CELEX: 32015M7614
Language: en
Date: 2015-07-22 00:00:00
Title: Commission Decision of 22/07/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7614 - CVC CAPITAL PARTNERS / ROYAL DSM (FIBRE INTERMEDIATES AND COMPOSITE RESINS)) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 22.7.2015
C(2015) 5189 final

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|To the notifying party:                                                |                                                                       |
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Dear Sir/Madam,

Subject:    Case M.7614 - CVC CAPITAL PARTNERS/ ROYAL DSM (fibre intermediates and composite resins)
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1] and Article 57 of the Agreement  on  the  European  Economic
Area[2]

    0. On 17 June 2015, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger  Regulation
       by which CVC Capital Partners SICAV-FIS SA ("CVC" or "Notifying Party", Luxembourg) through certain CVC controlled funds  acquires  within
       the meaning of Article 3(1)(b) of the Merger Regulation control over Royal DSM NV’s fibre  intermediates  and  composite  resins  business
       ("DSM", the Netherlands), namely  DSM  Fibre  Intermediates  International  B.V.  ("DFI  International"),  DSM  Composite  Resins  Holding
       International B.V. ("DCR Holding") and DSM Fibre Intermediates China B.V. ("DFI China"), collectively referred to as "the Target", by  way
       of purchase of shares.[3] CVC and DSM are hereinafter designated as the "Parties".

THE PARTIES

    0. CVC (i.e. CVC and its subsidiaries and affiliates) is a private equity  investor  which  provides  investment  advice  to  and/or  manages
       investments on behalf of a number of investment funds ("CVC Funds"). CVC holds interests in a number of companies  in  various  industries
       including chemicals, utilities, manufacturing, retailing and distribution, primarily in Europe, the US and the Asia-Pacific region.

    0. CVC portfolio companies include among others the following companies:

       • Univar: a company active in the distribution of commodity and specialty chemicals,

       • Paroc: a company active in the manufacture of mineral wool insulation products,

       • Parexgroup: a company active in the production and commercialisation of industrial specialty dry-mix solutions, which  are  a  form  of
         mortar products used in the construction industry, and

       • Van Gansewinkel Groep ("VGG"): a company active in waste management in the Netherlands.

    0. DSM, the seller, is a global science-based company active in health, nutrition and materials.

    0. The Target comprises part of the material science business of DSM, specifically its composite resin business and its  fibre  intermediates
       division (mainly comprising the production of caprolactam, acrylonitrile and certain by-products), together with  the  provision  of  site
       services (that is, activities related to fire services, site security, waste water treatment, management of the infrastructure).The Target
       is active in the provision of site services via Sitech, which is a joint venture between companies  located  in  the  Chemelot  industrial
       area, in Geleen (the Netherlands), where two of the Target's plants are located. Sitech provides site  services  mainly  at  the  Chemelot
       industrial park in Geleen, to all users of the Chemelot site.

THE OPERATION AND THE CONCENTRATION

    0. Based on the Sale and Purchase Agreement that the Parties irrevocably agreed to sign on 15 March 2015, CVC  will  indirectly  own  65%  of
       Newco 1's share capital, a special purpose vehicle which will ultimately control the Target. DSM will retain 35%  of  the  Target's  share
       capital. Newco 1 will indirectly control 100% of Newco 4 and Newco 5 which will directly acquire the different businesses of the Target.

    0. Decisions of the general meetings of the shareholders of Newco 1 are to be taken by simple majority of votes (one vote  for  each  share),
       including appointment and removal of members of the supervisory board and the management board. The supervisory  board  of  Newco  1  will
       consist of 6 members (three nominated by CVC, two by DSM and one (independent) nominated  by  CVC  after  consultation  with  DSM).  These
       provisions apply mutatis mutandis to Newco 4 and Newco 5.

    0. Certain strategic business decisions taken by Newco 4, Newco 5 or their respective management boards will require simple majority approval
       of their respective supervisory board, e.g. adoption or changes to the budget and business plan, the appointment or removal of  any  board
       member or member of management, and major disposals and acquisitions.[4]

    0. In light of the structure and the decision process of the supervisory and management boards, DSM will not be able to  block  decisions  of
       the supervisory boards of Newco 1, Newco 4 and Newco 5.

