Opinion of the Advisory Committee on concentrations given at its 141th meeting on 30 June 2006 concerning a draft decision relating to Case COMP/M.3796 — OMYA/J.M. HUBER PCC — Rapporteur: United Kingdom (Text with EEA relevance)
Date: 2006-06-30
Institutions: Advisory Committee on Restrictive Practices and Dominant Positions
Subjects: competition, economic concentration, merger control, mineral compound, pulp and paper industry

C 58/12

EN

Official Journal of the European Union

13.3.2007

Opinion of the Advisory Committee on concentrations given at its 141th meeting on 30 June 2006
concerning a draft decision relating to Case COMP/M.3796 — OMYA/J.M. HUBER PCC

Rapporteur: United Kingdom

(Text with EEA relevance)

(2007/C 58/05)

1. a) The Advisory Committee agrees with the Commission that the notified operation, which was
referred to the Commission pursuant to Article 22 ECMR, constitutes a concentration within the
meaning of Article 3(1)( b) of Council Regulation (EC) No 139/2004, and that

b) it does not have a Community dimension.

2. The majority of the Advisory Committee agrees with the Commission that for the purposes of assessing

the present transaction:

a) calcium carbonates can be distinguished from other industrial minerals used for applications in the

paper industry.

b) calcium carbonates for coating and filling applications are not substitutes from a customer's perspec-

tive.

Calcium carbonates for filling applications

c) based on supply-side considerations, filling PCC and coating PCC do not belong in the same product

market.

d)

i) the market investigation and

ii) the econometric study support a conclusion that there are degrees of competitive constraint
between filling PCC and filling GCC and to a lesser extent, vice versa. A minority of the Advisory
Committee disagrees and a minority abstains.

e) with regard to the supply of PCC filler, which may be carried out by on-site plant or by merchant
market supply, it is not necessary to come to a conclusion as to whether or not on-site supply of
PCC filler forms a distinct market since the proposed transaction will not give rise to competition
concerns under any reasonable product market definition. A minority of the Advisory Committee
disagrees.

Calcium carbonates for coating applications

f) it is not necessary to come to a conclusion as to whether there are distinct markets for the different

GCC coating grades.

g) all coating calcium carbonates (i.e. coating PCC and coating GCC, including steep GCC and blends

of GCC and PCC) are interchangeable or substitutable to some extent for customers.

h) it is not necessary to conclude whether merchant and on-site supplies of PCC for coating constitute

two separate markets.

3. The Advisory Committee agrees with the Commission that for the purposes of assessing the relevant

geographic markets for calcium carbonates affected by the present operation:

a) for merchant supply (PCC and GCC) the relevant geographic market is as follows:

i) For merchant filling calcium carbonates, it will vary between 400 km and up to a maximum of

2 000 km depending on the plant, the product and the mode of transport;

ii) For merchant coating calcium carbonates, it will vary between 450 km and 2 900 km

13.3.2007

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Official Journal of the European Union

C 58/13

b) For customers capable of having on-site filling supply solutions, the geographic scope is at least

EEA-wide.

4. The majority of the Advisory Committee agrees with the Commission that the notified concentration
raises no competitive concerns for customers of filling calcium carbonates supplied with either a
merchant or (despite the loss of Huber as a potential bidder) on-site supply solution in:

a) Austria

b) France

c) Finland or

d) Sweden.

A minority of the Advisory Committee disagrees on 4(c) and a minority abstains on 4(a), 4(b), 4(c) and
4(d).

5. The Advisory Committee agrees with the Commission that Huber is a potential competitor on the
market for calcium carbonates for paper coating applications and that, absent the merger, Huber would
very likely grow into an effective competitive force.

6. The Advisory Committee agrees with the Commission that the merger would reduce the incentives for

and benefits of innovation arising from development of coating GCC/PCC blends and additives.

7. The Advisory Committee agrees with the Commission that the notified concentration is likely to signifi-
cantly impede effective competition, in particular through the strengthening of Omya's dominant posi-
tion in the markets for coating calcium carbonates for affected customers in the South of Finland.

8. The majority of the Advisory Committee agrees with the Commission that the effect of the concentra-
tion on calcium coating customers in Northern Finland, Sweden, France and Austria is not sufficiently
likely and therefore that it creates no significant impediment to effective competition in respect of those
customers. A minority disagrees.

9. The majority of the Advisory Committee agrees that the undertakings offered, consisting of the divesti-
ture of the Kuusankoski PCC on-site plant and the coating and additive technology, together with a
suitable and up-front purchaser, will remove the significant impediment to effective competition arising
and will ensure that the purchaser would be placed in a similar position to Huber. A minority disagrees.

10. The majority of the Advisory Committee agrees with the Commission that consequently, the proposed
transaction will not significantly impede effective competition in the common market or a substantial
part of it, within the meaning of Article 2(2) of the Merger Regulation and can therefore be declared
compatible with Article 2(2) and 8(2) of the Merger Regulation and the EEA Agreement. A minority
disagrees.

11. The Advisory Committee asks the Commission to take into account all the other points raised during

the discussion.