovens carriers for bitumen membranes, which require 
nonwoven fabrics that can withstand high temperature and low shrinkage 
properties to be processed  and certain mechanical properties.30 
(46) However, from a supply -side perspective, the Parties and their main competitors 
manufacture other nonwovens for building/roofing with the same machines, which 
suggests a degree of supply -side substitutability.31 
                                                 
23  Form CO, paragraph 131.  
24  Form CO, paragraph 238.  
25  Form CO, paragraph 270.  
26  Form CO, paragraph 195.  
27  Form CO, pa ragraph 276.  
28  "Moulding" is the process during which the tufted carpet is formed to the requirements of the floor of a 
passenger car by applying heat and pressure.  
29  Questionnaires Q1, replies to questions 13 and 13.1.  
30  Questionnaires Q2, replies to questions 8 and 8.1.  
31  Form CO, paragraph 338.  
 
10 (47) In any e vent, the Commission considers that it is not necessary to conclude on the 
precise product market definition, as the Transaction does not raise serious doubts 
on any plausible alternative market definition.  
4.1.2.3.  Conclusion on product market definition  
(48) In light  of the above, the Commission considers that the relevant markets for the 
purpose of assessing the present Transaction are:  
(a) Nonwoven and other fabrics for floor coverings applications, and possible 
separate markets for (i) carpet backings for construction applications and (ii) 
carpet backings for automotive applications;  
(b) Nonwoven and other fabrics for building/roofing applications, and a possible 
separate market for nonwovens carriers for bitumen membranes.  
4.1.3.  Geographic market definition  
4.1.3.1.  The Notifying Party’s  view  
(49) The Notifying Party submits that the relevant geographic market should be at least 
EEA -wide and that several factors support a broader geographic scope:  
(a) the Parties compete regularly with both EEA and extra EEA based top -tier 
global suppliers, includ ing nonwovens manufacturers active in Turkey, 
Belarus, Russian and Ukraine.32 According to the Notifying Party, supply and 
demand for nonwovens in the EEA is influenced by significant imports and 
exports,33 with extra -European players serving European custom ers, either 
directly via imports from their home countries, or via small logistics assets 
within Europe (mainly consignation warehouses). The Notifying Party 
explains that this is the case for the Parties’ main Asian competitors in the 
affected markets;  
(b) transportation costs from Asia into Europe are limited, accounting for 
approximately […]% of the value of the goods. Customs tariffs would also be 
immaterial;  
(c) while there are reportedly still price differences across geographies, prices 
increasingly tend to track each other around the globe and both Parties set 
their prices for the EEA in a way that takes into account price levels in Asia 
and the rest of the world;  
(d) the Parties themselves have production facilities in Asia and have significant 
inter-company sa les from one continent to the other.  
                                                 
32  The Notifying Party submits that the leading international association serving the nonwovens and related 
industries (EDANA) only collects and publishes data for the geographical scope of […] (Form CO, 
paragraph 149, reference to EDANA report ‘2018 Nonwoven Statistics’, submitted as Annex 1.2 to the 
Form CO).  
33  Overall, in 2018, imports of nonwovens in Europe counted for something in the range of […] (Form CO, 
paragraph 156, reference to EDANA report ‘2018 Nonwoven Statistics’, submitted as Annex 1.2 to the 
Form CO).  
 
11 4.1.3.2.  The Commission’s assessment  
(50) In a prior decision, the Commission considered that the geographic scope of the 
nonwoven fabrics market was at least EEA -wide, given the absence of barriers to 
trade. However, the Commission  left the exact geographic scope open.34 
(51) In the present case, the majority of respondents considered that the market for 
nonwoven and other fabrics and possible sub -segmentations relevant in the present 
case is worldwide, considering the presence of global suppliers and customers 
across regions.35 On the other hand, the majority of respondents still considers 
important that supplier’s production facilities be located close to their own 
production site, due to lead time, flexibility, support and logistic imper atives.36  
(52) However, logistical issues associated to distance do not appear to constitute high 
barriers to entry into the EEA for non -European suppliers. In particular, suppliers 
based in Asia confirmed that they currently and increasingly supply EEA -based 
customers, despite longer delivery times and transportation costs.37 Furthermore, 
several primary carpet backings customers have indicated sourcing almost entirely 
from Asia.38 A respondent thus indicated that logistical and lead time issues were 
easily mitig ated by Asian suppliers with EEA -based storage warehouses.39 
(53) In light of the above, the Commission considers that the market for nonwoven and 
other fabrics, as well as relevant sub -markets (fabrics for floor coverings 
applications, and possible separate mar kets for (i) carpet backings for construction 
applications and (ii) carpet backings for automotive applications; nonwovens for 
building/roofing applications, and possible separate market for nonwovens carriers 
for bitumen membranes) are at least EEA -wide. In any event, for the purpose of the 
assessment of the present Transaction, the exact geographic scope of the relevant 
markets can be left open, as the Transaction does not raise serious doubts on any 
alternative geographic scope.  
4.2. Throw -in-mats  
(54) Throw -in ma ts are products that protect the automotive flooring system of a 
passenger car and facilitate the cleaning of the interior of the car. Throw -in mats 
may be made out of a range of different materials (including rubber, PVC, and 
tufted carpets). Freudenberg,  through its subsidiary Hanns Glass, is only active in 
throw -in mats made out of tufted carpets.40  
                                                 
34 Case M.5958 – Goldman Sachs/TPG/Ontex , 30 September 2010, paragraphs 45 -46. 
35  Questionnaires Q1, replies to questions 18 and 18.1; Q2, replies to questions 11 and 11.1; Q3, replies to 
questi ons 21 and 21.1.  
36  Questionnaires Q1, replies to questions 20 and 20.1; Q2, replies to questions 12 and 12.1; Q3, replies to 
questions 23 and 23.1.  
37  Questionnaire Q4, replies to questions 5, 5.1, 6.1, 6.2, 8, 8.1, 13, 13.1, 14.1, 14.2, 16 and 16.1.  
38  Questionnaire Q1, replies to questions 23, 23.1 and 23.2.  
39  Reply of Burmatex to questionnaire Q1, question 20.1.  
40  Hanns Glass has also a limited amount of sales of intermediate material tufted roll goods carpets (about 
EUR […] million in 2019). Intermed iate material tufted roll goods carpets are made out of carpet backings 
and are typical intermediate products for which companies such as Hanns Glass only perform the tufting 
process. Hanns Glass then sells these carpets to customers that make either autom otive flooring systems or 
throw -in mats out of these carpets.  Hanns Glass only perform the tufting process as a service provider for 
its customers of this product which outsource this service to tufting companies. It is not clear whether this 
 
 
12 4.2.1.  Product market definition  
(55) The Notifying Party submits that throw -in-mats are a distinct product market.  
(56) The results of the market investigation confirm that throw -in-mats constitute a 
different product with respect to other products such as moulded carpets for car 
interiors. In particular, certain manufacturers specialize in the production of throw -
in-mats. Moreover, automotive OEMs source throw -in-mats separa tely from other 
products.41 
(57) Therefore, for the purpose of the present decision, the Commission considers that 
the relevant product market is that for the manufacturing and supply of throw -in-
mats.  
4.2.2.  Geographic market definition  
(58) The Notifying Party submits th at the geographic dimension of the market of throw -
in-mats is at least EEA -wide.  
(59) Respondents to the market investigation confirmed that, in general, car 
manufacturers source components preferably from suppliers in the same region of 
their specific producti on sites (i.e., in the EEA for production sites in the EEA).42 
(60) The Commission considers that the market for the manufacturing and supply of 
throw -in-mats is at least EEA -wide. However, for the purposes of the present 
decision, the exact geographic scope of the market can be left open, given that the 
Transaction does not raise any competition concerns under any plausible 
alternative market definition.  
5. COMPETITIVE ASSESSMEN T 
5.1. Analytical Framework  
(61) Article 2 of the Merger Regulation requires the Commission to exa mine whether 
notified concentrations are compatible with the internal market, by assessing 
whether they would significantly impede effective competition in the internal 
market or in a substantial part of it.  
(62) The Commission Guidelines on the assessment of horizontal mergers under the 
Merger Regulation (the "Horizontal Merger Guidelines") distinguish two main 
ways in which mergers between actual or potential competitors on the same 
                                                                                                                                                      
activity form  part of a distinct market or it is just a specific service part of the market for nonwovens (and 
related sub -segments). In any case, considering the limited relevance of this activity and the very marginal 
position of Freudenberg (the Notifying Party esti mates a market share of about [0 -5]% at EEA level), this 
market will not be explored further. In any case, the observations on vertical effects relating to throw -in-
mats in section 5.4 below are applicable to an hypothetical market of intermediate material  tufted roll 
goods carpets.  
41  Questionnaire Q1, replies to question 13.1; Questionnaire Q4, replies to question 14.2; Minutes of the c all 
with Betap Tufting B.V. of 22 January 2020.   
42  Questionnaire Q5, replies to questions 7.1.  
 
13 relevant market may significantly impede effective competition, namely non -
coordinated effects and coordinated effects.43 
(63) In particular, non -coordinated effects may significantly impede effective 
competition by eliminating the competitive constraint imposed by one merging 
party on the other, as a result of which the merged entity wo uld have increased 
market power without resorting to coordinated behaviour. According to recital (25) 
of the preamble of the Merger Regulation, a significant impediment to effective 
competition can result from the anticompetitive effects of a concentration  even if 
the merged entity would not have a dominant position on the market concerned. In 
this regard, the Horizontal Merger Guidelines consider not only the direct loss of 
competition between the merging firms, but also the reduction in competitive 
pressu re on non -merging firms in the same market that could be brought about by 
the merger.44 
(64) Indeed, the Horizontal Merger Guidelines list a number of factors which may 
influence whether or not significant non -coordinated effects are likely to result 
from a merg er, 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 
competitive force. Not al l of these factors need to be present for significant non -
coordinated effects to be likely. The list of factors, each of which is not necessarily 
decisive in its own right, is also not an exhaustive list.45 
(65) A merger in a concentrated market may also signifi cantly 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, ev en without entering 
into an agreement or resorting to a concerted practice within the meaning of Article 
101 TFEU. A merger may also make coordination 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.46 
(66) To assess whether a merger gives rise to horizontal coordinated effects, the 
Commission should examine, first, whether it would be possible to reach terms o f 
coordination and, second, whether the coordination would be likely to be 
sustainable.47 
(67) Moreover, in examining the possibility and sustainability of coordination, the 
Commission should specifically consider the changes that the Transaction brings 
about.48 The reduction in the number of firms in a market may in itself be a factor 
that facilitates coordination.  
                                                 
43  Guidelines on the asse ssment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings, OJ C 31, 5.2.2004 p.5.  
44  Horizontal Merger Guidelines, paragraph 25.  
45  Horizontal Merger Guidelines, paragraphs 26 -38. 
46  Horizontal Merger G uidelines, paragraph 39.  
47  Horizontal Merger Guidelines, paragraph 42.  
48  Horizontal Merger Guidelines, paragraph 42.  
 
14 (68) A transaction may also entail vertical effects. In that respect, the Commission 
Guidelines on the assessment of non -horizontal mergers under the Merge r 
Regulation (the "Non -Horizontal Merger Guidelines") distinguish between two 
main ways in which vertical mergers may significantly impede effective 
competition, namely input foreclosure and customer foreclosure.49 
(69) For a transaction to raise input foreclosu re competition concerns, the merged entity 
must have a significant degree of market power upstream.50 In assessing the 
likelihood of an anticompetitive input foreclosure strategy, the Commission has to 
examine whether (i) the merged entity would have the ab ility to substantially 
foreclose access to inputs; (ii) whether it would have the incentive to do so; and 
(iii) whether a foreclosure strategy would have a significant detrimental effect on 
competition downstream51.   
(70) For a transaction to raise customer for eclosure competition concerns, the merged 
entity must be an important customer with a significant degree of market power in 
the downstream market.52 In assessing the likelihood of an anticompetitive 
customer foreclosure strategy, the Commission has to exami ne whether (i) the 
merged entity would have the ability to foreclose access to downstream markets by 
reducing its purchases from upstream rivals; (ii) whether it would have the 
incentive to do so and (iii) whether a foreclosure strategy would have a signif icant 
detrimental effect on consumers in the downstream market.53 
5.2. Affected markets  
5.2.1.  Horizontally affected markets  
(71) The Transaction would give rise to affected markets if the relevant markets are 
defined according to their applications, both at EEA and global level. In particular, 
the Transaction would give rise to a horizontally affected market in floor coverings 
applications. Assuming a further market segmentation, the Transaction would give 
rise to horizontally affected markets in (i) primary carpet backings  for construction 
applications and (ii) primary carpet backings for automotive applications.  
(72) Furthermore, within building/roofing applications, the Transaction would give rise 
to a horizontally affected market in nonwovens carriers for bitumen membranes.  
  
                                                 
49  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control of 
concentrations between undert akings, OJ C 265, 18.10.2008 p. 6.  
50  Non-horizontal Merger Guidelines, paragraph 35.  
51  Non-horizontal Merger Guidelines, paragraph 32.  
52  Non-horizontal Merger Guidelines, paragraph 61.  
53  Non-horizontal Merger Guidelines, paragraph 59.  
 
