2003/754/EC: Commission Decision of 26 June 2002 declaring a merger to be compatible with the common market and the EEA Agreement (Case COMP/M.2650 — Haniel/Cementbouw/JV (CVK)) (Text with EEA relevance.) (notified under document number C(2002) 2315)
Date: 2002-06-26
Institutions: European Commission
Subjects: building materials, competition law, economic concentration, merger control

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 26 June 2002

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

(Case COMP/M.2650 — Haniel/Cementbouw/JV (CVK))

(notified under document number C(2002) 2315)

(Only the German text is authentic)

(Text with EEA relevance)

(2003/754/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European
Community,

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

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

Having regard to the Commission Decision of 30 Novem-
ber 2001 to initiate proceedings in this case,

Having regard to the opinion of the Advisory Committee on
Concentrations (3),

Having regard to the final report of the Hearing Officer in
this case (4),

(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 261, 30.10.2003.
(4) OJ C 261, 30.10.2003.

(1) On 24 January 2002 Franz Haniel & Cie GmbH
(Haniel) and Cementbouw Handel & Industrie BV
(Cementbouw) notified the Commission under Article 4
of Council Regulation (EEC) No 4064/89 (the Merger
Regulation) of a concentration whereby in 1999
they acquired joint control, within the meaning of
Article 3(1)(b) of the Merger Regulation, of Coöperatie-
ve Verkoop- en Produktievereniging van Kalkzandsteen-
producenten (CVK, Netherlands) and its member
undertakings through an agreement and by purchasing
equity interests of RAG AG (RAG, Germany).

(2)

The Commission examined the notification and found
that the notified proposal fell within the scope of the
Merger Regulation and raised serious doubts as to its
compatibility with the common market and the EEA
Agreement. It therefore decided to initiate proceedings
under Article 6(1)(c) of the Merger Regulation. After a
thorough examination of the case, the Commission
the notified
has now reached the conclusion that
merger proposal did create a dominant position which
appreciably restricts competition in a substantial part

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of the common market. However, the commitments
made by the parties remove the reservations about the
merger from the competition standpoint.

I. PARTIES AND OPERATION

(Rijsbergen)

— Steenfabriek Boudewijn BV (Boudewijn)

[...]* %

— Kalkzandsteenfabriek Hoogdonk

BV

(Hoogdonk)

— Kalkzandsteenfabriek

Rijsbergen

BV

— Kalkzandsteenfabriek Harderwijk

BV

(Harderwijk)

— Kalkzandsteenfabriek

Roelfsema

BV

(Roelfsema)

— Kalkzandsteenfabriek Bergumermeer BV

(Bergumermeer)

[...]* %

[...]* %

[...]* %

[...]* %

[...]* %

(6)

(7)

(8)

— Anker Kalkzandsteenfabriek BV (Anker)

[...]* %

— Vogelenzang Fabriek van Bouwmateria-

len BV (Vogelenzang)

— Van Herwaarden Hillegom BV (Van

Herwaarden)

[...]* %

[...]* %

The shares in De Hazelaar, Loevestein, Boudewijn,
Hoogdonk and Rijsbergen belong to Haniel. The shares
in Harderwijk, Roelfsema and Bergumermeer belong
to Cementbouw. Haniel and Cementbouw each own
[...]* % of Anker, Vogelenzang and Van Herwaarden.

B. Background to and implementation of

the

merger of 9 August 1999

CVK has been in existence since 1947 and started out
as a joint sales organisation for its members, the Dutch
sand-lime brick manufacturers. In 1989 it was changed
into a cooperative, to improve cooperation among the
manufacturers.

in question was completed,

The originally independent sand-lime brickworks were
taken over in due course by various groups. Before
the merger
five of
the eleven CVK members (De Hazelaar, Loevestein,
Boudewijn, Hoogdonk and Rijsbergen) were subsidi-
aries of Haniel. Three sand-lime brickworks (Harder-
wijk, Roelfsema and Bergumermeer) were subsidiaries
of Cementbouw, which at
the time was still part
of
the Dutch group NBM Amstelland BV (NBM
Amstelland) (6). Two works (Anker and Vogelenzang)
were subsidiaries of RAG. Haniel owned [...]* %,
Cementbouw/NBM Amstelland [...]* % and RAG [...]* %
of Van Herwaarden.

(6) NBM Amstelland sold Cementbouw to CVC at the beginning of

2001.

(3)

(4)

(5)

A. Parties

it

sector

is a diversified German holding company. In
Haniel
the building materials
is active in the
manufacture and sale of wall-building materials such
as sand-lime bricks, aerated concrete and ready-mixed
concrete. Haniel’s main centre of activities is Germany,
but before the merger
it was also active in the
Netherlands through its stake in several sand-lime
brickworks that are members of CVK. In 2002 it has
also taken over the German undertaking Fels-Werke
GmbH (Fels) and Ytong Holding AG (Ytong), which
are both active, through subsidiaries, in the building
materials sector in the Netherlands; however, Haniel
has promised the Commission on certain conditions
to sell Ytong’s Dutch businesses (5).

Cementbouw is active in the building materials trade,
logistics and raw materials
construction markets,
supply,
building
concrete
ready-mixed
materials industry in the Netherlands. Cementbouw is
controlled by CVC Capital Partners Group Ltd (CVC),
an investment trust with its registered office in the
Canary Islands

and

the

CVK sells sand-lime brick products in the Netherlands
and controls the production of sand-lime bricks in its
the
member plants.
sand-lime brickworks in the Netherlands. The following
firms
show their
respective stakes in CVK):

Its membership consists of all

(the percentages

are members

— Kalkzandsteenfabriek De Hazelaar BV

(De Hazelaar)

— Kalkzandsteenindustrie

Loevestein BV

(Loevestein)

[...] (*) %

[...]* %

(*) Parts of this text have been omitted in order to ensure that no
confidential information is disclosed; these are contained in square
brackets and marked with an asterisk.

(5) See Commission Decisions of 21 February 2002 in Case COMP/
M.2495 — Haniel/Fels and of 9 April 2002 in Case COMP/
M.2568 — Haniel/Ytong.

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(9)

(NMa), was notified of

In 1998 the Dutch competition authority, Nederlandse
Mededingingsautoriteit
a
proposed merger whereby CVK would acquire control
over its members, all eleven of whom were sand-lime
brick manufacturers in the Netherlands. Control would
be transferred after
the conclusion of a pooling
agreement (poolingovereenkomst). This notification came
after the initiation of cartel proceedings against CVK
by the public prosecutor,
initially under the Dutch
competition rules in force up to the end of 1997 and
[...]*. The NMa authorised the notified merger by
decision of 20 October 1998 (7). It took the view that
the pooling agreement together with the corresponding
changes to CVK’s articles (statuten) ensured that the
original business and organisational ties between the
member companies and their owners would be broken
in a way that ensured that CVK would acquire control
over its members. Control of the member companies
by their owners (Haniel, Cementbouw / NBM Amstel-
land, RAG) would also be ruled out by this means. In
the NMa’s opinion, the notified merger would not lead
to the creation or strengthening of a dominant position
on the Dutch market. [...]*

(10) Before the merger was carried out, RAG had decided
to surrender its shares in the CVK member companies
and sell them to Haniel and Cementbouw. By acquiring
these shares, Haniel and Cementbouw would, through
their stakes in CVK member companies, each have
50 % of CVK. After the ‘Heads of Agreement’ had
been concluded on 5 March 1999, the parties informed
the NMa of their intentions. The NMa told the parties
that the proposed sale would not constitute a merger
under Dutch law,
it were carried out after the
if
pooling agreement had been concluded.

(11) CVK and its member companies concluded the pooling
agreement on 9 August 1999. CVK’s articles were also
altered on that date, to reflect the provisions of the
pooling agreement (statutenwijziging). On the same day,
the agreement by which RAG sold its shares to Haniel
and Cementbouw was signed and implemented. Also
on 9 August 1999, a ‘cooperation agreement’ between
Haniel and Cementbouw was concluded, setting out
inter alia how both firms intended to use their influence
over CVK. [Examples of individual provisions of the
cooperation agreement]*.

II. MERGER

(12) Under Article 3(1)(b) of

the Merger Regulation, a
concentration shall be deemed to arise where one or
more undertakings acquire, whether by purchase of
securities or assets, by contract or by any other means,
direct or indirect control of the whole or parts of one
or more other undertakings.

(13)

(14)

In the present case, by virtue of
the agreements
concluded on 9 August 1999 (pooling agreement,
alteration of the articles, cooperation agreement) and
the acquisition of RAG’s shares in Anker, Vogelenzang
and Van Herwaarden by Haniel and Cementbouw,
which was agreed and implemented on the same day,
Haniel and Cementbouw acquired control over CVK,
and at the same stroke the latter acquired control over
its eleven member companies.

Joint control exists where two or more undertakings
or persons have the possibility of exercising decisive
influence over another undertaking, i.e. they have the
power to block actions which determine the strategic
commercial behaviour of an undertaking and are
hence forced to reach a common understanding in
determining the commercial policy of the joint venture.
This is particularly the case where there are only two
parent companies which share equally the voting
rights in the joint venture (8).

(15) By buying RAG’s shares, Haniel and Cementbouw
acquired joint control of CVK. Their respective indirect
stakes of 50 % in CVK enable Haniel and Cementbouw
to exercise veto rights at the meeting of CVK members
(ledenvergadering). These rights were created by the
withdrawal of RAG, whose presence at the meeting
would have made variable majorities possible and
hence ruled out control of
the meeting by the
shareholders.

(16) The meeting of members decides who will sit on
CVK’s decision-making bodies. These are the managing
board (raad van bestuur) and the supervisory board
(raad van commissarissen). The articles and the pooling
agreement impose restrictions on the meeting’s choice,
since no member of the managing board, and only a

(7) Case 124/CVK Kalkzandsteen.

(8) Commission Notice on the concept of concentration under
Council Regulation (EEC) No 4064/89 on the control of concen-
trations between undertakings (OJ C 66, 2.3.1998, p. 5, recitals 19
and 20).

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minority of the members of the supervisory board,
may at the same time hold a position in the companies
of the shareowners of the CVK members.

decisions of
the Haniel group’s management with
regard to the merger in question show that, in Haniel’s
eyes at any rate, the pooling agreement would enable
the parties jointly to control CVK (10).

(17) Choosing who sits on the decision-making bodies of a
company is a basic strategic decision. A right to veto
such a decision therefore gives its holder,
for the
purposes of the Merger Regulation, control over the
company, in this case CVK, since the members of the
decision-making bodies will not disregard the views of
those who have the right to veto their decisions.

(20)

(18) The acquisition of control of CVK from its members,
through the conclusion of the pooling agreement, and
the alterations to CVK’s articles are also part of the
merger and hence a subject of these proceedings. The
pooling agreement provides
that CVK’s member
companies will be managed in such a way that CVK
is appointed as the institutional manager (directeur) of
each member company — the shareholder(s) appoint(s)
a further manager each — and has the power to
instruct that company. The member companies’ profits
and losses are distributed among the shareholders in
accordance with the latter’s indirect shares in CVK,
irrespective of
the profits and losses made by the
individual companies. Thus the individual member
companies are brought together in an economic unit
under the aegis of CVK, which consequently acts as
a full-function enterprise for all
sand-lime brick
manufacturers on the market. All strategic decisions
concerning CVK and its member companies are taken
centrally by CVK’s managing board.