    0. Consequently, the proposed transaction constitutes an acquisition of sole control by CVC over the Target, and  therefore  a  concentration
       within the meaning of Article 3(1)(b) of the Merger Regulation.

EU DIMENSION

    0. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[5]  [CVC:  […],  Target:  […][6]].
       Each of them has a EU-wide turnover in excess of EUR 250 million [CVC: […], Target: […]], but they do not achieve more than two-thirds  of
       their aggregate EU-wide turnover within one and the same Member State.

    0. The notified operation therefore has an EU dimension pursuant to Article 1(2) of the Merger Regulation.

RELEVANT MARKETS AND COMPETITIVE ASSESSMENT

    0. The proposed transaction does not give rise to any horizontal overlaps. However, it leads to several vertical links between  the  Parties'
       activities giving rise to affected markets. Specifically, the following links will be assessed in this decision:

       • distribution of speciality and/or commodity chemicals (Univar) which are used for the production of  some  specialty  and/or  commodity
         chemicals: acrylonitrile and sodium cyanide (the Target);

       • production of various specialty and commodity chemicals (caprolactam, cyclohexanone, acrylonitrile, sodium cyanide)  (the  Target)  and
         distribution of speciality and/or commodity of chemicals (Univar);

       • production of ammonium sulphate (the Target) and the production of mineral wool technical and building insulations (Paroc);

       • waste management services (VGG) on one hand and the site services by Sitech (the Target) and the production of various specialty and/or
         commodity chemicals (the Target) on the other hand;[7]

    0. Some markets involved in vertical links are not affected markets irrespective of the plausible market definition considered:  distribution
       of chemicals (Univar) and production of acetonitrile, hydrogen cyanide, unsaturated polyester  resins  ("UPR"),  and  sizing  and  binders
       (Target); production of ammonium sulphate and of acetonitrile (Target) and distribution of  chemicals  (Univar);  production  of  UPR  (by
       Univar) and production of mortars (Parexgroup).

1 Market definition

1 Distribution of chemicals

1 Product market definition

    0. In previous decisions relating to the distribution of  chemicals,  the  Commission  has          distinguished  between  three  categories
       (excluding direct sales by manufacturers): (i) the distribution of commodity chemicals; (ii) the distribution of specialty chemicals;  and
       (iii) the chemical bulk business (i.e. trading).[8]

    0. The Notifying Party does not contest the previous assessment of the Commission. In any event the exact  product  market  segmentation  for
       distribution of chemicals can be left open in this case as the transaction does not give rise to serious doubts as  to  its  compatibility
       with the internal market under any plausible market definition.

2 Geographic market definition

    0. The Commission has previously considered that the chemical distribution markets      are at least national in scope or even larger.[9]

    0. The Notifying Party does not contest the previous assessment of the Commission. In any event the exact geographic  market  definition  for
       distribution of chemicals can be left open in this case as the transaction does not give rise to serious doubts as  to  its  compatibility
       with the internal market under any plausible market definition.

2 Caprolactam

1 Product market definition

    0. Caprolactam is a colourless, solid organic compound at room temperature. It is a global commodity that is used for the production of nylon
       6 (polyamide 6 or PA6) fibres, resins and films. It is widely used in fibre and plastic applications, such as engineering  plastics  (e.g.
       in electrical or automotive applications), carpet filament, packaging film, textile filament and industrial filament.

    0. Caprolactam can be produced by different methods: (i) HSO (reaction of cyclohexanone with hydroxylamine sulphate), (ii) HPO  (reaction  of
       cyclohexanone with hydroxylamine phosphate; this process is proprietary to the Target), (iii) HSNO (via oxidisation and  hydrogenation  of
       ammonia, then oximation with cyclohexanone), (iv)  ammoximation,  (v)  others  (counting  for  approx.  3%  of  the  overall  production).
       Caprolactam is always produced in liquid form, however, it may be transformed into solid (flaked) form  in  order  to  transport  it  over
       longer distances (subsequently melted by the customers).

    0. The Commission has not previously considered the market for caprolactam. The Notifying Party submits  that  the  relevant  market  is  the
       market for caprolactam overall, as there is no meaningful difference between caprolactam sold  for  different  applications.  It  is  also
       submitted that every producer of caprolactam has facilities to flake caprolactam.

