OPERATIONS WERE ENTRUSTED TO REDAELLI SIDERURGIA ACCIAI SPECIALI SPA ( REDAELLI SIDAS ) . REDAELLI HOLDS 72,99 % OF THE SHARES IN REDAELLI SIDAS AND REDAELLI SIDAS UNDERTAKES TO HONOUR ALL REDAELLI'S COMMITMENTS UNDER THE AGREEMENT WITH FALCK .
5 . FALCK HAS MEANWHILE INCREASED ITS HOLDING IN REDAELLI FROM 7 % TO 14 % , AND ALSO HAS A 6,67 % HOLDING IN REDAELLI SIDAS .
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6 . THE AGREEMENTS IN QUESTION RESTRICT THE NORMAL PLAY OF COMPETITION BETWEEN THE UNDERTAKINGS CONCERNED , IN SO FAR AS THE LATTER HAVE AGREED TO COORDINATE THEIR INVESTMENTS , PRODUCTION PROGRAMMES AND PROCUREMENT AND SALES . THE AGREEMENTS THEREFORE FALL WITHIN THE SCOPE OF THE GENERAL PROHIBITION IN ARTICLE 65 ( 1 ) OF THE TREATY , EVEN THOUGH TO SOME EXTENT THEY ARE ONLY FRAMEWORK AGREEMENTS TO BE SUPPLEMENTED AT A LATER DATE .
7 . THESE AGREEMENTS ARE INTENDED TO ENABLE THE COMPANIES CONCERNED TO SPECIALIZE PRODUCTION BY COORDINATING THEIR INVESTMENTS AND VARIOUS PRODUCTION PROGRAMMES AND BY JOINT SELLING AND JOINT BUYING . THEY MAY BE AUTHORIZED UNDER ARTICLE 65 ( 2 ) OF THE TREATY IF AND TO THE EXTENT THAT THEY MAKE FOR A SUBSTANTIAL IMPROVEMENT IN PRODUCTION OR DISTRIBUTION AND ARE ESSENTIAL IN ORDER TO ACHIEVE THIS RESULT , WITHOUT BEING MORE RESTRICTIVE THAN IS NECESSARY FOR THAT PURPOSE . MOREOVER , THE AGREEMENTS MUST NOT BE LIABLE TO GIVE THE UNDERTAKINGS CONCERNED THE POWER TO DETERMINE THE PRICES , OR TO CONTROL OR RESTRICT THE PRODUCTION OR MARKETING OF A SUBSTANTIAL PROPORTION OF THE PRODUCTS IN QUESTION WITHIN THE COMMON MARKET , OR TO SHIELD THEM AGAINST EFFECTIVE COMPETITION FROM OTHER UNDERTAKINGS WITHIN THE COMMON MARKET .
III
8 . DURING THE OPERATION OF THE AGREEMENTS , THE COMPANIES CONCERNED HAVE SPECIALIZED AND COOPERATED AS FOLLOWS :
- REDAELLI SHUT DOWN ITS HOT-ROLLED STRIP MILL AT ROGOREDO , WHICH ENABLED FALCK TO MAKE CONSIDERABLE IMPROVEMENTS AT ITS MILL BY INCREASING THE COIL WEIGHT AND THE WIDTH AND THICKNESS OF THE STRIP . CONSEQUENTLY , DURING THE PERIOD OF THE AGREEMENT , FALCK WAS ABLE TO SUPPLY REDAELLI WITH 68 000 TONNES OF HOT-ROLLED STRIP AND HIRE-ROLLED SOME 12 500 TONNES OF SLAB SUPPLIED BY REDAELLI ;
- AS REGARDS PRODUCTION OF WIRE ROD AND ROUNDS , REDAELLI COMMISSIONED A MILL FOR SPECIAL STEELS IN 1967 AND MODERNIZED ITS ORIGINAL ROD MILL IN 1970 . THIS ENABLED IT TO SUPPLY FALCK WITH APPROXIMATELY 65 000 TONNES FO WIRE ROD - FALCK WAS ABLE TO SHUT DOWN ONE OF ITS MILLS IN 1972 - AND TO HIRE-PROCESS 7 000 TONNES OF BILLETS FOR FALCK .
9 . THE COMPANIES ARE PLANNING FURTHER RATIONALIZATION OF EXISTING PLANT AT A LATER DATE IN PARTICULAR BY INCREASING THE CAPACITY OF REDAELLI'S MORE MODERN ROD MILL AND GRADUALLY SHUTTING DOWN THE OTHER LESS PROFITABLE MILLS . THEY ALSO INTEND TO INCREASE TRADE IN PRODUCTS BETWEEN THE TWO COMPANIES .
10 . THE AGREEMENTS IN QUESTION HAVE ACCORDINGLY MADE FOR A SUBSTANTIAL