(19)

Further light is shed on Haniel’s and Cementbouw’s
acquisition of control of CVK by the cooperation
agreement which they concluded in the context of the
pooling agreement. This regulates various aspects of
their cooperation within CVK (see paragraph 11). In
addition, certain strategic decisions implemented by
CVK’s corporate management after the merger had
been carried out — in particular the closure of three
of the eleven sand-lime brickworks — were already
being discussed in detail by Haniel and Cementbouw
before the merger and thus, for the parties, plainly
formed the basis for concluding the pooling agree-
ment (9). Collectively,
the documents preparing the

therefore, Haniel

and
Indirectly
through CVK,
Cementbouw also acquired control of
the member
companies. The operations took place within a narrow
time frame and closely resembled each other. The legal
acts giving Haniel and Cementbouw control of CVK
and those giving CVK control of the eleven sand-lime
brick companies were performed on the same day
(9 August 1999) and were recorded by the notary in
a uniform document. Moreover,
it was the parties’
intention to link the two acquisitions of control, so
that one did not take place without the other. The
conclusion of the agreements, which were submitted
to the NMa, was thus postponed until the conclusion
of the negotiations on the transfer of RAG’s shares.
This came about because RAG had in the meantime
expressed the wish to withdraw from CVK, as it was
the cooperative’s
no longer willing to be part of
proposed new corporate structure. Economically too,
therefore, the two acquisitions of control should be
regarded as a unit. Even if one wanted to see these
events as two transactions separated in time by a
‘logical second’, they are dependent on each other in
such a way that they should be regarded as a single
merger.

in

of

the

and

objections

(21) Haniel, too, took this line in its comments on the
hearing.
statement
Cementbouw, however, proposed that, should the
departure of RAG be seen as an acquisition of joint
control over CVK by Haniel and Cementbouw —
which Cementbouw disputes — the Commission’s
responsibility could relate only to that acquisition.
CVK’s acquisition of control over its member compani-
es, on the other hand, was
separate
concentration. It cannot be concluded that because the
pooling agreement and the transfer of the RAG shares
to Haniel and Cementbouw were agreed on the same
day they form a single event in a legal or business
sense;
it was merely that practical difficulties which
had not been described in full had prevented the
pooling agreement from being concluded immediately
after the NMa’s authorisation on 20 October 1999.
CVK’s acquisition of control of the member plants,
however, was legalised by the NMa’s legally enforceable
decision of 20 October 1998, so that there was no

legally a

(9) The planned closure of

the Bergumermeer, Boudewijn and
Vogelenzang works is mentioned in various internal documents
of Haniel’s as a basis for carrying out the CVK operation [details
of the said documents]*.

(10) [Reference to internal documents of Haniel]*.

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way the Commission’s investigation in the present
proceeding could cover that event as well.

(22) The Commission cannot share Cementbouw’s view.
All
the agreements concluded on 9 August 1999
constitute a single economic event, as a result of
which a joint sales organisation for 11 hitherto legally
independent sand-lime brickworks belonging to a total
of three different parent companies was changed into
a full-function undertaking jointly controlled by Haniel
and Cementbouw. Haniel confirmed more than once
for the parties involved in the transaction of
that
9 August 1999 (Haniel, Cementbouw and RAG) all
these agreements were interdependent and formed an
economically unified whole. When asked, Cementbouw
could not give a convincing explanation why the
transaction authorised by the NMa was postponed for
more than nine months and only implemented when
RAG withdrew. The Commission therefore assumes
that RAG would not have been prepared to take part
in implementing the pooling agreement as an indirect
shareholder in CVK.

(23)

From a formal point of view, admittedly, RAG did
conclude the pooling agreement before the sale of its
shares to Haniel and Cementbouw was completed.
From the fact that the same notary officially recorded
the pooling agreement and the alteration of the articles
immediately before the sale of the RAG shares at the
same meeting, and drew up a single document for the
purpose, it is clear however that RAG can be said to
have been involved in the implementation of the CVK
structure
authorised by the NMa only from a
superficially formalistic perspective. Such a purely
formal perspective is not enough to decide the question
whether one or more business acquisitions constitute
a concentration that has to be vetted under the Merger
Regulation. The provision in the second paragraph of
Article 5(2) of the Merger Regulation, which is not
directly relevant here, also shows that an economic
perspective is appropriate in this case. It can therefore
be
concluded on
9 August 1999 form a single concentration, whereby
CVK acquired control over its member undertakings,
and at the same time Haniel and Cementbouw acquired
control over CVK.

assumed that

agreements

the

(24)

It follows that the merger authorised by the NMa on
20 October 1998 is different to that carried out by
the parties on 9 August 1999. The NMa authorised a
merger that would have led only to CVK’s acquisition

of control over its member companies, without the
shareholders acquiring control of CVK. When the NMa
the CVK member
the shares of
took its decision,
companies were held by three shareholders (Haniel,
Cementbouw and RAG), which would have resulted in
variable majorities
in the members’ meeting and,
hence, no one would have had control of CVK. Even
if one treats the acquisition of the eleven sand-lime
companies by CVK as an independent acquisition of
control, it still did not have a Community dimension.
The operation on which the NMa took a decision was
thus a concentration which did not have to be notified
to the Commission under the Merger Regulation.

(25) Only after it had taken its decision was the NMa
informed by the parties that RAG intended to sell its
to Haniel and
stake in the sand-lime companies
Cementbouw in the manner described. The NMa
confirmed in an informal letter to the parties that it
would not regard the sale of the RAG shares as a
merger from the standpoint of Dutch competition law,
the pooling agreement was concluded and the
if
alterations to the articles were made before the shares
were transferred. Basically,
it took the view that, by
transferring control of their companies to CVK, the
shareholders would lose direct control over them but
would not acquire any indirect control over CVK. This,
so the NMa reasoned, was due to the restrictions on
the composition of CVK’s organs contained in the
alterations to the articles. It is therefore applying a
criterion for control which according to the Merger
Regulation is not relevant in this form. At the time of
the
agreement
between Haniel and Cementbouw had not been
submitted to the NMa.

correspondence,

cooperation

the

(26) Opposing this approach, Haniel objected that

the
legislator had deliberately followed the Merger Regu-
lation when formulating the concept of control in the
Dutch Merger Act.
In accordance with the Com-
mission’s practice, too, having the same persons sitting
on the management boards of
the undertakings
concerned could lead to the acquisition of control.

(27)

It should be noted that the legislator’s intention that
the concept of control should be interpreted in a way
which corresponds as closely as possible to Community
law does not necessarily have to lead, in legal terms,
to an identical interpretation. The Commission cannot
influence the way the Dutch authority interprets the
concept, but it is definitely not acceptable that in its
interpretation of
in the Merger Regu-
lation the Commission should have to follow the

the concept

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the fact

national authority’s municipal law interpretation in an
earlier decision. In the present case, the NMa decided
that members of a joint venture’s
that
management bodies do not simultaneously occupy
posts in the parent companies was crucial
to its
conclusion that the joint venture was not controlled
by the parent companies. As regards the application of
Article 3(3) of the Merger Regulation, the Commission
the reasons already
cannot
share
in accordance with the Com-
explained. Even if,
mission’s practice,
the members of
the fact
managing bodies are the same persons may, depending
on the pattern of the case, be used, together with
other elements,
the opposite
conclusion should not be drawn from this, namely
that where the persons are not the same there is no
relevant
control, even if
criteria apply.

it exists when the other

to establish control,

this view,

that

for

(28) Since the operation examined by the Commission in
these proceedings is therefore different
from that
notified to the NMa in 1998, and authorised in the
decision of 20 October 1998, the national authority’s
rendered ineffective by a
decision will not be
Commission decision in the present
case. Both
authorities have acted in accordance with their
respective powers. The proposal notified to the NMa
that
time had no Community
by the parties at
the
dimension because,
the Merger
if
Regulation are applied,
the three indirect parent
companies of CVK (Haniel, Cementbouw and RAG)
the
had no joint control of CVK, on account of
variable majority, and were therefore not involved in
themselves. However, as a result of
the merger
the operation carried out on
RAG’s withdrawal,
9 August 1999 was, by virtue of
the Merger
Regulation, the basis for the joint control of CVK and
simultaneously its member companies by the remaining
parent
companies, Haniel and Cementbouw, and
therefore has a Community dimension. The examin-
ation of the concentration under merger control law
was thus a matter for the Commission.

tests of

that RAG’s withdrawal from CVK did not represent a
merger that had to be vetted again, provided the CVK
company structure on which the authorisation decision
of 20 October 1998 was based was put into effect
beforehand.

It

(30) This objection is not sustainable. As already explained,
the parties to the merger proceeding brought before
the NMa did not implement the proposal notified to
the NMa, but
instead carried out another merger
through the agreement of 9 August 1999, which was
not authorised by the NMa in that form. The NMa’s
confirmation in informal correspondence that a new
notification was not necessary does not protect the
merger from the application of
the Merger Regu-
lation or create a legitimate expectation in the parties
or CVK, which would be unsoundly attacked by the
present Commission decision.
is questionable
whether the parties and CVK have met the requirements
laid down by the NMa
correspondence
mentioned. As explained in paragraph 23, the CVK
company infrastructure authorised by the NMa in its
decision of 20 October 1998 before the sale of the
RAG shares to Haniel and Cementbouw can at best be
invoked in a superficially formalistic perspective. In
any event, however, an informal written confirmation
from a national authority cannot alter the division of
jurisdiction in the Merger Regulation. Besides, since
the national authority is not responsible for interpreting
the Merger Regulation, that confirmation cannot give
the undertakings involved a legitimate expectation that
there is no duty to notify under the Merger Regulation.
Nor did the NMa actually say this, for the relevant
correspondence only mentions a possible duty to
notify under Dutch law (11).

in the

that, on the question of control,

(31) Nor is the enforceability of the NMa decision altered
by the fact
the
Commission’s assessment differs from that made by
the NMa. Different
legal or factual assessments by
different authorities, each acting in accordance with
their own powers, cannot always be avoided, especially
legal basis
if
(Merger Regulation/national competition law). The
the undertakings affected by the
legal position of

those authorities act on a different

(29) The parties and CVK dispute

the Commission’s
jurisdiction on the grounds that in the present case
the Commission is setting aside the legally enforceable
decision of the NMa and attacking the duly acquired
legal positions of CVK and its members. The NMa
confirmed to CVK,
in the correspondence conducted
before the agreement of 9 August 1999 was concluded,

(11) See the letter from CVK’s legal adviser to the NMa dated
13 April 1999 and the NMa’s letter to the legal adviser dated
28 April 1999.

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respective decisions is not compromised thereby, for
each authority’s decision has a binding effect only in
respect of the underlying set of facts, which is different
in each case.