    0. In any event the exact product market segmentation for caprolactam can be left open in this case as the transaction does not give rise  to
       serious doubts as to its compatibility with the internal market under any plausible market definition.

2 Geographic market definition

    0. As regards geographic market delineation of the market for caprolactam, the Notifying Party submits that the market should be  defined  as
       worldwide as: customers generally source from a range of producers globally, caprolactam is priced globally, there are  substantial  trade
       flows (many hundreds of kilotons ("kt") between different regions).

    0. Third party market reports provided by the Parties however track prices in the different world regions (Asia, Europe, United  States),  as
       well as separately for liquid form and for flaked form (for export).[10]

    0. In any event the exact geographic market definition for caprolactam can be left open in this case as the transaction does not give rise to
       serious doubts as to its compatibility with the internal market under any plausible market definition.

3 Ammonium sulphate

1 Product market definition

    0. Ammonium sulphate is a by-product of caprolactam and an inorganic salt with a number of commercial applications, the most common of  which
       is a nitrogen fertiliser for alkaline soils. It is categorised as straight nitrogen fertiliser (N-straight fertilizer).

    0. The Commission has previously analysed the substitutability between the  different  types  of  N-straight  fertilisers  (such  as  calcium
       ammonium nitrate, ammonium sulphate, ammonium sulphate nitrate) either from the demand or supply side. However, the  Commission  left  the
       potential subsegmentation of the product market regarding N-straight fertilisers open.[11]

    0. In any event the exact product market segmentation for ammonium sulphate can be left open in this case as the transaction  does  not  give
       rise to serious doubts as to its compatibility with the internal market under any plausible market definition.

2 Geographic market definition

    0. As regards the geographic scope of the market for the supply of N-straight fertilizers (including ammonium sulphate), the  Commission  has
       previously defined the market as at least EEA-wide in scope.[12]

    0. In any event the exact geographic market definition for ammonium sulphate can be left open in this case as the transaction does  not  give
       rise to serious doubts as to its compatibility with the internal market under any plausible market definition.

4 Cyclohexanone

1 Product market definition

    0. Cyclohexanone is the organic compound - colorless oil used primarily for producing caprolactam. It is produced by either (i) an  oxidation
       of cyclohexane to cyclohexanone, (ii) a hydrogenation of phenol  to  cyclohexanone,  or  (iii)  transforming  benzene  to  cyclohexene  to
       cyclohexanol to cyclohexanone (production process used in China).

    0. The Commission has not previously analysed the market for cyclohexanone. The Notifying Party considers that the  relevant  market  is  the
       market for cyclohexanone as the different processes would be fully substitutable from a demand-side perspective, i.e. is identical from  a
       molecular perspective.

    0. In any event the exact product market segmentation for cyclohexanone can be left open in this case as the transaction does not  give  rise
       to serious doubts as to its compatibility with the internal market under any plausible market definition.

2 Geographic market definition

    0. As regards the geographic scope of the market for selling the Notifying Party submits that the market should be defined as worldwide as it
       can be shipped between continents, as shown by the Target generally shipping its excess cyclohexanone produced in the EU to its operations
       in China.

    0. Third party market reports provided by the Parties however track prices in the different world  regions  (Europe,  North  America,  China,
       etc.) and European imports appear limited compared to the market size provided by the Notifying Party.[13]

    0. In any event the exact geographic market definition for cyclohexanone can be left open in this case as the transaction does not give  rise
       to serious doubts as to its compatibility with the internal market under any plausible market definition.

5 Acrylonitrile

1 Product market definition

    0. Acrylonitrile is a colourless toxic and inflammable liquid that is a key ingredient in the manufacture of acrylic textile and carpet fibre
       and it is also used for automobile components, electronic devices, toys and sports equipment.

    0. In previous decisions the Commission has held that acrylonitrile constitutes a distinct product market.[14]

    0. In any event the exact product market segmentation for acrylonitrile can be left open in this case as the transaction does not  give  rise
       to serious doubts as to its compatibility with the internal market under any plausible market definition.