15 Table 1 – Parties’ market shares in affected markets (2018, Value and Volume)  
 Freudenberg  Low & Bonar  Combined  
EEA  World  EEA  World  EEA  World  
Floor coverings  Value  [10-20]%  [10-20]%  [10-20]%  [10-20]%  [20-30]%  [20-30]%  
Volume  [10-20]%  [10-20]%  [10-20]% [10-20]%  [30-40]%  [20-30]%  
Primary carpet 
backings for 
construction 
applications  Value  [20-30]%  [20-30]%  [20-30]%  [10-20]%  [50-60]%  [40-50]%  
Volume  
[20-30]%  [30-40]%  [20-30]%  [10-20]%  [40-50]%  [40-50]%  
Primary carpet 
backings for 
automotive 
applicat ions Value  [40-50]%  [50-60]%  [30-40]%  [20-30]%  [70-80]%  [70-80]%  
Volume  
[40-50]%  [50-60]%  [30-40]%  [20-30]%  [70-80]%  [70-80]%  
Nonwovens carriers 
for bituminous 
membranes  Value  [10-20]%  [20-30]%  [0-5]% [0-5]% [10-20]%  [20-30]%  
Volume  [20-30]%  [20-30]%  [0-5]% [0-5]% [20-30]%  [20-30]%  
Source: Form CO  
5.2.2.  Vertically affected markets  
(73) The Transaction gives also rise to vertically affected markets in connection with 
the upstream market of primary carpet backings for automotive applications, where 
both Parties ar e active with combined market share higher than 30% (see table 1 
above), and the downstream market of throw -in-mats, where Freudenberg is active.  
5.3. Horizontal non -coordinated effects  
5.3.1.  Nonwovens and other fabrics for floor covering  
5.3.1.1.  The Notifying Party’s view  
(74) The Notifying Party submits that the Transaction would not result in any 
competition concerns, in light of its limited combined market shares.  
(75) In addition, the Notifying Party submits that post Transaction the market will 
remain competitive, because:  
(a) the Parties will compete with a number of global players which have 
equivalent products in terms of characteristics and processing technologies, 
run production facilities around the world, including Europe, and serve their 
customers from whichever plant is in their view ideally placed to serve the 
particular customer;  
(b) the European market is expected to be increasingly exposed to competitive 
pressure coming from suppliers located outside of the EEA. Certain Chinese 
and Turkish suppliers are especially active in the low -end of the market while 
 
16 the more sophisticated Japanese and South Korean players are active in the 
high-end of the market;  
(c) the Parties’ products will continue to compete with other types of nonwoven 
fabrics for floor coverings that the Parties do n ot supply and with a number of 
different woven products (made out of PP, PET or PA6)54 which are also 
used for floor coverings applications;  
(d) the downstream markets for floor covering products would remain highly 
competitive and characterized by an increasin g demand for recycled 
products, luxury vinyl tiles, and laminates made out of wood powder. These 
demand -side trends would ensure effective competition post -merger because 
new product offerings provide new possibilities to substitute floor coverings 
with ot her products that do not require a nonwoven fabric based solution.  
(76) The Notifying Party also submits that the Parties are not their respective closest 
competitors because they use different manufacturing processes and different 
polymers, which in turn resul t in their products displaying significantly different 
characteristics:  
(a) Freudenberg manufactures “mainstream” products with its standard 
spunbond55 technology, and is primarily exposed to direct competition from 
the Asian suppliers Kolon and Unitika/Tusco, which use the same technology 
and have very similar products in terms of properties, with the additional 
advantage of being significantly cheaper;  
(b) Low & Bonar employs a unique two -step production process based on its 
proprietary spinning and spunlaid techn ology. As result, its products are 
considered by customers to be superior in terms of dimensional stability and 
strength/weight ratio. For these reasons they could not easily be substituted 
by Freudenberg’s products in applications where customers believe these 
properties to be crucial.  
(77) Moreover, the Parties consider that they target different customers because of the 
materials they use in their nonwovens. Accordingly, customers who attach great 
importance to recycled materials used as raw materials for the  products they 
source, would have a preference for Freudenberg and would not regard Low & 
Bonar’s products as a suitable alternative. Conversely, only Low & Bonar has 
developed antimony -free products which some customers would consider a must in 
their prod ucts. As a result, the Notifying Party argues that the Parties’ core 
customers do not overlap.  
                                                 
54  PP stands for Polypropylene and PA6, Polyamid 6, also referred as Nylon.  
55  The spunbond or "spunlaid" process is a webformation process in which the polymer chips are melted and  
molten polymer is extruded through spinnerets - the "spinning". The continuous filaments ar e then cooled 
and deposited on to a conveyor to form a uniform web - the "laying" - and are then bonded together, 
usually thermally - the "bonding". The terms "spunlaid" and "spunbond" are regularly used in the industry 
as equivalents. The term "spunlaid" refers, however, more specifically to the webformation on the 
conveyer, while the term "spunbond" refers more generally to the semi -finished materials extracted after it 
has been "laid" and "bonded" (Freudenberg's reply to RFI 4, 2 March 2020, page 1).  
 
17 5.3.1.2.  The Commission’s assessment  
(78) The Notifying Party provided market share estimates limited to nonwovens for 
floor coverings. These estimates are reported in the fol lowing table.  
Table 2 – Market shares in nonwovens for floor coverings - 2018 
Company  EEA -wide  Worldwide  
Volume  Value  Volume  Value  
Sales 
(in mn 
sqm)  Market 
Share 
(%) Sales 
(in 
EUR 
mn) Market 
Share 
(%) Sales 
(in 
mn 
sqm)  Market 
Share 
(%) Sales 
(in 
EUR 
mn) Market 
Share 
(%) 
Freudenberg  […] [10-20]%  […] [10-20]%  […] [10-20]%  […] [10-20]%  
L&B  […] [10-20]%  […] [10-20]%  […] [10-20]%  […] [10-20]%  
Combined  […] [30-40]%  […] [20-30]%  […] [20-30]%  […] [20-30]%  
Balta  […] [5-10]%  […] [10-20]%  […] [5-10]%  […] [5-10]% 
Betap  […] [5-10]%  […] [10-20]%  […] [5-10]%  […] [5-10]%  
Condor  […] [5-10]%  […] [5-10]%  […] [0-5]% […] [5-10]%  
Autoneum  […] [0-5]% […] [5-10]%  […] [0-5]% […] [5-10]%  
Ideal  […] [0-5]% […] [5-10]%  […] [0-5]% […] [5-10]%  
Adler Pelzer  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Others  […] [40-50]%  […] [30-40]%  […] [40-50]%  […] [30-40]%  
Total Market  […] 100%  […] 100%  […] 100%  […] 100%  
 Source: Form CO  
(79) Post-Transaction, the merged entity will have a combined market share of [30 -
40]% in the EEA and [20 -30]% worldwide, in volume, and of [20 -30]% in value, 
both at EEA and worldwide level. Although the increment brought about by the 
Transaction is substantial (about [10 -20]%), the combined market share would still 
be relatively limited.  
(80) Contrary to the Notify ing Party’s view, the Parties are close competitors in 
nonwovens for floor coverings. Although they use different production processes, 
both use the same raw material (PET nonwovens) and are mainly active in the 
same product segments (constructions and aut omotive). Accordingly, the vast 
majority of respondents to the market investigation submitted that the Parties are 
close competitors and that the differences in the Parties’ production processes are 
not decisive in order to determine the substitutability o f the final products. 56 
                                                 
56  Questionnaire Q1, replies to questions 38.1 and 39.1. Minutes of Call with Betap Tufting of 22 January 
2020; Minutes of call with AGM Durmont of 17 December 2019.  
 
18 (81) However, a significant number of alternative suppliers will remain active in the 
market after the Transaction, including competitors holding important market 
shares capable of exerting a significant competitive constraint on the mer ged entity, 
both at EEA and worldwide level.  
(82) On the basis of the foregoing considerations, the Transaction does not raise serious 
doubts as to its compatibility with the internal market with respect to horizontal 
non-coordinated effects in the market of n onwovens and other fabrics for floor 
coverings.57 
(83) The Commission has further assessed the impact of the Transaction assuming a 
segmentation within products used for floor coverings, in the markets of (i) primary 
carpet backings for construction applications  and (ii) primary carpet backings for 
automotive applications.  
5.3.2.  Primary carpet backings for construction applications  
5.3.2.1.  The Notifying Party’s view  
(84) In addition to the arguments submitted with respect to the market for nonwovens 
and other fabrics for floor cove rings applications, the Notifying Party submits that 
the Transaction would not raise competition concerns in primary carpet backings 
for construction applications for additional reasons.  
(85) First, the Notifying Party argues that the Parties are not close comp etitors because 
the distinctive features of their respective products would be of particular relevance 
for carpet manufacturers for construction applications, as customers would attach 
particular value to the different dimensional strengths and the weight of the 
products, to the differences in the amount of recycled PET or in the content of 
antimony in the nonwovens. Therefore, customers would not regard the Parties’ 
respective products as valid alternatives to each other, as demonstrated by a series 
of int ernal documents and by the fact that each Party would face difficulties in 
winning business from the other Party.  
(86) Second, effective competition will continue to exist in this market, mainly from the 
Asian manufacturers Kolon and Unitika/Tusco, which prese nce in the EEA is 
established and growing.  
(87) Third, the Notifying Party submits that there is a strong demand -side substitution 
that would act as a significant constraint post -Transaction, because the Parties’ 
customers could also turn to manufacturers of co mpeting products that the Parties 
do not offer (PP woven or nonwovens, composite materials and PET woven).  
(88) Last, the Notifying Party argues that the analysis of the proposed Transaction’s 
effects on competition should take the financial difficulties of Low  & Bonar into 
account, because lack of funding would result in restricting Low & Bonar’s 
investments and marketing, thus reducing Low & Bonar’s ability to compete. As a 
result, the Notifying party argues that there is a significant risk that the competitiv e 
                                                 
57  While table 2 only contains data related to nonwovens, the Commission notes that the combi ned market 
share of the merging entity would be lower than [20 -30]% if data related to wovens would have included 
since  the merging parties are only active in nonwovens for floor coverings.  
 
19 constraint Low & Bonar can exert on Freudenberg would be substantially reduced 
absent the merger.  
5.3.2.2.  The Commission’s assessment  
(A) The Parties' position post -merger  
(89) The Parties’ market shares and those of their main competitors in primary carpet 
backings for  construction applications are reported in the following tables.  
Table 3 – Market shares in primary carpet backings for construction 
applications  – EEA  
Company  2017  2018  2019   
Volume  Value  Volume  Value  Volume  Value  
 Sale
s (in 
m 
sqm
) Mark
et 
share 
% Sales 
(in 
EUR 
m) Mar
ket 
shar
e % Sales 
(in m 
sqm)  Mar
ket 
shar
e % Sales 
(in 
EUR
m) Mark
et 
share 
% Sales 
(in m 
sqm)  Mark
et 
share 
% Sales 
(in 
EUR 
m) Mark
et 
share 
% 
Freudenber
g […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  
L&B  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  
Combined  […] [50-
60]%  […] [50-
60]%  […] [40-
50]%  […] [50-
60]%  […] [40-
50]%  […] [50-
60]%  
Kolon  […] [10-
20]%  […] [0-
5]% […] [5-
10]%  […] [5-
10]%  […] [5-
10]%  […] [5-
10]%  
Unitika/Tu
sco […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Propex - 
PET 
Woven  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Mattex - 
PET 
Woven  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Toyobo  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
DuPont  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Propex - 
PP Woven  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  
Mattex - PP 
Woven  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  
Others PP  
[…] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [10-
20]%  […] [10-
20]%  
Total 
Market  […] 100%  […] 100
% […] 100
% […] 100%  […] 100%  […] 100%  
Source: Form CO  
  
 
20 Table 4 – Mark et shares in primary carpet backings for construction 
applications - worldwide  
Compan
y 2017  2018  2019   
Volume  Value  Volume  Value  Volume  Value  
 Sales 
(in m 
sqm)  Mark
et 
share 
% Sales 
(in m 
sqm) Mar
ket 
shar
e % Sales 
(in m 
sqm)  Mar
ket 
shar
e % Sales 
(in 
EUR
m) Mark
et 
share 
% Sales 
(in m 
sqm)  Mark
et 
share 
% Sales 
(in 
EUR 
m) Mark
et 
share 
% 
Freudenb
erg […] [20-
30]%  […] [20-
30]%  […] [30-
40]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  
L&B  […] [10-
20]%  […] [20-
30]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  
Combine
d […] [40-
50]%  […] [40-
50]%  […] [40-
50]%  […] [40-
50]%  […] [40-
50]%  […] [40-
50]%  
Unitika/T
usco […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Kolon  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Propex - 
PET 
Woven  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Mattex - 
PET 
Woven  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Toyobo  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
DuPont  […] [0-5]% […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Propex - 
PP 
Woven  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  
Mattex - 
PP 
Woven  […] [10-
20]%  […] [10-
20]%  […] [20-
30]%  […] [10-
20]%  […] [20-
30]%  […] [10-
20]%  
Others PP  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  
Total 
Market  […] 100%  […] 100
% […] 100
% […] 100%  […] 100%  […] 100%  
Source: Form CO  
(90) In primary carpet backings for construction applications, the merged entity will 
hold a combined market share of approximately [40 -50]%, with an increment 
brought about by t he Transaction in the range of 15 -25%, at both EEA and 
worldwide level. T he Transaction will therefore significantly reinforce the merged 
entity’s market position.  
(91) The results of t he market investigation have confirmed that the Parties are the two 
main suppliers of primary carpet backings for construction applications in the EEA 
and among the top five at worldwide level.58 Most respondents to the market 
investigation use one of the P arties as their main supplier for production facilities 
based in the EEA.59  
(92) Furthermore, in contradiction to the Notifying Party’s claims, the majority of 
customers consider that the Parties are the closest competitors in the EEA: despite 
                                                 