V. COMPATIBILITY WITH
THE COMMON MARKET

A. The relevant product markets

(32) The enforceability of the NMa decision of 20 Octo-
ber 1998 cannot therefore prevent the Commission
from exercising this
transaction
carried out on 9 August 1999 thus constitutes a
concentration within the meaning of Article 3(1)(b) of
the Merger Regulation.

jurisdiction. The

III. COMMUNITY DIMENSION

(33) The firms concerned achieve an aggregate world-
wide turnover of over EUR 5 billion (12)
(Haniel
EUR 18,7 billion, CVC EUR 18,8 billion, CVK
EUR 0,2 billion). Both Haniel and CVC have a
Community-wide turnover of over EUR 250 million
(Haniel EUR 17,5 billion, CVC EUR [...]* billion, CVK
EUR [...]* billion). Neither Haniel nor CVC achieves
more than two thirds of its Community-wide turnover
within one and the same Member State; this is only
the case with CVK (Netherlands). Consequently, the
notified concentration has a Community dimension.

IV. PROCEDURE

(34) After examining the notification,

the Commission
established that the notified concentration fell within
the scope of the Merger Regulation and raised serious
doubts about
its compatibility with the common
market and the EEA Agreement. On 25 February 2002
it therefore decided to initiate proceedings in accord-
ance with Article 6(1)(c) of the Merger Regulation.

commented

(35) On 25 April 2002 the Commission sent a statement
of objections to Haniel, Cementbouw and CVK, on
which Haniel
and
Cementbouw and CVK on 13 May 2002, in separate
documents. At the request of the parties and CVK an
oral hearing was held in Brussels on 16 May, in which
a third undertaking,
the builders’ merchant Raab
Kaarcher Baustoffen (‘Raab Kaarcher’), also took part.

11 May,

on

(12) Turnover was calculated in accordance with Article 5(1) of the
Merger Regulation and the Commission Notice on calculation of
turnover (OJ C 66, 2.3.1998, p. 25). Turnovers achieved before
1 January 1999 were calculated using the average ECU exchange
rate and converted into euros in the ratio of 1:1.

(36) The merger relates to the production and sale of wall-
building materials. CVK produces and sells sand-lime
bricks and sand-lime walling units.
In addition to
its activities in the construction materials market,
Cementbouw produces and distributes ready-mixed
concrete and precast concrete walling units. Aside
from its participation in CVK, Haniel was not active
in the Netherlands until recently, but, after the takeover
it is active in aerated concrete and gypsum
of Fels,
products; the takeover of Ytong, however, is not, on
account of
to sell Ytong’s Dutch
operations, a takeover of a building materials business
that is relevant to the assessment of this merger. In
addition to sand-lime, concrete, aerated concrete and
gypsum products, clay bricks are also used in wall
building, as are, to a limited extent, steel plates and
wooden panels.

the promise

1. The products

(37) Sand-lime bricks are masonry units prepared from
lime and sand by adding water and then compressing
and hardening them under steam pressure. The bricks
are used exclusively for building walls. They are
generally rendered, filled in with thin plaster or hidden
from view by a facing wall. When sand-lime masonry
is visible, it generally consists of facing bricks, which
are produced only in small formats (13). These form a
separate market, which will not be discussed in detail
here, as the parties produce such facing bricks only in
small quantities. Besides sand-lime bricks, other, larger
sand-lime walling units are used (usually measuring up
to 900 × 625 × 300 mm in the Netherlands).

(38) Aerated concrete is a building material made from
sand, lime and cement, to which aluminium powder
is added during the manufacturing process. The
powder
reacts with water to form a fine porous
structure. Aerated concrete products (blocks and other
units) are used mainly in the construction of buildings.
They can be used for both load-bearing walls —
particularly in the case of blocks and very dense units
— and non-load-bearing walls.

(39) Gypsum is a light wall-building material used only for
non-load-bearing walls, as it has a very low load-
bearing capacity. It is used in the form of gypsum
plasterboards and planks.

(13) Maximum size: 240 × 175 × 113 mm.

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(40) Concrete is another widely used wall-building material.
Concrete walls can be made by pouring mixed concrete
on site (in-situ concrete) or by using precast concrete
walling units. A third form of concrete comes in
small-format concrete blocks. Concrete walls are built
almost only as load-bearing walls.

(41)

In-situ concrete can be cast either by the traditional
method of using formworks specially made on site or
(tunnelgietbouw in Dutch) using
forming’
by ‘tunnel
prefabricated tunnel
formworks, whereby walls and
ceilings are cast in a single process.

(42) Precast concrete walling units are produced in factories
to precise specifications, then transported to the site
and incorporated in the building for which they are
intended. They generally constitute entire walls and
are thus considerably larger than the sand-lime bricks
or blocks predominantly used in masonry work, and
require heavy equipment.

(43) Brick — the classic masonry material — is manufac-
tured from a mixture of clay and water by firing at
temperatures of over 1 000 °C. However, the size of
individual bricks is limited, as the firing process causes
deformations such as shrinkage and warpage. Jointing
is
therefore necessary when working with these
products, in order to offset these deformations.

(44) Steel plates are used mainly in non-residential construc-
tion, and to a lesser extent in residential construction.
in wall space in
For example, they are used to fill
load-bearing concrete or steel structures. In such cases
the wall usually consists of
two steel plates with
insulating material between them (metal sandwich
plates).

(45) Wooden panels are

construction, mainly

employed in industrial

and
form of
residential
prefabricated walling units used to close off
the
building on the outside where there are no load-
bearing walls. In the Netherlands wood is used for
load-bearing walls only in exceptional cases.

in the

building materials depend to a not
inconsiderable
extent on national building practices and traditions, as
well as on conditions in the construction industry, and
can sometimes vary considerably therefore between
certain EEA states. In its investigation, the Commission
has focused on conditions in the Netherlands, since it
is only in that Member State that the merger has an
effect.

(a) M a r k e t d e f i n i t i o n u s e d b y t h e n o t i -
( w a l l - b u i l d i n g

p a r t i e s

f y i n g
m a t e r i a l s )

(47) The parties claim there is a single market

in particular

in wall-
building materials, given the existing conditions of
competition,
the lack of any price
difference based on use and the fact that they are
invariably sold via the building materials trade. This
market includes all products which are used in the
construction of walls: clay bricks, concrete blocks,
sand-lime bricks, aerated concrete blocks, precast
concrete walling units, sand-lime walling units, aerated
concrete units, masonry mortar, in-situ concrete, steel
plates, gypsum plasterboards and planks, and wooden
panels. The parties argue that, when a building is
designed,
there is generally a choice of various
solutions for constructing the walls.

(48) The parties state that the architect or project developer
generally defines the requirements to be met as regards
the building’s load-bearing capacity, age-resistance, ease
of maintenance, thermal insulation, fire protection and
noise insulation.
In some cases the architect also
makes a selection of building materials in the building’s
specifications, but, according to the parties,
these
specifications leave ample room for alternative sol-
utions. Building contractors have a free choice of
building materials, provided that the specifications are
met. In the project proposal they can opt for a specific
building material or put
forward several possible
solutions.

2. Definition of the relevant market

(46)

In determining the extent of a relevant market, the
Commission has to consider various product market
definitions. In so doing,
it has to be borne in mind
the use and exchangeability of various wall-
that

(49) The parties do concede, however, that

In view of

every purpose.

the various
wall-building materials are not entirely interchangeable
for
the considerable
differences in the demands made on building materials,
depending on whether they are used for load-bearing
or non-load-bearing walls, the parties consider that
there is a case for dividing the market in wall-building
materials into materials for load-bearing and for non-
load-bearing walls.

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(b)

P r e v i o u s
( m a s o n r y / l o a d - b e a r i n g m a s o n r y )

C o m m i s s i o n

p r a c t i c e

(50)

In its Decision on Preussag/Hebel (14), the Commission
looked at two alternative product market definitions,
but without adopting any firm position. On the one
hand it considered the possibility of a market for all
materials that can be used to build walls by the ‘brick
on brick’ method (masonry),
including clay bricks,
sand-lime bricks, aerated concrete blocks and pumice
blocks.
Its investigations at that time suggested that
these products were interchangeable at the building
planning stage. Within this market definition,
the
Commission also considered that a further distinction
could be made between load-bearing and non-load-
bearing walls
took no
(load-bearing masonry).
account of precast concrete walling units or in-situ
concrete.

It

(c)

P r a c t i c e
o f
k a r t e l l a m t ( m a s o n r y )

t h e G e r m a n

B u n d e s -

(51) The Bundeskartellamt has consistently defined the
relevant market in wall-building materials in a similar
to that which the Commission initially
manner
envisaged in its Decision on Preussag/Hebel.
In its
decisions the Bundeskartellamt assumes the existence
of a market in building materials for rising back-up
masonry which takes in aerated concrete products,
sand-lime products, bricks, pumice blocks and concrete
blocks
(masonry). The Bundeskartellamt does not
distinguish between load-bearing and non-load-bearing
walls. As far as the Bundeskartellamt is aware, the
materials used in Germany for both types of wall are
essentially the same.

(d)

P r a c t i c e
t h e
m a t e r i a l s f o r l o a d - b e a r i n g w a l l s )

( b u i l d i n g

N M a

o f

the market

materials used for load-bearing walls in its definition
of
in wall-building materials for load-
bearing materials. This covers not only the above-
mentioned wall-building materials for masonry referred
to in recital 51 (the ‘brick on brick’ method), but also
precast concrete units and in-situ concrete. However, it
should also be pointed out
in a subsequent
that,
the NMa opened up the possibility of a
decision,
distinction between in-situ concrete and other wall-
building materials (16).

3. Assessment

in the Netherlands

(53) On the basis of the information available to it and, in
particular, the market investigation carried out by it in
the case, the Commission, like the NMa, concludes —
as in its Decisions of 21 February 2002 (Case COMP/
M.2495 — Haniel/Fels) and 9 April 2002 (COMP/
there is a relevant
M.2568 Haniel/Ytong) — that
product market
for building
materials for load-bearing walls and a separate one for
building materials
for non-load-bearing walls. The
former includes all building materials used for load-
bearing walls, such as clay bricks, sand-lime, aerated
concrete, concrete blocks, precast concrete wall units
and, possibly, in-situ concrete. However, the result of
the market investigation suggests that in-situ concrete,
in particular that cast by tunnel forming, should be
excluded; however,
it is not necessary to settle this
matter conclusively, since the question does not affect
the assessment of
the
market
for building materials for non-load-bearing
walls covers all building materials used for non-load-
bearing walls, such as sand-lime, aerated concrete,
gypsum plasterboards and planks, steel sheets and
wood.

the concentration. Likewise,

(52) By contrast, the NMa draws a distinction between
load-bearing and non-load-bearing walls because, to its
knowledge, different materials are used for each type
of wall
this
difference in uses, sand-lime, which is used for both
types of wall, is in competition with different materials
in each case. The NMa has included all wall-building

in the Netherlands (15). Because of

(14) Case COMP/M.1866 — Preussag/Hebel, 29.3.2000; but compare
the Decision of 21 February 2002 on Case COMP/M.2495 —
Haniel/Fels and the Decision of 9 April 2002 on Case COMP/
M.2568 — Haniel/Ytong.