2 Geographic market definition

    0. As regards the geographic scope of the market for acrylonitrile, the Commission has considered worldwide, EEA wide and EEA wide  +  Turkey
       dimensions.[15]

    0. Third party market reports provided by the Parties track prices in the different  world  regions  (Europe+Turkey,  Asia/Far  East,  United
       States+Mexico+Brazil, etc.). European imports appear to come primarily from the United States, Brazil, Korea and India (depending  on  the
       years), but not from other producing countries such as China or Taiwan. However, imports appear relatively limited compared to the  market
       size provided by the Notifying Party.[16]

    0. In any event the exact geographic market definition for acrylonitrile can be left open in this case as the transaction does not give  rise
       to serious doubts as to its compatibility with the internal market under any plausible market definition.

6 Sodium cyanide

1 Product market definition

    0. Sodium cyanide is a white water-soluble cubic crystalline solid mainly used in the  extraction  of  precious  metals  in  mining  and  the
       production of chelates. It is also used for the production of vitamin B5, dyes and pigments, pharmaceutical,  chemical  intermediates  and
       agrochemicals.

    0. Sodium cyanide is always first produced in liquid form (cyanide is a "30% solution", i.e. 70% water) and then it can be  transformed  into
       solid form (by water evaporation) in order to be transported over longer distances. Additional facilities to transform the forms  (on  the
       supply and demand side) are required.

    0. The Commission has not previously analysed the market for sodium cyanide. The Notifying Party considers liquid sodium  cyanide  and  solid
       sodium cyanide as part of the same product market. Nevertheless, the Notifying Party estimates that 30% of  acrylonitrile  producers  have
       these facilities (or outsource the evaporation of water to a third party).

    0. In any event the exact product market segmentation for sodium cyanide can be left open in this case as the transaction does not give  rise
       to serious doubts as to its compatibility with the internal market under any plausible market definition.

2 Geographic market definition

    0. As regards the geographic scope of the market the Notifying Party estimates that liquid sodium cyanide can  be  shipped  economically  for
       distances of around 500-700 km, while it can be shipped worldwide in solid form. The Notifying Party considers the market to be worldwide.

    0. In any event the exact geographic market definition for sodium cyanide can be left open in this case as the transaction does not give rise
       to serious doubts as to its compatibility with the internal market under any plausible market definition.

7 Mineral wool technical and building insulations

1 Product market definition

    0. Insulation products reduce the thermal and acoustic exchange through a wall, roof or duct on which they are placed.

    0. The Commission has previously considered it to be likely that each  of  mineral  wool  building  insulation  and  mineral  wool  technical
       insulation constitute distinct product markets.[17]

    0. In any event the product market segmentation for mineral wool technical and building insulations can be left open  in  this  case  as  the
       transaction does not give rise to serious doubts as to its compatibility with the internal market under any plausible market definition.

2 Geographic market definition

    0. As regards the relevant geographic market definition the Commission has previously considered that the production and supply of insulation
       materials is at least national in scope, possibly regional (e.g. Nordic countries) or EEA-wide.[18]

    0. In any event the exact geographic market definition for mineral wool technical and building insulations can be left open in this  case  as
       the transaction does not give rise to serious doubts as to  its  compatibility  with  the  internal  market  under  any  plausible  market
       definition.

8 Waste management

1 Product market definition

    0. In previous decisions, the Commission has distinguished between the collection and disposal of waste,  between  municipal  and  industrial
       waste and between hazardous and non-hazardous waste.[19] In addition, the Commission has previously considered that  the  market  for  the
       disposal of waste may be further segmented by the method of disposal (such as incineration, landfill or detoxification).[20]

    0. The Notifying Party does not contest the previous assessment of the Commission. In any event the exact  product  market  segmentation  for
       waste management can be left open in this case as the transaction does not give rise to serious doubts as to its  compatibility  with  the
       internal market under any plausible market definition.

2 Geographic market definition

    0. As regards geographic delineation of the market, the Commission has considered that the market for collection of waste is at most national
       and possibly regional in scope (with a radius of 200 km from each facility, in particular for hazardous waste) and for disposal  of  waste
       is national in scope.[21]

    0. In any event the exact geographic market definition for waste management can be left open in this case as the transaction  does  not  give
       rise to serious doubts as to its compatibility with the internal market under any plausible market definition.

9 Site services

1 Product market definition

    0. In previous decisions, the Commission identified a separate market for facility management services, which it held  to  comprise  property
       management services including technical building management, commercial management and general building  management,  but  left  open  the
       question of whether distinctions could be drawn in relation to the type of client (industrial, tertiary) and the type of building.[22]

    0. In any event the exact product market segmentation for site services can be left open in this case as the transaction does not  give  rise
       to serious doubts as to its compatibility with the internal market under any plausible market definition.