58  Questionnaire Q1, replies to question 36.1.  
59  Questionnaire Q 1, replies to question 19.  
 
21 distinctive featu res, the Parties’ carpet backings are considered as substitutes, 
providing similar performance.60 
(93) As a result, the merged entity will hold high market shares and combine close 
competitors. The Commission has therefore assessed whether competitors 
remaining on the market would be able to exercise a competitive pressure so as to 
counterbalance the market position of the merged entity and prevent negative effect 
on competition arising from the Transaction.  
(B) Competitive constraints remaining post -merger  
(B.i) Suppliers  of primary carpet backings using other raw materials  
(94) Several customers indicated in the course of the market investigation that 
alternative suppliers competing with the Parties, in the EEA and worldwide, using 
technologies other than PET nonwovens, would remain present after the 
Transaction. These suppliers include Propex, Beaulieu and Mattex.61 Propex and 
Mattex in particular hold material positions in primary carpet backings for 
construction applications, offering carpet backings made of PET woven and PP 
woven.   
(95) However, as already mentioned above in the market definition section, these 
suppliers seem to exercise a more distant competitive constraint on the Parties than 
PET nonwoven suppliers. According to the results of the market investigation, 
technica l differences between PET nonwoven and primary carpet backing made of 
woven material (PP or PET) may limit the scope of their substitution.62  
(96) Nevertheless, the Parties' internal documents indicate that there is scope for 
substitution. Several internal corr espondence reporting customer visits by the 
Parties’ respective marketing personnel provide evidence that customers of primary 
backings for construction applications partly switched from the Parties to suppliers 
of non -PET nonwoven primary backings63 or con sidered the latter to constitute 
better alternatives.64 
(97) Despite a degree of substitution with non -PET nonwoven primary backings, 
demand has not primarily diverted to suppliers like Propex and Mattex. These 
competitors' market share, although material, has r emained relatively stable in the 
years 2016 -2019.65 This is because, as explained in the following section, 
customers generally indicated that Asian suppliers, which supply the same PET 
                                                 
60  Questionnaire Q1, replies to questions 38.1 and 39.1. Minutes of Call with Betap Tufting of 22 January 
2020.  
61  Questionnaire Q1 – replies to Questions to 19.1, 19.2 and 36.1, Minutes of the Call with Balta of 19 
December 2019 ’. 
62  Questionnaire Q1, replies to question 9. Minutes of Call with Betap Tufting of 22 January 2020.  
63  See, e.g., […] customer visit report to […] dated […] 2018, indicating that Mattex's products are effective 
substitutes as “ […] increased their share m ore to […] and volumes will remain the same however […] 
lost the main part  […]” (Form CO, annex 7.4) . 
64  See, e.g., […] customer visit report to […] dated […] 2017, Form CO, paragraph 134,  indicating that 
“[c]urrent best performing material (as far stitch holding) is ‘Artis Tru’ from Propex (a combination 
between woven + non -woven . […] […] expressed that it is unlikely that the new […] 'improved stitch 
holding' product […] will ever be able to meet the stitch holding performance of a product like the 'Artis  
Tru' non -woven ”). 
65  See above tables 3 -4 and Form CO, annex 7.  
 
22 nonwovens as the Parties, constitute their closest competitors at the w orldwide 
level.66 
(B.ii) Suppliers of PET nonwoven primary carpet backings  
(98) The results of the market investigation indicate that suppliers of PET nonwoven 
primary carpet backings are the Parties' closest competitors. Both worldwide and in 
the EEA, the main remaini ng suppliers of PET nonwoven primary carpet backings 
post-merger will be Unitika/Tusco and Kolon. These companies are considered by 
the majority of respondents to constitute the Parties' closest competitors.67 
(99) Unitika is a Japanese company that manufactures  and supplies all types of PET 
spunbond nonwoven products used for carpet backings for construction and 
automotive applications, other construction and agricultural materials. It also offers 
a broad range of cotton spunlace materials. Tusco is a joint vent ure between 
Unitika and Teijin Fibers Company Ltd., Thailand. Tusco uses the same 
manufacturing technology that Unitika uses and built a new manufacturing plant in 
Thailand in 2017.68  
(100)  Kolon is a South Korea -based manufacturer. It manufactures and supplies PET 
spunbond nonwovens for carpet backings for construction and automotive 
applications, in addition to PET spunbond nonwovens for filter media, geotextiles, 
building materials and fashion applications. It also offers yarns, tire cords, PET and 
Nylon films , as well as resins.69 
(101)  Relevant factors for assessing the constraints exercised by these competitors 
include, as explained in the paragraphs below, (i) the absence of barriers to 
switching, (ii) closeness of competition, (iii) the growth of Asian competitor s’ sales 
worldwide and in the EEA, (iv) the existence of available capacity and (v) the fact 
that the recent market entry by Asian suppliers does not appear to be merely 
opportunistic.  
(102)  First, Kolon and Unitika/Tusco, have achieved their current market pos ition in the 
EEA by inducing customers to switch suppliers. For carpet manufacturers, 
switching primary backings suppliers requires: (i) meeting customers’ requirements 
in terms of lead time, flexibility and logistical support (hereinafter, “logistical 
requirements”) and (ii) passing a technical qualification.  
(103)  In respect of customers’ logistical requirements, most customers that responded to 
the market investigation indicated that they value the geographic proximity of their 
supplier’s production facilitie s, as geographic proximity minimizes lead time and 
                                                 
66  Questionnaire Q1, replies to questions 38.1 and 39.1  
67  Questionnaire Q1, replies to questions 38.1 and 39.1.  
68   Freudenberg's reply to RFI 6 10 April 2020, pages 5 -6. Unitika/Tusco has b een designated as "Itochu" by 
one respondent to the market investigation (questionnaire Q1), because Unitika has used Itochu as 
distributor in Europe (Form CO, paragraph 57, footnote 19).  
69  Freudenberg's reply to RFI 6, 10 April 2020, page 7. The Notifyin g Party mentioned also Toyobo, a 
leading Japanese company offering films, resins and textiles but also PET spunbond nonwoven products 
for carpet backings for construction applications.  Toyobo has already a plant in Obernburg, Germany 
(active in films, res ins and textiles) but in the carpet backings for construction applications, Toyobo has 
thus far had a focus on the Asian and NAFTA markets.  
 
23 maximizes flexibility, and logistical support.70 Nevertheless, despite such 
preference, the majority of respondents to the market investigation also considered 
that carpet backings for construction applicat ions supplied by Asian producers 
currently constitute a credible alternative to the ones supplied by the Parties.71  
(104)  With respect to EEA -based carpet manufacturers, switching to Asian suppliers does 
not entail prohibitive costs. From the perspective of cust omers, the main 
impediments to switch to Asian suppliers relate to doubts over the security of 
supply, delivery flexibility and lead time.72 Nevertheless, as the Notifying Party 
explained and respondents to the market investigation confirmed,73 Asian supplie rs 
have been able to mitigate such issues by carrying stock within EEA -based 
warehouses and using logistical support provided by third parties in the EEA.74 In 
this regard, the Commission observes that Kolon has recently installed a warehouse 
in Europe75 “to prevent supply chain issues ”.76 As Unitika/Tusco has further 
observed, “ the size of the European market does not justify setting up a production 
capacity in Europe ”,77 whereas the market investigation has not identified any 
particular barriers to suppliers wishing to obtain warehousing capacity in the EEA . 
A third party study dated 19 February 2020  submitted by the Notifying Party 
(hereinafter, the "SuP study") thus reports the use of warehouses located in the 
EEA by Asian suppliers.78  
(105)  In addition, Asian com petitors are already present worldwide and do not appear to 
face any difficulties serving their Europe and US -based customers as carpet 
backings made out of PET nonwoven can be rolled and cost -effectively shipped in 
containers.79 
(106)  Moreover, the Notifying Par ty indicated that transportation costs are estimated to 
amount to approximately [ …]% of the value of goods and therefore remain 
limited.80 The market investigation confirmed the Parties’ assessment as customers 
having effectively switched to Asian suppliers  confirmed having been able to 
“easily” recoup transportation costs via overall savings allowed by Kolon’s and 
Unitika/Tusco’s more competitive pricing.81. 
                                                 
70  Questionnaires Q1, replies to questions 20,  20.1, 21 and 21.1; and Q4, replies to questions 8, 8.1. and 
8.1.1.  
71  Questionnaire Q1, replies to questions 42.1 and 42.1.1.  
72   Questionnaire Q1 –replies to questions 21, 21.1 and 43.1.1. It has been submitted that without a 
production localized in the EEA or at least a significant stock to compensate the delivery lead  time from 
Asia, Asian suppliers are still facing major constraint to deliver EEA (Tarkett's reply to questionnaire Q1, 
question 43.1.1, see also its reply to question 42.1).  
73  Form CO, paragraph 247. Questionnaire Q1, replies to questions 20.1 and 42.1.1 . 
74  Reply of Kolon to questionnaire Q4, question 8.1.1.  
75   Schlegel & Partner, Annex 5.4.1.n  to the Form CO, page 16..  
76  […] customer visit report dated […] 2018, to […] (Form CO, Annex 7.4).  
77  Minutes of the c all with Unitika of 30 January 2020.  
78  Schlegel und Partner study entitled "Competitor Landscape Carpet Backings", dated 19 February 2020, p. 
4, 9, 13, 15 and 16.  
79  Freudenberg's reply to RFI 6, 10 April 2020, page 12. See also Form CO, paragraph 157.  
80  Form CO, paragraph 152; RBB study entitl ed Unilateral Effects in the Market for Nonwovens dated 2 
March 2020, p. 17.  
81  Reply of Burmatex to questionnaire Q1, questions 23.3 and 23.4.  
 
24 (107)  In respect of the qualification process, using a new supplier requires customers to 
invite certain pr oducers for product qualification processes. The qualification 
process of a prospective supplier foresees certain product tests relating to the 
performance, quality and stableness of their products. Several customers have thus 
qualified Asian suppliers and  effectively switched part or almost all of their 
supplies to Unitika/Tusco and Kolon.82 Other customers expressed reservations 
concerning the quality of Asian products and indicated that they would still require 
testing before being deemed fit for their ne eds. A few EEA customers explained 
having tested and failed Asian suppliers in past years.83  
(108)  In this respect, the Commission notes that  Asian suppliers are recent entrants in the 
EEA market and, as the Notifying Party observes, it is typical for a new 
prospective supplier to initially fail to qualify in the first tests run by new 
customers, as it is often necessary to optimize the material or to offer a similar 
material to achieve qualification for certain carpet qualities. Certain adjustments to 
the tuftin g process (for instance lowering the speed of the tufting machine)84 that 
the customer considers important for the characteristics of its carpet backing can 
also lead to qualification at a later point in time, once the adjustments have been 
implemented.85 Moreover, both Unitika/Tusco and Kolon are already active with 
increasing market shares at worldwide level. Therefore, qualification requirements 
and quality considerations have not constituted insurmountable barriers to entry 
and expansion.  Moreover, as wil l be discussed below (paragraph 114), the Parties' 
internal documents indicate that, for significant EEA customers, primary carpet 
backings supplied by Asian manufacturers demonstrated their good performance 
and overcame the quality issues of their first t ests in the EEA.86  
(109)  In addition, all suppliers, regardless of the origin of the product, must obtain 
qualification in order to serve customers87. Accordingly, thorough testing is a 
necessity for both European and non -European product and therefore does not 
constitute a specific hurdle to switch from European to Asian suppliers.88 As the 
majority of the respondents have confirmed, switching to suppliers qualified 
outside of the EEA, is relatively easy.89 A customer in this regard observed that, 
“[their] qualific ation process includes significant product testing, so if they  
[suppliers] had qualified, [it is]  easy to switch ”.90 As it is evidenced further below, 
Asian suppliers are already been qualified by a series of EEA carpet manufacturers.  
(110)  In sum, despite reserv ations expressed by some respondents to the market 
investigation,91 Asian suppliers effectively compete with the Parties both 
worldwide and at the EEA level, with their product being considered a credible 
alternative source of primary carpet backing for con struction applications.92 
                                                 
82  Questionnaire Q1, replies to question 23.2.  
83  Questionnaire Q1, replies to questions 32, 32.1, 32.2.1 and 32 .2.1.2.  
84  Form CO paragraph 270.  
85  Freudenberg's reply to RFI 6, 10 April 2020, page 23.  
86  Annex 7.4 to the Form CO.  
87  Questionnaire Q1, replies to question 35.  
88  Minutes of the call with Burmatex of 10 January 2020.   
89  Questionnaire Q1, reply to qu estion 35.2.  
90  Burmatex's reply to questionnaire Q1, question 35.2.  
91  Questionnaire Q1 –replies to questions 32.1.2.2 and 42.1.  
92  Minutes of the Call with Balta, of 19 Dece mber 2019  
 
25 Furthermore, Kolon and Unitika/Tusco employ the same web -formation process as 
Freudenberg93 and are perceived by the vast majority of the respondents to the 
market investigation as the Parties' closest competitors.94 Accordingly, in the 
course of the market investigation, Asian suppliers did not indicate specific 
technical requirements preventing them from expanding in the EEA.  
(111)  Therefore, neither technical advantages nor the established position of incumbent 
firms constitute barriers  to entry and expansion on the relevant market.95  
(112)  As for the cost of switching, the Notifying Party explained that the overall cost of 
switching suppliers would amount to no more than approximately EUR 30,000 and 
take about six months,96 an estimate broadly  confirmed by the market 
investigation,97 in the course of which several respondents indicated that switching 
would be possible in less than six months or one year.98 As a result, barriers to 
switching to Asian suppliers are limited and do not entail high co sts.  
(113)  Second , the results of the market investigation indicate that Kolon and 
Unitika/Tusco are the Parties’ closest competitors. From a technical perspective, 
Asian products compete head -to-head with the Parties' products. Kolon and 
Unitika/Tusco thus use  raw materials (PET nonwovens) and production processes 
similar to those of Freudenberg. As mentioned above, a large number of 
respondents designated Kolon and Unitika/Tusco as the Parties’ closest competitors 
at worldwide level.99 Moreover, Kolon and Uniti ka/Tusco are already qualified as 
suppliers of carpet backings for construction applications by a significant number 
of EEA carpet manufacturers.100  
(114)  Both Parties’ internal documents provide further evidence of their head -to-head 
competitive interactions wit h Kolon and Unitika/Tusco. In particular, internal 
correspondence reporting customer visits provide evidence that customers of 
primary backings for construction applications effectively switched to Asian 
suppliers due to better pricing101 and/or product qual ity,102 or credibly threatened 
                                                 