(15) NMa, Decision of 20 October 1998 in Case 124/CVK —

Kalkzandsteen.

(54) All the building materials included by the parties in
their proposed market definition are suitable for the
building of walls and are actually used for
this
purpose. The Commission’s market investigation in the
Netherlands has shown, however, that not all of these
materials are in competition with one another.

(16) NMa, Decision of 29 February 2000 in Case 2427/NCD —

Fernhout.

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(a)

P r o p e r t i e s
t h e
b u i l d i n g m a t e r i a l s

o f

v a r i o u s w a l l -

(55) Each of the abovementioned wall-building materials
has specific properties that are taken into account in
the selection of a specific wall-building material for a
specific building project.

(56) Sand-lime products are a cheap building material
though they cannot achieve the size of
which,
aerated concrete precast products, nevertheless, with
dimensions of up to 900 × 625 × 300 mm, are
larger than traditional bricks. Furthermore, sand-lime
products, like aerated concrete, have a smooth surface
that does not have to be evened out by jointing. The
walling units can be glued together. In addition, sand-
lime products can be cut to shape at the factory in
accordance with the building plans, so that walling
units forming the gable or window openings can be
pre-prepared. All these factors mean that less time and
less expenditure on wage costs are needed than in the
the same
case of,
for example, ordinary bricks. At
time,
large-scale
investment in heavy cranes, as in the case of precast
concrete wall units, or casting moulds, as in the case
of in-situ concrete. In the Netherlands, because of their
excellent load-bearing properties, sand-lime is used for
load-bearing walls and, to a lesser extent, also for non-
load-bearing walls. In the Netherlands, it is estimated
that some [60-80]* % of sand-lime is used in load-
bearing walls. When it is used in non-load-bearing
walls, sand-lime has the disadvantage of being relatively
twice as heavy as aerated concrete).
heavy (about
However, the material does have good sound-insulating
properties and is suitable in particular for high, non-
load-bearing walls, such as those often required in non-
residential construction. Sand-lime is the traditional and
most popular wall-building material in the Netherlands.

sand-lime units do not

require

(57) Precast concrete walling units do not require masonry
work as they are already the size of the wall to be
produced. Concrete as a product can be produced
from relatively simple raw materials. However, fairly
large-scale resources such as cranes must be used in
erecting such walls, and this in its turn involves some
investment costs. They are therefore used mainly for
relatively large-scale projects. Precast concrete walling
units are used mainly in industrial construction (in
Dutch, utiliteitsbouw, abbreviated to u-bouw), and less
in housing construction (in Dutch, woningbouw, the
abbreviated form of which is w-bouw). However, their
use in medium-sized projects involving 10 or more
units, can also save costs, as the wall
is produced at
the factory and erection at the building site requires
relatively little labour and takes relatively little time.
The bigger the project, the lower the costs for the
precast wall.

(58)

In-situ concrete requires the largest amount of on-site
investment in its use, particularly in-situ concrete used

in the

in tunnel forming. The manufacture and use of the
frameworks required for repeated casting in the tunnel
forming method are so costly that this method is
economically viable only if there is a minimum of 30
to 50 residential units (over about 15 residential units
according to other sources) and only if those units are
identical in shape and size (17). There is therefore little
flexibility as to shape and size in construction using
in-situ concrete
forming method.
However, flexibility is an important criterion in the
Netherlands, even in the case of fairly large projects,
so as to avoid uniformity. The tunnel forming method
is not, therefore, an appropriate technique for relatively
small building projects or projects which do not
include rectangular shapes or repetitive use of the
material. In-situ concrete is also used in the construc-
tion of both individual houses and high-rises, the load-
bearing capacity of which is ensured by means of a
cast concrete skeleton to which non-load-bearing wall-
building materials are attached.

tunnel

(59) Aerated concrete is an expensive wall-building material.
It
is produced from high-grade, expensive basic
materials with high energy costs. Large sections must
be reinforced with steel, which further increases the
price, since reinforced sections entail significant costs
in the manufacture of the reinforcing elements.
In
contrast to steel reinforcement in the case of ordinary
concrete, the steel used for reinforcement here has to
be coated in order to protect against corrosion. The
constructional properties of aerated concrete are
somewhat more limited than those of sand-lime, but
it is possible to use it to build up to two storeys with
load-bearing walls. Aerated concrete does, however,
have excellent thermal
insulation properties. In Ger-
many, some 80 % of the aerated concrete products
used in wall building are used for load-bearing walls,
while only 20 % are used in non-load-bearing walls.
In the Netherlands, however, the ratio is the reverse:
some 80 to 85 % of aerated concrete is used in non-
load-bearing walls.

(60) Gypsum is a light material. Because of this property,
it is very well suited to non-load-bearing walls. The
load-bearing demands placed on floors are small, and
load-bearing
space is saved. Because of
capacity, gypsum is used only for non-load-bearing
walls.

its lack of

(61) Bricks are relatively small wall building units, and
because of
their uneven surface they are usually
jointed, although there are apparently also ways of

(17) The construction industry association VOBN claims that the
tunnel method can be a viable option where there are more than
about 15 residential units. However,
this depends on local
circumstances, and in particular on the design of the houses and
the degree of variation. Most market participants questioned
regard the tunnel method as economically viable only where
more than 30 to 50 residential units are involved.

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Official Journal of the European Union

L 282/11

gluing them together. Their use thus entails relatively
high labour costs and is relatively time-consuming,
industrial
and this makes bricks unsuitable
construction methods.

for

(b) D i s t i n c t i o n b e t w e e n w a l l - b u i l d i n g
l o a d - b e a r i n g w a l l s

m a t e r i a l s
a n d f o r n o n - l o a d - b e a r i n g w a l l s

f o r

(62) The market investigation showed that the decision as
to which building material to use for a specific project
is influenced both by the client and the architect and
by the building contractor. Exactly how much influence
on the choice of wall-building material is exercised by
each of these three groups of persons varies from case
to case.

in the

(63) The client’s precise preferences regarding, for example,
aesthetics and building costs are factors here, as are
the architect’s specifications. Criteria which are of
the various wall-
selection of
relevance
building materials are quality, constructional properties,
flexibility of use, appearance, the purchase price of the
material and the costs involved in using it. The special
requirements of the building project must be taken
into account in this respect, as must the use to which
the building is to be put, the necessary load-bearing
capacity, resistance to ageing, fire protection, sound
insulating properties, other technical capabilities, time-
table and the overall costs of the project. The building
contractor’s main criteria,
in so far as he has any
options regarding the choice of wall-building materials,
are costs and building speed. These in turn are
influenced by his experience with specific building
materials and the resources and facilities (e.g. cranes)
available to him. As far as the cost factor is concerned,
it must be borne in mind that the cost of materials is
always just one part of the overall costs of erecting a
wall.

(64)

their

conduct

In its market investigation, therefore, the Commission
surveyed all these decision-makers to determine the
in selecting wall-building
basis of
materials. Similarly, the manufacturers of the various
building materials were asked to provide information.
In the Netherlands, the survey showed that, in selecting
building materials, a fundamental distinction was made
between the choice of building materials for load-
bearing walls and building materials for non-load-
bearing walls.

Such walls must be distinguished from walls which do
not have any function in supporting the building, but
merely divide up the space or fill gaps inside a load-
bearing framework (external or internal walls). Building
materials used in load-bearing walls must meet certain
requirements as to resistance to pressure, load-bearing
capacity and stiffness. Building materials used in non-
load-bearing walls, by contrast, must meet other,
possibly contrary requirements. Lighter, non-load-
bearing walls,
for example, have the advantage of
making fewer demands on the load-bearing capacity
of the ceilings. Thin non-load-bearing walls for their
part save space.

In the Netherlands,

(66) These varying requirements in respect of load-bearing
and non-load-bearing walls result, in the Netherlands,
in different building materials being selected for these
different purposes.
the main
material used in load-bearing walls is sand-lime. Sand-
lime is used in [50 to 60]* % of all load-bearing walls.
Concrete is the next largest building materials category.
In-situ concrete is used in [10 to 15]* % of all load-
bearing walls. At
this building
material is used in tunnel forming (18). A total of [5 to
10]* % is accounted for by load-bearing walls made
from precast concrete wall units. Aerated concrete and
bricks, accounting for proportions of [0 to 2]* % and
[2 to 5]* % respectively, play a very minor role.

two-fifths of

least

(67)

In the case of non-load-bearing walls, by contrast,
gypsum products are the main materials used. They
account for [40 to 50]* % of the materials used in
non-load-bearing walls. Next comes aerated concrete
with [15 to 20]* %, followed by sand-lime with [15
to 20]* %.

(68) This demand-side pattern is typical of the Netherlands
and differs fundamentally from that in other countries,
such as Germany. In Germany, the proportions in the
use of aerated concrete for load-bearing and non-load-
bearing walls are just the reverse of
those in the
Netherlands. Whereas in Germany 80 % of all aerated
concrete products are used to construct load-bearing
walls,
in the Netherlands 85 to 90 % of all aerated
concrete products are used in non-load-bearing walls.
In Germany, concrete plays a minor role in load-
bearing walls in residential construction, while bricks
and other masonry units feature prominently.
In
Belgium, by contrast, concrete blocks appear to be
much more widespread than in the Netherlands and,
together with bricks, to be the most common wall-
building material. The use of in-situ concrete in tunnel
forming is much less widespread in Germany and
Belgium than in the Netherlands.

(65) The difference between load-bearing and non-load-
bearing walls, as the terms suggest, is the load-bearing
function of the relevant wall-building material. Load-
bearing walls ensure the stability of a building. The
relevant walls are often external walls. However,
internal walls too may perform a load-bearing function.

(18) According to the information provided by the parties,

in-situ
concrete accounts for [30 to 40]* % of the materials used in
tunnel forming; the market investigation suggested that the
proportion might be even higher than that.

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(69) The reasons

for

these differences

in demand-side
behaviour stem,
firstly, from differences in building
traditions and aesthetic approaches and, secondly,
from the advanced industrialised building methods
used in the Netherlands.

(70)

In the Netherlands, building and construction activity
is based on large-scale projects even in the residential
sector. Less than 20 % of all new residential building
relates to individual house building. In Germany, by
In the
the figure is more than 90 %.
contrast,
Netherlands, large areas are released by the government
for building purposes, and on such areas the building
and construction industry erects as much as several
thousand residential units (e.g. what are known as
VINEX locaties).
In building projects on this scale,
building materials that require high investment but
involve lower wage costs, such as in-situ concrete
using the tunnel
forming method, are profitable.
Consequently, bricks, which are labour-intensive at the
building site (small size and need for jointing) and
hence entail higher wage costs and are more time-
consuming, are used to only a minor extent.