2 Geographic market definition

    0. As regards geographic delineation of the market, the Commission considered the market for site services as national.[23]

    0. In any event the exact geographic market definition for site services can be left open in this case as the transaction does not give  rise
       to serious doubts as to its compatibility with the internal market under any plausible market definition.

2 Competitive assessment

    0. On the basis of the market definitions presented above, the proposed transaction gives rise to the following affected markets:

       • distribution of speciality and/or commodity chemicals by Univar (a CVC portfolio company) which are used for  the  production  of  some
         specialty and/or commodity chemicals of the Target (acrylonitrile, sodium cyanide);

       • production of various specialty and commodity chemicals (caprolactam, cyclohexanone, acrylonitrile, sodium cyanide) by the  Target  and
         distribution of speciality and/or commodity of chemicals by Univar (a CVC portfolio company);

       • production of ammonium sulphate of the Target and the production of mineral wool technical and building insulations  of  Paroc  (a  CVC
         portfolio company);

       • waste management services of VGG (a CVC portfolio company) on one hand and the site services by Sitech (Target) and the  production  of
         various specialty and/or commodity chemicals by the Target on the other hand.

1 Distribution of specialty and/or commodity chemicals (CVC) and production of various chemicals (Target)

    0. Univar (a CVC portfolio company) is active in the markets for the  distribution  of  commodity  chemicals  and  for  the  distribution  of
       specialty chemicals (upstream market), while the Target purchases chemical distribution services in France, Italy and the Netherlands  for
       its production of acrylonitrile, acetonitrile, sodium cyanide, hydrogen cyanide, UPR, sizing and binders (downstream markets).

    0. Univar's market shares for 2014 in the markets for the distribution of commodity chemicals and of specialty chemicals were below [0-5]% in
       the EEA and below [10-20]% in each EEA country in which a vertical link could occur (i.e. in France, Italy,  the  Netherlands,  where  the
       Target is active as a purchaser downstream).

    0. The Target´s market shares giving rise to affected markets concern the following products:

       • acrylonitrile ([5-10]% worldwide, [30-40]% in the EEA, [20-30]% in the EEA and Turkey),

       • sodium cyanide ([0-5]% regarding the overall market worldwide, [20-30]% regarding the overall market in the EEA, [50-60]% regarding the
         liquid form in the EEA, 0% regarding the solid form in the EEA).

    0. Given that the Target is not an important customer in the market for distribution of commodity and specialty chemicals, as  its  purchases
       represent less than [0-5]% of the market demand in France, Italy, the Netherlands and the EEA overall, CVC (via  Univar)  would  therefore
       not have the incentive to engage into customer foreclosure by internalising the demand. Indeed, such a  strategy  would  not  seem  to  be
       profitable.

   Table 1 - Target's share of purchase for the distribution of chemicals (2014)

|                                                                                                                               |
|                 |Distribution of commodity chemicals                 |Distribution of specialty chemicals                     |
|                 |                                                    |                                                        |
|Relevant EEA     |                                                    |                                                        |
|State            |                                                    |                                                        |
|                 |Estimated       |Target's        |Target's          |Estimated        |Target's           |Target's           |
|                 |size of         |maximum         |maximum           |size of          |maximum            |maximum            |
|                 |market          |value of        |share of          |market           |value of           |share of           |
|                 |segment         |purchase        |purchase          |segment          |purchase           |purchase           |
|Italy            |[<3500]         |[…]             |[0-5]%            |[<2000]          |[…]                |[0-5]%             |
|Netherlands      |[<1000]         |[…]             |[0-5]%            |[<1000]          |[…]                |[0-5]%             |
|EEA total        |[<25000]        |[…]             |[0-5]%            |[<25000]         |[…]                |[0-5]%             |

      Source: Form CO.

    0. In addition, Univar estimates that sales to material science businesses (Target´s business) comprise well under [5-10]%  of  its  chemical
       sales in the EEA, therefore the market on which the Target is active does not represent a significant customer base for Univar.