93  Form CO, paragraphs 199 - 200.  
94  Questionnaire Q1, replies to ques tions 38.1 and 39.1.  
95  Horizontal Merger Guidelines, paragraph 71.  
96  Form CO, paragraph 240; RBB study, p. 4.  
97  Most customers estimated that the cost of switching would range between EUR 10,000 and 50,000. One 
respondent, however, considered that switc hing would be more costly (more than EUR 500,000). 
However, that estimate is inconsistent with both the majority view and the experience of customers that 
effectively switched to Asian suppliers (Questionnaire Q1, replies to question 29).  
98  Questionnaire Q1, replies to question 29.  
99  Questionnaire Q1, replies to questions 38.1 and 39.1.  
100  Questionnaire Q4, replies to question 7.  
101  See, e.g., […] customer visit report to […] dated […] 2019, Form CO, Annex 7.4. , indicating that “The 
reason for their decis ion [to switch to Kolon for the supply of primary backings for carpet tiles]  was due 
to the much better pricing on the primary […] backing that would save […] […] per annum. Pricing of 
the 90gr Kolon is […]% below our price ”. 
102  See, e.g., […] customer vis it report to […] dated […] 2019, Form CO, Annex 7.4.. , indicating that the 
“Supplier at […] is Kolon (100%) – 1st Quality lost again Kolon Mid of 2016 due to Quality  […] We 
submitted a new and extremely aggressive offer to […] […]  We know price level is ch anging in EU and is 
decreasing ”. […] customer visit report to […] dated […] 2018 : “In the meantime, Kolon has modified its 
product - […] is very happy about the actual quality, but also about the speed and responsiveness of the 
Korean competitor ”; […] custo mer visit report to […], dated […] 2018, Form OC, Annex 7.4, indicating 
that using Unitika/Tusco's product “Marix”, “[…] is not only bringing […] improved dim [ensional] 
 
 
26 Freudenberg and Low & Bonar to switch to Asian suppliers in order to negotiate 
lower prices.103  
(115)  The existence of head -to-head price -based competition between the Parties and 
Asian suppliers was further confirmed by the market in vestigation. Customers 
observed that Kolon's entry in the market was caused by the Parties’ pricing policy, 
indicating that “[t] he general approach of EEA suppliers –Low & Bonar and 
Freudenberg for example –, is not be proactively competitive, even when ra w 
materials are reducing and should facilitate price reduction. […] As a result, the 
environment existed for proactive, well priced alternatives to enter into the market, 
which Kolon did .”104  A large number of respondents thus indicated being willing 
to swi tch to the Asian manufacturers, in case prices were no longer deemed 
competitive.105 
(116)  Third , Asian suppliers have consistently increased their sales of primary carpet 
backings for construction applications, both at the worldwide and EEA level.  
(117)  On the worldwi de market:  
(a) Unitika/Tusco's sales in volume increase by 32% from [ …] million sqm in 
2017 to [ …] million sqm in 2019. In value, its sales increased by 45%, from 
EUR [ …] million in 2017 to EUR [ …] million in 2019;  
(b) Kolon’s expansion has been larger, with sales  in volumes having increased 
by 45%, from [ …] million sqm in 2017 to [ …] million sqm in 2019. In value, 
Kolon's sales also grew by 42%, from EUR [ …] million in 2017 to EUR [ …] 
million in 2019.106 
(118)  During the same period, the Parties' combined worldwide sales of primary carpet 
backings for construction applications decreased by [0 -5]% in volume and [0 -5]% 
in value.  
(119)  Overall, the worldwide market for primary carpet backings for construction 
applications remained stable in volume and declined by [ 5-10]% in value over the 
2017 -2019 period. The increase in Asian suppliers' sales over this period (EUR 
[…] million) was equivalent to the Parties' combined sales loss (EUR [ …] million). 
Although sales of PET woven primary carpet backings also grew (by EUR 4 
million), giv en the closer competitive relationship between PET nonwoven -based 
primary backings sold by Asian suppliers and the Parties' products, diversions of 
                                                                                                                                                      
stability, but also a cost saving in face yarn. This making a potential (re -)introducti on of […] in […] even 
more difficult".  
103  See, e.g., […] customer visit report to […] dated […] 2019, Form CO, Annex 7.4. , indicating that “Both 
Kolon and Tusco are going round telling everyone who they are supplying […] […] stated that if they are 
to keep  their market share, they have no option to buy as competitively as their own competitors […] 
Furthermore, it was intimated that if Tusco/Unitika and/or Kolon trials prove successful, both 
Freudenberg and Bonar’s business could be at threat, irrespective o f the outcome of the takeover, because 
of the significant price differential ”.  
104  Burmatex's reply to Questionnaire Q1, reply to question 23.3.  
105  Questionnaire Q1, replies to questions 22 and 22.1.  
106  See above at table 4 and Form CO, Annex 7.  
 
27 demand from the Parties' customers at the worldwide level throughout the 2017 -
2019 period likely mainly bene fitted Unitika/Tusco and Kolon.107 
(120)  Similarly, in the EEA, Kolon’s and Unitika/Tusco’s sales steadily increased on a 
year-to-year basis in the 2017 -2019 period:  
(a) Unitika/Tusco sales in volume increased by 50% from [ …] million sqm in 
2017 to [ …] million sqm in  2019. In value, the company's sales increased by 
33%, from EUR [ …] million in 2017 to EUR [ …] million in 2019;  
(b) Kolon sales also increased significantly. Its sales in volume increased by 33% 
from [ …] million sqm in 2017 to [ …] million sqm in 2019. In valu e, the 
company's sales increased by 33% from EUR [ …] million in 2016 to EUR 
[…] million in 2019.108  
(121)  During the same period, the Parties' combined sales of primary carpet backings for 
construction applications in the EEA decreased by [5 -10]% both in volume a nd in 
value. For their part, suppliers of primary carpet backings for construction 
applications manufactured with PET wovens increased slightly, while those made 
out of PP wovens decreased (in value).  
(122)  Overall, the EEA -wide market for primary carpet backin gs for construction 
applications slightly decreased in volume (less than 5%) and remained stable in 
value over the 2017 -2019 period. The increase in Asian suppliers' sales over this 
period (EUR [ …] million) approximately matched the Parties' combined loss (EUR 
[…] million). All suppliers of primary carpet backings either had stable or lost 
sales. Consequently, and given the closer competitive relationship between PET 
nonwoven -based primary backings sold by Asian suppliers and the Parties' 
products, diversio ns of demand from the Parties' customers at the EEA level 
throughout the 2017 -2019 period were to the benefit Unitika/Tusco and Kolon.  
(123)  According to the results of the market investigation, the trend towards switching to 
Asian suppliers has been fostered b y their price competitiveness.109 The Parties' 
internal documents, in particular, tend to show that the entry and subsequent 
expansion of Asian suppliers has created a downward pricing pressure on the 
Parties' sales.110 
(124)  The expansion of Asian suppliers in the EEA and in the rest of the world is further 
driven by price differences existing between Asia and other regions. For example, 
Freudenberg’s average sales prices in the EEA for primary backings for carpet tiles 
were approximately [ …]% higher than in Asia in  2019 (and [ …]% higher in 
                                                 
107  To be n oted that also Toyobo, a Japanese supplier of PET nonwovens, mentioned in footnote 64 above, 
had a limited increase in the value of its sales (in the range of EUR […] to […]).  
108  See above at table 3 and Form CO, Annex 7.  
109  Reply of Burmatex to questionn aire Q1, questions 23.3 and 23.4.  
110  See previous paragraphs 114 and 115 and related footnotes. See also, […] customer visit report to […] 
dated […] 2018,  Form CO, annex 7.4  indicating that “ The pricing pressure remains, Kolon is actively 
trying to get bac k (part of) their lost position where we now have almost 100% of their business. …” See 
also a visit report of […] to the same customer, dated […] 2019 indicating: “ We need to discuss internally, 
but I think it is better to hit the “reset button” that allo ws us to change the delivery and (excessive) 
payment condition, increase the […] price, maintain the […] price as they are already high and to keep 
one door open”  (Form CO, annex 7.4).  
 
28 2018).111 According to the Notifying Party, in general Asian suppliers tend to be 
cheaper, with prices in the region [ …]% lower than the Parties' EEA prices.112 
Overall transport costs from Asian plants to customers located outside of  Asia are 
estimated to amount to approximately [ …]% of the value of the goods.113 As a 
result, Asian suppliers will continue to have an incentive to expand their sales in 
the EEA and worldwide after the Transaction.   
(125)  Moreover, a significant number of custom ers that do not currently source primary 
carpet backings from Asian suppliers have nevertheless already qualified Asian 
suppliers.114 As a result, according to information provided by Asian competitors in 
the course of the market investigation, approximately  40% of the Parties’ combined 
top 10 customers either are already supplied or have qualified Kolon and/or 
Unitika/Tusco to supply them.115 The Parties’ top 10 customers, in 2018, represent 
approximately [ …]% of their total sales in primary carpet backings fo r construction 
applications116. Accordingly, in the event of an attempt to increase prices, a large 
number of the Parties’ customer base would be able to shift their demand to Asian 
suppliers without delay.  
(126)  Fourth , Asian suppliers have significant spare capa city that could be utilized in the 
short term to serve additional customers in the EEA and worldwide.  
(127)  The SuP study provides estimates of Unitika/Tusco's and Kolon's current 
production capacity:117  
(a) Unitika/Tusco has a PET nonwovens production capacity of 5 3,000 tons per 
year, including a recently opened production line with a capacity of 6,000 
tons.118 This approximately corresponds to a 530 million sqm yearly 
production capacity.119 That capacity is equivalent to more than half of the 
total worldwide  market fo r primary carpet backings for construction 
applications and to more than twice the size of the EEA market;  
(b) Kolon's total production capacity amounts to 22,000 tons per year,120 which 
corresponds to approximately 220 million sqm per year. That capacity is 
equivalent to 20% of the total worldwide market for primary carpet backings 
for construction applications and to the total EEA market.  
(128)  The Notifying Party submits that spare capacity can be estimated in two ways. 
First, spare capacity results from idle capaci ty (i.e., production lines not currently 
used). According to Low & Bonar's internal estimates, both Unitika/Tusco and 
                                                 
111  RBB study, page 17.  
112  Form CO, paragraph 345.  
113  In addition, custo ms tariffs amount to 4.3% in case of shipments from Taiwan to Europe, while there are 
no customs tariffs for shipments from Korea to the EU (Form CO, paragraph 152).  
114  Questionnaire Q4, replies to question 7.  
115  Elaboration on the basis of Questionnaire Q 4, replies to question 7 and Form CO.  
116  Form CO, paragraph 229.  
117 SuP Report, Schlegel & Partner, Annex 5.4.1.n ), to the Form CO,  page  15. 
118 https://www nonwovens -industry.com/top -40/unitika/2018/  
119  The sqm capacity is calculated based on the weight of a typical primary carpet backing for construction 
applications manufactured out of PET nonwoven of 100g per sq.  
120 SuP Report, Schlegel & Partner, Annex 5.4.1.n ), to the Form CO,  page   16. 
 
29 Kolon each have [ …]% idle capacity as of July 2019.121 Second, the Notifying 
Party submits that producers that do not have idle capacity, ne vertheless have de 
facto  spare capacity, resulting from the possibility to shift production between 
nonwovens for different applications taking into account profit margins that can be 
realized by selling the different products122.  
(129)  The level of idle capacity  currently held by Asian suppliers, as estimated by the 
Parties, amounts for more than [ …]% of the Parties' combined worldwide sales of 
primary backings for construction applications.  
(130)  With respect to the EEA, Kolon and Unitika/Tusco confirmed having spare  
capacity and being able to serve additional demand should customers wish to 
switch suppliers in the event of a price increase. Kolon and Unitika provided 
estimates of the time and cost required for increasing their supplies up to certain 
volume amounts in  the EEA.123 One of these suppliers thus indicated being able to 
use spare capacity without any substantial investments up to [ …].124 The other 
Asian supplier confirmed currently having spare capacity, in amounts up to [ …].125 
These estimates therefore provide e vidence that Asian competitors would be able to 
achieve a short term increase in production and supplies in amounts exceeding the 
Parties’ pre -merger sales levels to EEA customers.  
(131)  In this respect, the Commission is unlikely to find that the merger will c reate or 
strengthen a dominant position or otherwise significantly impede effective 
competition when rival firms have available capacity and find it profitable to 
expand output sufficiently.126 Given the existence of spare capacity, evidence of 
Kolon's and U nitika/Tusco's aggressive pricing and expansion in the EEA and the 
rest of the world over the past 3 years, it is likely that these suppliers would have 
the incentive to maintain their present strategy by reacting aggressively in the event 
of a post -merger  price increase. This appears all the more likely since significant 
price differences exist between the EEA and Asia. In particular, the Notifying 
Party's own average sales prices in the EEA are [ …] higher than in Asia.127 
Accordingly, given the recent growt h of Asian suppliers outside of Asia, further 
price increases would likely further support the profitability of exporting products.  
(132)  For Kolon and Unitika /Tusco, the production process, equipment and necessary 
inputs remain overall the same for the differe nt applications. Apart from 
investment necessary to handle and transport into the EEA or in other regions in 
the world – that are not substantial as explained above (paragraphs 106 and 124) – 
no specific technical barriers would impede Kolon and Unitika/Tu sco from 
                                                 
121  RBB Study, page 14. Freudenberg’s reply to RFI 6, 10 April 2020, page 9.  
122  RBB study, pages 14 -15. 
123  Unitika’s e -mail of 17 February 2020; Kolon’s submission of 28 February 2020; Questionnaire Q4, replies 
to questions 9 and 9.1.  
124  Questionnaire Q 4, replies to questions 9 and 9.1.  
125  […] e-mail of 17 February 2020.  
126  Horizontal Merger Guidelines, paragraph 33.  
127  Freudenberg provided the average sales price for its primary carpet backings for carpet tiles, which 
represent the vast majority of it s sales of primary carpet backings for construction applications, showing 
EEA average prices […]% higher than in Asia in 2018 and […]% higher in 2019 (RBB study, page 17).  
 
