2002/343/EC: Commission Decision of 9 February 2000 declaring a concentration to be compatible with the common market and the EEA Agreement (Case COMP/M.1641 — Linde/AGA) (Text with EEA relevance.)(notified under number C(2000) 352)
Date: 2000-02-09
Institutions: European Commission
Subjects: European Commission, application of EU law, economic concentration, gas, merger control

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 9 February 2000

declaring a concentration to be compatible with the common market and the EEA Agreement

(Case COMP/M.1641 — Linde/AGA)

(notified under number C(2000) 352)

(Only the German version is authentic)

(Text with EEA relevance)

(2002/343/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European Com-
munity,

Having regard to the Agreement on the European Economic
Area, and in particular Article 57(2)(a) thereof,

(1) On 1 September 1999 the Commission received notifi-
cation of a proposed concentration under Article 4 of
Council Regulation (EEC) No 4064/89 (the Merger
Regulation). By this transaction Linde AG (Linde) was to
purchase shares in AGA AB (AGA), thereby acquiring
control of the whole of AGA within the meaning of
Article 3(1)(b) of the Merger Regulation.

Having regard to Council Regulation (EEC) No 4064/89 of
21 December 1989 on the control of concentrations between
undertakings (1)
amended by Regulation (EC)
No 1310/97 (2) and in particular Article 8(2) thereof,

last

as

Having regard to the Commission’s decision of 30 September
1999 to initiate proceedings in this case,

Having given the undertakings concerned the opportunity to
make known their views on the objections raised by the
Commission,

(2) On 30 September 1999 the Commission decided to
initiate proceedings in the case under Article 6(1)(c) of
the Merger Regulation and Article 57 of
the EEA
Agreement.

(3)

The Advisory Committee discussed a draft of
Decision on 24 January 2000.

this

After consulting the Advisory Committee on Concen-
trations (3)

I. THE PARTIES AND THE PROPOSED TRANSACTION

(1) OJ L 395, 30.12.1989, p. 1; Corrigendum: OJ L 257, 21.9.1990,

p. 13.

(2) OJ L 180, 9.7.1997, p. 1.
(3) OJ C 110, 7.5.2002.

(4)

Linde’s areas of business are process engineering,
materials handling, refrigeration and the production and
distribution of industrial gases. AGA also produces and
distributes industrial gases.

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(5)

Linde already holds shares in AGA which account for
21,76 % of the capital and 14,45 % of the voting
rights. On 15 August 1999 Linde concluded conditional
contracts with six large AGA shareholders under which
Linde was to buy a total of 66 891 874 A shares and
41 974 157 B shares in AGA. This would bring Linde’s
stake in AGA to over 66 % altogether.

(6)

Linde has since then acquired the remaining A and B
shares in AGA by means of a public bid.

(11)

Industrial gases can be obtained from the air, from
synthetic processes, or from natural sources. Atmos-
pheric gases are extracted from the air by liquefaction
and separation of the air into its component parts. Air is
composed of 20,95 % oxygen, 78,09 % nitrogen, 0,93 %
argon and 0,03 % other noble gases such as neon,
krypton, xenon and helium. Acetylene and hydrogen are
produced by chemical processes. Carbon dioxide comes
from natural sources or occurs as a by-product of other
chemical processes. Helium is extracted from natural
sources.

II. CONCENTRATION

The proposed transaction constitutes a concentration
within the meaning of Article 3(1)(b) of the Merger
Regulation, because Linde would acquire sole control of
AGA.

(12) According to the notifying party, about 75 % of turnover
in industrial gases is accounted for by atmospheric gases,
and about 25 % by gases produced by synthetic processes
or extracted from natural sources.

(7)

(8)

III. COMMUNITY DIMENSION

The undertakings concerned have a combined aggregate
worldwide turnover of more than EUR 5 billion (4).
Linde and AGA have an aggregate Community-wide
turnover of more than EUR 250 million each. The
parties do not achieve more than two thirds of their
Community-wide turnover in any one Member State.
The notified transaction accordingly has a Community
dimension. It also requires cooperation under Article 57
of the EEA Agreement in conjunction with Article 2(1)(c)
of Protocol 24 to that Agreement.

IV. APPRAISAL UNDER ARTICLE 2 OF THE MERGER REGU-
LATION

Oxygen

A. THE RELEVANT PRODUCT MARKET

Nitrogen

(9)

Both Linde and AGA produce and distribute industrial
gases, medical gases and high-purity gases.

(10)

‘Industrial gases’ comprise all the gases and mixtures of
gases provided by gas suppliers for applications in
industry and research, applications of which there is a
very wide variety. The most commonly used industrial
gases are oxygen, nitrogen, argon, carbon dioxide,
acetylene and hydrogen, and mixtures including them.
Strictly speaking industrial gases do not include medical
gases and gases which possess a purity above the
standard degree or which are mixed to a precision
greater than that of industrial gases.

(4) Turnover has been calculated in accordance with Article 5(1) of
the Merger Regulation and with the Commission notice on
calculation of turnover (OJ C 66, 2.3.1998, p. 25). Turnover
before 1 January 1999 has been calculated by applying the
average ecu exchange rates and converting into euro on a one-
for-one basis.

(13) The following table summarises the main uses of oxygen,
nitrogen, argon, hydrogen, carbon dioxide, acetylene
and helium.

Gas

Main industries where used

Metallurgy (steel production), chemicals,
metalworking (cutting and welding), paper
(bleaching), glass
electronics,
waste water purification, fish farming

(melting),

Electronics, chemicals, food (improving shelf
life by protecting from oxygen and cryogenic
freezing), metalworking (pressing of alu-
minium parts), building (soil freezing, cool-
ing for the setting of concrete, shielding of
prestressing steels against oxidation)

Metallurgy (steel production), metalworking
(shielding of weld seams against oxidation),
semiconductors
(shielding of
electronics
against impurities), inflation of air bags

Argon

Hydrogen

Chemicals (purification),
production), glass (grinding)

food (edible oil

Carbon dioxide

Acetylene

Helium

Metalworking (shielding of weld seams
against oxidation), steel production, chemi-
cals, drinks manufacturing, food (cryogenic
freezing), dry ice, waste water purification
(neutralisation of alkaline wastes)

Metalworking (cutting and welding), glass
(lubrication of moulds)

Aerospace,
healthcare

lifting

gas

for

balloons,

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(14) The notifying party submits that industrial gases can be
classed in groups with similar uses and capabilities. In
almost all applications one gas can be replaced by
another with suitable physical and chemical character-
istics. Mixtures can almost always be replaced by pure
gases. Nitrogen, argon and carbon dioxide can be used
where an inert gas is needed, and liquefied nitrogen,
liquefied argon, liquefied helium and liquefied or solid
carbon dioxide can be used for cooling. Gases which can
be used to shield weld seams, such as carbon dioxide,
argon and certain mixtures, form one group; air and
oxygen might also be considered to form a single group.