    0. In light of the above, the Commission concludes that the transaction does not give rise to serious doubts as to its compatibility with the
       internal market in relation to the distribution of specialty and/or commodity chemicals (CVC, upstream market)  which  are  used  for  the
       production of various chemicals (Target, downstream market).

2 Production of various chemicals (Target) and distribution of speciality and/or commodity of chemicals (CVC)

    0. The Target produces a number of chemicals, i.e. caprolactam, cyclohexanone, ammonium sulphate, acrylonitrile, acetonitrile, sodium cyanide
       (upstream markets) that it sells to distributors. Univar (a CVC portfolio company) is active on the downstream market for distribution  of
       specialty and of commodity chemicals.

    0. Univar's market shares for 2014 in the markets for distribution of commodity chemicals and of specialty chemicals were below [0-5]% in the
       EEA and mostly well below [10-20]% in each EEA country in which Univar has been active as a purchaser of products produced  by  Target  in
       any of the last three years (i.e. France, the Netherlands, Belgium, Germany, Poland, Spain, Sweden and the  UK).  Univar  potentially  has
       more material presence in Nordic countries (market share of [10-20]%) and Sweden (market share well below [30-40]%).

    0. The Target´s market shares lead to the following affected markets:

       • caprolactam ([10-20]% on the overall market worldwide, [20-30]% on the overall market in the EEA, 100% - produced by HPO method in  the
         EEA[24], [20-30]% - produced by HSO method in the EEA),

       • cyclohexanone (in terms of capacity: [5-10]% on the overall market worldwide, [20-30]% on the overall market in the  EEA,  [40-50]%  in
         the EEA -  produced by hydrogenation production method; in terms of sales: [10-20]% on the overall market in the EEA, [10-20]%  in  the
         EEA -  produced by hydrogenation production method),

       • acrylonitrile ([5-10]% worldwide, [30-40]% in the EEA, [20-30]% in the EEA and Turkey),

       • sodium cyanide ([0-5]% on the overall market worldwide, [20-30]% on the overall market in the EEA, [50-60]% on the liquid form  in  the
         EEA, 0% on the solid form in the EEA).

    0. In 2014 Univar's EEA demand of the above products amounted to […] out of the total value of distributed products of EUR 1 636 million. The
       Notifying Party therefore submits that these products are not important inputs for Univar.

    0. In addition, the Target has a limited number of distributors among its customers: […]  for  caprolactam  and  cyclohexanone  and  […]  for
       acrylonitrile, […] for sodium cyanide (i.e. direct sales). As a result, any input foreclosure would concern only these companies who could
       find alternative sources of these products elsewhere. Indeed, other suppliers of these  products  in  the  EEA  are  BASF,  Lanxess,  DOMO
       Chemicals and Grupa Azoty for caprolactam, Versalis and DOMO Chemicals for cyclohexanone, INEOS Europe and Mitsubishi  International  GmbH
       for acrylonitrile, and BASF, Lučební závody Draslovka a.s. Kolín and CyPlus GmbH for sodium cyanide.

    0. In addition, among the top competitors of Univar (i.e. distributors of specialty and/or commodity chemicals) who responded to  the  market
       investigation, only around half of them buy caprolactam, cyclohexanone,  ammonium  sulphate,  acrylonitrile,  acetonitrile  and/or  sodium
       cyanide. Among those distributors who buy these chemicals, most respondents indicated that the products concerned are not important inputs
       for their business. Even among the few distributors who consider one or several products as must-have products for  their  business,  none
       expressed concerns as to a potential negative impact of the transaction on their business or on the market for distribution of  chemicals.

    0. In light of the above, the Commission concludes that the transaction does not give rise to serious doubts as to its compatibility with the
       internal market in relation to the vertical link between production of various chemicals (Target) and distribution  of  speciality  and/or
       commodity of chemicals (CVC).

3 Production of ammonium sulphate (Target) and production of mineral wool technical and building insulations (CVC)

    0. The Target produces ammonium sulphate, a chemical product which Paroc (a CVC portfolio company) purchases for use  in  its  production  of
       mineral wool technical and building insulations. This product is only purchased in Sweden due to environmental restrictions which  do  not
       apply across the EEA or even across Sweden, but only to the Hässleholm municipality where Paroc's plant is located.