30 increasing their production if market opportunities arose due to a post -merger price 
increase.128 
(133)  Fifth , the expansion of Asian suppliers does not appear to be the result of an 
opportunistic strategy, whereby their supplies to the EEA or to other re gions are a 
mere function of price fluctuations and demand conditions prevailing in their 
domestic markets. Demand for primary carpet backings for construction 
applications in Asia is significant and has not decreased over the past three years 
and is not e xpected to decrease in the foreseeable future.129 In the EEA, the entry 
and growth of Asian suppliers results from a long term strategy. This is further 
evidenced by Kolon's investment in warehousing capacity in Europe.130 For its part, 
Unitika/Tusco stated th at the size of the European market currently would not 
justify setting up a production capacity in Europe but that opening a warehouse in 
Europe would not entai l significant costs .131 
(134)  Finally, the expansion of Asian suppliers can be facilitated post -Transact ion by the 
fact that customers in this sector are relatively concentrated, with major customers 
enjoying a degree of buyer power, as they individually represent a significant 
portion of the Parties' sales. In the EEA, Freudenberg's top 10 customers in 2018  by 
volume in construction applications accounted for […]% of its sales in value, while 
Low & Bonar's accounted for [ …]%.132 The vast majority of those customers 
already employ a multisourcing strategy and therefore generally maintains 
commercial relationshi ps and qualifies more than one supplier.133 In that respect, 
customers often have simultaneous agreements with multiple suppliers which 
grants them the freedom and flexibility to place orders with whichever supplier 
offers the best terms, at a particular poi nt in time and for their desired quantities.134 
The effective exercise of buyer power by certain customers is thus reflected in the 
Parties' internal documents reporting on the status of negotiations and showing that 
customers routinely rely on prices offere d from competitors to negotiate better 
prices from their current suppliers.135 
                                                 
128  Case M.9239, Evonik /Peroxychem , 4 June 2019, paragraph 74.  
129  Questionnaire Q4,  replies to questions 10 and 11.  
130  Annex 7.4 to the Form CO, […]’s visit to […], page 51 and […] customer’s visit to […], page 53.   
131  Minutes of the c all with Unitika of 30 January 2020.  
132  Form CO, paragraph 229.  With specific reference to carpet tile s, in 2019 Freudenberg's three largest 
customers accounted for […]% of its total sales in this sub -segment and for Low & the three largest 
customers account for […]% of its total sales  (RBB study, page 21).  
133  Questionnaire Q1, replies to questions 33 and  33.1.  
134  Form CO, paragraph 367.  
135  See e.g., A […] customer visit report to […], dated […] 2018, indicating that; “.. they switched to Kolon 
due to better pricing . . Pricing of the 90gr Kolon is […]% below our price resulting in Euro …] per m2 .. 
[…] said  that they would keep us as second supplier … We need to discuss internally, but I think it is 
better to hit the “reset button” that allows us to change the delivery and (excessive) payment condition, 
increase the […] price, maintain the […] price as they are already high and to keep one door open ”; a 
[…] customer visit report to […] dated […] 2019 indicating that “ Supplier at […] is Kolon (100%)  … 2nd 
one lost due in 2018 due to price .. We submitted a new […] offer to […].. Feedback to our offer: 1. 
Havin g a separate look at the sales prices, the […] price of the quality […] is more interesting compared 
to Kolon. 2. For […], the price of Kolon is more attractive . ..”,  A customer visit report of […] to […], 
dated […] 2018, indicates the pressure exercised “Feedback customer : … Could use Kolon in 120gsm 
instead of our 110gsm and would nevertheless save money and will have one SKU less The price 
difference with Kolon is […] ”. Telling is also another […] customer visit to […]“ […] lost appr. 80% of 
the business  against Kolon due to pricing (see below)  … Current price situation (net) 100gsm: […] 
 
 
31 (135)  As a result, Asian suppliers would be able to continue to expand significantly by 
gaining only a limited number of new customers. On the other hand, for the same 
reason, major cus tomers will also retain a significant degree of bargaining power in 
their negotiation with the merged entity, as they would retain the ability to qualify 
other alternative suppliers.  
(136)  In light of the above, the Commission considers that, post -Transaction, t he 
presence of Asian suppliers –Kolon and Unitika/Tusco136 – will exert a competitive 
constraint sufficient to eliminate the incentives for the merged entity to raise prices 
as a result of the elimination of competition between the Parties. The results of th e 
market investigation show that, before the Transaction, Asian suppliers already 
exercise a downward pricing pressure on the Parties’ sales. As a result of 
significant spare capacity, Asian suppliers will be able to structurally and 
continuously disciplin e EEA -based suppliers. That ability is further supported by 
the fact that Kolon and Unitika/Tusco are already qualified to supply a significant 
number of large customers, also EEA -based. Accordingly, the pricing pressure 
exercised by Asian suppliers in cur rent market conditions is likely to be maintained 
or increase rapidly following the Transaction, at both worldwide and EEA level.   
(137)  On the basis of the foregoing considerations, the Commission considers that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with respect to horizontal non -coordinated effects in the market of primary 
carpet backings for constructions applications.  
5.3.3.  Primary carpet backings for automotive applications  
5.3.3.1.  The Notifying Party’s view  
(138)  In addi tion to all the arguments submitted with respect to the market for 
nonwovens for floor coverings applications, the Notifying Party submits that the 
Transaction will not have negative effects on competition in the market of carpet 
backings for automotive ap plications, for several reasons.  
(139)  First, the Notifying Party argues that the Parties are not their respective closest 
competitors. It argues that differences in the dimensional strength and performance 
during the moulding process of the Parties’ respective tuft PET nonwoven carpet 
backings are of crucial importance for their customers.  
(140)  Second, the Notifying Party submits that effective competition will continue to 
exist after the Transaction, mainly from Kolon and Unitika/Tusco, which are 
already active and  are growing their sales to customers in the EEA. 137 
                                                                                                                                                      
EUR/100m² ([…]) vs. […] EUR/100m² (KOLON)  -> appr. […]% difference , 120gsm: […] EUR/100m² 
([…]) vs. […] EUR/100m² (KOLON)  -> appr. […]% difference .” ( Form CO, annex 7.4)  
136  As mentioned above at footnote 69, Toyobo is another relevant Asian supplier in this sector.  According to 
the Parties, there are at least three Chinese companies active in similar PET spunmelt nonwovens used as 
carpet backings for construction and aut omotive applications which could enter the European market in 
short notice: Jinan Haoxin (China), Yaolong Nonwovens (China) and HuaHao Nonwovens (China) (Form 
CO, paragraph 395).  
137  Schlegel & Partner study “ Competitor Landscape Carpet Backings In molded c arpets and throw -in-mats 
for light vehicles ” of 19 February 2020, submitted as Annex 5.4.1.n, to the Form Co.  
 
32 (141)  Third, the Notifying Party explains that the Parties’ customers manufacture both 
moulded carpets (for which they need a primary carpet backing) and needle -
punched carpets (which do not require a primary c arpet backing). The Notifying 
party argue that, because automotive OEMs are free to switch from one solution to 
the other, such switching behaviour would, in turn, influence the Parties' 
customers’ demand. Accordingly, suppliers of primary carpet backings,  which are 
only used to manufacture tufted carpets, would be constrained from increasing 
prices as doing so would lead to a diversion of demand by end -customers 
(automotive OEMs) in favour of needle -punch carpets.  
5.3.3.2.  The Commission’s assessment  
(A) The Parties' p osition post -merger  
(142)  The Parties’ market shares and those of their main competitors in market for the 
production and supply of primary carpet backings for automotive applications are 
reported in the following tables.  
Table 5 – Market shares in primary carpe t backings for automotive 
applications – EEA  
Company  2017  2018  2019  
Volume  Value  Volume  Value  Volume  Value  
Sales 
(in m 
sqm)  Mar
ket 
share 
% Sales 
(in 
EUR 
m) Market 
share %  Sale
s (in 
m 
sqm
) Market 
share 
% Sales 
(in 
EUR 
m) Mark
et 
share 
% Sales 
(in m 
sqm)  Mark
et 
share 
% Sales 
(in 
EUR 
m) Market 
share 
% 
Freudenbe
rg […] [40-
50]%  […] [50-
60]%  […] [40-
50]%  […] [40-
50]%  […] [40-
50]%  […] [40-
50]%  
L&B  […] [30-
40]%  […] [30-
40]%  […] [30-
40]%  […] [30-
40]%  […] [20-
30]%  […] [20-
30]%  
Combine
d […] [70-
80]%  […] [80-
90]% […] [70-
80]%  […] [70-
80]%  […] [70-
80]%  […] [70-
80]%  
Unitika/Tu
sco […] [0-
5]% […] 
[0-5]% […] 
[0-5]% […] [0-
5]% […] [5-
10]%  […] 
[5-10]%  
Kolon  […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-
5]% […] [5-
10]%  […] [5-10]%  
Mattex - 
PET 
Woven  […] 
[0-
5]% […] 
[0-5]% […] 
[0-5]% […] 
[0-
5]% […] 
[0-
5]% […] 
[0-5]% 
Propex - 
PP Woven  […] [5-
10]%  […] 
[5-10]%  […] 
[5-10]%  […] [5-
10]%  […] [5-
10]%  […] 
[5-10]%  
Mattex - 
PP Woven  […] [0-
5]% […] 
[0-5]% […] 
[5-10]%  […] [0-
5]% […] [5-
10]%  […] 
[5-10]%  
Total 
Market  […] 100
% […] 100%  […] 100%  […] 100%  […] 100%  […] 100%  
Source: Form CO  
  
 
33 Table 6 – Market shares in primary carpet backings for automotive 
applications  – Worldwide  
Source: Form CO  
(143)  Post-Transaction, the merged entity will hold a combined market share superior to 
[70-80]%, with an increment brought about by the Trans action in the range of [20 -
30]%, at both EEA and worldwide level. Therefore, the Transaction will 
significantly reinforce the merged entity’s market position.  
(144)  The results of the market investigation have confirmed that the Parties are the two 
main supplier s of primary carpet backings for automotive applications in the 
EEA.138 The majority of the respondents indicated one of the Parties as their main 
supplier in the EEA.139  
(145)  Furthermore, contrary to the Notifying Party’s claims, the majority of the Parties’ 
customers consider them to be the closest competitors in the EEA.140 Despite 
distinctive features, the Parties’ carpet backings are considered as substitutes, 
providing similar performance.141  
                                                 
138  Questionnaire Q1, replies to question 36.2.  
139  Questionnaire Q1, replies to question 19.  
140  Questionnaire Q1, replies to questions 38.2 and 39. 2. 
141  Questionnaire Q1, replies to questions 38.2 and 39.2. Minutes of Call with Betap Tufting of 22 January 
2020; Minutes of call with AGM Durmont of 17 December 2019.  Company  2017  2018  2019 (Expected)  
Volume  Value  Volume  Value  Volume  Value  
Sales 
(in m 
sqm)  Mar
ket 
share 
% Sales  
(in 
EUR 
m) Mar
ket 
shar
e % Sales 
(in m 
sqm)  Marke
t share 
% Sales 
(in 
EUR 
m) Market 
share 
% Sales 
(in m 
sqm)  Marke
t share 
% Sales 
(in 
EUR 
m) Market 
share %  
Freudenberg  […] [50-
60]%  […] [50-
60]%  […] [50-
60]%  […] [50-
60]%  […] [50-
60]%  […] [50-60]%  
L&B  […] [10-
20]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [10-
20]%  […] [10-20]%  
Combined  […] [70-
80]%  […] [70-
80]
% […] [70-
80]%  […] [70-
80]%  […] [70-
80]%  […] 
[70-80]%  
Unitika/Tusco  […] [5-
10]%  […] [5-
10]%  […] [5-
10]%  […] [5-
10]%  […] [5-
10]%  […] [5-10]%  
Kolon  […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Mattex - PET 
Woven  […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Toyobo  […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
DuPont  […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Propex - PP 
Woven  […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Mattex - PP 
Woven  […] [0-
5]% […] [0-
5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Others PP  […] [0-
5]% […] [0-
5]% […] [5-
10]%  […] [0-5]% […] [5-
10]%  […] [5-10]%  
Total Market  […] 100
% […] 100
% […] 100%  […] 100%  […] 100%  […] 100%  
 
34 (146)  As a result, the merged entity will hold high market shares and combin e close 
competitors. The Commission has therefore assessed whether competitors 
remaining on the market would be able to exercise a competitive pressure so as to 
counterbalance the market position of the merged entity and prevent negative effect 
on competit ion arising from the Transaction.  
(B) Competitive constraints remaining post -merger  
(B.i) Suppliers of primary carpet backings using other raw materials  
(147)  The results of the market investigation have indicated that alternative suppliers 
competing with the Pa rties, in the EEA and worldwide, using technologies other 
than PET nonwovens, would remain present after the Transaction. These suppliers 
include Propex and Mattex. 142 
(148)  However, as already mentioned above in the market definition section, these 
suppliers exe rcise a more distant competitive constraint on the Parties than PET 
nonwoven suppliers. The results of market investigation indicated that technical 
differences between PET nonwoven and a primary carpet backing made of woven 
material (PP or PET) may limit the scope of their substitution.143  
(149)  Nevertheless, Parties' internal documents indicate that there is scope for 
substitution. Several internal correspondence reporting customer visits by the 
Parties’ respective marketing personnel provide evidence that custo mers of primary 
carpet backings for automotive applications switched from the Parties to suppliers 
of non -PET nonwoven primary backing or considered the latter to constitute better 
alternative.144  
(150)  These competitors’ market shares however, remain limited (se e tables 5 and 6). 
This is because as explained above, Asian suppliers, which supply the same PET 
nonwovens as the Parties, constitute their closest competitors at the worldwide 
level.145 
(151)  As concerns the impact of downstream substitution by automotive OEMs o f 
needle -punched carpets for tufted moulded carpets on the demand for tuft PET 
carpet backings, the result of the market investigation shows that tufted carpets, for 
which a primary carpet backing is required, are usually used for high -end car 
models, wher eas needle -punched nonwovens are used for lower -end cars.146 
Although some examples of substitution of tufted moulded by needle -punch 
carpets in high -end cars exist,147 the scope of such substitution tends to remain 
                                                 