(71) Sand-lime is the traditional building material

in the
Netherlands, since it is very cheap to produce and can
be used with great flexibility, speed and on favourable
cost terms in the building process (large units, cut to
the
factory, no jointing
in the
necessary).

required shape

(72) Aerated concrete, which is very widely used in
Germany in load-bearing walls because of
its good
thermal-insulating properties, is, despite this advantage,
not so widely used in the Netherlands because of its
substantially higher price compared to sand-lime. In
Germany, 30 cm-thick aerated concrete units are used
for load-bearing walls. These have then only to be
plastered and painted to produce a complete wall that
meets high thermal-insulation requirements. There are
no costs for facing masonry and additional insulation.
In the Netherlands, by contrast, smooth, plastered
external walls are not customary. The preference there
is for facades which give the impression of brickwork.
This is done by means of brickwork facing in front of
the load-bearing wall and the insulation between wall
and facing. This means that the cost advantage of
aerated concrete, which does not need insulation and
facing, is forfeited and hence that aerated concrete is a
much more expensive building material than sand-
lime. Consequently, aerated concrete is used only
occasionally in the Netherlands for load-bearing walls
in residential construction.

(73) However, since aerated concrete costs about the same
as gypsum walls, is relatively light, but affords better
thermal insulation, aerated concrete products are used
in the Netherlands for non-load-bearing walls. Sand-
lime is also used here. This is because it has very good

sound-insulating properties which may, in some cases,
offset its disadvantages as a heavy building material.
In addition, because of its constructional properties, it
is particularly suitable for high, non-load-bearing walls,
such as are required primarily in non-residential
construction.

(74) There is therefore only limited competition in the
Netherlands between, on the one hand, products used
in load-bearing walls and, on the other, those used in
non-load-bearing walls. This prompts the Commission
to draw a distinction in the Netherlands between a
relevant product market in load-bearing walls and one
in non-load-bearing walls. This is despite the fact that
some wall-building materials that are suitable for load-
bearing walls may also be used in non-load-bearing
walls and vice versa. This applies in particular to sand-
lime, which is the only wall-building material which is
used to any significant
extent equally in load-
bearing and non-load-bearing walls. Firms which make
products suitable for both types of wall are,
in the
market in load-bearing walls,
in competition with a
largely different set of competitors and faced with
different competitive conditions from those applying
in the market in non-load-bearing walls.

(75)

regards

in many cases,

In setting its prices for products used in load-bearing
walls, CVK, as the only sand-lime brick producer in
the Netherlands, is not restricted by prices charged on
the market in products intended for non-load-bearing
walls. The Commission’s market investigation shows
that CVK is often aware of the specific use of
its
products (19). Firstly,
the company
knows the place where its products will be used, since
it is itself often responsible for delivering them to a
particular building site. Secondly, as
the
delivery of sand-lime walling units, that make up half
its turnover, CVK has access to the architect’s plans.
In addition, Haniel has indicated that the thickness of
a substantial portion of sand-lime products means that
they can be used in load-bearing or non-load-bearing
walls. This information was confirmed by Raab Karcher
during the hearing. In view of the comments of the
parties and CVK on the statement of objections and
the discussion of this question at
the hearing, the
Commission therefore takes the view that CVK is in a
position to differentiate its prices according to the
perceived competitive situation. In this respect, implicit
price differentiation between large and small building
projects through bulk discounts and uniform transport
prices is possible. CVK has said that it grants builders’
merchants project- and contractor-specific discounts.

(19) In particular for elements cut for a specific use or for specific

deliveries; see paragraph 56.

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(76) Even if CVK cannot differentiate the prices of sand-
lime brick products for load-bearing walls from those
for non-load-bearing walls, it is to be assumed that it
tailors its pricing strategy primarily to the requirements
of the market in load-bearing walls, since it sells [60
to 80]* % of its products on that market.

(c)

I n c l u s i o n o f
m a r k e t
f o r l o a d - b e a r i n g w a l l s

i n - s i t u c o n c r e t e i n t h e
i n w a l l - b u i l d i n g m a t e r i a l s

(80) However, the question of whether in-situ concrete, and
in particular in-situ concrete used in tunnel forming,
should be viewed as belonging to the market in wall-
building materials for load-bearing walls can, however,
be left often, as it has no impact on the outcome of
the negotiation. Although the parties deemed it
appropriate to define the relevant product market,
which includes all kinds of in-situ concrete, the planned
merger has placed CVK in a dominant position on the
Dutch market.

(77) The results of

for

the market

load-bearing walls. This applies

investigation raise the
question of whether and to what extent in-situ concrete
is also to be included in the market in wall-building
materials
in
particular to in-situ concrete used in tunnel forming.
As already explained in recital 58,
this technique
involves high fixed investment costs which become
worthwhile when only a certain number of units are
to be built. According to various sources, this number
if
is in the region of 30 to 50 residential units or,
they are of
few as
approximately 15 residential units This means that
this method is not an option, not only in the case of
small projects, but also in the case of large projects in
which, for aesthetic and social reasons, a repetitive
building style is to be avoided. Irrespective of the exact
number of residential units required to make tunnel
forming economically viable, it can be concluded that
sand-lime is not exposed to competition from in-situ
concrete in relatively small-scale projects (20).

shape and size, as

identical

(78)

Furthermore, tunnel forming allows not only walls but
also, as part of
the same process, ceilings to be
produced. For these reasons, a decision to opt for
tunnel forming is not so much a price decision as a
decision in favour of a particular system. For instance,
if a builder working on a construction project wanted
to switch from sand-lime products to in-situ concrete
as part of the tunnel forming, this would result in not
only a change in the wall construction materials, but
also in a change in the materials used to make the
floor and ceiling. This means that a changeover to
tunnel forming would result in a change in the overall
construction plan. That is why in-situ concrete used in
tunnel forming would be a rather unusual option for
those builders who currently use sand-lime products
for their projects.

(79)

In their comments on the statement of objections and
in the hearing, the parties and CVK confirmed and
in-situ concrete in all
consolidated their view that
forms must be regarded as
the relevant product
market.

(20) It should be noted in this context that in many cases CVK knows

the site where its products are to be used, (see recital 75).

4. Conclusion concerning the relevant product markets

(81)

in building materials for

In view of the above, the Commission considers that,
for the purposes of assessing the notified concentration,
to be made in the Netherlands
a distinction has
load-
between a market
bearing walls and a market in building materials for
non-load bearing walls. As far as the market
in
building materials for load-bearing walls is concerned,
the question of whether in-situ concrete, in particular
that used in tunnel forming, is to be included in this
market, may be left open, as it does not affect the
assessment of the concentration.

B. The relevant geographic market

(82) The parties define the relevant geographic market with
regard to the Netherlands as national. Although a few
firms involved in the building materials trade tend to
operate on a regional basis, they argue, transport costs
in the Netherlands are not of such significance that
building materials cannot be supplied throughout the
entire territory of
the Netherlands. Wall building
materials are transported by lorry, usually from the
production site direct to the building site.

(83) The investigations have confirmed that

the Dutch
market is indeed national. The market investigation
has shown that
the prices charged for most wall
building materials are calculated free at production site
for delivery throughout the Netherlands, even though
transport costs represent a not insignificant cost factor.
CVK, as the only producer of sand-lime, can, moreover,
supply any building site in the Netherlands direct from
the nearest sand-lime works.

(84) Although imports of wall building materials from
Belgium and Germany do apparently take place in the
border regions of the Netherlands, these are marginal
and do not justify incorporating parts of Belgium and
Germany into the relevant geographic market. The
investigation has revealed the existence of
market

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30.10.2003

to market entry based,

barriers
in particular, on
building and industrial safety regulations. For example,
bricks laid manually may not weigh more than 18 kg
in the Netherlands which is not the case in other
Member States. On the other hand, building standards
in Germany mean that walls of comparable wall
thickness must be stronger and, given the extra
materials that requires, are more expensive than in the
Netherlands. All
that
operate on the Dutch market in wall-building materials
are also established in the Netherlands. Belgian and
German producers operating in the Netherlands also
do so via Dutch subsidiaries.

the important undertakings

(85) The Commission therefore takes the view that, for the
purposes of
the relevant geographic
market should be defined as a national market covering
the entire territory of the Netherlands.

this Decision,

appreciable influence on the conditions under which
that competition will develop, and in any case to act
largely in disregard of it so long as such conduct does
not operate to its detriment.

factors which,

taken separately,

(89) The existence of a dominant position may derive from
several
are not
necessarily decisive, but among which the existence of
very large market shares is highly important. Important
evidence of the existence of a dominant position is,
moreover, the relationship between the market shares
of
involved in the concentration
and their competitors, especially those of the next
largest (21).

the undertakings

C. Competitive assessment

(b) M a r k e t s t r u c t u r e

(86) The Commission has reached the conclusion that the
merger in this case, i.e. the acquisition of control by
CVK over its members and by Haniel and Cementbouw
over CVK, has led to the emergence of a dominant
position by CVK and its controlling parent companies
in wall-
Haniel and Cementbouw on the market
building materials
in the
load-bearing walls
for
Netherlands.

(90)

in wall-building materials was [...]* m3.

In 2000, the total quantitative volume of the Dutch
market
In
value terms, it had a volume of some EUR [...]*. The
market in wall-building materials for load-bearing walls
had a volume of [...]* m3 and was worth EUR [...]*. If
in-situ concrete is excluded from the load-bearing walls
market, the latter’s volume shrinks to [...]* m3 and
EUR [...]*.
If only in-situ concrete by the tunnel
forming method is excluded, the market volume is
[...]* m3 and EUR [...]* (22).

(87)

In the following, there will first be a description of the
dominant position as it stands today followed by an
account of the extent to which it has arisen as a result
of the merger.

(91) Below are the market shares (by volume) of the parties
and of
their main competitors including all wall-
building materials for load-bearing walls and, alterna-
tively, excluding in-situ concrete and in-situ concrete
cast by the tunnel-forming method (23):

1. Dominant position of the parties

(a)

P r i n c i p l e s

(88) The Court of Justice of the European Communities has
defined a dominant position as a position of economic
strength enjoyed by an undertaking which enables it
to prevent effective competition being maintained on
the relevant market by affording it
the power to
behave to an appreciable extent independently of its
competitors,
its customers and ultimately of con-
sumers. Such a position does not preclude some
competition, but enables the undertaking which profits
to have an
by it,

to determine, at

if not

least

(21) Case 85/76 Hoffmann-La Roche v Commission (1979) ECR 461,
paragraph 39; see also Case T-102/96 Gencor v Commission
(1999) ECR II-753, paragraphs 201 and 202.

(22) Assuming that [20 to 40]* % of the in-situ concrete used in
the Netherlands is cast using the tunnel-forming method; see
footnote 18.

(23) The calculation is based on estimates made by the parties on the
shares of the various building materials in the consumption of
wall-building materials as a whole and broken down between
load-bearing and non-load-bearing walls. In as much as wall-
building materials are used in load-bearing and non-load-bearing
walls (e.g. sand-lime bricks, aerated concrete), only that part of
such building materials which is estimated to be used in load-
bearing walls was taken into account. On the basis of its market
investigation, the Commission considers these estimates to be
basically accurate; however, precise statistical data are not
available.