(15) The notifying party also submits that

in 60 % of
applications industrial gases can be replaced by alterna-
tive non-gas-based processes. It claims that this is so
in heat treatment in metallurgy; oxygen enrichment,
including glass melting processes; joining, binding and
cutting; inert gas protection in chemistry; cooling pro-
cesses for foodstuffs; drinks manufacture; water treat-
ment; etching and doping for semiconductors, elec-
tronics and lighting; cooling and pressure applications
in the plastics and rubber industry; and assisted respir-
ation and anaesthesia. In these areas of use users can
employ non-gas-based processes as well as gas-based
processes, and the relevant market should accordingly
be taken to include such alternative technologies. The
notifying party therefore suggests that each of the ten
main areas of use should be taken to constitute a relevant
market.

(16) On the basis of its investigations in this case and in
the
the parallel Case M.1630 — Air Liquide/BOC,
Commission takes the view that because of the different
chemical and physical properties of
the individual
industrial gases they are not generally interchangeable.
Industrial gases are used in production processes on the
basis of their particular chemical and physical properties
in order to produce a desired result in that particular
application. The requirements of customers are very
different from one application to another, and there is
in a
no general
particular application there are several gases which
possess the properties fundamentally required;
thus
nitrogen and argon may both be used for protection
with an inert gas, and nitrogen and carbon dioxide can
both be used for the deep freezing of foodstuffs. But
even in cases of that kind it can be assumed that one of
these gases is technically superior in the user’s particular
application. This means that from the customer’s point
of view there is no real interchangeability, because using
a replacement would impair the process and reduce
quality. And in fact the users consulted in the course of

interchangeability.

It may be that

the investigation in this proceeding, and in the parallel
Case M.1630 — Air Liquide/BOC, have almost without
exception denied that the industrial gases they use could
be replaced by others.

(17) On the basis of its investigations in this case and in
the parallel Case M.1630 — Air Liquide/BOC the
Commission likewise takes the view that there is no
general interchangeability between industrial gases and
non-gas-based processes. The users questioned by the
Commission in the present case have almost without
exception stated that for their purposes industrial gases
cannot be replaced by non-gas-based processes, such as
mechanical or chemical processes for example.

(18)

It may happen that replacement is possible in a particular
application: thus compression refrigerators may be used
instead of carbon dioxide and nitrogen for chilling and
freezing foodstuffs, and air may be used instead of
oxygen in steel production. But in the latter case the
energy expended is greater, quality suffers and the
process consequently works less well, so that there is no
real interchangeability. In the first case mentioned it
should be pointed out that a changeover from carbon
dioxide and nitrogen to compression refrigerators for
chilling and freezing foodstuffs would require a decision
to convert from one system to another. Given the
investment needed for such a conversion, there is no
reason to suppose that in the event of any lasting
increase in the prices charged for industrial gases the
user will be able to convert production rapidly to a non-
gas-based process.

(19) The Commission is satisfied, therefore, that because of
their specific chemical and physical properties the
individual gases constitute separate product markets.

(20)

Industrial gases are delivered to purchasers who need
continuous supply, either from a pipeline forming part
of a pipeline network belonging to the supplier, or from
a plant on the user’s own site which is tailored to the
user’s needs and production volumes. Large purchasers
whose requirements are not so great that an on-site
plant would be economically justified are supplied using
tanks. The gases are usually delivered by tanker in
liquefied form. Industrial gases can also be supplied in
cylinders. Mixtures of gases for industrial and scientific
purposes, high-purity gases, noble gases and reactive
gases for the semiconductor industry are likewise bottled
in cylinders and marketed in that form.

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(21) On the basis of the information supplied by the notifying
party, and the information which the Commission
has assembled in the parallel Case M.1630 — Air
Liquide/BOC, the Commission takes the view that each
of the relevant product markets should be subdivided in
terms of the three distribution channels, namely on-site
plants and pipelines; tankers; and cylinders. The facilities
on the customer’s premises differ greatly from one
distribution channel
to another, depending on the
manner of supply and the prices of the individual
gases, as the notifying party has itself submitted. The
Commission’s investigations in this and the parallel
Case M.1630 — Air Liquide/BOC have confirmed that
competitors and purchasers from the three distribution
channels regard them as separate product markets.

(26) As far as the distribution of cylinder gas is concerned,
the notifying party has itself stated that there is very
little cross-border delivery. Thus the relevant geographic
markets for cylinder gas are to be defined in local terms.
The areas in which deliveries can be made from the
various filling plants overlap, and as a rule a large
number of local markets cover an entire Member State
seamlessly. At least between the large suppliers, then,
competition is not merely local or regional but extends
over the whole of a Member State. As the basis for its
assessment, therefore, the Commission has taken the
relevant geographic markets for cylinder gases each to
comprise the entire territory of a particular Member
State.

B. THE RELEVANT GEOGRAPHIC MARKETS

C. ASSESSMENT

(22) The notifying party submits that the relevant geographic
market is the Community. It argues that the gas manufac-
turers who operate Community-wide are present in
almost all Member States and supply gas there through
all the customary distribution channels, though their
market shares vary. Sales of cylinder gas across the
borders of Member States are comparatively limited, but
this does not change the fact that the geographic market
is Community-wide. All competitors supply customers
in the Member States by means of on-site plants and
pipelines, and are in competition with one another, thus
determining the limits of the market.

(23) The Commission’s investigations in this case and the
parallel Case M.1630 — Air Liquide/BOC have estab-
lished that the extent of the relevant geographic market
depends on the properties of the particular gas and the
particular form of distribution.

(24) To take supply from a plant on the customer’s own site
first, all the main suppliers of industrial gases clearly
have the know-how and resources necessary to build
and operate such units anywhere in the EEA. Thus they
can all tender throughout the EEA for contracts to build
and operate on-site plants of this kind. Here, therefore,
the relevant geographic markets are EEA-wide.

(25) Turning to delivery by tanker, the high cost of transport
means that delivery by tanker will be economical only
within a radius of about 200 km from the filling plant,
at least in the case of the atmospheric gases oxygen and
nitrogen. Even though the areas covered by the existing
filling plants may intersect, the Commission takes the
view that here the relevant geographic markets are
smaller than the EEA as a whole, and generally consist
of one country only. This conclusion is supported by
the price differences that the Commission has observed
between Member States.

(27) The transaction would create dominant positions:

it
would give Linde/AGA dominant positions on the
markets in cylinder gases in the Netherlands and in
liquefied and cylinder gases in Austria.

1. GERMANY

(aa)

In Germany Linde and Messer both hold large
market shares

(28) Germany is by far the largest market for industrial gases
in the EEA, and has the greatest number of competitors.
The main suppliers of industrial gases in Germany are
Linde and Messer Griesheim GmbH (Messer), in which
Hoechst AG has a two-thirds holding and the Messer
family a one-third holding. In 1997 Linde and Messer
in
both had a [25-30] %* (*) share of
industrial gases (5). Other major suppliers in Germany
are the AGA subsidiary AGA Gas GmbH & Co., KG
(‘AGA’) and Air Liquide GmbH (‘Air Liquide’), a subsidi-
ary of L’Air Liquide SA. In 1997 AGA had a [10-15] %*
share of the market in all industrial gases together, and
Air Liquide had [10-15] %* (6). The international gas
suppliers Air Products and Chemicals Inc., (Air Products)
and Praxair Inc., (Praxair) also do business in Germany,
though their shares are smaller. In 1997 Air Products
had [less than 5] %* of the market in all industrial gases,

the market

(*) Parts of this text have been edited to ensure that confidential
information is not disclosed; those parts are enclosed in square
brackets and marked with an asterisk.