142  Annex Questionnaire Q1, replies to questions 24.2, 36.2, Customer visit reports (For m CO, annex 7.4).  
143  Questionnaire Q1, replies to question 11.2.1. and 12.  
144  A […] customer visit report dated […] 2018 indicated that “ […]”.  […] customer visit report dated […] 
2018 indicated that,  “ […][…] has offers on the table of a WPP product from P ropex […][…] is looking 
into it and they don’t want to move, but the market is […] and OEM’s are embracing lower priced, lower 
quality option mats so […] may be forced to move. For 2018 there is no threat, maybe for 2019. This is 
nothing new and we see thi s at […] as well ” (Form CO, annex 7.4).  
145  Questionnaire Q1, replies to questions 38.2 and 39.2  
146  Questionnaires Q1, replies to questions 14 and 14.1; and Q4, replies to questions 4, 4.1 and 5.  
147  Questionnaires Q1, replies to questions 16 and 16.1. See e.g. a […] customer visit reports to […], dated 
[…] 2018 and […] 2019  indicating that the Parties’ product is affected by needle -punched technology: “ -
tuft business is decreasing in favor of needle -punched carpets –main affected product ->  […];  
 
 
35 limited as OEMs appear to prefer tufted moul ded carpets for high -end cars. 
However, given the low rate of response to the market investigation in this 
respect,148 the Commission cannot reach a conclusive view for the purpose of the 
present decision.  
 (B.ii) Suppliers of PET nonwoven primary backings  
(152)  As already discussed in previous paragraph 150, the market investigation results 
indicate that suppliers of PET nonwoven primary carpet backings are the Parties' 
closest competitors. Both worldwide and in the EEA, the remaining suppliers of 
PET nonwoven pri mary carpet backings post -merger will be Unitika/Tusco and 
Kolon. These companies are considered by the majority of respondents to 
constitute the Parties' closest competitors.  
(153)  Relevant factors for assessing the constraints exercised by these competitors 
include (i) the absence of barriers to switching, (ii) closeness of competition, (iii) 
the growth of Asian competitors’ sales worldwide and in the EEA, (iv) the 
existence of available capacity, (v) the fact that recent market entry by Asian 
suppliers does no t appear to be merely opportunistic and (vi) the fact that 
customers in this sector are relatively concentrated.  
(154)  First, as explained above in relation to primary carpet backings for construction 
applications, customers can switch to new suppliers if the la tter can (i) meet 
customers’ requirements in terms of lead time, flexibility and logistical support 
(hereinafter, “logistical requirements”) and (ii) pass a technical qualification. In 
addition to qualification by their direct customers, primary backing su ppliers must 
also be qualified by automotive OEMs.  
(155)  As concerns logistical requirements, the market investigation provided mixed 
results, as respondents did not provide consistent views on the importance of the 
proximity of suppliers’ production facilities.  Other factors cited by customers as 
relevant for the selection of suppliers include product quality and pricing.149 
However, on balance, most respondents confirmed that Asian producers are 
credible suppliers of carpet backings for automotive applications, d espite additional 
lead time, logistical issues and additional costs.150 
(156)  With respect to EEA -based manufacturers, switching to Asian suppliers does not 
entail high costs. As indicated above in relation to primary carpet backings for 
construction applications (Section 5.3.2.2), Asian suppliers have effectively 
mitigated flexibility and lead time issues by carrying stock in EEA -based 
warehouses. Furthermore, transportation costs are limited and have been 
outweighed by the economic advantage of sourcing primary b ackings from Asian 
suppliers offering competitive pricing.151 Accordingly, most respondents to the 
                                                                                                                                                      
“[c]urrently very difficult market situation in automotive in general,  new models are getting specified with 
needle punch -carpets in the trunk, side -trims + seat -backs due to price reasons - running models (e.g. 
[…]) are being changed from tuft to needle punch ”. ( Customer visit report, Freudenberg’s reply to RFI 1 
of 13 December 2019).  
148  Only 2 OEMs replied in the substance to the questionnaire addressed to car OEMs (Questionnaire Q5).  
149  Questionnaire Q1, replies to questions 25, 25.1 and 28.  
150  Questionnaire Q1 , replies to questions 42.2 and 42.2.1.  
151  Questionnaires Q1, replies to questions 26.2 and 26.2.1.  
 
36 market investigation have submitted that they would consider switching to non -
EEA suppliers in the event of an attempt by the merged entity to increase prices.152  
(157)  As concerns the qualification process, as in primary backings for construction 
applications, using a new supplier requires customers to test their product 
performance. In addition to testing, because automotive applications customers are 
usually tier -1 suppliers of automotive OEMs, they require the approval of their own 
customers if they wish to add or change suppliers for manufacturing their own 
products. Several customers have thus qualified Asian suppliers and effectively 
switched supplies to Unitika/ Tusco and Kolon.  
(158)  According to information submitted by the Notifying Party, Asian manufacturers 
supply in Asia several automotive OEMs for the manufacture of carpets for car 
models that are also present in Europe: Unitika/Tusco supplies carpet backings fo r 
various Mercedes, GM, Jaguar Land Rover, Lexus, Toyota and Nissan models, 
while Kolon supplies carpet backings for moulded carpets to high -end Ford 
models. It thus appears that the main Asian manufacturers – in particular Kolon 
and Unitika/Tusco – are ab le to supply suitable alternatives to the Parties’ 
products.153 Therefore, no technical or quality -related reasons preclude considering 
Asian primary carpet backings from being suitable for similar models 
manufactured in the EEA or elsewhere in the world.  
(159)  Barriers to switching to Asian suppliers therefore appear limited and do not entail 
high costs. The Notifying Party explained that the overall cost of switching 
suppliers would amount to no more than approximately EUR 30,000 and take about 
six months.154 Half of the respondents to the market investigation confirmed that 
switching would be possible within six months to one year, with limited 
investments. The other half indicated that more than one year would be 
necessary.155 On balance, past examples of effective  changes of suppliers in favour 
of Asian competitors show that such switching is possible, within a timeframe and 
for a cost that would not constitute a barrier to switching.  
(160)  Second , respondents to the market investigation unanimously designated Kolon as 
the Parties’ closest competitors at the worldwide level.156 The two main Asian 
competitors, Kolon and Unitika/Tusco, use raw material (PET nonwovens) and 
production processes similar to those of Freudenberg. Moreover, Kolon and 
Unitika/Tusco are already quali fied as suppliers of carpet backings for automotive 
applications by a significant number of EEA carpet manufacturers.157 
(161)  The Parties’ internal documents provide further evidence of direct competitive 
interactions with Kolon and Unitika/Tusco. In particular, internal correspondence 
reporting customer visits by the Parties’ respective marketing personnel provide 
                                                 
152  Questionnaires Q1, replies to questions 26.2 and 26.2.1.  
153  Form CO, paragraph 288; Schlegel & Partner study, pages 15 -16; RBB study, p. 12. Minutes of call with 
Betap Tufting, of 22 January 2020, where it is stated that Unitika/Tusco, “ might be a valid alternative that 
car OEMs could approve because the quality of their products, is close to the quality of the Parties’ 
products” . 
154  Form CO, paragraph 24 0; RBB study, p. 4.  
155  Questionnaire Q1, replies to question 30.  
156  Questionnaire Q1, replies to questions 38.2 and 39.2.  
157  Questionnaire Q4, replies to question 15.  
 
37 evidence that Asian suppliers exercise a pricing pressure in throw -in mats,158 
overcoming logistical issues,159 and lead customers to divert demand away fr om 
the Parties.160 Similarly, Freudenberg’s internal documents provide evidence of 
recent head -to-head competition with Unitika/Tusco in the supply of tuft PET 
primary carpet backings for moulded carpets to [ …], a moulded carpet supplier for 
[…]. According t o Freudenberg’s internal documents, [ …].161  
(162)  Third , Asian suppliers have consistently increased their sales of primary carpet 
backings for automotive applications, both at the worldwide and EEA level.  
(163)  On the worldwide market:  
(a) Unitika/Tusco sales in volume i ncreased by 8% from [ …] million sqm in 
2017 to [ …] million in 2019. In value, they increased slightly, from EUR 
[…] million to EUR [ …] million over the same period of time;  
(b) Kolon's expansion has been much larger, with sales in volume more almost 
tripling from [ …] million sqm in 2017 to [ …] million sqm in 2019. In value, 
Kolon's sales also grew very significantly, from EUR [ …] million in 2017 to 
EUR [ …] million in 2019.  
(164)  During the same period, the Parties' combined worldwide sales of primary carpet 
backing s for automotive applications [ …] in volume and declined by about [ …]% 
in value.  
                                                 
158  See, e.g., […] customer visit report to […] dated […] 2018, indicating that “[…] […] in creased their share 
more to Kolon and Mattex, our volumes will remain the same however […] lost the main part. Only a 
small price increase will be possible. […] Competition: Current pricing of Kolon is for 100gr Euro […] 
per m2, added with small surcharge for the products that come from Germany (1 container safety stock of 
each product), as they installed a warehousing facility to prevent supply chain issues. […] 100gr is net 
Euro […]. […] Our […] will be transferred to Kolon due to the much better pricing ”; […] customer visit 
report to […] dated […] 2018, indicating that, although at that stage there were still doubts about quality 
and logistic, mainly due to limited knowledge of Kolon’s and Unitika’s offers, “ the prices offered by them 
cannot be overlooked ”; […] customer visit report to […] dated […] 2019, indicating that “ Kolon offered 
80gr primary for Euro […] per m2 to […], and this explains the reason that […] is looking for general 
cost price reduction in the […]. Kolon has the stocks at […] transport company, […] which is very 
convenient and difficult to neglect. […] Price mentioned of the 80gr of […]ct is a bit lower than realistic 
(my view) as in the past […] used the 90gr at Euro […] (included commission of Itochu) […] However 
this is used as refere nce and put pressure on us to prevent a reason for […] to start qualification as an 
alternative to the […] 80 which could save […] Euro […] per m2 (Euro […]) and also at […] a 
significant amount. […] On the other hand, when we would allow an entrance of Ko lon, we will create a 
problem for the coming yrs”.  (Form CO, annex 7.4).  
159  See, e.g., […] customer report to […] dated […] 2018 (Form CO, annex 7.4).  
160  See, e.g., […] customer visit report to […] dated […], 2018, indicating that, in throw -in mats, “ […] 
business is appr.  […] spread between tiles and broadloom) […] potential for […] – in 2017 we delivered 
appr. […]% of the entire business with appr.  […] m2 –[…] lost appr. […]% of the business against Kolon 
due to pricing […] ”. (Form CO, annex 7.4).  
161  See [ …]’s internal email correspondence dated […] 2019, in Form CO, paragraph 292, indicating that 
“Today our sales manager […] visited […] and got the following news: (1) They said the price gap 
between […] and Tusco is still big, so […] will accelerate the qu alification progress with Tusco material 
on […]. (2) […] think […] has no problem to adopt Tusco material on for molding. […] If Tusco can be 
qualified, […] consider to nominate Tusco as the only one supplier for […] next year for both […]. […] 
Yes, our bu siness loss in […] will spread out to […]. It seems […] intend to nominate a sole supplier on 
[…] platform globally and Tusco is in the list of for consideration. ” (Form CO, annex 7.4). Schlegel & 
Partner study reports that [CUSTOMER], Freudenberg’s second  largest customer, as per the Form CO, is 
currently testing a moulded carpet from an Asian supplier (page 4).  
 
38 (165)  Overall, the worldwide market for primary carpet backings for automotive 
remained stable in volume and declined by 11% in value. In this context, 
Unitika/Tusco and Kolon's gr owth had no equivalent on the market. Although the 
amount of growth attributed to Asian suppliers (EUR [ …] million) represented 
about [10 -30]% of the Parties' combined loss (EUR [ …] million), it is likely that 
part of that loss reflected the overall declin e in the total market value and therefore 
was not absorbed by other competitors. Accordingly, and given the close 
competitive relationship between primary carpet backings supplied by the Parties 
and Asian manufacturers, it is likely that any diversion from  the Parties' customer 
base mainly benefited Unitika/Tusco and Kolon.  
(166)  Similarly, in the EEA Kolon’s and Unitika/Tusco’s sales steadily increased on a 
year-to-year basis in the 2017 -2019 period: in the market of primary carpet 
backings for automotive applic ations, neither Unitika/Tusco nor Kolon had any 
sales in 2016. Unitika/Tusco and Kolon entered the EEA market in 2017 and their 
respective sales increased by 300% in volume from [ …] million sqm in 2017 to 
[…] million sqm in 2019. In value, their respective  sales increased by more than 
250% from [ …] million EUR in 2017 to EUR [ …] million [each] in 2019.  
(167)  During the same period the Parties' combined EEA sales of primary carpet 
backings for automotive applications decreased by more than [10 -20]% in both 
volume and value.  
(168)  Overall, the EEA market for primary carpet backings for automotive applications 
declined both in volume and in value. No supplier present on the market other than 
Unitika/Tusco and Kolon had any growth. Furthermore, as the amount of additional 
sales captured by Kolon and Unitika/Tusco (EUR [ …] million) matched a large 
portion of the Parties' combined loss (EUR [ …] million), diversions of demand 
from the Parties' customers at the EEA level throughout the 2017 -2019 period were 
to the benefit Uniti ka/Tusco and Kolon.  
(169)  With specific respect to the EEA, the growth of Asian suppliers since 2017 has 
focused on throw -in mats, which constitute the entry point for new suppliers in 
primary carpet backings for automotive applications according to the SuP stu dy.162 
Nevertheless, Kolon and Unitika/Tusco’s expansion in moulded carpets is likely 
for the following reasons. First, outside of the EEA, Kolon and Unitika/Tusco 
represented in 2019 approximately [30 -40]% of the narrow segment for primary 
backings for moul ded carpets (Unitika/Tusco: [20 -30]%, Kolon: [5 -10]%). Their 
position outside of the EEA has increased slightly while the Parties’ combined 
market share has decreased (by approximately [5 -10] percentage points) during the 
2016 -2019 period.163 Second, Unitika /Tusco’s and Kolon’s competitive position 
outside of the EEA results from primary backings sales to automotive OEMs for 
car models also manufactured and sold in the EEA, currently using moulded 
carpets using the Parties’ primary backings.164 
(170)  In the EEA, a si gnificant number of customers have already qualified 
Unitika/Tusco and Kolon as suppliers of primary carpet backings for automotive 
                                                 
162 S&P study, Annex 5.4.1.n, to the Form Co, page 6.  
163  RBB study entitled Unilateral Effects in the Market for Nonwovens dated 2 March 2020, p. 11 -12, and 
Form CO, annex 7.  
164  See above paragraph 158 and relevant reference.  
 
39 applications.165 Information provided by Unitika/Tusco and Kolon in response to 
the market investigation shows that approximat ely one -third of the Parties’ 
combined top 10 customers have qualified Kolon and/or Unitika/Tusco. The 
Parties’ top 10 customers in 2018 represent approximately [ …]% of their total 
sales.166 In particular, Asian suppliers are already qualified by [ …] and by  […]. 
Accordingly, Kolon and Unitika/Tusco can potentially supply a material portion of 
the affected markets without any significant delay.  
(171)  The expansion of Asian suppliers in the EEA and worldwide is further driven by 
price differences existing between As ia and other regions. For example, 
Freudenberg’s average sales price for primary carpet backings for automotive 
applications in the EEA was more than [ …]% higher than the average price in Asia 
in both 2018 and 2019.167 According to the Notifying Party, in ge neral Asian 
suppliers tend to be cheaper, with prices in the region of [ …]% lower than the 
Parties.168 As a result, as already submitted in section 5.3.2.2 above on construction 
applications, given the existence of limited transport costs and custom tariffs,  Asian 
suppliers will continue to have incentive to expand their sales in the EEA and 
worldwide after the Transaction.  
(172)  As the market investigation has further indicated, price constitutes a driving factor 
for customers to select their suppliers. Customers who currently procure from 
Freudenberg and/or Low & Bonar, submit that “[p] roduct end price is the most 
important globally ” and that, “[i]  f prices are no more competitive we [will]  have to 
find another solution. Costs of warehousing and oversupply have to  be 
considered. ”169 Several of the Parties' internal documents support the conclusion of 
the investigation that attempts to increase prices will lead more customers to 
switching to more competitive Asian suppliers.170 
(173)  Fourth , Asian suppliers have significant s pare capacity that could be utilized in the 
short term to serve customers based in the EEA or the rest of the world. In this 
respect, capacity estimates outlined above in section 5.3.2.2, show that (i) 
Unitika/Tusco's total capacity corresponds to more tha n […] the total market for 
automotive applications and to more than [ …] times the size of the EEA market; 
and (ii) Kolon's total capacity correspond to more than [ …] and to [ …] the EEA 
market size. The level of idle capacity currently held by Asian supplie rs, as 
estimated by the Parties, amounts to [ …] times of the Parties' combined worldwide 
sales of primary backings for automotive applications. Accordingly, Asian 
competitors would be able to achieve a short term increase in production and 
supplies in amou nts exceeding the Parties’ pre -merger sales levels to EEA 
customers. The Parties' estimates in this regard are consistent with Kolon's public 
                                                 
165  Questionnaire Q4, replies to question 15.  
166  Elaboration on the basis of Questionnaire Q4, replies to question 15 and Form CO, paragraph 229.  
167  RBB Study, page 17.  
168  Form CO , paragraph 345.  
169  Questionnaire Q1 –replies to question 26.2.1.  
170  See for instance, “[ …] customer visit report to [ …] dated [ …] 2018 and to [ …] dated [ …] 2019, 
referenced in footnote (157) above; [ …] customer visit report to [ …] dated [ …] 2018, referenc ed in 
footnote (158) above [ …] customer visit report to [ …], dated [ …] 2019, “.. However based on a low -
price -offer , […] might be forced to trial and qualify Unitika .”, […] customer visit report to [ …], dated 
[…] 2018, “ Growing the business remains a chall enge as [ …] has a decisive role and does not have any 
other interest (than price) to evaluate alternative backings ”.(Customer Visit report, Freudenberg’s reply 
to RFI 1 of 13 December 2019,  
 
40 announcement that  the company has decided to expand its capacity in 2017, “ as it is 
seeking to use spunbond for au tomotive carpets ”.171  
(174)  For their part, Kolon and Unitika/Tusco confirmed in the course of the market 
investigation having spare capacity and being able to serve additional demand in 
primary backings for automotive applications in the EEA should customers wis h to 
switch suppliers in the event of a price increase. Kolon and Unitika/Tusco provided 
estimates of the time and cost required for increasing their supplies up to certain 
volume amounts in the EEA.172 One of these suppliers thus indicated being able to 
use spare capacity without any substantial investments up to [ …].173 The other 
Asian supplier confirmed currently having spare capacity, in amounts up to [ …].174 
These estimates therefore provide evidence that Asian competitors would be able to 
achieve a short te rm increase in production and supplies to EEA customers in 
amounts exceeding one of the Parties’ pre -merger sales level.  
(175)  In this respect, the Commission is unlikely to find that the merger will create or 
strengthen a dominant position or otherwise signifi cantly impede effective 
competition when rival firms have available capacity and find it profitable to 
expand output sufficiently.175 Given the existence of spare capacity, evidence of 
Kolon's and Unitika/Tusco's aggressive pricing and expansion in the EEA a nd the 
rest of the world over the past 3 years, it is likely that these suppliers would have 
the incentive to maintain their present strategy by reacting aggressively in the event 
of a post -merger price increase. This appears all the more likely that, as i ndicated 
above in paragraph 171, significant price differences exist between the EEA and 
Asia. The Notifying Party's own average sales prices in the EEA are significantly 
higher than in Asia.176 Accordingly, given the recent growth of Asian suppliers 
outside  of Asia, further price increases would likely further support the profitability 
of exporting products.  
(176)  For Kolon and Unitika/Tusco, the production process, equipment and necessary 
inputs remain overall the same for the different applications. Apart from 
investment necessary to handle and transport into the EEA or in other regions in 
the world – that are not substantial as explained above (Section 5.3.2.2) – no 
specific technical barriers would impede Kolon and Unitika/Tusco from increasing 
their production  if market opportunities arose due to a post -merger price 
increase.177 
(177)  Fifth , as explained above in relation to construction applications, the entry and 
expansion of Asian suppliers in the European market or in other regional markets 
for primary carpet backi ngs for automotive applications does not appear to be the 
result of an opportunistic strategy, whereby their supplies to different regions 
depend on price fluctuations and demand conditions in their domestic markets. 
                                                 
171  http://www.businesskorea.co.kr/news/articleView.html?idxno=16079   
172  Unitika’s e -mail of 17 February 2020; Kolon’s submission of 28 February 2020; Questionnaire Q4, replies 
to questions 9 and 9.1.  
173  Questionnaire Q4, replies to question s 9 and 9.1.  
174  Unitika's e -mail of 17 February 2020.  
175  Horizontal Merger Guidelines, paragraph 33.  
176  EEA average prices were about [ …]% higher than in Asia in both 2018 and 2019 (RBB study, page 17). 
The Notifying Party submits that in general Asian s uppliers tend to be cheaper, with prices in the region of 
[…]% lower than the Parties.  
177  Case M.9239, Evonik /Peroxychem , 4 June 2019, paragraph 74  
 
41 Demand for primary carpet backings for automotive applications in Asia is 
significant and has not decreased over the past three years and is not expected to 
decrease in the foreseeable future.178 Accordingly, the entry and growth of Asian 
suppliers in the EEA or in other markets results from a lo ng term strategy. With 
specific respect to Europe, this is further evidenced by Kolon's investment in 
warehousing capacity.179 Unitika/Tusco stated that the size of the European market 
currently would not justify setting up a production capacity in Europe bu t that 
opening a warehouse in Europe would not entai l significant costs .180  
(178)  Finally, the expansion of Asian suppliers can be facilitated by the fact that 
customers in this sector are relatively concentrated, with major customers enjoying 
a degree of market power, as they individually represent a significant portion of the 
Parties' sales. In the EEA, Freudenberg's top 10 customers in 2018 by volume in 
automotive applications accounted for […]% of its sales in value, while for Low & 
Bonar they accounted for [ …]%.181 The vast majority of those customers already 
employs a multisource strategy and therefore generally maintains commercial 
relationships and qualifies more than one supplier 182  In that respect, agreements 
with customers allow them to exercise pressure o n the supplier, even in on -going 
projects with the threat of awarding new projects to a competitor.183 The effective 
exercise of buyer power by certain customers is thus reflected in the Parties' 
internal documents reporting on the status of negotiations and  showing that 
customers routinely rely on prices offered from competitors to negotiate better 
prices from their current suppliers.184 As a result, Asian suppliers would be able to 
continue to expand significantly by gaining only a limited number of new 
custo mers. On the other hand, for the same reason, major customers will also retain 
a significant degree of bargaining power in their negotiation with the merged 
entity, as they would retain the ability to qualify other alternative suppliers.  
(179)  In light of the ab ove, the Commission considers that, post -Transaction, the 
presence of Asian suppliers – Kolon and Unitika/Tusco – will exert a competitive 
constraint sufficient to eliminate the incentives for the merged entity to raise prices 
as a result of the eliminatio n of competition between the Parties. The results of the 
market investigation show that, before the Transaction, Asian suppliers already 
exercise a significant pricing pressure on the Parties’ sales in primary backings for 
throw -in mats, also in the EEA, a nd that no material barriers impede their 
expansion in primary backings for moulded carpets, where at present Asian 
                                                 
178  Questionnaire Q4, replies to questions 18 and 19.  
179  See above paragraphs 104 and 133 and related footn otes. 
180  Minutes of the c all with Unitika of 30 January 2020.  
181  Form CO, paragraph 230.  
182  Questionnaire Q1, replies to questions 33 and 33.2.  
183  Form CO, paragraph 368.  
184  See e.g. [ …] customer visit report dated [ …] 2018 to [ …] indicating that “ [ …] mentioned the presence of 
new players like Kolon and Unitika, the prices offered by them cannot be overlooked ”; Similarly, a [ …] 
customer visit report to [ …], dated [ …] 2018, indicates the flexibility customers enjoy while negotiating 
“Our suggestion for opti on mats to use 90gr instead of 100gr Kolon is not seen as a possibility due to new 
qualifications . Our [ …] will be transferred to Kolon due to the much better pricing . … [ …] understands 
the need from our side to increase prices … […]  has the assignment wi th every increase to search for an 
alternative, meaning we will take a risk ” ”; a [ …]’ customer visit report to [ …] dated [ …] 2019 indicating 
that “ Kolon offered 80gr primary for Euro [ …] per m2 to [ …], and this explains the reason that [ …] is 
looking for general cost price reduction in the [ …] price…However, this is used as a reference to put 
pressure on us. .”  (Form CO, annex 7.4).  
 
42 suppliers are active at worldwide level but with limited presence in the EEA. As a 
result of significant spare capacity, Asian suppliers wil l be able to structurally and 
continuously discipline EEA -based suppliers.185 That ability is further supported by 
the fact that Kolon and Unitika/Tusco are already qualified to supply a significant 
number of large worldwide and EEA -based customers. Accordin gly, the price 
pressure exercised by Asian suppliers in current market conditions is likely to be 
maintained or increase rapidly following the Transaction, at both worldwide and 
EEA level.  
(180)  On the basis of the foregoing considerations, the Commission consi ders that the 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with respect to horizontal non -coordinated effects in the market for primary 
carpet backings for automotive applications.  
5.3.4.  Nonwovens carriers for bitume n membranes  
5.3.4.1.  The Notifying Party’s view  
(181)  The Notifying Party submits that the Transaction would not give rise to any 
competitive concerns in nonwovens carriers for bitumen membranes. First, the 
combined market share of the Parties would be limited and the in crement brought 
about by the Transaction would be small. Second, the Parties argue that they are 
not close competitors because they use different production processes and different 
machines to manufacture their products. As a result, their products would d iffer in 
prices/properties and would serve different customers’ needs. Finally, after the 
Transaction, effective competition will continue to exist in the market.  
5.3.4.2.  The Commission’s assessment  
(182)  Both Freudenberg and Low & Bonar are active in the production an d supply of 
nonwovens for building/roofing applications and in particular in the production of 
nonwovens carriers for bitumen membranes.  
(183)  In the overall market for nonwovens for building/roofing applications, the Parties 
will have a combined market share be low [10 -20]%, both at EEA and worldwide 
level ([10 -20]% combined market share in value and [10 -20]% in volume in the 
EEA; [10 -20]% in value and [10 -20]% in volume at the worldwide level).  
(184)  Therefore, the market for nonwovens for building/roofing application s is not an 
affected market within the purposes of the present decision, irrespective of the 
geographic market definition.  
(185)  Assuming a narrower market for nonwovens carriers for bitumen membranes, the 
market shares of the Parties and of their main competito rs are reported in the 
following table.  
  
                                                 
185  Case M.9502, Synthomer/Omnova Solutions , 15 January 2020, paragraph 81.  
 
43  
Table 7 – Market shares in nonwovens carriers for bitumen membranes - EEA  
 2017  2018  2019  
Company  Volume  Value  Volume  Value  Volume  Value  
Sales 
(in m 
sqm)  Market 
share 
% Sales 
(in 
EUR 
m) Market 
share 
% Sales 
(in m 
sqm)  Market 
share 
% Sales 
(in 
EUR 
m) Market 
share 
% Sales 
(in m 
sqm)  Market 
share 
% Sales 
(in 
EUR 
m) Market 
share 
% 
Freudenberg  […] [10-
20]%  […] [10-
20]%  […] [20-
30]%  […] [10-
20]%  […] [20-
30]%  […] [10-
20]%  
L&B  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Combined  […] [20-
30]%  […] [10-
20]%  […] [20-
30]%  […] [10-
20]%  […] [20-
30]%  […] [10-
20]%  
Johns 
Manville  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  
Orbond  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Wattex  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Warmor  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Akinal  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Others  […] [50-
60]%  […] [60-
70]%  […] [40-
50]%  […] [50-
60]%  […] [50-
60]%  […] [50-
60]%  
Total 
Market  […] 100%  […] 100%  […] 100%  […] 100%  […] 100%  […] 100%  
Source: Form CO  
  
 
44 Table 8 – Market shares in nonwovens carriers for bitumen membranes - Worldwide  
Company  2017 2018  2019  
Volume  Value  Volume  Value  Volume  Value  
Sales 
(in m 
sqm)  Marke
t share 
% Sales 
(in 
EUR 
m) Marke
t share 
% Sales 
(in m 
sqm)  Marke
t share 
% Sales 
(in 
EUR 
m) Marke
t share 
% Sales 
(in m 
sqm)  Marke
t share 
% Sales 
(in 
EUR 
m) Marke
t share 
% 
Freuden ber
g […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [10-
20]%  
L&B  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Combined  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [20-
30]%  […] [10-
20]%  
Johns 
Manvill e  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  
Orbond  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Wattex  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Warmor  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Akinal  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Mogilev  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Aquaizol  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Tamko  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Mexichem  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Toyobo  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Unitika  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Mada  […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% […] [0-5]% 
Chinese  
Suppliers  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  […] [10-
20]%  
Others  […] [20-
30]%  […] [30-
40]%  […] [20-
30]%  […] [30-
40]%  […] [20-
30]%  […] [30-
40]%  
Total 
Market  […] 100%  […] 100%  […] 100%  […] 100%  […] 100%  […] 100%  
Source: Form CO  
(186)  In this respect, the Commission observes that the market share of the merged entity 
would be limited, in the range  of [20 -30]%. Moreover, the increment brought about 
by the Transaction would be marginal ([0 -5]%). Finally, several competitors would 
remain active in the market, in particular Johns Manville, with a market share 
comparable to the merged entity’s position,  especially at the EEA level.  
(187)  The market investigation confirmed the absence of competition concerns. Most 
respondents to the market investigation confirmed that Freudenberg and Low & 
Bonar are not close competitors.186 Moreover, respondents unanimously cons idered 
that the Transaction would not have any negative competitive impact on the market 
for nonwovens for building/roofing applications or on the market for nonwovens 
carriers for bitumen membranes, mainly because Low & Bonar is a minor player 
                                                 
186  Questionnaire Q2, replies to questions 15.1, 1 5.2, 16.1 and 16.2.  
 
45 and the Par ties are distant competitors: Low & Bonar offers a niche product with 
different technical specifications and end -uses compared Freudenberg’s product.187 
(188)  Based on the foregoing, the Commission considers that the Transaction does not 
raise serious doubts as to  its compatibility with the internal market with respect to 
horizontal non -coordinated effects in the market for nonwovens for 
building/roofing applications and/or in the market for nonwovens carriers for 
bitumen membranes.  
5.4. Horizontal coordinated effects  
(189)  As explained above in section 5.1, a merger may give rise to horizontal coordinated 
effects, in particular in concentrated markets.  
5.4.1.  The Notifying Party’s view  
(190)  The Notifying Party submits that the Transaction would not give rise to 
anticompetitive coordinat ed effects either in the market for carpet backings for 
construction applications, or in the market for carpet backings for automotive 
applications, since those two markets would lack the conditions for coordination to 
materialize.  
(191)  Notably, the different m arket players have different economic incentives: the 
parties are incumbent suppliers with high market shares, while Asian suppliers are 
recent entrants and have limited market shares, although significant cost 
advantages and spare capacity. As a result, t he latter would have an incentive to 
aggressively compete and undercut the Parties' prices in order to gain market 
shares, as is already their strategy before the Transaction. Asian suppliers are likely 
to pursue this strategy further post -merger, thus mai ntaining strong price 
competition.  
5.4.2.  The Commission’s assessment  
(192)  Assuming a market definition limited to general applications, the Commission has 
already observed that in the market for nonwoven and other fabrics for floor 
coverings, the market position of t he merged entity would still be relatively limited 
and a significant number of alternative suppliers will remain active in the market 
after the Transaction (see above section 5.3.1.2.). Therefore, the Commission does 
not consider that the Transaction would  bring about such changes as to increase the 
likelihood of coordination or to make existing coordination easier, more stable or 
more effective. The same conclusion can be reached with respect to the market for 
nonwovens carriers for bitumen membranes, wher e in addition to the above 
considerations on market shares and competitors, the increase brought about by the 
Transaction is marginal (see above section 5.3.4.2).  
(193)  In light of similar market conditions in primary carpet backing for construction and 
automoti ve applications, coordinated effects will be analysed jointly in the 
paragraphs below.  
                                                 
187  Questionnaire Q2, replies to questions 17 to 18.1. See also minutes of the call with Soprema of 19 
December 2019.  
 
46 (194)  As a preliminary remark, the Commission's market investigation and analysis of 
the Parties' internal documents has not provided any indication of coordination 
already i n place between the main market players – or some of them – either in 
market for primary carpet backings for construction applications, or in the market 
segment for primary carpet backings for automotive applications, at the EEA and 
worldwide level . This s uggests that current market conditions are not conducive to 
coordination.  
(195)  Moreover, the markets for primary carpet backings for construction and automotive 
applications are not  characterised by a high degree of transparency, in particular as 
regards prices , since negotiations are not public and competitors normally do not 
have access to the prices offered by other operators in the same market. In practice, 
any pricing indications are provided via customers for the purpose of negotiating 
better prices from s uppliers.  
(196)  Furthermore, the Transaction will increase the current asymmetry in the markets of 
carpet backings for construction and automotive applications, since the Transaction 
will accentuate the difference in market shares between the merged entity and i ts 
competitors (see Sections 5.3.2.2 and 5.3.3.2).  
(197)  In addition, the main suppliers' offerings will remain relatively differentiated: while 
the merged entity will continue to manufacture and sell PET nonwovens, other 
European manufacturers use other raw mat erials and technologies (see above 
sections 5.3.2.2 and 5.3.3.2), thus making coordination more difficult in markets.188 
As for the main Asian competitors that produce PET nonwovens (Kolon and 
Unitika/Tusco), they have a different cost structure (lower produ ction costs and 
higher logistic costs). It can be added that Asian suppliers like Kolon and 
Unitika/Tusco are relatively new entrants and are pursuing an aggressive expansion 
strategy, in particular in terms of pricing and quantities (see above sections 5. 3.2.2 
and 5.3.3.2).  
(198)  The Commission also considers that changes in demand and supply are an element 
to be taken into consideration in the assessment of any possible coordinated effects. 
In particular, according to a third party report, demand in automotive and 
construction applications is projected to grow as economies ramp up after 2021.189 
Therefore, demand conditions do not look stable and therefore unlikely to be 
conducive of coordination.  
(199)  In sum, whereas the Transaction will change the market structure by  reducing the 
number of operators and causing a higher degree of concentration, the main 
operators would remain differentiated and demand unstable, implying a limited risk 
of coordination.  
(200)  On the basis of the foregoing, the Commission concludes that the Tr ansaction does 
not raise serious doubts as to its compatibility with the internal market in relation to 
horizontal coordinated effects on the markets for nonwoven and other fabrics for 
floor coverings, carpet backings for construction applications, and car pet backings 
for automotive applications) or in the market of nonwovens carriers for bitumen 
membranes.  
                                                 
188  Horizontal Merger Guidelines, paragraph 45.  
189  The Future of Global Nonwovens to 2014 , Philp Mango, Smithers Pira, 2 019, page 99.  
 
47 5.5. Non-horizontal effects  
5.5.1.  Upstream market of primary carpet backings for automotive applications and 
downstream market of throw -in-mats  
5.5.1.1.  The Notifying Party ’s view  
(201)  The Notifying Party submits that the Transaction would not cause any risk of 
vertical foreclosure because the merged entity would not have the ability or the 
economic incentive to foreclose its rivals in supplying carpet backings, for the 
following  reasons:  
(a) an input foreclosure strategy would not make any economic sense in light of 
Freudenberg’s modest sales and market shares in the downstream market for 
throw -in mats;  
(b) Freudenberg’s competitors in the throw -in-mats market would have plenty 
alternati ve suppliers for nonwoven carpet backings to choose from, as the 
technical requirements for throw -in mats are low and the Asian competitors 
already supply carpet backings for throw -in mats (including to Freudenberg). 
Accordingly, any attempt by Freudenberg  to foreclose supply of nonwoven 
backings would only result in Freudenberg’s competitors expanding their 
sales in the upstream markets;  
(c) Finally, Freudenberg’s competitors in the throw -in-mats market could also 
use other carpet backing material for throw -in mats (as woven PP), as is 
already the case today.  
5.5.1.2.  The Commission assessment  
(202)  The Parties’ and their competitors’ market shares are reported in table 2 above for 
the upstream market for floor coverings applications, and in tables 5 and 6 above 
for the upstr eam market for primary carpet backings for automotive applications. 
Considering the moderate position of the Parties in the floor coverings market, the 
Commission will focus its analysis on the narrower possible market of primary 
carpet backings for automo tive applications, where the market position of the 
merged entity would be more significant. In any case, the below considerations are 
applicable also to the market for floor coverings applications.  
(203)  In the downstream market for throw -in-mats, the Notifying  Party estimates that its 
market share at EEA level in 2019 amounts to approximately [5 -15]%.190 Other 
competitors are present in the market with comparable shares ( Ideal Automotive, 
Racemark International, Vissche r Caravalle, Berco and Autostop ). 
(204)  As a preli minary remark, the Commission observes that any negative effect in 
terms of customer foreclosure can be dismissed because (i) the market position of 
Freudenberg in the downstream market is limited and (ii) already before the 
Transaction Freudenberg was ver tically integrated and, given its market position in 
the upstream market, had the possibility to exclude other carpet backing suppliers 
from its downstream activity in throw -in mats. Therefore, any hypothetical 
customer foreclosure effect would not be merg er-specific.  
                                                 
190  Form CO, paragraph 319.  
 
48 (205)  With respect to input foreclosure, the results of the market investigation regarding 
the ability of the merged entity to foreclose access to the relevant supply were 
inconclusive. Although, some respondents to the market investigation submitte d 
that, as a result of the Transaction, the merged entity would have the ability to 
foreclose access to the supply of primary carpet backings to companies that 
produce throw -in mats,191 others considered that other options would be available 
on the market, t hus depriving the merged entity of the ability to foreclose.192 
(206)  In this respect, the considerations listed above (Section 5.3.3.2) in relation to the 
upstream market of carpet backings for automotive applications, are relevant, in 
particular as regards the e xpansion of Asian suppliers in the EEA, and the 
competitive constraints that they pose on the merged entity. Accordingly, the 
Commission considers that the merged entity would not have the ability to 
foreclose competitors in the market of carpet backings f or automotive applications, 
with respect to the downstream market of throw -in mats.  
(207)  As regards incentives to engage in input foreclosure, the majority of respondents to 
the market investigation submitted that, as a result of the Transaction, the merged 
entity will not have the incentive to foreclose access to the supply of primary carpet 
backings to companies that produce throw -in mats.193 The Commission further 
notes that Freudenberg’s limited position on the downstream market constrains its 
incentives to en gage in input foreclosure.  
(208)  Furthermore, the Parties’ average profit margins are significantly higher on the 
upstream market for primary carpet backings than on the downstream market for 
throw -in mats. In primary carpet backings for automotive applications in the EEA 
Freuden berg’s gross margin amounts to […]% and its return on sales to [ …]% (in 
2019). Low & Bonar’s figures are comparable, w ith a gross margin of […]% and a 
return on sales of [ …]% (2019). In throw -in mats, by contrast, Freudenberg’s gross 
marg in amounts to [ …]% and its return on sales to [ …]%.194 As a result, the 
merged entity would have no economic incentives to engage in input foreclosure.  
(209)  In light of the above, the Commission considers that the merged entity would not 
have the incentive to for eclose competitors in the market of carpet backings for 
automotive applications.  
(210)  Finally, the effects of a foreclosure strategy on competition in throw -in mats would 
be alleviated by the availability of alternative suppliers of inputs in the upstream 
mark et, and are therefore unlikely to be significant.  
5.5.2.  Conclusion on non -horizontal effects  
(211)  Based on the foregoing, the Commission considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal market with respect to 
non-horizontal effects in the upstream market of primary carpet backings for 
automotive applications and in the downstream market of throw -in mats.  
                                                 
191  Questionnaire Q1, replies to questions 45 and 45.1.  
192  Reply of Milliken to questionnaire Q1, question 45.1.  
193  Questionnaire Q1, replies to questions 46 and 46.1.  
194  Freudenberg’s e -mail of 11 March 2020.  
 
49 6. CONCLUSION  
(212)  For the above reasons, the European Commission has decided not to oppose the 
notified operation and t o declare it compatible with the internal market and with the 
EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement.  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Executiv e Vice -President