    0. The Target has [5-10]% and [20-30]% market share in the upstream market for ammonium sulphate worldwide and EEA-wide respectively. On  the
       downstream market, CVC's market shares for the production of mineral wool technical insulations are [20-30]% in the EEA, [50-60]%  in  the
       Nordics, [50-60]% in Sweden, [70-80]% in Finland, [40-50]% in Lithuania and [30-40]% in Poland, and for mineral wool building  insulations
       are below [5-10]% in the EEA, [20-30]% in the Nordics and [30-40]% in Sweden.

    0. CVC purchased less than […] of ammonium sulphate per year in the last 3 years. Its purchases therefore represent a very small part of  the
       EEA demand (less than [0-5]%). CVC is therefore not an important customer of ammonium sulphate and thus the merged entity would  not  have
       the ability to carry out customer foreclosure.

    0. Furthermore, most of the top producers of ammonium sulphate who responded to the market investigation indicated  that  they  do  not  sell
       ammonium sulphate for use in the production of mineral wool technical and  building  insulations.  Among  those  for  which  mineral  wool
       technical and building insulations constitute one of the outlets for their production of ammonium sulphate, none indicated that Paroc is a
       significant customer nor expressed concerns as regards a potential negative impact of the transaction on their ability  to  sell  ammonium
       sulphate.

    0. In light of the above, the Commission concludes that the transaction does not give rise to serious doubts as to its compatibility with the
       internal market in relation to the vertical link between production of ammonium sulphate (Target) and production of mineral wool technical
       and building insulations.(CVC).

4 Waste management (CVC), and site services and production of chemicals (Target)

    0. VGG (controlled by CVC) is a waste management company in the Netherlands which supplies waste management services to the Target  (via  the
       Target's joint venture Sitech). Sitech provides commercial management and general building management  services  mainly  at  the  Chemelot
       industrial park in Geleen (Netherlands). The Notifying Party  notes  that  the  Sitech  structure  has  been  established  such  that  the
       shareholders/partners in the Sitech entities (DSM, OCI Nitrogen and Lanxess which will change to four  customers  following  the  proposed
       transaction: Target, other entities of DSM, OCI Nitrogen and Lanxess) are also its main customers.

    0. Sitech purchases waste management services from VGG for around […] and recently contracted  with  a  third  party  company  (Indaver)  for
       collection of hazardous waste.

    0. The transaction gives rise to a vertical link between waste management (CVC via VGG, upstream)  and  site  services  (Target  via  Sitech,
       downstream) on the one hand and a potential vertical link between waste management (CVC via VGG, upstream)  and  production  of  chemicals
       (Target, downstream) on the other hand.

    0. As regards the link between waste management and site services, VGG's market shares for waste management (for each collection and disposal
       of non-industrial waste and of industrial hazardous waste) do not exceed 30% neither at EEA, national or regional level.[25] In  addition,
       the Notifying Party submits that Sitech's market share for facilities management services in the Netherlands is below [5-10]%.

    0. As regards the potential link between waste management and production of chemicals, VGG's market shares for  waste  management  (for  each
       collection and disposal of non-industrial waste and of industrial hazardous waste) do not exceed 30% neither at EEA, national or  regional
       level. Downstream, the only potentially vertically affected markets therefore occur in relation to the production of chemicals in  Geleen,
       the Netherlands, where the Target produces caprolactam (together with cyclohexanone and ammonium  sulphate)  and  acrylonitrile  (together
       with acetonitrile, hydrogen cyanide and sodium cyanide). Indeed, the market shares of the composite resins business of  the  Target  (i.e.
       production of UPR, sizings and binders) are below 30% on any plausible market.

    0. However, the Target already purchases non-hazardous waste collection services from VGG (therefore no merger-specific effect).  As  regards
       collection of hazardous waste, the Target entered on 1 January 2015 into a contract with the third party  Indaver  for  […]  /  year.  The
       Target can therefore not be considered as a significant customer for the collection of industrial waste and no customer foreclosure  could
       likely arise.

    0. In light of the above, the Commission concludes that the transaction does not give rise to serious doubts as to its compatibility with the
       internal market in relation to the vertical link between waste management services (CVC) and site services  and  production  of  chemicals
       (Target).