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L 282/15

Company

Building material

(in %)

Load-bearing wall
building materials,
including in-situ
concrete

Market share

Load-bearing wall
building materials,
excluding in-situ
concrete used
in tunnel forming

Load-bearing wall
building materials,
excluding in-situ
concrete

CVK (Haniel/Cement-
bouw)

Cementbouw

Sand-lime products

[50-60]*

[50-60]*

[60-70]*

concrete walling

Precast
units
In-situ concrete

[2-5]*

[2-5]*

[2-5]*

Haniel (Fels)

Aerated concrete

[0-2]*

[0-2]*

[0-2]*

[60-70]*

[60-70]*

[60-70]*

CVK + Cementbouw
+ Haniel

Mebin

NCD

In-situ concrete

In-situ concrete

Wienerberger

Clay bricks

Hanson (Pioneer)

Clay bricks
In-situ concrete

[2-5]*

[0-2]*

[0-2]*

[0-2]*

Oudenallen

Precast
units

concrete walling

[0-2]*

Ytong

CRH

Aerated concrete

Clay bricks

[0-2]*

[0-2]*

[2-5]*

[0-2]*

[0-2]*

[0-2]*

[0-2]*

[0-2]*

[0-2]*

0,0

0,0

[0-2]*

[0-2]*

[0-2]*

[0-2]*

[0-2]*

(92) According to the Commission’s findings, CVK alone has
a share of more than [50 to 60]* % of the market
in wall-building materials for load-bearing walls. The
second-largest market player is Cementbouw, which,
together with Haniel, has acquired control of CVK as a
result of the merger, with a market share of almost [2 to
5]* %. Cementbouw owes its market position to its
activities in the area of precast concrete walling units
and in-situ concrete. Apart from through CVK, Haniel is
active on the Dutch market only through the activities
of Fels. The parties’ joint market share is therefore almost
[60 to 70]* %. The next-largest competitor is the ready-
mixed concrete manufacturer Mebin, with a market
share of around [2 to 5]* %. Other competitors have
market shares of less than 2 %. The market share of CVK
is therefore more than [10 to 15]* times bigger than
that of its leading competitor.

(93)

If in-situ concrete were not to be included in the market
in wall-building materials for load-bearing walls, the
market share of CVK alone would be [60 to 70]* %
as CVK does not supply in-situ concrete. Including
Cementbouw’s market share, the parties would hold a
combined market share of around [60 to 70]* %. The
largest independent competitor, Mebin, would then not
be active in the relevant product market. This would

leave only a limited number of much smaller competi-
tors whose market shares do not exceed 2 %, or indeed
much less in some cases.

(94)

If only in-situ concrete cast by the tunnel-forming
method is excluded from the market definition, CVK’s
market share would be [50 to 60]* %.
Including
Cementbouw’s market share, the parties would hold a
market share of around [60 to 70]* %.

(95) The market positions of the parties and their competitors
have — as the parties themselves state — hardly changed
in recent years.

(c) R o l e o f

t h e v a r i o u s w a l l - b u i l d i n g

m a t e r i a l s

(96) None of CVK’s competitors in the Netherlands is active
in the sand-lime brick sector. CVK is the only producer
and supplier of this building material in the Netherlands.
Sand-lime is, however, for the reasons given above, the
traditional and most popular wall-building material in
that country. Moreover, they are the only wall building
material to be used to a significant extent in both load-
bearing and non-load-bearing walls.

(97)

In-situ concrete cannot be regarded as a material for
which CVK is subject to considerable competitive press-

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ure. On the one hand, in-situ concrete accounts for only
[10 to 15]* % of the market in wall-building materials, of
which some [0 to 2]* % is attributable to Cementbouw.
According to data from the industry association VOBN,
the share of in-situ concrete seems to have remained
stable. According to some on the market, it has even
declined slightly. Those questioned put this down to a
trend towards small and more diversified construction
projects. On the other hand, the competitive pressure
on the market depends not only on the market position
of one product but also on the market position of the
competitors which supply that product. As indicated
above, competitors on the market
in wall-building
materials are dispersed. The largest producer of in-situ
concrete, Mebin, has a share on the overall market for
wall-building materials for load-bearing walls of only [2
to 5]* %, while that of other competitors is less than
2 %. By contrast, the parties have a market share of [60
to 70]* %, with that of CVK alone standing at [50 to
60]* %.

(98) However, an important factor for the market position
of competitors is which products they offer. This is
particularly true in this case because the market in
question is a differentiated product market on which a
range of products compete with each other to varying
extents for the same uses. In each case, it depends on the
characteristics of the product and the specific situation
whether a given product directly competes with another
product, and — as explained in connection with the
definition of the product market — it is consequently
doubtful whether or not in-situ concrete should be
included in the relevant market. In such a market, the
ability to supply a specific product which is perhaps
particularly appreciated by certain consumers or for
certain uses may be important to a given firm’s market
position. Consequently, CVK’s market position is
strengthened over and above its market share by the fact
that it is the sole manufacturer of sand-lime products in
the Netherlands.

wall-building materials such as aerated concrete. The
production processes and hence the production plants
are different for each wall-building material.

(100) While Haniel has put the investment costs for a sand-
lime brickworks at only some EUR [...]*. The setting-up
of a ready-mix concrete plant costs, according to Haniel,
EUR [...]*); Cementbouw has estimated these investment
costs to be much higher. Moreover, the competitors
questioned in connection with the investigation of the
market have all stated that they would have considerable
difficulties in expanding their existing capacities or
launching production of another wall-building material.
One competitor indicated that the establishment of a
new sand-lime brickworks would require an investment
of EUR [...]*, that the necessary official authorisation
would be difficult to obtain, and that building the works
alone would take two years. In contrast to the parties’
view that the market entry barriers are low, the Com-
mission accordingly assumes that no competitive press-
ure is exerted by possible market entries such as to
control CVK’s room for manoeuvre on the relevant
market. Consequently,
there have been only a few
market entrants in recent times, and these were all
limited to the concrete sector.

(101) There are also considerable excess capacities for sand-
lime products, a fact which makes market entry an
unattractive prospect, even now that CVK has closed
three of its original eleven sand-lime brickworks. More-
over, CVK’s remaining production facilities are evenly
dispersed across the Netherlands, and it is therefore able
to supply any customer from a local brickworks. The
Commission’s market investigation has shown that this
factor also strengthens CVK’s market position.

(d) B a r r i e r s t o m a r k e t e n t r y

(e) B u y e r p o w e r

(99) Notwithstanding the parties’ and CVK’s comments on
the statement of objections and the discussion during
the hearing, the Commission takes the view that there
are substantial barriers to market entry. CVK controls all
the sand-lime brickworks in the Netherlands and hence
the production of by far the most
important wall-
building material in the relevant product market. The
Commission’s market investigation has shown that it
would be possible for manufacturers of other wall-
building materials to undertake the manufacture of sand-
lime brick products only at great expense in terms of
time and investment. The same is also true of other

(102) Notwithstanding the parties’ and CVK’s comments on
the statement of objections and the discussion during
the hearing, the Commission takes the view that the
customers of CVK have no buyer power. No one
customer buys a substantial part of CVK’s output.
Although the five largest building materials traders (the
largest of which has a sales share of [20 to 30]* %)
account for [60 to 80]* % of CVK’s sales, this does not
give the largest buyer any power since there are enough
other traders on the market. Moreover, some of these
traders are buying associations (inkoopcombinaties). What
is important is the fact that the dealers are dependent on
dealing in CVK’s products. Sand-lime is the most

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important building material in the Netherlands. The next
most important is concrete. However, this does not
constitute an alternative for traders because neither
in-situ concrete nor, to any appreciable extent, precast
concrete walling units are marketed via them. Conse-
quently, no other building material can replace sand-
lime products for traders. This was confirmed by Raab
Karcher during the hearing. It may be true that — as
Haniel argued — the building materials trader risks
losing the building project to concrete if his sand-lime
brick offer is not cheap enough. However, this only
means that the trader with his sand-lime brick offer —
and indirectly also CVK — is in competition with
concrete suppliers, not that the trader is in a position to
exert buyer power on CVK.

competition on the load-bearing-walls market, which
for it is more important, was not refuted by the parties
and CVK. Reference should be made to the comments
in recitals 75 and 76 in this respect.

(g)

I n t e g r a t i o n w i t h C e m e n t b o u w

(105) CVK’s dominant position on the Dutch market

in
wall-building materials for load-bearing walls is also
characterised by its structural links to its controlling
parent company Cementbouw.

(103) Moreover, CVK has considerable influence on determin-
ing the prices charged to building firms. Although
materials traders bear the financial risk of sale, it is
traders that decide which
building firms and not
materials to use. As already explained in detail, CVK is
generally well informed about the identity of users and
the use to which its products are put. For example,
bricks are supplied direct by the works situated closest
to the construction project. According to CVK, discounts
are granted to dealers, whereby they might be bound to
supply certain construction firms or projects. Moreover,
construction firms are widely dispersed and not in a
position to exert buyer power themselves. Similarly, the
demand component of the large Dutch building groups
such as Bam Groep, Koninklijke Volker Wessels Stevin,
Heijmans, Ballast Nedam and HBG is too small individu-
ally to exert any buyer power such as could offset CVK’s
dominance on the supply side.

(f)

I n f l u e n c e
a d j a c e n t m a r k e t

o f

c o m p e t i t i o n

o n

t h e

(104) CVK’s operational scope on the market in wall-building
materials for load-bearing walls is not limited either by
the conditions of competition on the adjacent market in
wall-building materials for non-load-bearing walls, on
which its market position is weaker. The Commission’s
comment in the statement of objections that CVK is
aware, when setting prices, of whether its products will
be used for load-bearing or non-load-bearing walls
and gears its prices primarily to the conditions of

area of precast

(106) Cementbouw operates on the relevant market by supply-
ing in-situ concrete and precast concrete walling units.
concrete walling units,
In the
Cementbouw has a strong position in particular with
regard to smaller units, which are principally used in
residential construction, i.e. products which are readily
substitutable for sand-lime products. Together, CVK and
Cementbouw thus offer three or, (depending on the
market definition), two of the most important wall-
building materials
load-bearing walls. CVK/
Cementbouw therefore have a considerably wider oper-
ational scope than competing suppliers of wall-building
materials on a differentiated product market such as the
one in question, since no other supplier is in the position
of covering their customers’ needs as comprehensively.

for

(107) Cementbouw is also active on the downstream building
materials trading market. Its building materials trading
division is one of the largest wholesalers of building
materials in the Netherlands, with a strong market
position above all
in the west, north and east of
the country (24). Some building materials dealers have
indicated that those dealers belonging to Cementbouw
receive preferential treatment from CVK. Both of these
factors contribute to CVK-Cementbouw’s considerably
wider operational scope as compared to its competitors.

(108) Cementbouw objected that the structural link between
CVK and Cementbouw could not be taken into account
in the competitive assessment, because CVK was not
controlled by Cementbouw and both undertakings had
in the past been in competition with one another.
However, for the reasons set out in Section II of this
Decision, the Commission starts from the assumption
that Cementbouw controls CVK on a joint basis with

(24) See, for example, the 2000 Annual Report of NBM Amstelland

(at that time Cementbouw’s parent company).

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Haniel. In assessing the effects of the merger, therefore,
it cannot be assumed that Cementbouw and CVK
operate independently of one another on the market as
competitors.

on the market in wall-building materials for load-bearing
walls was some [20 to 30]* % each, while that of the
RAG works was some [5 to 10]* % (25).

(h) R e s u l t

(109) The parties’ market position can be summarised as
follows: CVK has by far the largest market share with
more than [50 to 60]* %. To this should be added
Cementbouw’s market share of almost [2 to 5]* %, with
the result that the parties have a combined market share
of almost [50 to 60]* %. The remaining market volume
is fragmented and divided among competitors with
market shares of just a few percent. CVK, moreover, is
the only Dutch supplier of the most important building
material in the Netherlands. The market power available
to the parties is not offset by buyer power on the other
side of the market. It should also be borne in mind that
Cementbouw is active with other important building
materials on the relevant market
itself and on the
downstream market of building materials trading. The
combination of all these factors gives the parties a
dominant position on the market
in wall-building
materials for load-bearing walls in the Netherlands.

2.

Emergence of a dominant position as a result of the
merger

(110) On the basis of its investigations, the Commission takes
the view that the parties’ dominant position, as described
above, arose as a result of the merger on 9 August 1999
of all of the Dutch manufacturers of sand-lime products
into a full-function company, CVK, jointly controlled by
Haniel and Cementbouw.

(111) Before this merger, the sand-lime brick works making
up CVK were legally and economically independent of
each other. Only the marketing of their products was
centralised within the joint marketing organisation that
was CVK. Neither the sand-lime brick manufacturers
controlled
by
Cementbouw or RAG achieved individual shares on the
market in wall-building materials for load-bearing walls
which led to the conclusion that there was a dominant
position. According to estimates by Haniel, the market
share of the Haniel works and the Cementbouw works

by Haniel nor

controlled

those

(112) The fact that the sand-lime brickworks belonging to
CVK were already linked to each other by a joint
marketing organisation before the merger does not
justify the view that these firms already held a dominant
position via CVK and that the merger did therefore not
significantly alter the market structure.
the
conversion of a joint marketing organisation into a full-
function company constitutes a structural change to
market conditions which might lead to the emergence
of a dominant position. This occurred in this case, since
the merger permanently brings the 11 Dutch sand-lime
brick manufacturers under the single management of
CVK.

Indeed,

(113) While the joint marketing organisation which existed
before the operation standardised only one — albeit
important — aspect of the competitive conduct of the
CVK works, namely the marketing of their products, all
links in the value-added chain (research and develop-
ment, purchasing, logistics, production, marketing, etc.)
are now centralised within CVK, and all related strategic
decisions determining the conduct and success of the
firm in the competitive process are adopted uniformly
by CVK’s management.

(114) Moreover, the structural change to market conditions
brought about by the creation of a full-function
company is generally more permanent than the forma-
tion of a joint marketing organisation. While it is
relatively easy for the members of a joint marketing
organisation to withdraw from such an organisation
and again operate independently without the need for
extensive restructuring, it is possible in the case of a
full-function company that the various functions of
previously separate firms are integrated in such a way
that it is either very difficult or indeed no longer possible

(25) According to figures presented to the supervisory board of Franz
Haniel & Cie GmbH on 12 March 1999, the market shares of the
Haniel works and the Cementbouw works in the Netherlands
before the merger each stood at [40 to 50]* %, with that of the
RAG works at [15 to 20]* %. Assuming that CVK’s share of the
relevant market was [50 to 60]* %, Haniel and Cementbouw
would each have had a market share of [20 to 30]* % and RAG
[5 to 10]* %.

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for the company to be split up and the original situation
to be restored (26).

(115) It should also be remembered that only as a result of the
merger Cementbouw’s activities on the relevant market
and the downstream market of building materials trading
inure to CVK as a whole.

(116) Finally, the view that the merger led to the emergence of
a dominant position on the part of CVK on the Dutch
market in wall-building materials for load-bearing walls
is confirmed by some of the market developments
uncovered by the Commission in its market investigation
and by CVK’s competitive conduct since the merger.

(117) While the price level for sand-lime had previously risen
at a relative moderate rate ([0 to 5]* % in 1999 and
again in 2000), CVK increased its prices by [5 to 10]* %
in 2001 and [5 to 10]* % in 2002. According to the
information at the Commission’s disposal, demand for
wall-building materials actually declined in the same
period, and the price of other products, especially
bricks, fell or remained unchanged. A large number of
customers have indicated that CVK imposes its prices
unilaterally and is not prepared to negotiate. Raab
Karcher also stated at the hearing that before 1999
despite the existence of the CVK marketing organisation
individual price negotiations with individual sand-lime
brick works had in individual cases been quite possible.
Since the conversion of CVK into a full-function under-
taking, however, the works which were members of
CVK had refused individual talks with customers and
referred them to the CVK central office in Hilversum.

(118) In response to its existing surplus capacities, CVK
has closed three of its eleven sand-lime brick works
(Bergumermeer and Vogelenzang in 2001, Boudewijn
in 2002) with a combined production capacity of
[...]* bwf (27). This corresponds to some [15 to 20]* % of
the total capacity of all CVK works.

(119) CVK is also said to have unilaterally imposed transport
charges and conditions. Customers are said to have been
required to purchase the glue required to construct sand-

lime brick walls also from CVK, which CVK in turn
obtains from Cementbouw, because CVK refuses to
abide by the guarantee if the glue of other manufacturers
is used. Building material dealers and other market
players have indicated that they have increasingly been
passed over or marginalised by CVK and, as a result of
unilateral price increases, have been required to accept
reduced margins.

(120) Some of those questioned have stated that it has been
made more difficult or impossible to import
from
Germany. On the one hand, the Dutch customers of
German sand-lime brick works owned by Haniel and
situated close to the border have been refused supplies.
On the other, some of those questioned expressed the
fear that CVK would no longer supply them with certain
types of sand-lime brick elements not available in
Germany if they obtained sand-lime bricks and units
from Germany. This was also stated by Raab Karcher at
the hearing. Raab Karcher also stated that a German
sand-lime brickworks belonging to the Haniel group had
recently increased its supply price by 55 %; Raab Karcher
sees this as an attempt to direct demand back to CVK.

(121) CVK’s conduct is described by many market players as
monopolistic. Some have stated that competition has
declined. Others have pointed to vertical
links with
Cementbouw’s activities in the building materials trade.

(122) All of these factors suggest that CVK’s conversion to a
full-function company has put
it in a position to
behave, to a much greater extent, independently of its
competitors and customers than had previously been
possible for the joint marketing organisation. Whereas,
before the merger, price competition between sand-lime
brick manufacturers was essentially ruled out by the
cartel, while those manufacturers nevertheless defined
their business strategy independently, CVK is now able,
as a result of the single management of the entire Dutch
sand-lime brick industry, to focus all of the competition
parameters (product development and diversification,
capacity adjustment, production quantities, prices, etc.)
centrally on profit maximisation for the overall company
and thereby fully exploit the advantage of its unique
position on the market vis-à-vis its competitors and
customers.

(26) In this case, for example, it was decided after conclusion of the
pooling agreement to close three of the eleven existing sand-lime
brick works (Bergumermeer, Boudewijn and Vogelenzang) with
the consequence that, were CVK to be broken up, three of its
eleven members would no longer have their own business
operations.

(27) Abbreviation for basiswaalformaat (basic wall format), the stan-

dard unit of size for wall-building materials.

(123) The parties and CVK are of the opinion that the merger
has not had any impact on the market. CVK had existed
as a marketing organisation since 1947 and was thus of
longer duration than many full-function joint ventures.
CVK had also, prior to 1999, from the point of view of
demand-side firms, been operating as an integrated
supplier on the market. The member works had not had
any distribution structures of their own, so that, even

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before the present merger, exit would not have been a
straightforward matter. The changes in the competitive
behaviour of the parties which are described by cus-
tomers in the Commission’s market investigation and
which point to the development of market power are
partly repudiated by the parties and partly attributed to
other reasons. For example, the price increases for sand-
lime are attributed to higher costs and are said to be in
line with the general trend of prices. The 55 % price
increase imposed by a German Haniel sand-lime brick-
works and complained of by Raab Karcher at the hearing
is said to involve a factory in the new German Länder
which, prior to its takeover by Haniel, had sold surplus
production in the Netherlands at below cost price.

(124) Even taking account of the comments of the parties and
of CVK, the Commission maintains its view that the
merger has brought about a structural change in market
conditions. A joint marketing organisation cannot be
equated in its effect on competition with an integrated
full-function undertaking under single control even if it
has existed for many years and even if
the exit of
individual members makes certain adjustments necess-
ary, such as the establishment of their own distribution
structures. Otherwise, mergers between previously inde-
pendent undertakings which, before the merger, had
formed a distribution organisation could be covered by
the material criterion of merger control (creation or
strengthening of a dominant position) only in excep-
tional cases. Furthermore, the information provided by
Raab Karcher at the hearing indicates that even so solid
a marketing organisation which had lasted so long as
CVK was not in a position to deprive its members
entirely of the scope for their own competitive action.
Even if CVK had, with the price increases charged since
1999, been partly or entirely passing on cost increases
to its customers, this indicates, in view of the existing
surplus capacities,
falling demand and stagnating or
decreasing prices for competing wall-building materials,
that CVK is to a substantial extent able to act indepen-
dently of its competitors and customers. An undertaking
fully exposed to competition is, under such circum-
stances, in general not able to pass on cost increases in
full to its customers.

(125) Furthermore, it is by no means certain that, without the
merger, CVK would still exist today in the form in which
it had existed until 1999. [more detailed explanation of
this statement in view of the fact that cartel proceedings

against CVK were in progress before the pooling agree-
ment was notified at the NMa]* It must therefore be
assumed that the present dominant position of the
parties was created as a result of the merger.

C. Conclusion

(126) The Commission has therefore reached the conclusion
that the merger has led to the emergence of a dominant
position on the part of CVK on the market in wall-
building materials for load-bearing walls in the Nether-
lands, as a result of which effective competition within
the common market or a substantial part thereof is
significantly obstructed.

VI. COMMITMENT SUBMITTED BY HANIEL AND
CEMENTBOUW

(127) In order to remove the Commission’s misgivings in
relation to the market in wall-building materials for
load-bearing walls in the Netherlands, Haniel and
Cementbouw initially submitted a draft commitment
which essentially provided that Haniel and Cementbouw
would end the cooperation agreement and would sell
the holdings they had acquired in 1999 from RAG in
the firms Anker, Vogelenzang and Van Herwaarden to
an independent purchaser. The pooling agreement and
the change in CVK’s articles were to be maintained; the
purchaser of the shares to be sold would have to
undertake to participate in the pooling agreement and
the current CVK structure.

(128) After the Commission had pointed out to the parties
that, in its view, this draft commitment was not sufficient
to resolve the competitive problem identified by the
Commission, Haniel and Cementbouw submitted the
commitment described below, the full text of which is
set out in the Annex to this Decision.

(129) Haniel and Cementbouw undertake:

(a) within [...]* of the adoption of the Commission
Decision, to revoke the pooling agreement, to undo
the amendment to CVK’s articles and to dissolve
CVK;

(b)

(c)

to revoke the cooperation agreement with immedi-
ate effect;

simultaneously with the ending of the pooling
agreement, to end the joint control of the firms
Anker and Van Herwaarden [description of how
this is to be achieved]*;

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(d)

insofar as the firm Vogelenzang, which at present
has no business activity, were to resume its pro-
duction, Haniel and Cementbouw undertake to end
joint control of this undertaking in the same way
as provided for in respect of Anker and Van
Herwaarden.

(130) Haniel and Cementbouw also undertake [commitment

concerning CVK’s internal organisation]*.

(131) The commitment also contains rules on the appointment
of a trustee, whose task it is to supervise compliance
with the commitment by the parties.

VII. COMPETITIVE ASSESSMENT OF THE NOTIFIED
MERGER IN THE LIGHT OF THE COMMITMENT SUB-
MITTED BY HANIEL AND CEMENTBOUW

(132) The commitments submitted by the parties initially in
draft form are, in the Commission’s view, not sufficient
to dispel the competitive doubts as regards the Dutch
market in wall-building materials for load-bearing walls.
The draft commitments remove only the joint control
of Haniel and Cementbouw over CVK, without at the
same time removing CVK’s dominant position created
by the merger. The draft commitments are based on the
assumption, which as explained in Section II of this
Decision is incorrect, that only the acquisition of joint
control by Haniel and Cementbouw over CVK was
subject to examination by the Commission in these
proceedings, while the simultaneously completed acqui-
sition of control by CVK over its member undertakings
was, because of the decision taken by the NMa on
20 October 1998, not subject to the Commission’s
jurisdiction.

(133) The final commitments described in recitals 129 to 131
are, by contrast, in the Commission’s view sufficient to
resolve in an appropriate manner the abovementioned
competitive misgivings.

(134) As a result of these commitments, the effects of the
merger as described in Section II are undone. Through
the revocation of the pooling agreement and the cooper-
ation agreement, CVK’s control over its member under-
takings is removed. This means that the undertakings
wholly owned by Haniel, i.e. De Hazelaar, Loevestein,
Hoogdonk, Rijsbergen and Boudewijn, and the undertak-
ings wholly owned by Cementbouw,
i.e. Harderwijk,
Roelfsema and Bergumermeer, once again come under
the sole control of their respective shareholders. The
simultaneously restored joint control of the three joint
ventures Anker, Van Herwaarden and Vogelenzang is
removed by the following measures: in each instance,
one of the two parties, i.e. Haniel or Cementbouw, will
take over sole control of one of the two undertakings,
Anker and Van Herwaarden.

(135) [Means by which Hamiel or Cementbouw will acquire

sole control of Anker and Van Herwaarden]*.

(136) [Analysis of specific means by which Hamiel or
Cementbouw will acquire sole control of Anker and Van
Herwaarden]*.

(137) The firm Vogelenzang does not at present have any
business activity. The parties intend to sell the assets of
this undertaking to a third party and to share the
proceeds of the sale in proportion to their holdings. If,
however, the business activity of Vogelenzang were to
be resumed under the present shareholders Haniel and
Cementbouw, one of the two parties will take over sole
control of this undertaking in the same way as is
provided for in the case of the firms Anker and Van
Herwaarden.

(138) The parties have also undertaken to dissolve CVK.
[Description of the parties’ motives in making this
commitment and the steps needed to put it into effect]*.

(139) This means that, once the commitment has been fully
complied with, CVK will cease to exist in its present
form as a joint venture jointly controlled by Haniel and
Cementbouw in which the entire Dutch sand-lime brick
industry is combined under uniform direction. In place
there will be two competing
of
suppliers of sand-lime brick to which the sand-lime
brickworks solely owned or owned on the basis of a
majority holding by Haniel and Cementbouw belong
and which are integrated into the respective groups of
Haniel and Cementbouw.

the present CVK,

(140) Even taking account of their respective continued supply
of products on the relevant market in wall-building
materials for load-bearing walls, it is not to be expected
that Haniel or Cementbouw can individually or jointly
retain a dominant position. Cementbouw is an undertak-
ing which has long been operating on the Dutch market
with ready-mixed concrete and precast concrete balling
elements and which moreover is vertically integrated
into the wholesale stage. Haniel, by contrast, has, in the
building materials sector, hitherto operated mainly on
the German market and entered the Dutch market only
in the 1990s through the acquisition of various sand-
lime brickworks belonging to CVK. With the recent
acquisition of the aerated concrete manufacturer Fels,
Haniel has added an essential product to its product

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range on the Dutch wall-building materials market. This
suggests that the two parties have differing interests on
the Dutch market which (also in view of the geographical
distribution of the works belonging to Haniel and to
Cementbouw after the separation) rule out any risk of
coordination following the ending of the distribution
organisation that existed before the merger. This also
applies because, given the small geographical size of
the Dutch market, the location of a works does not
significantly affect transport costs.

VIII. CONDITIONS AND OBLIGATIONS

(145) The first sentence of the second paragraph of Article 8(2)
of the Merger Regulation states that the Commission
may attach to its decision conditions and obligations
intended to ensure that the undertakings concerned
comply with the commitments they have entered into
vis-à-vis the Commission with a view to rendering the
concentration compatible with the common market.

(141) [Analysis from the point of view of competition of
specific means by which the commitment is to be put
into effect]*.

(142) [Analysis from the point of view of competition of
specific means by which the commitment is to be put
into effect]*.

in its place,

(143) The period of [...]* allowed the parties for compliance
with the commitment appears necessary, by way of
exception, in view of the unusual circumstances of this
case. In order to dissolve the existing, centrally integrated
full-function undertaking CVK and,
to
establish two mutually independent sand-lime brick
undertakings, the parties must be enabled to cope with
all the organisational measures, including the associated
labour-management
labour-law requirements
described in paragraph 138. [More detailed explanation
of this statement]*. Thus, the present case, in which the
merger being examined by the Commission was effected
almost three years ago and has resulted in the creation
of a new, integrated undertaking, whose dissolution is
the subject of the commitment given by the parties,
differs from the conventional case of a commitment to
sell an already existing undertaking which can operate
on a stand-alone basis (28).

and

be

imposed

form of

(146) Measures that effect a structural change to the market
will
‘conditions’;
in the
implementing steps necessary to achieve this result will
take the form of ‘obligations’. If a condition is not
fulfilled, the Commission decision declaring the concen-
tration compatible with the common market is null and
void. Where the undertakings concerned commit a
breach of an obligation, Article 8(5)(b) of the Merger
Regulation empowers the Commission to revoke a
clearance decision; Article 14(2)(a) and Article 15(2)(a)
of the Merger Regulation empower it to impose fines or
periodic penalties on the parties (29).

(147) In accordance with this basic distinction, the Com-
mission decision should be made subject to the condition
of full compliance with those commitments given by
Haniel and Cementbouw that relate to the dissolution of
CVK in its present form and the formation of two
mutually independent sand-lime brick suppliers (30).
These commitments serve to offset the identified cre-
ation of a dominant position by the parties on the Dutch
market in wall-bearing materials for load-bearing walls
and hence to maintain competition on that market. All
the remaining parts of the commitment, in particular
the details regarding the trustee to be appointed by
Haniel and Cementbouw, should be made the subject of
obligations, since they are merely intended to ensure the
implementation of the above-mentioned conditions.

IX. ADDRESSEES OF THIS DECISION

(144) The Commission has therefore come to the conclusion
that, taking account of the commitment given by Haniel
and Cementbouw, the notified merger will not give the
parties a dominant position on the market in wall-
building materials for load-bearing walls in the Nether-
lands.

(148) This Decision — like the statement of objections which
preceded it — is addressed not only to the notifying
parties, but also to the CVK joint venture jointly
controlled by the parties. Exceptionally, the particular
circumstances of this case militate in favour of including

(28) See paragraph 14 of

the Commission notice on remedies
acceptable under Council Regulation (EEC) No 4064/89 and
under Commission Regulation (EC) No 447/ 98 (OJ C 68,
2.3.2001, p. 3).

(29) See paragraph 14 of

the Commission notice on remedies
acceptable under Council Regulation (EEC) No 4064/89 and
under Commission Regulation (EC) No 447/ 98 (OJ C 68,
2.3.2001, p. 3, recital 12).

(30) Points 27, 28, 32 to 35 and 40 of the Annex.

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CVK in the addressees of the Decision. Although CVK is,
via its parent companies, indirectly an addressee already,
it is not merely the target undertaking in this case.
Rather, it is the instrument by which the merger took
place, and CVK’s direct involvement is also necessary for
the commitment given by Haniel and Cementbouw to
be fulfilled. CVK is a party to the pooling agreement,
and the specified measures involve an amendment to
CVK’s articles.

X. CONCLUSION

Article 2

the
Article 1 shall apply subject
commitments entered into by Franz Haniel & Cie. GmbH and
Cementbouw Handel & Industrie BV and set out in points 27,
28, 32 to 35 and 40 of the Annex are complied with in full.

to the condition that

Article 3

The obligation is attached to this Decision that the other
commitments entered into by Franz Haniel & Cie. GmbH and
Cementbouw Handel & Industrie BV and set out in the Annex
must be complied with in full.

(149) For these reasons, provided the commitments entered
into by Haniel and Cementbouw are fully complied with,
it can be accepted that the concentration does not create
or strengthen a dominant position as a result of which
effective competition would be significantly impeded in
the common market or in a substantial part of it. Subject
to full compliance with the commitments set out in the
Annex, therefore, the concentration should be declared
compatible with the common market and the EEA
Agreement pursuant to Articles 2(2) and 8(2) of the
Merger Regulation and Article 57 of the EEA Agreement,

Article 4

This Decision is addressed to:

Franz Haniel & Cie. GmbH
Franz-Haniel-Platz 1
D-47119 Duisburg

Cementbouw Handel & Industrie BV
Bennebroekerdijk 244
2142 LE Cruquius
The Netherlands

HAS ADOPTED THIS DECISION:

Article 1

The notified concentration by which Franz Haniel & Cie.
GmbH and Cementbouw Handel & Industrie BV have, within
the meaning of Article 3(1)(b) of the Merger Regulation,
acquired joint control of the undertaking Coöperatieve Ver-
koop- en Produktievereniging van Kalkzandsteenproducenten
and its member undertakings is hereby declared compatible
with the common market and the EEA Agreement.

Coöperatieve Verkoop- en Produktievereniging van Kalkzand-
steenproducenten
Utrechtseweg 38
1213 TV Hilversum
The Netherlands

Brussels, 26 June 2002.

For the Commission

Mario MONTI

Member of the Commission

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ANNEX

The full wording of the conditions and obligations referred to in Articles 2 and 3, in the original German, can be
consulted on the following Commission website:

http://europa.eu.int/comm/competition/mergers/cases/decisions/m2650–de.pdf