(5) Salomon Smith Barney,

Industrial Gases:

Industry Report,

July 1998, p. 178.

(6) Salomon Smith Barney,

Industrial Gases:

Industry Report,

July 1998, p. 178.

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and Praxair had [less than 5] %* (7). In 1997 the BOC
Group plc (BOC) was still operating in Germany, and
had a share of [less than 5] %* of the market in all
industrial gases (8). Since then BOC’s German operations
have been taken over by Air Liquide.

operations,
such as Sauerstoffwerk Friedrichshafen
GmbH, Sauerstoffwerk Friedrich Guttroff GmbH, and
basi Schöberl GmbH & Co. The Norwegian company
Hydrogas AS (Hydrogas) also supplies carbon dioxide in
Germany. The total number of smaller suppliers active
in Germany is about 30.

(29)

In 1997 other suppliers of industrial gases in Germany
had a combined market share of [10-15] %* (9). These
included Westfalen AG, which operates throughout
the country, and other suppliers with largely regional

(30) According to the investigations carried out by the
Commission, market shares for liquefied gases in Germ-
any break down as follows:

Oxygen

Nitrogen

Argon

Hydrogen

CO2

Liquefied gases

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

Linde

Messer

AGA

Air Liquide

Air Products

Praxair

Other

[20-25]* % [30-35]* % [25-30]* % [25-30]* % [20-25]* % [30-35]* % [20-25]* % [20-25]* % [10-15]* % [10-15]* %

25-30 %

35-40 %

30-35 %

35-40 %

45-50 %

40-45 %

40-45 %

45-50 %

15-20 %

20-25 %

10-15 %

5-10 %

5-10 %

5-10 %

10-15 %

5-10 %

10-15 %

5-10 %

<5 %

<5 %

5-10 %

<5 %

<5 %

<5 %

<5 %

25-30 %

30-35 %

5-10 %

25-30 %

25-30 %

10-15 %

5-10 %

5-10 %

5-10 %

5-10 %

5-10 %

25-30 %

20-25 %

<5 %

5-10 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

5-10 %

5-10 %

5-10 %

5-10 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

10-15 %

10-15 %

(31) According to the investigations carried out by the Commission, market shares for cylinder gases in

Germany break down as follows:

Cylinders

Linde

Messer

AGA

Air Liquide

Air Products

Praxair

Other

Oxygen

Nitrogen

Argon and
argon mixtures

CO2

Hydrogen

Acetylene

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

[25-30]* % [25-30]* % [20-25]* % [25-30]* % [25-30]* % [25-30]* % [10-15]* % [10-15]* % [5-10]* % [15-20]* % [40-45]* % [40-45]* %

30-35 %

30-35 %

20-25 %

20-25 %

30-35 %

30-35 %

15-20 %

15-20 %

15-20 %

25-30 %

25-30 %

25-30 %

10-15 %

10-15 %

5-10 %

10-15 %

10-15 %

10-15 %

25-30 %

25-30 %

45-50 %

25-30 %

15-20 %

15-20 %

10-15 %

10-15 %

5-10 %

5-10 %

5-10 %

5-10 %

25-30 %

25-30 %

5-10 %

5-10 %

10-15 %

10-15 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

5-10 %

30-35 %

30-35 %

10-15 %

10-15 %

15-20 %

10-15 %

10-15 %

15-20 %

<5 %

<5 %

<5 %

<5 %

<5 %

<5 %

(7) Salomon Smith Barney,

Industrial Gases:

Industry Report,

July 1998, p. 178.

(8) Salomon Smith Barney,

Industrial Gases:

Industry Report,

July 1998, p. 178.

(9) Salomon Smith Barney,

Industrial Gases:

Industry Report,

July 1998, p. 178.

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(32)

(33)

In 1998 the atmospheric gases oxygen and nitrogen
accounted for some 60 % of turnover from the distri-
bution of liquefied gases in Germany, and the atmos-
pheric gases oxygen, nitrogen and argon for some 78 %
of all German turnover. Messer’s share of the liquefied
oxygen market, by value, is 35-40 %, while Linde has a
share of [30-35]* %. Messer’s share of the market in
liquefied nitrogen, by value, is 35-40 %, while Linde has
a share of [25-30]* %. Messer’s share of the market in
liquefied argon, by value, is 40-45 %, while Linde has a
share of [30-35]* %.

In 1998 more than 69 % of turnover from the distri-
bution of cylinder gases in Germany was accounted for
by oxygen, nitrogen, and argon and argon mixtures.
Messer’s share of the market in cylinder oxygen, by
value, is 30-35 %, while Linde has a share of [25-30] %*.
Linde’s share of the market in cylinder nitrogen, by
value,
is [25-30]* %, while Messer has a share of
20-25 %. Messer’s share of the market in cylinder argon
and argon mixtures, by value, is 30-35 %, while Linde
has a share of [25-30]* %.

(bb) Both market leaders have countrywide infra-
structures, a countrywide distribution network
and an extensive clientele

(34)

In air separation plants the individual atmospheric gases
are extracted in liquid form. They may be vaporised and
bottled in filling units on the same premises, and then
supplied direct
to large users of cylinder gas. But
atmospheric gases are also delivered in liquid form by
tanker direct to the final user, or to filling plants which
are not directly connected to an air separator. There they

are bottled and sold. Both liquefied and cylinder gas are
bought not only by final users but also by dealers. For
the most part these are small gas manufacturers or
dealers who buy in liquefied gas for bottling in their
own filling plants, or cylinder gas for sale to final
consumers through their own distribution outlets.

(35) Transport costs are very important in the liquefied and
cylinder gas business. Transport accounts for about 40 %
of costs in the case of liquefied oxygen and nitrogen,
and for 10 % even in the case of the very expensive
liquefied argon. Transport costs are usually integrated
into the price and passed on to customers. The denser a
supplier’s production and distribution network,
the
easier it is to minimise costs by supplying over only
short distances. As the notification points out, pro-
duction costs have a smaller impact on price competition
today than the costs of distribution and administration.

(36)

Linde and Messer have much denser production and
distribution networks in Germany than their competi-
tors. Messer also has a traditionally very strong position
in the west (North Rhine-Westphalia, Hesse, Rhineland-
Palatinate and Saarland), and Linde in the south (Baden-
Württemberg and Bavaria); these are the two regions
with the highest gross value added in manufacturing. The
north (Lower Saxony, Hamburg, Bremen and Schleswig-
Holstein) and the east (Mecklenburg-Western Pomerania,
Brandenburg, Berlin, Saxony-Anhalt, Thuringia and
Saxony) account for only 14 % and 15 % respectively of
gross value added.

(37)

Production and filling plants are distributed between the
German regions as follows.

Air separation plant,
or air separation plant and pipeline

North

East

South

West

All Germany

Linde

Messer

AGA

Air Liquide

Air Products

Other

3

0

1

1

1

0

6

Total

3

0

1

1

0

0

5

1

1

1

0

0

1

4

4

8

1

1

1

2

11

9

4

3

2

3

17

32

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Filling plant or acetylene works

North

East

Linde

Messer

AGA

Air Liquide

Air Products

Other

7

1

2

2

1

0

5

9

3

6

0

2

Total

13

25

South

11

3

2

3

0

10

29

West

All Germany

8

8

3

6

1

5

31

31

21

10

17

2

17

98

(38) Manufacturers can also reduce their transport costs by
agreeing to exchange volumes. Linde and Messer have
such an agreement, under which Linde supplies Messer
with liquefied oxygen and nitrogen from its air separ-
ation plants in Worms (in the western region) and Leuna
(in the eastern region), and Messer supplies Linde with
liquefied oxygen from its air separation plant in Hürth

Outlets and distributors

North

Linde

Messer

AGA

Air Liquide

Air Products

107

226

143

36

47

576

Total

(40) According to the notifying party,

there are about
450 000 customers for industrial gases in Germany.
Linde has [less than 200 000]* customers in the country.
[Of these,
...]* are large customers manufacturing at
more than one site who are supplied by pipeline or from
on-site plants. Another [...]* or so are customers who
require gas in tanks but also in cylinders, or who
use relatively high volumes of cylinder gases. These
customers are dealt with direct by Linde’s sales staff. The
remaining [...]* or so are small customers with a
requirement of one to 10 cylinders, accounting for a
turnover of less than DEM [...]* a year. These are dealt
with by Linde distributors, of whom there are just under
800. The distributors sell only Linde cylinder gas, for
Linde’s account (10).

(41) Messer has a clientele of 150 000 to 200 000 customers
in Germany. It has 850 distributors to deal with small
customers.

(10) Linde, Kompetenz vor Ort (Responsibility on the Ground), p. 32.

(in the western region). The volume contracted for is
7 million m3 of oxygen a year.

(39)

Linde and Messer also have the densest network of
distributors.

East

251

258

155

244

41

949

South

West

All Germany

254

163

151

57

0

625

186

202

141

102

73

704

798

849

590

439

161

2 837

(42)

Linde’s and Messer’s dense networks of production
plants and sales outlets ensure high product availability
and security of supply over short distances, and give
them decisive cost advantages over their competitors.

cc) Despite the market structure,

in which both
Linde and Messer have high market shares, the
movement of market shares and prices over time
indicates that there is real competition between
them

(43) As has already been explained, the structure of the
markets in liquefied and cylinder gases in Germany is
characterised by the high market shares held by the two
leading suppliers, Linde and Messer, who also enjoy
considerable advantages over their competitors in terms
of infrastructure and distribution networks. That high
market shares should be held by only two undertakings
can be strong evidence for the existence of a dominant
duopoly. But a market structure of this kind is not

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7.5.2002

enough to prove that there is in fact joint dominance, at
least where it can be shown that there is real competition
between the two leaders.

(44)

In the present case there is also the fact that industrial
gases are homogeneous products, which usually facili-
tates oligopolistic parallel conduct. But it has to be borne
in mind that on the markets in industrial gases there is
some differentiation of the products on offer on the
basis of the applications technology to be used. The
development of new applications technologies by the gas
manufacturers and the provision of assistance specific to
the particular application stand alongside price as major
parameters of action on these markets. Linde states that
there are currently between 500 and 1 000 different uses
for industrial gases. This figure is constantly growing.
According to Linde, something approaching one third
of the gas sold in recent years was used for purposes
which even 10 years ago were not regarded as suitable
applications for industrial gases.

(48) On the market in liquefied oxygen, for example, Linde’s
share fell slightly between 1989 and 1992; Messer’s
rose substantially, by five percentage points. Between
1993 and 1995 Linde’s market share rose a little, while
Messer’s fell. Between 1996 and 1999 Linde’s market
share fell slightly, and Messer’s fell by eight percentage
points. On the market in liquefied argon, Messer’s share
fluctuated widely between 1989 and 1999. Between
1989 and 1994 it fell by 11 percentage points; between
1995 and 1997 it rose by almost seven percentage
points; and by 1999 had fallen back by four percentage
points. Linde’s share of the liquefied argon market, by
contrast, stayed more or less constant over the whole
period 1989 to 1999, with only minor variations. On
the market in liquefied nitrogen, Linde’s share grew by
three percentage points between 1989 and 1995, with
small variations from year to year, but between 1996 and
1999 it fell slightly. Messer’s share of the liquefied
nitrogen market fell by seven percentage points between
1989 and 1993, but since then, though with some
fluctuations,
it has risen by three percentage points
overall.

(45) Nevertheless, the market structure described here and
the fundamental homogeneity of the gases being sold
does suggest the existence of a dominant duopoly.
Against this conclusion, however, there is the movement
of market shares over time, and the pricing of the
different gases.

(49)

In the last 13 years, Linde’s share of the cylinder gas
market has fallen quite significantly overall, by 11 to
17 percentage points depending on the gas. This fall has
been relatively steady. Messer’s share, on the other hand,
has remained roughly stable or fallen slightly, with the
exception of acetylene, where Messer’s market share has
risen by nine percentage points.

(46)

(47)

In the course of the proceedings Linde has submitted
extensive data showing the movement of market shares
and average revenue from the separate gases from 1986
onward, or in the case of liquefied gases from 1989
onward; from 1994 these data are based on figures
supplied by the German Chemical Industry Federation,
the VCI. They show that Linde’s and Messer’s market
shares have fluctuated in different directions for different
gases. Average revenues on individual gases have also
differed widely between Linde and Messer. Both of these
there is significant competition
things indicate that
between Linde and Messer.

For liquefied oxygen and argon, Linde’s market share
has fallen slightly over the last 10 years, oxygen by
1,6 percentage points and argon by 0,3 percentage
points. For liquefied nitrogen its market share has risen
slightly over the same period, by 1,6 percentage points.
But there is no steady trend. In some years Linde’s
market shares were above those of 1989, and in other
years they were lower. Messer’s share of the markets in
all three liquefied gases has fallen substantially: oxygen
by 6,1 percentage points, nitrogen by 4,5, and argon by
8,5. But there is no steady trend here either. Nor did
Linde’s and Messer’s shares of the markets in particular
gases move in the same way. In some years Linde’s share
of the market in a particular gas would rise substantially,
while Messer’s share fell. In other years the reverse
happened.

(50) Turning to the outside competition, Air Liquide’s shares
of the markets in almost all types of industrial gas, both
liquefied and in cylinder, have been growing strongly.
This has meant that in the last 10 years Air Liquide has
established a firm foothold in the German liquefied and
cylinder gas markets. All of the other suppliers listed in
recital 29, who are not among the seven largest gas
manufacturers, have also had substantial gains in market
share.

(51)

In the course of the proceedings Linde has submitted
a number of examples of prices which have been
substantially reduced because of competition for existing
customers. Given the large number of customers served
by Linde, these examples can obviously involve only a
relatively small proportion of the existing clientele. But
the trend reflected in these examples and in the ‘reviews
of competition’ (Wettbewerbsbilanzen) submitted with
the notification is confirmed by shifts in average rev-
enues (DEM per m3).

(52)

Like the movement of market shares, the movement of
average revenues also presents a different picture in the
two companies. For liquefied oxygen, Linde’s average
revenue fell by [...] %* in the period from 1994 to 1999,

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L 120/9

and Messer’s by [...] %*. In 1999, as in most years before,
both suppliers’ average revenues were above the average
revenue on the market as a whole. For liquefied nitrogen,
Linde’s average revenue fell by [...] %* and Messer’s by
[...] %*. In both 1994 and 1999 Linde’s average revenues
were in line with those of the market as a whole, while
Messer’s were lower in 1994 and higher in 1999. For
liquefied argon Linde’s average revenue fell by [...] %*
and Messer’s by [...] %*. Despite that, over the same
period Linde’s average revenues were very far above the
market average, and Messer’s were well below. For
cylinder gases there were similar variations. For cylinder
oxygen, for example, Linde’s average revenue was always
well above the market average over the whole of the
period 1994 to 1999; Messer’s was sometimes roughly
equal to the market average, depending on the year, and
sometimes substantially below. For cylinder acetylene
Linde’s average revenue was well below the market
average, and Messer’s was substantially above. For
cylinder argon both suppliers had average revenues
below the market average, but the gap varied from year
to year.

(53)

Even with homogeneous goods, average revenues do
not allow firm conclusions to be drawn regarding
competitors’ pricing. It is true that where the goods are
homogeneous there are none of the difficulties which
arise with differentiated goods offered as part of different
product mixes by different suppliers. But even in the
case of homogeneous goods there may be different
customer structures, with correspondingly different
delivery volumes, and this can affect the relationship
between average revenues and actual prices. Neverthe-
less, where the goods are homogeneous the average
revenues do provide important indications of the pricing
practised by the individual suppliers. This is especially
true here, where Linde and Messer have market shares
of comparable size. It can safely be assumed, therefore,
that their clienteles are also similar in structure. The
different movement of Linde’s and Messer’s average
revenues which has been outlined in recital 52 is
therefore clear evidence of price competition between
them.

Finding

(55)

It cannot be concluded that Linde and Messer currently
form a dominant duopoly in Germany.

After the transaction

(56) As a result of the transaction Linde’s share of most of
the relevant markets would increase by 5-10 %. On a
number of markets Linde would replace Messer as
market leader. The gap between the two leading suppliers
and their competitors would widen. But there is no
reason to believe that the increase in Linde’s market share
would appreciably alter the competitive relationship
between Linde and Messer, and would in the future lead
to a position where the competition which currently
exists between Linde and Messer would be decisively
weakened. It is true that Linde’s takeover of AGA would
remove one undertaking currently competing with Linde
and Messer. This would reduce the pressure for compe-
tition between the leaders which is exerted by outside
competition. It has to be borne in mind here, though,
that alongside AGA the other large suppliers of industrial
gases are also active on the markets in liquefied and
cylinder gases in Germany, and that among the outsiders
competing would be Air Liquide, the competitor which
has increased its market share by easily the largest
proportion over the last 10 years. In so far as outside
competition has in the past helped to ensure that there
was active competition between Linde and Messer too,
the situation would not change so drastically that there
would in future be no real competition between the two
leaders.

Finding

(57) The Commission is satisfied, therefore, that the trans-
action would not create a dominant duopoly formed by
Linde/AGA and Messer on the markets in liquefied and
cylinder gases in Germany.

2. THE NETHERLANDS

(aa) On the markets in liquefied and cylinder gases
in the Netherlands there are four main suppliers

(54) Taking all things together, then, it can be concluded that
Linde and Messer are competing actively with one
another. Despite the duopolistic market structure, the
competitive relationship between Linde and Messer is
too marked to allow it to be supposed that there is no
real competition between them.

(58) The main suppliers on the markets in liquefied and
cylinder gases in the Netherlands are Linde, through a
company it controls, NV Hoek’s Machine en Zuurstoffa-
briek; AGA, through AGA Gas BV; Air Products, through
Air Products Nederland BV; and Air Liquide, through
Air Liquide BV. There are smaller operations run by

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Official Journal of the European Communities

7.5.2002

Messer, through Messer Nederland BV, and Praxair,
through Praxair BV. BOC’s Dutch operations have now
been taken over by Air Liquide.

(59) Other, smaller suppliers are Westfalen Gassen Nederland
BV, a subsidiary of Westfalen AG; Nederlandse Techni-
sche Gasmaatschappij BV, which is controlled by the
Italian gas supplier SOL SpA; and Hydrogas Holland BV,
a subsidiary of Norsk Hydro ASA in Oslo. Hydrogas
Holland, however, essentially supplies carbon dioxide
only.

(60)

Linde operates two air separation plants and five filling
plants for all kinds of gas in the Netherlands. AGA
operates one filling plant for all kinds of gas, one filling
plant for carbon dioxide, and one acetylene works in the
Netherlands. AGA has no air separation plant of its own
in the Netherlands, and therefore cooperates with Air

Products in the production of liquefied atmospheric
gases. Air Products has an air separation plant
in
Rotterdam, which is the largest in the world, and another
in Terneuzen. Air Products also has a filling plant for all
gases and another for hydrogen only. Air Liquide
likewise has a filling plant for all gases and another for
hydrogen. Since it took over BOC’s Dutch operations,
Air Liquide also operates an air separation plant in
Terneuzen. Messer has a filling plant for all gases and an
acetylene works. The smaller suppliers listed in recital 59
all operate one filling plant each.

(bb) The merged Linde/AGA would be the only large
supplier of cylinder gases; the rest of the market
is fragmented

(61) According to the investigations carried out by the
Commission, market shares for cylinder gases in the
Netherlands break down as follows:

Cylinders

Linde

AGA

Oxygen

Nitrogen

Argon and
argon mixtures

CO2

Hydrogen

Acetylene

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

[40-45]* % [45-50]* % [45-50]* % [50-55]* % [25-30]* % [25-30]* % [25-30]* % [30-35]* % [55-60]* % [55-60]* % [30-35]* % [35-40]* %

25-30 %

25-30 %

15-20 %

15-20 %

35-40 %

35-40 %

50-55 %

45-50 %

<5 %

<5 %

45-50 %

40-45 %

Linde/AGA

[65-75]* % [70-80]* % [60-70]* % [65-75]* % [60-70]* % [60-70]* % [75-85]* % [75-85]* % [55-65]* % [55-65]* % [75-85]* % [75-85]* %

Air Liquide

5-10 %

5-10 %

5-10 %

5-10 %

10-15 %

10-15 %

5-10 %

5-10 %

15-20 %

15-20 %

5-10 %

5-10 %

Air Products

5-10 %

5-10 %

10-15 %

10-15 %

5-10 %

5-10 %

<5 %

5-10 %

<5 %

5-10 %

<5 %

<5 %

Messer

Other

5-10 %

<5 %

<5 %

<5 %

5-10 %

10-15 %

<5 %

5-10 %

<5 %

<5 %

5-10 %

5-10 %

5-10 %

5-10 %

10-15 %

5-10 %

5-10 %

10-15 %

5-10 %

5-10 %

15-20 %

15-20 %

5-10 %

5-10 %

(62)

the market

Linde/AGA’s joint share of the market in cylinder oxygen
is [70-80] %*. The next largest competitor in cylinder
oxygen is Air Products, with a market share of 5-10 %.
The market share lead over other suppliers is 70 %.
Linde/AGA’s joint share of
in cylinder
nitrogen is [65-75] %*; the next largest competitor is Air
Products, with a market share of 10-15 %. The market
share lead over other suppliers is more than 60 %.
Linde/AGA’s joint share of the market in cylinder argon
and argon mixtures is [60-70] %*. The next largest
competitors in cylinder argon and argon mixtures are
Air Liquide and Messer, both of whom have a market
share of 10-15 %. The market share lead over other
suppliers is about 50 %.

(63)

Linde/AGA’s joint share of the market in cylinder carbon
dioxide is [75-85] %*. Air Liquide, Air Products and
Messer all have market shares of 5-10 % of this market.
in cylinder
Linde/AGA’s joint share of

the market

hydrogen is [55-65] %*. The next largest competitor in
cylinder hydrogen is Air Liquide, with a market share of
15-20 %. The market share lead between Linde/AGA
and the other suppliers is over 50 %. Linde/AGA’s joint
share of the market in cylinder acetylene is [75-85] %*.
The next largest competitors in acetylene are Messer and
Air Liquide, who each have a market share of 5-10 %;
Linde/AGA’s market share lead over the remaining
competitors is over 70 %.

(64) The remaining small suppliers of cylinder gas are to a
great extent dependent on supplies from the main
suppliers. The transaction would substantially reduce
the number of main suppliers, making aggressive com-
petition appreciably more difficult. There is no reason
to suppose, then, that Linde/AGA’s freedom of action
would be restricted by the remaining small suppliers.

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Official Journal of the European Communities

L 120/11

(cc) The merged Linde/AGA would be the market leader in a number of liquefied gases in the

Netherlands, but the transaction would not create dominant positions on these markets

(65) According to the investigations carried out by the Commission, market shares for liquefied gases in

the Netherlands break down as follows:

Oxygen

Nitrogen

Argon

Hydrogen

CO2

Liquefied gases

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

Linde

AGA

Linde/AGA

Air Liquide

Air Products

Praxair

Messer

Other

[15-20]* % [30-35]* % [20-25]* % [25-30]* % [15-20]* % [15-20]* % [40-45]* % [35-40]* % [5-10]* % [5-10]* %

10-15 %

10-15 %

15-20 %

15-20 %

20-25 %

25-30 %

0 %

0 %

15-20 %

20-25 %

[25-35]* % [40-50]* % [35-45]* % [40-50]* % [35-45]* % [40-50]* % [40-50]* % [35-45]* % [20-30]* % [25-35]* %

45-50 %

20-25 %

30-35 %

25-30 %

25-30 %

25-30 %

35-40 %

35-40 %

15-20 %

20-25 %

10-15 %

10-15 %

10-15 %

10-15 %

10-15 %

10-15 %

15-20 %

25-30 %

<5 %

<5 %

5-10 %

5-10 %

5-10 %

5-10 %

5-10 %

5-10 %

<5 %

<5 %

<5 %

<5 %

5-10 %

<5 %

0 %

0 %

0 %

0 %

<5 %

<5 %

5-10 %

5-10 %

<5 %

10-15 %

<5 %

5-10 %

<5 %

<5 %

<5 %

<5 %

50-55 %

35-40 %

(66) The most important liquefied gases in terms of volume
and value are the atmospheric gases oxygen, nitrogen
and argon. In terms of both volume and value these
three account for more than 80 % of gases sold in
liquefied form in the Netherlands. On the markets in
atmospheric gases Linde and AGA together have shares
of [40-50] %* by value of the market in liquefied oxygen,
[40-50] %* of the market in liquefied nitrogen, and [40-
50] %* of the market in liquefied argon. The next largest
competitor is Air Liquide, with shares of 20-25 % by
value of the market in liquefied oxygen, 20-25 % of the
market in liquefied nitrogen, and 25-30 % of the market
in liquefied argon. Air Liquide is followed by Air
Products, which has shares of 10-15 % by value of the
markets in these three liquefied gases. Praxair has shares
of 5-10 % of the same markets. The smaller suppliers
account for just under 20 % of the market in liquefied
oxygen,
just under 15 % of the market in liquefied
nitrogen, and less than 10 % of the market in liquefied
argon. With this distribution of market shares it cannot
be assumed that after the transaction Linde/AGA would
enjoy a freedom of action which was no longer subject
to the control of their competitors.

(67)

In the case of liquefied hydrogen the transaction would
not result in any addition of market shares, because
AGA does not do business on this market. In the case of
liquefied carbon dioxide the merged Linde/AGA would
have a combined market share of [25-35] %*, in second
place behind the market leader, Hydrogas, which has a
share of 35-40 %.

Finding

(68) The Commission is satisfied, therefore, that the trans-
action would give Linde/AGA dominant positions on
the markets in cylinder gases in the Netherlands.

3. AUSTRIA

(aa) The markets in liquefied and cylinder gases in
Austria are already highly concentrated, with
only three main suppliers

(69) On the Austrian markets in liquefied and cylinder gases
Linde, AGA and Messer operate through subsidiaries.
Other suppliers in Austria are SIAD Vertrieb technischer
Gase GmbH, a subsidiary of SIAD SpA; Sapio Produ-
zione Idrogeno Ossigeno SRL; SOL SpA; and Sauer-
stoffwerk Friedrich Guttroff GmbH.

(70)

Production and filling plants in Austria break down as
follows:

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Official Journal of the European Communities

7.5.2002

Air separation plants

Filling plants, all gases

CO2 filling plants

Acetylene works

Hydrogen plants

Linde

AGA

Messer

SIAD

2

3

4

2

2

2

5

0

3

1

2

5

1

1

1

0

1

0

0

0

(71) According to the investigations carried out by the Commission, market shares for liquefied gases in

Austria break down as follows.

Oxygen

Nitrogen

Argon

Hydrogen

CO2

Liquefied gases

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

Linde

AGA

Linde/AGA

Messer

Other

[45-50]* % [40-45]* % [45-50]* % [40-45]* % [70-75]* % [55-60]* % [85-90]* % [80-85]* % [25-30]* % [35-40]* %

25-30 %

35-40 %

20-25 %

20-25 %

15-20 %

25-30 %

<5 %

<5 %

20-25 %

20-25 %

[70-80]* % [75-85]* % [65-75]* % [60-70]* % [85-95]* % [80-90]* % [85-95]* % [80-90]* % [45-55]* % [55-65]* %

10-15 %

10-15 %

20-25 %

25-30 %

5-10 %

5-10 %

<5 %

<5 %

45-50 %

35-40 %

5-10 %

5-10 %

5-10 %

5-10 %

<5 %

<5 %

10-15 %

15-20 %

<5 %

<5 %

(72) According to the investigations carried out by the Commission, market shares for cylinder gases in

the Netherlands break down as follows:

Cylinders

Linde

AGA

Oxygen

Nitrogen

Argon and
argon mixtures

CO2

Hydrogen

Acetylene

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

volume
(%)

value (%)

[20-25]* % [25-30]* % [20-25]* % [15-20]* % [30-35]* % [25-30]* % [40-45]* % [40-45]* % [0-5]* % [10-15]* % [35-40]* % [30-35]* %

35-40 %

45-50 %

30-35 %

30-35 %

30-35 %

40-45 %

15-20 %

15-20 %

20-25 %

20-25 %

35-40 %

40-45 %

Linde/AGA

[55-65]* % [70-80]* % [50-60]* % [45-55]* % [60-70]* % [65-75]* % [55-65]* % [55-65]* % [20-30]* % [30-40]* % [70-80]* % [65-75]* %

Messer

Other

15-20 %

15-20 %

30-35 %

35-40 %

20-25 %

20-25 %

25-30 %

25-30 %

65-70 %

60-65 %

15-20 %

20-25 %

15-20 %

10-15 %

15-20 %

10-15 %

10-15 %

5-10 %

5-10 %

5-10 %

<5 %

<5 %

<5 %

5-10 %

(bb) The transaction would give Linde/AGA high
joint shares of the markets in liquefied and
cylinder gases

(73)

Following the transaction Linde/AGA would have com-
bined shares of [75-85] %* of the market in liquefied
oxygen, [60-70] %* of the market in liquefied nitrogen,
[80-90] %* of the market in liquefied argon, [80-90] %*
of the market in liquefied hydrogen, and [55-65] %* of
the market in liquefied carbon dioxide. Linde/AGA’s
shares of the cylinder gas markets would be [70-80] %*
in the case of oxygen, [45-55] %* in the case of nitrogen,
[65-75] %* in the case of argon and argon mixtures,

[55-65] %* in the case of carbon dioxide, and [65-
75] %* in the case of acetylene. The market share lead
between Linde/AGA and the only remaining large
competitor, Messer, would be over [...] %* in the case of
liquefied oxygen,
just under [...] %* in the case of
liquefied nitrogen, over [...] %* in the case of liquefied
argon and hydrogen, and [...] %* in the case of liquefied
carbon dioxide. For cylinder gases Linde/AGA’s market
share lead would be [...] %* in the case of oxygen, argon
and acetylene, [...] %* in the case of carbon dioxide, and
[...] %* in the case of nitrogen. The only market where
Messer would still be market leader would be that in
cylinder hydrogen, where Linde/AGA would have a
market share of [30-40] %*.

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Official Journal of the European Communities

L 120/13

Finding

(74) The Commission is satisfied, therefore, that the trans-
action would give Linde/AGA dominant positions on
the markets in liquefied and cylinder gases in Austria.

(76)

Woikoski AB, which supplies liquid hydrogen and
smaller volumes of cylinder gases, and Messer.

In Sweden the main suppliers of liquefied and cylinder
gases are AGA and Air Liquide. Other suppliers are
Hydrogas, which supplies carbon dioxide, and Hydrogas-
Messer AB, which is a joint venture set up by Messer and
Hydrogas.

4.

FINLAND, SWEDEN, NORWAY AND ICELAND

(aa) The markets in liquefied and cylinder gases in
Finland, Sweden, Norway and Iceland are highly
concentrated

(75)

In Finland the main suppliers of liquefied and cylinder
gases are AGA and Air Liquide. Other suppliers are Oy

(77)

In Norway the main suppliers of liquefied and cylinder
gases are AGA and Hydrogas. In Iceland there is only
one supplier of industrial gases, namely AGA.

(bb) On a number of markets AGA’s market share is

well over 50 %

(78) According to the investigations carried out by the
Commission, market shares for liquefied and cylinder
gases in Finland break down as follows:

Liquefied gases

Oxygen

Nitrogen

Argon

Hydrogen

CO2

Cylinder gases

Oxygen

Nitrogen

AGA

Air Liquide

Other

volume (%)

value (%)

volume (%)

value (%)

volume (%)

value (%)

50-55 %

50-55 %

45-50 %

45-50 %

70-75 %

65-70 %

25-30 %

30-35 %

25-30 %

30-35 %

70-75 %

65-70 %

45-50 %

45-50 %

<5 %

<5 %

50-55 %

50-55 %

65-70 %

65-70 %

30-35 %

30-35 %

80-85 %

75-80 %

15-20 %

20-25 %

65-70 %

75-80 %

30-35 %

20-25 %

Argon/argon mixtures

75-80 %

75-80 %

20-25 %

20-25 %

CO2

Hydrogen

Acetylene

80-85 %

80-85 %

15-20 %

15-20 %

75-80 %

65-70 %

20-25 %

30-35 %

65-70 %

60-65 %

30-35 %

35-40 %

L 120/14

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Official Journal of the European Communities

7.5.2002

(79) According to the investigations carried out by the Commission, market shares for liquefied and

cylinder gases in Sweden break down as follows:

Liquefied gases

Oxygen

Nitrogen

Argon

Hydrogen

CO2

Cylinder gases

Oxygen

Nitrogen

Argon/argon mixtures

CO2

Hydrogen

Acetylene

AGA

Air Liquide

Other

volume (%)

value (%)

volume (%)

value (%)

volume (%)

value (%)

80-85 %

65-70 %

65-70 %

<5 %

75-80 %

65-70 %

70-75 %

15-20 %

30-35 %

30-35 %

24 %

32 %

28 %

<5 %

95-100 %

95-100 %

40-45 %

60-65 %

10-15 %

10-15 %

45-50 %

20-25 %

65-70 %

60-65 %

70-75 %

60-65 %

85-90 %

75-80 %

75-80 %

60-65 %

70-75 %

65-70 %

90-95 %

80-85 %

30-35 %

35-40 %

25-30 %

35-40 %

10-15 %

20-25 %

35-40 %

25-30 %

30-35 %

5-10 %

20-25 %

15-20 %

(80) According to the investigations carried out by the Commission, market shares for liquefied and

cylinder gases in Norway break down as follows:

Liquefied gases

Oxygen

Nitrogen

Argon

Hydrogen

CO2

Cylinder gases

Oxygen

Nitrogen

Argon/argon mixtures

CO2

Hydrogen

Acetylene

AGA

Hydrogas

volume (%)

value (%)

volume (%)

value (%)

60-65 %

65-70 %

25-30 %

<5 %

15-20 %

65-70 %

50-55 %

95-100 %

50-55 %

95-100 %

65-70 %

60-65 %

60-65 %

30-35 %

<5 %

15-20 %

85-90 %

65-70 %

95-100 %

35-40 %

95-100 %

65-70 %

35-40 %

30-35 %

70-75 %

<5 %

80-85 %

30-35 %

45-50 %

<5 %

45-50 %

<5 %

30-35 %

30-35 %

30-35 %

65-70 %

<5 %

80-85 %

10-15 %

30-35 %

<5 %

60-65 %

<5 %

30-35 %

7.5.2002

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Official Journal of the European Communities

L 120/15

(81) On the markets in liquefied and cylinder gases in Iceland

Phase II

AGA is the only supplier.

(cc) The transaction would not strengthen the domi-
nant positions currently held by AGA on a
number of markets in liquefied and cylinder
gases in Finland, Sweden, Norway and Iceland

(82) The proposed transaction might strengthen AGA’s
dominant positions on the Scandinavian markets if
Linde were a major potential competitor, a competitor
which might choose to enter the Scandinavian markets.
On the basis of the submissions made by the notifying
party in its reply to the statement of objections and at
the hearing, however, the Commission has reached the
conclusion that this is not so.

(83)

In the Community as a whole Linde operates on the
markets in industrial liquefied and cylinder gases in the
following Member States: Germany, France, the United
Kingdom, Italy, Spain, the Netherlands, Belgium, Austria,
Portugal and Greece. But by itself this does not justify
the assumption that Linde is also a major potential
competitor which might choose to enter the Scandinavi-
an markets.

(84) Market entry requires heavy investment. In the notifi-
cation Linde estimates the total costs of market entry as
follows.

Phase I

Rent of a 4 000 m3 site for a
cylinder depot

DEM 15 000 per month

Portable buildings or office premises

DEM 40 000

Warehouse or roofing of storage area

DEM 40 000

DEM 5 000 cylinders, pallets, cylinder
bundles

DEM 1 350 000

Fork-lift trucks and lifting gear

DEM 100 000

Vehicles

DEM 250 000

Investment volumes

± DEM 1 180 000

Monthly costs, including staff

± DEM 100 000

Purchase of site, 5 000 m3

DEM 1 500 000

Bottling plant, tanks etc.

DEM 2 500 000

Total

Phase III

± DEM 4-5 million

1 air separation plant

DEM 40 million

5 filling plants

DEM 25 million

Stock of 110 000 cylinders, miscel-
laneous tanks

DEM 30 million

Vehicles, tankers

DEM 15 million

Cylinder bundles, pallets, buildings

DEM 10 million

Total

DEM 120 million

(85) The total costs estimated for Phase III are those which
Linde actually incurred when it entered the market in
Italy. [...] %* In its notification Linde also refers to its
activities in France in the period 1989 to 1998, and
submits that it had negative results in France over [...]
%* years despite a total investment of more than DEM
[...] %* million. Given the heavy investment and long
period in which losses have to be accepted in order to
set up in another Member State, the Commission takes
the view that the probability and feasibility of a market
entry have to be judged from the point of view of a
supplier, in the light of the characteristics of the market
under consideration. The size of the market and the
degree of concentration obtaining there will be of
primary importance.

(86) After Germany, France is the biggest market in industrial
gases in the EEA. Italy is in fourth place, after the United
Kingdom. The Swedish market in industrial gases is the
largest in Scandinavia; in size it is the equivalent of 14 %
of the German market. The gas markets in Finland and
Norway are smaller than the Austrian market, which is
the equivalent of 10 % of the German market. In 1998
the markets in liquefied and cylinder gases amounted to
EUR 160 million in Sweden, just under EUR 62 million
in Finland and EUR 65 million in Norway. For such

L 120/16

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Official Journal of the European Communities

7.5.2002

small markets it is hardly to be expected that Linde
would be prepared to incur investment costs on the
scale described, and then to accept a long launch period
in which it would be making heavy losses.

(92)

(87)

In addition, the markets in the production of industrial
gases in these countries are already highly concentrated:
in Finland, Sweden and Norway there are only two main
suppliers, and in Iceland there is only one. It should be
borne in mind, too, that on a number of markets in
liquefied and cylinder gases in Finland, Sweden, Norway
and Iceland one of the main suppliers, AGA, holds a
dominant position. The other main supplier in Finland
and Sweden is Air Liquide, which is the European and
worldwide leader in the production and distribution of
industrial gases.

(88) Given the small sizes of the markets in liquefied and
cylinder gases in Scandinavia, and the stiff barriers to
entry, the Commission takes the view that Linde cannot
be regarded as a major potential competitor which
might choose to enter the Scandinavian markets.

Finding

(89) The Commission is satisfied that the transaction would
not strengthen the dominant positions held by AGA on
the markets in liquefied and cylinder gases in Finland,
Sweden, Norway and Iceland.

In Austria, Linde undertakes to dispose of the entire gas
business operated in Austria by AGA through its
subsidiary AGA GmbH. The commitment to dispose of
the business extends to all air separation plants with the
existing on-site supply agreements, all related liquefac-
tion, filling and acetylene plants, the associated staff
(about [...]* employees), current contracts with cus-
tomers and suppliers, the list of customers, the tanks
installed on customers’ premises, the associated tankers
and other transport vehicles, and the associated gas
cylinders (about [...]*). Linde will not dispose of the shell
of the company, with its name, and AGA GmbH’s
interests outside Austria.

2. ASSESSMENT OF THE COMMITMENTS OFFERED

Netherlands

(93) Under the commitment proposed, AGA’s cylinder gas
business in the Netherlands would be offered for sale to
competitors. The disposal would ensure that Linde’s
position on the markets in cylinder gases would not be
strengthened. After the commitment had been complied
with the purchaser would be in the same position as
AGA was beforehand. This would ensure that after the
transaction there would still be another large supplier
on the markets in cylinder gases in the Netherlands. The
Commission is therefore satisfied that the proposed
commitment would prevent the creation of dominant
positions on the markets in cylinder gases in the
Netherlands.

V. COMMITMENTS OFFERED BY THE NOTIFYING PARTY

Austria

1. COMMITMENTS

(90)

In order to overcome the Commission’s objections to
the planned transaction, Linde has entered into the
following commitments:

(91)

In the Netherlands, Linde undertakes to dispose of the
industrial cylinder gas business (nitrogen, oxygen, argon,
carbon dioxide and acetylene) of AGA Gas BV. The
commitment to dispose of the business extends to the
industrial gas filling plant in Amsterdam, the associated
staff (about [...]* employees), the current contracts with
customers, suppliers and forwarding agents, the list of
customers, and the associated gas cylinders (about [...]*).
The commitment to dispose of the business does not
apply to special gases, including Mison®, and gases for
medicinal purposes.

(94) Under the commitment proposed, AGA’s entire gas
business in Austria would be offered for sale to competi-
tors. The disposal would ensure that Linde’s position on
the markets in liquefied and cylinder gases would not be
strengthened. It would also ensure that there would still
be three main suppliers in Austria. The disposal of the
two air separation plants and the liquefaction plants is
necessary in order to ensure that the purchaser is placed
in the same competitive position that AGA occupied
previously in both liquefied atmospheric gases and
atmospheric gases in cylinder. Linde has not proposed
that the commitment should be restricted to cylinder
oxygen, nitrogen, argon, carbon dioxide and acetylene,
thus excluding cylinder hydrogen. A restriction of that
kind would in any event be difficult to apply in practice,
because all cylinder gases are generally bottled together.
The Commission is therefore satisfied that the proposed
commitment would prevent the creation of dominant
positions on the markets in liquefied and cylinder gases
in Austria.

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Official Journal of the European Communities

L 120/17

VI. SUMMARY

(95) On the grounds set out above, the Commission is
satisfied that the proposed transaction would not create
or strengthen any dominant position as a result of which
effective competition would be significantly impeded in
a substantial part of the common market, provided that
the commitments entered into by the notifying party
are complied with. With that proviso, therefore, the
transaction should be declared compatible with the
common market in accordance with Article 8(2) of the
Merger Regulation and Article 57 of the EEA Agreement,

HAS ADOPTED THIS DECISION:

Article 1

The notified concentration by which Linde Aktiengesellschaft
would acquire sole control of the entire share capital of AGA
AB is hereby declared compatible with the common market

and with the EEA Agreement, provided that the commitments
entered into by the notifying party and set out in the Annex to
this Decision are complied with.

Article 2

This Decision is addressed to:

Linde AG
Abraham-Lincoln-Straße 21
D-65189 Wiesbaden

Done at Brussels, 9 February 2000.

For the Commission

Mario MONTI

Member of the Commission

L 120/18

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Official Journal of the European Communities

7.5.2002

ANNEX

The full original text of the conditions and obligations referred to in Article 1 may be consulted on the following
Commission website:
http://europa.eu.int/comm/competition/index–en.html