CONCLUSION

    0. For the above reasons, the European Commission has decided not to oppose the notified operation and to  declare  it  compatible  with  the
       internal market and with the EEA Agreement. This decision is adopted in application of  Article  6(1)(b)  of  the  Merger  Regulation  and
       Article 57 of the EEA Agreement.

For the Commission
(Signed)
Margrethe VESTAGER
Member of the Commission

-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
('TFEU') has introduced certain changes, such as the replacement of 'Community'  by  'Union'  and  'common  market'  by  'internal  market'.  The
terminology of the TFEU will be used throughout this decision.

[2]   OJ L 1, 3.1.1994, p.3 ("the EEA Agreement").

[3]   Publication in the Official Journal of the European Union No C 210, 26.6.2015, p. 11.

[4]         [Redacted text relates to confidential governance arrangements of the Target].

[5]   Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission Consolidated Jurisdictional Notice (OJ  C  95,
16.4.2008, p. 1).

[6]   This figure includes 100% of the turnover generated by DNCC, since DSM is obliged to consolidate 100% of the turnover of DNCC according  to
the IFRS accounting rules. In the context of the EU Merger Regulation DNCC may technically be considered to be jointly controlled by  Target  and
two third parties (rather than solely controlled by Target), in which case the worldwide turnover of Target would  be  reduced  to  […].  In  any
event, this point does not affect the Commission's jurisdiction over the Proposed Transaction.

[7]   The current owners of Target, i.e. DSM, currently also purchase loss adjustment services from Cunningham Lindsay  (controlled  by  CVC)  in
respect of a number of DSM business divisions, including the Target. However, loss adjustment services can hardly be considered as an  input  for
the production of chemicals,  the value of sales made by Cunningham Lindsay in the EU that can be attributed to  the  Target  business  are  very
low: approximately […] in 2014, EUR […] in 2013 and EUR […] in 2012. Finally, DSM has not purchased loss adjustment services  from  any  provider
other than Cunningham Lindsay. This link will therefore not be further considered

[8]   Case No. M.2244 – ROYAL VOPAK / ELLIS & EVERARD, Case No. COMP/M.4836 – CVC / UNIVAR.

[9]   Case No. M.2244 – ROYAL VOPAK / ELLIS & EVERARD, Case No. COMP/M.4836 – CVC / UNIVAR.

[10]  Nylon Intermediates & Fibres, monthly report, N°306, PCI Research GmBH, May 2015.

[11]  Chemical business focus, A monthly roundup and analysis of the key factors shaping world chemical markets,  N°421,  Tecnon  OrbiChem,  28th
May 2015.

[12]  Case No. M.5238 – INEOS / BASF Assets, Case No. COMP/M.2345 – Deutsche BP / Erdolchemie.

[13]  Case No. M.5238 – INEOS / BASF Assets, Case No. COMP/M.2345 – Deutsche BP / Erdolchemie.

[14]  Acrylonitrile and Derivatives, monthly report, N°309, IHS Chemical, 26th May 2015.

[15]  Case No. M.7457 – CVC / Paroc.

[16]  Case No. M.7457 – CVC / Paroc.

[17]  Case No. M.4318 – Veolia / Cleanaway, Case No. M.2897 – SITA Sverige AB / Skdkraft Ecoplus.

[18]  Case No. M.4318 – Veolia / Cleanaway.

[19]  Case No. M.4318 – Veolia / Cleanaway; Case No. M.2897 - SITA Sverige AB / Sydkraft Ecoplus.

[20]  Case No. M.7137 – EDF / Dalkia En France.

[21]  Case No. M.7137 – EDF / Dalkia En France.

[22]  Caprolactam purchased by Univar is manufactured under the HSNO method.
[23]  In addition, CVC [Redacted text relates to the manner of CVC's exit from VGG] no longer holds a controlling interest in VGG.

-----------------------
 In the published version of this decision, some information has  been  omitted  pursuant  to  Article  17(2)  of  Council  Regulation  (EC)  No
 139/2004[pic]"+,>?@ABCZ[\]^_`xyz{|Œ“•šíî[24]            -    7     :     ;    íéÛ×Ó×ÍÓÛÓÆ¾º¾Û²¾×«¡œ˜Ž˜…€×|u×q×j×f_ concerning non-disclosure of
 business secrets and other confidential information. The omissions are shown thus […]. Where possible the information omitted has been replaced
 by ranges of figures or a general description.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE