CELEX: 32018M8988
Language: en
Date: 2018-12-11 00:00:00
Title: Commission Decision of 11/12/2018 declaring a concentration to be compatible with the common market (Case No COMP/M.8988 - ENERGIZER / SPECTRUM BRANDS (BATTERY AND PORTABLE LIGHTING BUSINESS)) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                              Brussels, 18.12.2018
                                                              C(2018) 8846 final
                                                                                           PUBLIC VERSION
                                                                In the published version of this decision,
                                                                some information has been omitted
                                                                pursuant to Article 17(2) of Council
                                                                Regulation      (EC)      No     139/2004
                                                                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                                                                information omitted has been replaced by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.
                                                              To the notifying party
Subject:            Case M.8988 – Energizer/Spectrum Brands (Batteries and Portable Lighting
                    Business)
                    Commission decision pursuant to Article 6(1)(b) in conjunction with Article 6(2)
                    of Council Regulation No 139/20041 and Article 57 of the Agreement on the
                    European Economic Area2
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').
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak---                                     TABLE OF CONTENT
1. THE PARTIES ............................................................................................................7
2. THE OPERATION AND CONCENTRATION .........................................................7
3. EU DIMENSION .........................................................................................................7
4. RELEVANT MARKETS ............................................................................................8
   4.1. Introduction to the industry and the Parties' activities .......................................8
        4.1.1.  Consumer batteries ...............................................................................8
        4.1.2.  Portable battery chargers ....................................................................10
        4.1.3.  Portable lighting products ..................................................................11
        4.1.4.  Other products ....................................................................................11
   4.2. Relevant product markets ................................................................................11
        4.2.1.  Wholesale supply of consumer batteries ............................................11
        4.2.2.  Wholesale supply of portable battery chargers ..................................26
        4.2.3.  Wholesale supply of portable lighting products ................................27
        4.2.4.  Conclusion on relevant product markets ............................................27
   4.3. Geographic market definition ..........................................................................28
        4.3.1.  Wholesale supply of branded consumer batteries to the retail channel28
        4.3.2.  Wholesale supply of branded consumer batteries to the OEM channel30
        4.3.3.  Wholesale supply of branded battery chargers ..................................31
        4.3.4.  Wholesale supply of branded portable lighting products ..................31
   4.4. Conclusion on market definition ......................................................................32
5. COMPETITIVE ASSESSMENT ..............................................................................33
   5.1. Analytical framework ......................................................................................33
   5.2. Horizontal non-coordinated effects..................................................................33
   5.3. Wholesale supply of branded consumer batteries to the retail channel – overview
        of market dynamics across different national markets in the EEA ..................34
        5.3.1.  The Parties are close and important competitors in most of the national
                markets in the EEA in an already concentrated industry with limited
                alternatives .........................................................................................34
        5.3.2.  Private label batteries only exercise a limited constraint on the Parties35
        5.3.3.  E-commerce is unlikely to affect the Parties' market position in the short-
                to medium term ..................................................................................36
        5.3.4.  Customers only exercise a limited constraint on the Parties' ability to
                increase prices ....................................................................................37
                                                                  2
 ---pagebreak--- 5.4. Assessment of potential horizontal non-coordinated effects on the national
     markets for the wholesale supply of branded household primary batteries to the
     retail channel ....................................................................................................38
     5.4.1.    Finland ...............................................................................................40
     5.4.2.    Germany .............................................................................................40
     5.4.3.    Norway ...............................................................................................41
     5.4.4.    Sweden ...............................................................................................42
     5.4.5.    Czechia ...............................................................................................42
     5.4.6.    Greece ................................................................................................43
     5.4.7.    Slovakia..............................................................................................44
     5.4.8.    Denmark .............................................................................................44
     5.4.9.    Slovenia..............................................................................................45
     5.4.10. Hungary ............................................................................................45
     5.4.11. Latvia         ............................................................................................46
     5.4.12. France         ............................................................................................47
     5.4.13. Other affected markets .......................................................................48
     5.4.14. Other horizontal overlaps ...................................................................49
     5.4.15. Conclusion on the assessment of potential horizontal non-coordinated
               effects on the national markets for the wholesale supply of branded
               household primary batteries to the retail channel ..................................
                            49
5.5. Assessment of potential horizontal non-coordinated effects on the national
     markets for the wholesale supply of branded household secondary batteries to the
     retail channel ....................................................................................................49
     5.5.1.    France .................................................................................................52
     5.5.2.    Hungary..............................................................................................53
     5.5.3.    Netherlands ........................................................................................54
     5.5.4.    Austria ................................................................................................54
     5.5.5.    Germany .............................................................................................55
     5.5.6.    Greece ................................................................................................56
     5.5.7.    Slovakia..............................................................................................56
     5.5.8.    Romania .............................................................................................57
     5.5.9.    Malta ..................................................................................................58
     5.5.10. Norway ............................................................................................58
     5.5.11. Italy          ............................................................................................59
     5.5.12. Other affected markets .......................................................................59
     5.5.13. Other horizontal overlaps ...................................................................60
                                                                 3
 ---pagebreak---      5.5.14. Conclusion on the assessment of potential horizontal non-coordinated
               effects on the branded household secondary batteries markets .........61
5.6. Assessment of potential horizontal non-coordinated effects on the national
     markets for the wholesale supply of branded specialty batteries to the retail
     channel .............................................................................................................61
     5.6.1.    Latvia .................................................................................................63
     5.6.2.    Finland ...............................................................................................63
     5.6.3.    France .................................................................................................64
     5.6.4.    Germany .............................................................................................65
     5.6.5.    Norway ...............................................................................................65
     5.6.6.    Sweden ...............................................................................................66
     5.6.7.    Other affected markets .......................................................................67
     5.6.8.    Other horizontal overlaps ...................................................................68
     5.6.9.    Conclusion on the assessment of potential horizontal non-coordinated
               effects on the national markets for the wholesale of branded specialty
               batteries to the retail channel .............................................................68
5.7. Assessment of potential horizontal non-coordinated effects on the national
     markets for the wholesale supply of branded hearing aid batteries to the mass
     retail channel ....................................................................................................68
     5.7.1.    The Parties are close and important competitors in most of the national
               markets in the EEA in an already concentrated industry with limited
               alternatives .........................................................................................70
     5.7.2.    Private label batteries only exercise a limited constraint on the Parties71
     5.7.3.    E-commerce is unlikely to affect the Parties' market position in the short-
               to medium term ..................................................................................72
     5.7.4.    Customers only exercise a limited constraint on the Parties' ability to
               increase prices ....................................................................................73
     5.7.5.    Concerns raised by market participants in the course of the market
               investigation .......................................................................................73
     5.7.6.    Bulgaria ..............................................................................................73
     5.7.7.    Czechia ...............................................................................................74
     5.7.8.    Denmark .............................................................................................75
     5.7.9.    Finland ...............................................................................................75
     5.7.10. Hungary ............................................................................................76
     5.7.11. Ireland          ............................................................................................77
     5.7.12. Luxembourg .......................................................................................77
     5.7.13. Norway ............................................................................................78
     5.7.14. Slovakia ............................................................................................79
     5.7.15. Slovenia ............................................................................................79
                                                                   4
 ---pagebreak---          5.7.16. Poland          ............................................................................................80
         5.7.17. Netherlands ........................................................................................80
         5.7.18. United Kingdom .................................................................................81
         5.7.19. Spain           ............................................................................................82
         5.7.20. Belgium ............................................................................................82
         5.7.21. Italy           ............................................................................................83
         5.7.22. Austria         ............................................................................................84
         5.7.23. Germany ............................................................................................85
         5.7.24. Sweden ............................................................................................85
         5.7.25. France and Romania ..........................................................................86
         5.7.26. Conclusion on the assessment of potential horizontal non-coordinated
                 effects on the national markets for the wholesale supply of branded
                 hearing aid batteries to the mass retail channel......................................
                                 87
   5.8. Assessment of potential horizontal non-coordinated effects on the EEA-wide
         markets for the wholesale supply of branded household and specialty batteries to
         OEMs ...............................................................................................................87
   5.9. Wholesale supply of branded portable battery charners – overview of market
         dynamics across different national markets in the EEA ..................................89
   5.10. Assessment of potential horizontal non-coordinated effects on the national
         markets for the wholesale supply of branded portable battery chargers ..............
                 91
         5.10.1. France          ............................................................................................93
         5.10.2. Germany ............................................................................................93
         5.10.3. Hungary ............................................................................................94
         5.10.4. Netherlands ........................................................................................94
         5.10.5. Poland          ............................................................................................95
         5.10.6. United Kingdom .................................................................................95
         5.10.7. Other affected markets .......................................................................96
         5.10.8. Other horizontal overlaps ...................................................................97
         5.10.9. Conclusion on the assessment of potential horizontal non-coordinated
                 effects on the national markets for the wholesale supply of branded
                 portable battery chargers ....................................................................97
   5.11. Assessment of potential horizontal non-coordinated effects on the markets for the
         wholesale supply of branded portable lighting products .................................97
6. PROPOSED REMEDIES ..........................................................................................98
   6.1. Introduction ......................................................................................................98
   6.2. Initial Commitments ........................................................................................98
                                                                      5
 ---pagebreak---         6.2.1.  Description of the Initial Commitments ............................................98
        6.2.2.  Results of the market test .................................................................100
        6.2.3.  Commission’s assessment of the Initial Commitments ...................103
   6.3. Final Commitments ........................................................................................109
        6.3.1.  Description of the Final Commitments ............................................109
        6.3.2.  The Commission’s assessment of the Final Commitments .............109
   6.4. Conclusion .....................................................................................................110
7. CONDITIONS AND OBLIGATIONS ...................................................................110
8. CONCLUSION ........................................................................................................111
                                                                   6
 ---pagebreak--- Dear Sir or Madam,
(1)     On 19 October 2018, the European Commission received notification of a proposed
        concentration pursuant to Article 4 of the Merger Regulation by which Energizer Holdings,
        Inc. ("Energizer") will acquire within the meaning of Article 3(1)(b) of the Merger
        Regulation sole control of the whole of the global battery and portable lighting business (the
        "Target Business") of Spectrum Brands Holdings, Inc. ("Spectrum"), (the "Transaction").3
        Energizer is further referred to as the "Notifying Party". Energizer and Spectrum (or the
        Target Business, as the context requires) are further referred to together as the "Parties", whist
        the undertaking that would result from the Transaction is referred to as "the merged entity".
1.      THE PARTIES
(2)     Energizer’s main business is the manufacturing and marketing of consumer batteries sold
        under the Energizer and Eveready brands, mostly through the retail channel to end-
        consumers. In the EEA, Energizer predominantly sells Energizer-branded consumer batteries,
        including household batteries, specialty batteries and hearing aid batteries. Energizer is also
        active in the sale of Energizer-branded portable chargers for rechargeable batteries as well as
        some lighting products (such as flashlights, lanterns and mini lights). Energizer is also active
        in the design and marketing of automotive fragrance and appearance products.
(3)     The Target Business comprises Spectrum's consumer battery and portable lighting business
        worldwide. Spectrum supplies consumer batteries under the Varta and Rayovac brands, as
        well as private label batteries to retailers. Furthermore, pursuant to a distribution and supply
        agreement entered into with Varta Microbattery in 2002, Spectrum distributes Varta-branded
        specialty batteries manufactured by Varta Microbattery.4 Spectrum is also active in the sale of
        portable chargers for rechargeable batteries as well as some portable lighting products.
2.      THE OPERATION AND CONCENTRATION
(4)     Pursuant to an Acquisition Agreement signed on 15 January 2018, Energizer intends to
        purchase shares and assets comprising the Target Business. As a result of the Transaction,
        Energizer will obtain sole control over the Target Business.
(5)     Therefore, the Transaction constitutes a concentration within the meaning of Article 3(1)(b)
        of the Merger Regulation.
3.      EU DIMENSION
(6)     The Transaction does not have a Union dimension within the meaning of Article 1 of the
        Merger Regulation as the turnover thresholds set out therein are not met. As the Transaction
        was capable of being reviewed under the national competition laws of Germany, Spain and
        the United Kingdom, the Notifying Party requested the referral of the case to the Commission
        pursuant to Article 4(5) of the Merger Regulation on 13 June 2018. The Member States
3   Publication in the Official Journal of the European Union No C 388, 26.10.2018, p.12.
4   As explained in more detail below, for historic reasons, three separate entities under different ownership are active in
    the manufacturing and distritbution of batteries under the Varta brand.
                                                                 7
 ---pagebreak---          competent to examine the Transaction did not express their disagreement to the request for
         referral within 15 working days. The Transaction is therefore deemed to have a Union
         dimension.
4.       RELEVANT MARKETS
4.1.     Introduction to the industry and the Parties' activities
4.1.1.     Consumer batteries
(7)      Batteries are devices that produce electrical energy by means of a chemical interaction
         between a negative electrode (“anode”) and a positive electrode (“cathode”) through a
         conductive material (“electrolyte”).5 The resulting electricity can be used to power a wide
         range of devices or installations.
(8)      The overall battery industry encompasses different categories: (i) industrial batteries (such as
         stationery power supplies that are used in business and factories), (ii) automotive batteries
         (which are used in cars, trucks and other wheeled vehicles), (iii) batteries that are directly
         integrated into consumer devices (such as mobile telephones and laptops), and (iv) batteries
         used in relatively small devices (such as power tools and toys).6 The batteries in the latter
         category are commonly known as "consumer batteries". Energizer and Spectrum only supply
         consumer batteries.7 Therefore, this decision will only deal with consumer batteries.
(9)      The industry appears to distinguish consumer batteries based on their size and overall
         purpose:8
         (a)       The general purpose cylindrically shaped consumer batteries, with common battery
                   sizes such as AA and AAA, and typically used to power various types of household
                   electronic devices, are often referred to as "general purpose" or "household"
                   batteries. These household batteries can be disposable (primary), if manufactured for
                   example according to an alkaline or lithium chemistry, or rechargeable (secondary), if
                   manufactured according to a chemistry that allows recharging, for example nickel-
                   metal hydride (NiMH).
         (b)       Batteries that have a coin or a button shape and which are most commonly
                   manufactured according to chemistries such as lithium, with commonly known sizes
                   such as CR2032, CR2016, or cylindrical batteries with sizes such as AAAA or A23,
                   and which are typically used for electronic watches and photo equipment, are
                   commonly known as "specialty" batteries.9
5   Case M.7655 – Berkshire/Hathaway/The Duracell Business, paragraph 10.
6   Form CO, paragraph 94.
7   Form CO, paragraph 94.
8   Form CO, paragraphs 97-99. See also Minutes of a call with a competitor, 8 August 2018, 14:00, paragraph 4. There
    are also other forms of consumer batteries, such as power banks. Given that there are no horizontal overlaps between
    the Parties in the supply of power banks (Form CO, paragraph 177), this decision will not assess the competitive
    effects of the Transaction on the markets for power banks.
9   Like household batteries, specialty batteries can also be disposable or rechargeable. However, given that neither
    Energizer nor Spectrum sells rechargeable specialty batteries (Form CO, paragraph 98), these are not considered
    further in this decision.
                                                               8
 ---pagebreak---        (c)       Batteries used to power hearing aid devices are very small button-cell shaped
                 specialty batteries that tend to be manufactured according to a zinc-air chemistry, and
                 are typically known as "hearing aid batteries".
(10)   There are a number of manufacturers and suppliers of consumer batteries in the EEA. The
       other suppliers of consumer batteries sold in the EEA include Duracell, Panasonic, Gold
       Peak, Sony (now Murata), Philips, Agfa, Kodak, Toshiba, FDK (Fujitsu), Ansmann, Cegasa,
       Emos, Maxell, Camelion, Renata, Powercell, Airam, and Varta Microbattery.10
(11)   Today, the ownership and use of the Varta brand is split between three separate entities:11
       (a)       Johnson Controls holds the rights to the automotive batteries division;12
       (b)       Spectrum holds rights to the Varta-branded consumer batteries division (including
                 household batteries, portable chargers and portable lighting products).13 Spectrum
                 owns a manufacturing facility in Dischingen, Germany, where Varta-branded
                 consumer batteries are manufactured; and
       (c)       Varta AG, via its subsidiary Varta Storage GmbH, holds the rights to storage
                 solutions,14 and via its subsidiary Varta Microbattery GmbH ("Varta Microbattery"),
                 to the microbattery division (which includes specialty and hearing aid batteries).15
                 Varta Microbattery is based in Ellwangen, Germany, where it owns a manufacturing
                 facility that manufactures Varta-branded specialty batteries, as well as hearing aid
                 batteries under the Varta Microbattery's PowerOne brand and hearing aid batteries
                 under private label.
                 Source: http://varta.com/
10 Form CO, paragraphs 313-385 and 404. A number of other suppliers may also export batteries from outside the
   EEA, including Zhejiang Hengwei Battery (China), Sichuan Changhong Electric (China), Zhejiang Yonggao
   (China), Chung Pak (Hong Kong), ChaoChuang (China), Power Glory Battery Tech (China), Eve (China), EBL Mall
   (China), Ultralife (USA) – see Form CO, paragraphs 386-408.
11 See http://varta.com/.
12 See https://www.varta-automotive.com/en-gb.
13 See http://www.varta-consumer.com/en.
14 See https://b2b.varta-storage.com/en/nc/b2b.html.
15 See https://www.varta-microbattery.com/?lang=en.
                                                           9
 ---pagebreak--- (12)     Pursuant to a distribution agreement between Varta AG and Spectrum in relation to Varta
         Microbattery products, [Distribution of distribution agreement]16.17
(13)     Energizer and Spectrum are both active in the production and sale of consumer batteries
         which they do not sell directly to consumers, but rather to retailers (e.g. [Parties’
         retailers/customers] and others), wholesalers and distributors.18 Energizer and Spectrum are
         therefore only active at the wholesale level, where they compete to supply retailers,
         wholesalers and distributors with consumer batteries.19
(14)     The Parties supply some of their consumer batteries through other channels, in particular to
         original equipment manufacturers ("OEM"), who integrate such batteries directly in their
         devices. Unlike the parties in Panasonic/Sanyo,20 neither Energizer, nor Spectrum has
         significant activities regarding the supply of consumer batteries to OEMs. Energizer realized
         less than [Percentage]% of its 2017 EEA consumer batteries revenues through the sale of
         consumer batteries to OEMs, industrial and institutional customers21 while such sales
         accounted for around [Percentage]% of Spectrum's revenues in the EEA in 2017.22
(15)     In the EEA, Energizer predominantly sells Energizer-branded batteries, including household
         batteries (disposable and rechargeable), specialty and hearing aid batteries. Approximately
         [Percentage]% of the consumer batteries sold by Energizer in the EEA (by volume) are not
         manufactured by Energizer, but are sourced from third parties. 23 For example, Energizer does
         not itself manufacture the hearing aid batteries that are sold under the Energizer brand, but
         procures these from [Supplier].24
(16)     In the EEA, Spectrum supplies household (disposable and rechargeable) and specialty
         batteries under the Varta brand, as well as hearing aid batteries under the Rayovac brand.
         Spectrum also supplies hearing aid batteries, as well as other consumer batteries, under the
         Rayovac and Varta brands in non-EEA territories.25
4.1.2.     Portable battery chargers
(17)     Household rechargeable batteries (otherwise known as secondary batteries) can be recharged
         by the consumer using a portable battery charger.
(18)     Energizer is active in the sale of Energizer-branded portable chargers for rechargeable
         batteries.26
16  Form CO, paragraph 62.
17  Form CO, paragraph 61.
18 Form CO, paragraph 3.
19 Form CO, paragraph 3.
20 Case M.5421 - Panasonic/Sanyo.
21 The term “institutional customers” refers to governmental entities such as the Ministry of Defense and institutions
such as hospitals
22 Form CO, paragraphs 106 and 111.
23 Form CO, paragraph 45.
24 Form CO, paragraphs 1326-1327; Parties' reply to RFI 3, Annex 47.1.
25 Form CO, paragraph 50.
26 Form CO, paragraph 46.
                                                               10
 ---pagebreak--- (19)     Spectrum's battery portfolio also includes portable chargers for rechargeable batteries. These
         products are licensed to and produced by third parties.27
4.1.3.    Portable lighting products
(20)     Energizer is active in the sale of Energizer-branded portable lighting products.
(21)     Spectrum's portable lighting products include flashlights, lanterns, headlights, special lights
         (e.g. bike lights, handbag lights, book lights), and mini lights (e.g. mini torches, keyrings).28
4.1.4.    Other products
(22)     Spectrum supplies hearing aid battery testers and cleaning kits, which are not supplied by
         Energizer.29
4.2.     Relevant product markets
(23)     The Transaction gives rise to overlaps in the wholesale supply of consumer batteries, the
         wholesale supply of portable battery chargers and the wholesale supply of portable lighting
         products.
4.2.1. Wholesale supply of consumer batteries
(24)     In previous decisions the Commission has differentiated the market for batteries into three
         separate product markets:30 (a) portable batteries;31 (b) heavy-duty industrial batteries;32 and
         (c) automotive batteries.33
(25)     Consumer batteries are part of the portable batteries category and are used in relatively small
         devices such as power tools and toys but do not comprise built-in batteries used in small
         electronic devices such as mobile phones.34
(26)     In relation to markets identified by levels of trade, the Commission has previously
         distinguished between the upstream market for the manufacture and supply of portable
         batteries and the downstream market for the distribution of portable batteries.35
(27)     Since the Parties are not active in the manufacture and/or supply of heavy industrial batteries
         or automotive batteries and also not in the distribution of portable batteries, the relevant
         product and geographic market definitions below are considered in relation to the wholesale
         supply of consumer batteries.
27  Form CO, paragraph 52.
28  Form CO, paragraph 51.
29  Form CO, paragraph 1354.
30  Case M.5421 - Panasonic/Sanyo, paragraph 12.
31  The term “portable" battery denotes sealed power cells that can be hand-carried and are meant for use in relatively
    small devices like mobile telephones, laptop computers, power tools, toys, and the like.
32  Stationary power supplies that are used in businesses, factories and the like.
33  Batteries which are used in cars, trucks, and other wheeled vehicles.
34  Case M.5421 - Panasonic/Sanyo, footnote 6.
35  Case M.7655 - Berkshire Hathaway/The Duracell Business, paragraphs 10-21.
                                                                11
 ---pagebreak--- 4.2.1.1. Distinction between the OEM and retail channels
        (a) The Commission's past practice
(28)    In its previous decisional practice, the Commission has considered putative
        industrial/consumer channels in the context of consumer batteries. 36 However, the
        Commission has left open whether the battery market should be segmented according to sales
        channel.37 The term 'industrial channel' as used in the Panasonic/Sanyo precedent is largely
        synonymous with 'OEM channel': "The industrial channel would consist of sales to device
        manufactures and pack makers (including private label suppliers) while the consumer
        channel according to the Parties consists of direct sales to wholesalers and retailers".38
        (b) The Notifying Party's view
(29)    The Notifying Party submits that there is a distinction between the wholesale supply of
        consumer batteries by specialized manufacturers to the OEM channel and the wholesale
        supply of consumer batteries by battery manufacturers to retailers and wholesalers, which is
        the level of trade where the Parties mainly overlap.39
(30)    The Notifying Party cites the arguments made by the Parties in Panasonic/Sanyo, which were
        as follows. First, the batteries that are sold to these two channels are different, as the batteries
        for the industrial channel are enhanced so they are more reliable and have longer shelf life.
        Second, the batteries for the customer channel are standardized as opposed to the OEM
        channel, where the customers can have the products tailored to their own specifications.
        Third, consumer branding is significantly more important at the consumer level as opposed to
        the OEM level. Fourth, the contractual terms for the customers in these two channels are also
        different. Fifth, the price levels in these two channels are different.40
        (c) The Commission's assessment
(31)    The Commission's investigation has clearly indicated that consumer batteries sold in the
        OEM channel and consumer batteries sold in the retail channel are not viewed as being part
        of the same product market due to differing conditions of competition both on the demand
        side and on the supply side.
(32)    A majority of competitors replying to the Commission's market investigation consider that
        the wholesale supply of batteries to OEMs is distinct from the wholesale to retailers, taking
        into account market dynamics, competitors, product characteristics and prices.41
(33)    A competitor stressed the importance of the support function for sales to the OEM channel:
        "The sale to OEMs is distinct from the wholesale to retailers because whole sales business
        regards the brand name of suppliers as important more than OEM business and OEM
        business considers the support function of suppliers as more important."42 Another
36  Case M.5421 - Panasonic/Sanyo, paragraph 35.
37  Case M.5421 - Panasonic/Sanyo, paragraph 33.
38  Case M.5421 - Panasonic/Sanyo, ibid.
39  Form CO, paragraph 120.
40  Form CO, paragraph 124.
41  Replies to Q2 - Questionnaire to Competitors, question 5.
42  Replies to Q2 - Questionnaire to Competitors, question 5.1.
                                                              12
 ---pagebreak---         competitor indicated that cost, price and production to specification are more important
        commercial drivers for OEM sales: "OEM sales is more cost, price & technical specification
        driven. Wholesale is next to cost and price, more marketing driven (support for retailer sell
        out such as promotions, listing fees, POS material, brand, ...".43 Another competitor
        explained that batteries for the OEM channel are priced differently and sometimes made to
        order: "Technical / Industrial market is catered by different pricing levels and also with
        different product, sometimes tailor-made." 44
(34)    For these reasons, the Commission considers that it is appropriate to distinguish between the
        wholesale supply of consumer batteries to the retail channel and the wholesale supply of
        consumer batteries to the OEM channel.
4.2.1.2. Distinction between primary (disposable) and secondary (rechargeable) consumer batteries
        (a) The Commission's past practice
(35)    The Commission has previously drawn a fundamental distinction between ‘primary’
        (‘disposable’) batteries and ‘secondary’ (‘rechargeable’) batteries on the basis that primary
        batteries hold more energy by size/weight (i.e., have a higher ‘energy density’) than
        rechargeable batteries, but may be used after purchase only until their chemical charge is
        depleted before being discarded.45
        (b) The Notifying Party's view
(36)    The Notifying Party submits that a distinction between primary and secondary batteries need
        not be made, since (i) retailers typically look to procure both primary and secondary batteries
        - reflecting the fact that they represent direct alternatives for consumers; (ii) secondary
        batteries are functionally identical to and substitutable for primary batteries, with the
        consumer being able to use an AA battery to power a given device, whether with a primary or
        a secondary battery, and with device power requirements not distinguishing between
        disposable and rechargeable batteries; and (iii) secondary batteries are also marketed under
        the same brands, and are merchandised by retailers in the same in-store locations, as primary
        batteries.46
        (c) The Commission's assessment
(37)    The Commission's investigation has indicated that primary and secondary consumer batteries,
        a distinction which, as discussed in paragraph (9)(a), is materially relevant only for the
        household category, are in separate markets.
(38)    First, secondary batteries require specific production equipment and are not produced by
        certain suppliers such as Spectrum and Energizer (which only purchase and resell secondary
        batteries).
43  Replies to Q2 - Questionnaire to Competitors, question 5.1.
44  Replies to Q2 - Questionnaire to Competitors, question 5.1.
45 Case M.5421 – Panasonic/Sanyo, paragraph 11. See also Case M.7655 - Berkshire Hathaway/The Duracell
    Business, paragraph 12.
46 Form CO, paragraphs 141-148.
                                                              13
 ---pagebreak--- (39)    Second, respondents to the market investigation point to significant differences in price,
        technical characteristics and intended use.47 For example, a Swedish customer explained:
        "Rechargeable batteries are priced at a high premium, which is partially due to the fact that
        they are much more expensive to produce." A Bulgarian customer further commented:
        "Rechargeable batteries are not substitutable with disposable batteries, considering use
        intensity and price." 48 A Slovenian customer pointed to different categories of users:
        "Disposable and rechargeable are not substitutable because of different type of users."49
        These views were echoed by competitors. For example, a competitor pointed to significant
        differences in price and end use: "In particular, rechargeable household batteries are more
        than five times the price of disposable household batteries. Moreover, on top of this premium
        for the batteries themselves, end-consumers also have to purchase a battery charger.
        Chargers can cost as much as €40."50
(40)    Third, some respondents point out that certain electronic devices are not suitable for the use
        of rechargeable batteries while others are typically used with rechargeable rather than
        disposable batteries.51
(41)    Fourth, market participants highlight the decline in sales of secondary batteries. A Swedish
        customer explained: "Rechargeable batteries sales are overall decreasing in volume year on
        year. Consumers appear to prefer the convenience of disposable batteries, even though the
        per unit price of rechargeable batteries can be significantly lower than that of disposable
        batteries after the initial investment is made, as every rechargeable battery can be recharged
        hundreds of times." 52 A competitor pointed out that "Rechargeable is a declining segment,
        […]".53
(42)    For these reasons, the Commission finds that primary (disposable) and secondary
        (rechargeable) consumer batteries are in separate relevant product markets.
4.2.1.3. Distinction based on chemistry for the wholesale supply of consumer batteries to the retail
        channel
        (a) The Commission's past practice
(43)    In previous decisions, the Commission has considered that the market for primary and
        secondary consumer batteries might be distinguishable according to their chemistry. More
        specifically, the Commission has considered that: (i) primary household batteries could be
        further segmented into chemistries such as (a) carbon zinc, (b) alkaline, and (c) lithium; 54 (ii)
        primary coin shaped/specialty batteries can be made from lithium, silver oxide, alkaline or
47  Replies to Q1 – Questionnaire to Customers, question 15.
48  Replies to Q1 – Questionnaire to Customers, question 15.
49  Replies to Q1 – Questionnaire to Customers, question 15.
50  Replies to Q2 – Questionnaire to Competitors, question 18.
51  Replies to Q1 – Questionnaire to Customers, question 15; Replies to Q2 – Questionnaire to Competitors, question
    18.
52  Minutes of a call with a customer, 8 August 2018, 11:00 CET.
53  Minutes of a call with a competitor, 8 August 2018, 14:00 CET.
54  Case M.7655 - Berkshire Hathaway/The Duracell Business, paragraph 12.
                                                              14
 ---pagebreak---        zinc air;55 and (iii) secondary batteries could be further segmented into chemistries such as (a)
       nickel cadmium (“NiCd”), (b) NiMH, (c) Li-ion, and (d) lithium.56
       (b) The Notifying Party's view
(44)   In the Notifying Party's view, the chemistry of primary and secondary batteries is not a
       relevant dimension for defining the boundaries of a relevant product market - both at the
       downstream level, and at the upstream wholesale level of supply.57
(45)   First, the Notifying Party contends that final consumers are mostly unaware of the particular
       chemistry embodied in the battery: the technical capabilities of the battery and its intended
       use are far more important considerations than chemical composition from the perspective of
       consumers.58
(46)   Second, the Notifying Party submits that most suppliers of consumer batteries offer batteries
       based on all the different chemistries, that they either manufacture themselves or source from
       third parties. It is the retailers and the distributors which choose whether they want to source
       all types of chemistries from a single supplier or whether they prefer procuring these
       chemistries from multiple suppliers.59
(47)   Third, the Notifying Party submits that, within the primary household battery categories,
       carbon zinc, alkaline and lithium technology exist in a continuum of price and performance
       (in terms of running time), with carbon zinc at the lower end of the range and lithium at the
       higher end.60
(48)   Fourth, as for secondary batteries, the Notifying Party submits that no distinction needs to be
       drawn between chemistries, whether they are manufactured using (a) NiCd; (b) NiMH; (c) Li-
       ion or (d) lithium.61
       (c) The Commission's assessment
(49)   The market investigation has indicated that end users do not tend to distinguish among the
       various chemistries of consumer batteries.
(50)   A clear majority of customers replied that end users consider household batteries of different
       chemistries (alkaline vs carbon zinc, alkaline vs lithium, and lithium vs carbon zinc) to be
       substitutable taking into account technical characteristics, intended use and price
       considerations.62
55 Case M.7655 - Berkshire Hathaway/The Duracell Business, paragraph 14.
56 Case M.5421 - Panasonic/Sanyo, paragraph 14.
57 Form CO, paragraph 154.
58 Form CO, paragraph 154.
59 Form CO, paragraph 171.
60 Form CO, paragraph 159.
61 Form CO, paragraph 176.
62 Replies to Q1 – Questionnaire to Customers, question 15.
                                                            15
 ---pagebreak--- (51)    A Danish customer stated: "In Denmark, most people do not understand the difference
        between alkaline and other types of batteries. So they are substitutable. The only difference
        are the customers who are looking for rechargeable batteries, they are non-substitutable."63
(52)    A Czech competitor commented: "[…] most of consumers don´t understand the real technical
        difference across chemistries, so they most often substitute batteries".64
(53)    Panasonic/Sanyo focused on the supply of household and specialty batteries to OEMs, and
        segmented the markets for consumer batteries on the basis of several criteria including
        chemistry. The market investigation had clearly shown limited demand-side substitutability
        because OEM customers clearly differentiated between batteries of different chemistries based
        on their diverging technical and performance characteristics and therefore suitability for the
        devices that they manufacture. This Transaction, however, focuses on the supply of consumer
        batteries for the retail channel, and therefore in this case it is the purchasing behaviour of end
        consumers that determines demand-side substitutability. In this regard, the market investigation
        has shown that end consumers at the retail level have little awareness of the different kinds of
        chemistries when buying consumer batteries and that there is therefore a high degree of demand-
        side substitutability in the wholesale of consumer batteries for the retail channel.
(54)    For these reasons, the Commission finds that for the wholesale supply of consumer batteries
        to the retail channel, it is not necessary to distinguish between batteries by chemistry.
4.2.1.4. Potential segmentations within the wholesale supply of household and specialty batteries to
        the OEM channel
        (a) The Commission's past practice
(55)    In its decision in Panasonic/Sanyo, which assessed in detail the supply of household and
        specialty batteries to OEMs, as the parties to that transaction were mainly active in the sale to
        OEM customers, the Commission segmented the markets for consumer batteries on the basis
        of rechargeability (primary/secondary), shape (cylinder, coin, etc.) and chemistry.65
        (b) The Notifying Party's view
(56)    The Notifying Party submits that there is no need to provide a market definition for the
        supply of consumer batteries to OEMs on the grounds that it does not appear to be relevant to
        the current case given that neither Energizer nor Spectrum has significant sales in this
        market.66
        (c) The Commission's assessment
(57)    The Commission considers that the markets for the supply of household and specialty
        batteries to the OEM channel should be segmented based on rechargeability
        (primary/secondary), shape (cylinder, coin) and chemistry (alkaline, lithium, silver oxide,
        zinc carbon and NiMH). This is in view of the conclusions of the Commission’s in-depth
63  Replies to Q1 – Questionnaire to Customers, question 15.
64  Replies to Q2 – Questionnaire to Competitors, question 18.1.
65 Case M.5421 - Panasonic/Sanyo, paragraphs 13-32.
66 Form CO, paragraph 125.
                                                             16
 ---pagebreak---         investigation in Panasonic/Sanyo,67 which focused on the market for the supply of household
        and primary batteries to OEMs.
4.2.1.5. Distinction between branded and private label consumer batteries
        (a) The Commission's past practice
(58)    In its Berkshire Hathaway/Duracell and MEI/Philips decisions, the Commission treated
        private label and branded supplies as part of the same relevant market at the “upstream”
        wholesale level, taking private label sales into account in its market share calculations.68
        (b) The Notifying Party's view
(59)    The Notifying Party takes the view that branded batteries and private label consumer batteries
        form part of the same relevant product market and fiercely compete at the wholesale level, as:
        (i) this reflects its business experience (where the Parties face strong competition from private
        label suppliers and private label brands); (ii) this is how retailers sell battery products with
        identical performance; and (iii) this reflects the characteristics and the dynamics in the
        market, where sales of private label consumer batteries have grown, and this growth has been
        maintained, at the expense of branded consumer batteries.69
(60)    The Notifying Party further submits that private label and branded consumer batteries
        compete at the downstream retail level, which drives the level of interaction at the wholesale
        level, on the following grounds: (i) the quality of private label consumer batteries is similar to
        branded products; (ii) private label consumer batteries continue to gain market share; (iii)
        retailers increasingly promote their own brands, (iv) consumer batteries are “low emotion”
        products characterized by low brand loyalty and reactivity of customers to promotions and
        special offers. In particular, the Notifying Party claims that there is demand-side
        substitutability since end consumers increasingly do not differentiate between branded and
        private label batteries, as evidenced by the high share70 of private label battery sales.71
        (c) The Commission's assessment
(61)    The market investigation has clearly indicated that branded and private label consumer
        batteries are not viewed as being part of the same product market. 72
(62)    First, the vast majority of consumer battery customers who responded to the market
        investigation consider that it would not be an economically sound option for them to purchase
67  Case M.5421 - Panasonic/Sanyo.
68  Case M.7655 - Berkshire Hathaway/The Duracell Business, paragraph 25. See also Case M.2386 - MEI/Philips,
    paragraph 13.
69  Form CO, paragraph 179.
70  Sales of private label consumer batteries are currently at [20-30]% in value and [30-40]% in volume in the EEA,
    ranging from less than [0-5]% to [60-70]% at national level.
71  Form CO, paragraph 201.
72  Replies to Q1 – Questionnaire to Customers, questions 6-11; Replies to Q3 – Questionnaire to Competitors,
    questions 6-11.
                                                               17
 ---pagebreak---        only private label batteries or only branded batteries73 and that they do not source private
       label and branded batteries from the same supplier per EEA country.74
(63)   Second, a very large number of the customers who responded to the Commission's market
       investigation stated that they trade only in branded batteries,75 which suggests that there are
       different players on the market: those that engage in private label batteries trade, those that
       engage in only branded batteries trade and those that engage in trade of both branded and
       private label batteries. As one customer put it: "we want to be perceived as a brand
       distributor".76 This seems to be confirmed by the competitors, the majority of whom have
       indicated that they do not sell white label and branded batteries to the same customers per
       EEA country.77
(64)   Third, of those customers that trade in both branded and private label batteries, the majority
       explain that selection procedures for branded and private label batteries are often run
       separately, and often by different departments.78 As one customer explained: "The negotiation
       timing and the negotiation process are organized separately for private label batteries and
       branded batteries. A bundling or combined sourcing does not take place, even though a
       branded partner can also offer private label, just at a different time."79 The majority of
       competitors responding to the market investigation that sell both branded and private label
       batteries have similarly stated that they have separate sales teams for the sales of branded and
       white label batteries in the EEA.80 As one competitor explained: "Branded consumer
       batteries requires more marketing activities whereas white label does not."81 Another
       competitor explained that sales teams are different due to "[d]ifferent customers structure and
       price"82. In addition, the vast majority of consumer battery competitors that sell both branded
       and private label batteries do not sell private label and branded batteries to the same
       customers per EEA country83.
(65)   Fourth, customers apply different criteria for the selection of branded and private label
       batteries.84 For example, in choosing a private label batteries supplier, customers consider
       factors such as technical specifications, commercial characteristics, logistics modalities,
       potential volumes and prices, whereas in their choice of branded consumer batteries, factors
       such as the availability and frequency of promotions, brand value and awareness and market
       leadership are often considered key alongside volume and prices.85 As one customer
       explained: "Tender processes are different for the purchasing of branded and white label
       batteries to take into account different selection criterias [and] different duration for
       procurement".86 In the opinion of another customer: "The negotiation of private label and
73 Replies to Q1 – Questionnaire to Customers, question 7.
74 Replies to Q1 – Questionnaire to Customers, question 8.
75 Replies to Replies to Q1 – Questionnaire to Customers, question 6.1, question 7.1.
76 Replies to Q1 – Questionnaire to Customers, question 7.1.
77 Replies to Q3 – Questionnaire to Competitors, question 7.
78 Replies to Q1 – Questionnaire to Customers, questions 6 and 8.
79 Minutes of a call with a customer, 31 July 2018, 16:00 CET.
80 Replies to Q3 – Questionnaire to Competitors, question 6.
81 Replies to Q3 – Questionnaire to Competitors, question 6.1.
82 Replies to Q3 – Questionnaire to Competitors, question 6.1.
83 Replies to Q2 – Questionnaire to Competitors, question 7.
84 Replies to Q1 – Questionnaire to Customers, question 6.1.
85 Replies to Q1 – Questionnaire to Customers, question 6.1.
86 Replies to Q1 – Questionnaire to Customers, question 6.1.
                                                             18
 ---pagebreak---        branded are based on a completely different commercial logic, it is unthinkable to conduct a
       single negotiation."87 Furthermore, the purchase of private label batteries typically involves
       additional checks and quality tests, in particular with regard to health, safety and technical
       standards.88
(66)   Fifth, an overwhelming majority of customers and competitors that responded to the
       Commission's market investigation stated that end consumers perceive technical or quality
       differences between private label and branded consumer batteries. 89 The market investigation
       showed that consumer preferences are based on several factors, such as price, brand loyalty
       and expected lifetime. For example, branded batteries were said to be perceived by consumer
       as being of "better" "superior" or "higher quality", "more precisely processed", "more
       technical", "more innovative", of having a "longer life" and being products in which
       consumers "place more trust".90 Private label batteries were described as being perceived by
       consumers as "much cheaper" and as being of "lower" or "inferior quality".91 As one
       customer explained: "The brand value of for example Varta or Duracell is substantial in
       Denmark. We as a company do much to promote our white label items, but the branded
       batteries are still king."92
(67)   According to another customer, branded batteries are a "must-stock" item, which it could not
       delist, as it would then lose all brand-loyal customers.93 This customer explained that even if
       in general it is growing its offering of private label batteries, "[n]evertheless, consumers still
       trust brands more. Customers that buy private label batteries tend to be more price-
       oriented".94 Furthermore, despite the availability of literature on product testing and
       comparisons of the performance of branded and private label batteries, "brand recognition
       has remained quite unchallenged – at least for the group of brand-conscious buyers".95
(68)   Sixth, brand recognition was shown to be very important, with the vast majority of customers
       indicating that brand recognition was important or very important when selecting a supplier,
       both from a wholesaler/retailer and form an end-consumer point of view.96 This is reflected in
       the fact that marketing activity in general is a very important driver of battery sales. For
       example, a customer reports that, if a manufacturer is engaged in a marketing campaign for
       its brand of batteries in a particular period of time, it is a good idea to stock that brand for that
       period of time.97 As one customer explains, promotions are "a good way to attract the
       attention of consumers", with that customer offering "several (on average 6-8) price
87 Replies to Q1 – Questionnaire to Customers, question 7.1; translated from Italian original "Le negoziazioni della
   private label e quelle della marca si fondono su logiche commerciali completamente diverse, è impensabile fare una
   negoziazione unica."
88 Replies to Q1 – Questionnaire to Customers, question 6.
89 Replies to Q1 – Questionnaire to Customers, question 9; Replies to Q2 – Questionnaire to Competitors, question 8.
90 Replies to Q1 – Questionnaire to Customers, question 9.1.
91 Replies to Q1 – Questionnaire to Customers, question 9.1.
92 Replies to Q1 – Questionnaire to Customers, question 9.1.
93 Minutes of a call with a customer, 31 July 2018, 16:00 CET.
94 Minutes of a call with a customer, 31 July 2018, 16:00 CET.
95 Minutes of a call with a customer, 31 July 2018, 16:00 CET.
96 Replies to Q1 – Questionnaire to Customers, question 26. For instance, one customer explained specifically with
   respect to hearing aid batteries: "brand recognition matters in the hearing aid battery market. The battery business is
   a brand business." Minutes of a call with a customer, 26 July 2018, 15:30 CET.
97 Minutes of a call with a customer, 8 August 2018, 11:00 CET.
                                                               19
 ---pagebreak---         promotions over the year. Timing and purchase conditions are usually negotiated with the
        manufacturer."98
(69)    For retailers it seems to be important to have appealing and well-recognised battery brands in
        their store in order to draw customers' attention to their battery offer. A customer commented:
        "Consumer batteries are purchased on impulse as a "coincidental purchase". Most
        consumers do not enter grocery stores like ALDI or EDEKA with the purpose of buying
        batteries: these are usually not planned purchases. Consumers need milk or sugar and may
        then decide spontaneously to buy batteries as well. Therefore, the eyecatching placement of
        batteries is of crucial importance to incentivize unplanned impulse purchases".99
(70)    Seventh, the results of the market investigation show that there are significant price
        differences between branded and private label consumer batteries. Customers' replies
        indicated that depending on the battery type, branded products are on average around 50%
        and up to 75% (and in some cases, even up to 200%) more expensive at the wholesale
        level,100 whereas replies from competitors suggest that, depending on the battery type,
        branded products are up to 300% more expensive at the wholesale level101 and that profit
        margins are proportionally higher for branded batteries than for private label products.102 In
        this context, a customer explained for instance that on the German market, the prices of
        private label batteries are driven by the price signals from the private label offerings of big
        German discounter retailers. By contrast, given that the price-setting discount retailer Aldi is
        not active in the branded batteries segment, price competition among other German retailers
        is less fierce in the branded segment. 103
(71)    Eighth, the different price levels for branded and private label consumer batteries are also
        reflected in the Parties' internal documents which show that branded products can command a
        price premium when compared with private label batteries. An Energizer document cites as
        one of the main considerations for private label supply "[Comment on margins]".104 The same
        Energizer document states "[Comments on private label and brands]" and that "[Comments
        on private label and brands]".
(72)    Ninth, the respective strength of competitors differs between the sale of branded and private
        label batteries. A competitor contends in this context that Varta, Energizer and Duracell
        compete head-to-head in branded batteries, (although there are some markets/countries where
        Duracell is a weaker, more distant competitor to Varta and Energizer), but not with regard to
        private label batteries.105
(73)    Tenth, as regards the alleged growth of private label battery sales, such growth appears to
        have slowed down or stopped in a number of EEA countries.106 Furthermore, a competitor
98  Minutes of a call with a customer, 31 July 2018, 16:00 CET.
99  Minutes of a call with a customer, 31 July 2018, 16:00 CET
100 Replies to Q1 – Questionnaire to Customers, question 11.1.
101 Replies to Q2 – Questionnaire to Competitors, question 10.1.
102 Replies to Q2 – Questionnaire to Competitors, question 10.2.
103 Minutes of a call with a customer, 31 July 2018, 16:00 CET.
104 Energizer internal document [Internal document], submitted as 5(4) Annex 13.
105 Minutes of a call with a competitor, 8 August 2018, 14:00 CET.
106 For instance, between 2008 and 2017 the value share of private label went from [20-30]% to [20-30]% in Belgium,
    from [30-40]% to [20-30]% in France, from [10-20]% to [10-20]% in Italy, and from [10-20]% to [10-20]% in the
    UK (Annex 34.1 to the reply to RFI 3).
                                                              20
 ---pagebreak---         submits that, insofar as there is nonetheless growing demand for private label batteries, it is
        not driven by a particular battery-related consumer choice inside the stores; the increasing
        popularity of private label batteries simply reflects the overall trend that increasingly more
        people are shopping in discounters than in grocery stores. This is currently the case in
        countries such as Germany and Spain, where discounters (e.g. Aldi, Lidl and Mercadona
        respectively) have an increasing demand and consumers move to the same extent to private
        labels. 107 Not all end consumers who switch from branded batteries to private label do so of
        their own volition. A number of consumers who buy private label batteries in discount stores
        would not buy private label batteries in grocery stores, where they are offered the choice
        between branded and private label.
(74)    For these reasons, the Commission finds that branded consumer batteries are in a separate
        relevant product market, distinct from private label consumer batteries.
4.2.1.6. Distinction between household batteries and specialty batteries
         (a) The Commission's past practice
(75)    The Commission has previously assessed coin-shaped108 and cylindrical consumer batteries
        separately.109 In particular, the Commission found that, in contrast to cylindrical batteries,
        primary coin-shaped batteries make up almost all sales of coin-shaped batteries. As discussed
        in paragraph (9)(b)), the term 'coin shaped batteries' largely coincides with 'specialty
        batteries'.
        (b) The Notifying Party's view
(76)    The Notifying Party indicates that a distinction can be made between household and specialty
        batteries.110
(77)    Within household batteries, the Notifying Party submits that the different sizes and shapes of
        such batteries can be seen as forming part of one overall market at the wholesale supply level.
        From a supply-side perspective, most manufacturers offer (or can easily offer through
        contract manufacturing by a third party) all different shapes and sizes of household
        batteries.111
(78)    Within specialty batteries, the Notifying Party submits that the different sizes and shapes of
        such batteries can also be seen as forming part of one overall market at the wholesale supply
        level. From a supply-side perspective, manufacturers typically offer the full range of specialty
        batteries through third party supply manufacturing arrangements.112
107 Minutes of a call with a competitor, 8 August 2018, 14:00 CET.
108 The term 'Coin shaped batteries' largely coincides with 'specialty batteries' (see paragraph (9)(b))
109 Case M.5421 - Panasonic/Sanyo, paragraph 14; Case M.7655 - Berkshire Hathaway/The Duracell Business,
    paragraph 14.
110 Form CO, paragraph 97.
111 Form CO, paragraph 135.
112 Form CO, paragraph 136.
                                                                21
 ---pagebreak---          (c) The Commission's assessment
(79)    The Commission concludes that household and specialty batteries are in separate relevant
        product markets.
(80)    First internal documents show that the Parties attach importance to those different battery
        segments.113
(81)    Second, feedback from customers and competitors indicates that tenders are often run for
        household and specialty batteries separately and that household and specialty batteries are
        sourced from different suppliers in ranges114, notably because purchase prices, offerings,
        profit margins115 and end consumer perception of branded vs private label products differ for
        household compared to specialty batteries.116 For example, a Spanish customer commented:
        "Household batteries present a minor differenciation (specially concerning toys or simple
        devices). Differentiation grows along with the device energy requirements. Specialty batteries
        definitely present a big differentiation. Branded miniatures and lithium batteries perform
        significantly better, in our opinion."117 Furthermore, one competitor explained specifically
        that household batteries should be distinguished from specialty batteries, contrasting "the
        common AA, AAA type alkaline batteries (general purpose category or the 'historical'
        business)" with "the specialty battery segment (e.g. lithium coin and button cells) as a
        growing and fast moving business".118
(82)    Third, asked whether it was important for their customers to be able to purchase household
        and specialty consumer batteries under the same contract from the same supplier, none of the
        competitors replying answered that this is important or very important.119
(83)    Fourth, on the question how easy it is for a supplier to offer both household and specialty
        batteries to customers that demand both categories, a majority of competitors replying
        answered that this is difficult or fairly difficult.120
(84)    Fifth, while most battery suppliers are able to supply both categories, suppliers seem to differ
        in strength, with diverging market shares, between those categories. Producing household
        consumer batteries on the one hand and specialty consumer batteries on the other hand
        requires specific production equipment. Therefore, specialty batteries are not produced by
        certain suppliers such as Spectrum (who only purchases and resells secondary batteries).
(85)    For these reasons, the Commission finds that household batteries and specialty batteries are in
        separate relevant product markets.
113 See Energizer internal document "[Internal document]", submitted as 5(4) Annex 33
114 Replies to Q1 – Questionnaire to Customers, question 8.2
115 Replies to Q1 – Questionnaire to Customers, questions 11.1; Replies to Q2 – Questionnaire to Competitors,
    questions 10.1, 10.2.
116 Replies to Q1 – Questionnaire to Customers, 9.2; Replies to Q2 – Questionnaire to Competitors, question 8.2.
117 Replies to Q1 – Questionnaire to Customers, 9.2.
118 Minutes of a call with a competitor, 8 August 2018, 14:00 CET.
119 Replies to Q2 – Questionnaire to Competitors, question 13.
120 Replies to Q2 – Questionnaire to Competitors, question 15.
                                                              22
 ---pagebreak--- 4.2.1.7. Hearing aid batteries as a distinct relevant product market
        (a) The Notifying Party's view
(86)    The Notifying Party submits that for the purposes of this Transaction, hearing aid batteries
        should be considered separately, since (i) hearing aid batteries were developed specifically to
        fit and work well only with hearing aid devices, (ii) hearing aid batteries are smaller in size
        than the vast majority of other consumer batteries and feature different packaging that is
        designed, inter alia, to facilitate the placement of a hearing aid battery into a hearing aid
        device; (iii) hearing aid batteries are primarily sold through specialist audiologist stores or
        provided through the healthcare systems of certain Member States, as opposed to the other
        types of consumer batteries which are sold primarily through the mass retail channel. 121
(87)    The Notifying Party further submits that it is not necessary to further segment the relevant
        market into primary and secondary hearing aid batteries, since neither Energizer nor
        Spectrum sell secondary hearing aid batteries.122
(88)    The Notifying Party also submits that segmentation on the basis of chemistry is not
        appropriate for hearing aid batteries, since the total sales of silver oxide hearing aid batteries
        (designed specifically for waterproof devices) are so small as to render any conclusion
        regarding possible segmentation by chemistry largely meaningless.123
        (b) The Commission's assessment
(89)    The results of the market investigation confirm the Parties' view that hearing aid batteries
        should be considered separately. For the following reasons the Commission finds that hearing
        aid batteries constitute a separate relevant product market, distinct from other consumer
        batteries.
(90)    First, there is no demand-side substitutability between hearing aid batteries and other types of
        specialty batteries since customers cannot use them interchangeably.
(91)    Second, producing hearing aid batteries on the one hand and other specialty consumer
        batteries on the other hand requires specific production equipment. Therefore, the identity and
        respective strength of producers differ. For instance, Duracell and Energizer do not produce
        their own hearing aid batteries and have a much more limited market position in hearing aid
        batteries than in other types of batteries.
(92)    Third, the most important brands used in the EEA for hearing aid batteries and other batteries
        differ in part. For instance, Spectrum Brands uses the Rayovac brand for sales of its hearing
        aid batteries while using the Varta brand for its sales of other specialty batteries. Similarly,
        PowerOne, an important hearing aid brand in the EEA, is not used for specialty batteries.
(93)    Fourth, hearing aid batteries are typically available for sale through different sales channels as
        compared with household and specialty batteries. In addition to the mass retail channel,
        hearing aid batteries are also available through audiologists, specialised doctors and national
        health systems.
121 Form CO, paragraphs 1356-1359,
122 Form CO, paragraphs 1364-1365.
123 Form CO, paragraphs 1365-1369.
                                                       23
 ---pagebreak--- (94)     Fifth, in certain countries in the EEA, national health systems provide subsidies for hearing
         aids and hearing aid batteries (e.g. Denmark, Netherlands, Sweden and Norway124). As one
         customer explained, in those countries, social security or national health services procure
         hearing aids and hearing aid batteries by way of a public tender on two-year contracts.125
         When submitting quotes to such a social security or national health service in those countries,
         hearing aid manufacturers tend to agree a price with a hearing aid battery manufacturer and
         quote together. In those markets, Varta Microbattery126 and Rayovac would each pair up with
         a local hearing aid company and have the complete market for two years at a time.127 The
         dynamics for competition, on those markets, is therefore quite different for branded hearing
         aid batteries than for other types of branded specialty batteries.
(95)     Sixth, for a supplier it is not necessary to have hearing aid batteries in a range of consumer
         batteries. A significant number of wholesale and retail customers responding to the
         Commission's market investigation have indicated that they either do not trade in hearing aid
         batteries or that hearing aid batteries represent a very small part of their business. 128 For
         example, one customer explains that hearing aid batteries are not a "very important type of
         batteries in our business", but that it is "more of a "nice to have and offer" product".129 A
         German customer explained further that: "Hearing aid batteries are not considered as
         essential product, but as a product for rounding off the product range".130 Another customer
         remarked: "The proportion of sales of [hearing aid] batteries is so small compared to
         alkaline batteries that this is only an additional offer for our customers."131
(96)     For these reasons, the Commission finds that hearing aid batteries are in a separate relevant
         product market, distinct from other consumer batteries. The Commission further finds that for
         the purposes of the present Transaction, it is not necessary to further subsegment the relevant
         product market for hearing aid batteries by chemistry or rechargeability.
4.2.1.8. Distinction between different retail channels for hearing aid batteries
         (a) The Notifying Party's view
(97)     The Notifying Party submits that it is not appropriate to define the audiologist and the non-
         audiologist retailer channels as separate relevant product markets, since (i) there is no
         competitive overlap between the Parties as regards audiologist retailers (because Energizer
124 According to the information supplised by the Parties in the Form CO, paragraph 1376, Table 6.II.4 and in their
    Reply to RFI 1, paragraph 2,a number of EEA countries provide some form of reimbursement for hearing aid
    batteries regardless of where these are purchased (Bulgaria, Finland, Germany, Liechtenstein, Norway) and for
    purchases made via pharmacies or audiologists (France) or via a community audiology service (Ireland). In other
    EEA countries, hearing aid batteries are provided free of charge (Denmark, UK), or at a subsidised rate (Hungary) or
    are otherwise subsidised via tax deductions (Italy). Conditions for being eligible to participate in the support scheme
    vary from country to country.
125 Minutes of a call with a customer, 26 July 2018, 16:00 CET.
126 As explained in section 4 above, Varta Microbattery is a separate entity (and not part of the Target Business) that
    owns the rights to use the Varta brand in specialty and hearing aid batteries.
127 Minutes of a call with a customer, 26 July 2018, 16:00 CET.
128 Replies to Q1 – Questionnaire to Customers, question 14.1.
129 Replies to Q1 – Questionnaire to Customers, question 14.1.
130 Replies to Q1 – Questionnaire to Customers, question 14.1.
131 Replies to Q1 – Questionnaire to Customers, question 14.1.
                                                                24
 ---pagebreak---         does not sell to audiologists), and (ii) both Parties sell their hearing aid batteries as part of the
        respective consumer battery offerings to non-audiologist retailers.132
        (b) The Commission's assessment
(98)    The results of the market investigation indicate that the mass retail channel (i.e. traditional
        retailers such as grocery stores, do-it-yourself stores and other consumer retail stores where a
        range of consumer products are made available) for hearing aid batteries constitutes a
        separate relevant product market, distinct from the specialist hearing aid retail channel (e.g.
        audiologists).
(99)    First, not all suppliers are active in all channels. For example, Energizer does not sell to the
        OEM channel or to audiologists, only to the mass retail channel.133
(100) Second, dedicated personnel and marketing strategies are necessary for suppliers to market
        and sell their products in other channels (e.g. audiologists, national health services).134
(101) Third, the vast majority of customers in the mass retail channel that responded to the
        Commission's market investigation have stated that they do not compete with other types of
        sales outlets, only with other mass retailers like themselves, in the sale of hearing aid
        batteries.135
(102) Fourth, in those countries where national health systems subsidise hearing aids and hearing
        aid batteries, end-consumers have a strong preference for buying hearing aid batteries in the
        specialist (e.g. audiologist) channel. As one hearing aid customer explains: "in Denmark,
        where hearing aid batteries are provided to consumers for free in hearing aid shops, the
        consumers have no incentive to purchase these via any other channel. In France, however,
        where consumers have to pay for their own hearing aid batteries, there is more competition
        between the different sales channels."136 In those countries where end-consumers still have to
        pay for hearing aid batteries, but may be partially reimbursed by national health systems, end-
        consumers also seem to have a preference for specialist rather than the mass retail channel, as
        this makes reimbursement from the national health system easier. As one French retailer
        explains: "Social Welfare can reimburse 60% of the price of the Hearing aid batteries. It is
        easier to be paid back when the sell is made in the audiologist’office than when it is made in
        a retailer store."137
(103) Fifth, the sale of hearing aid batteries in channels other than the mass retail channel are
        typically accompanied with supplementary services, e.g. checking the proper fitting of a
        hearing aid, showing the end-consumer how to replace the battery, discussing the end-
        consumer's other needs with respect to the hearing aid. 138 Such services are not available in
        the mass retail channel. For example, as one retailer customer explains: "With us, the
132 Form CO, paragraphs 1389-1390.
133 Form CO, paragraphs 1326, 1336, 1482-1483.
134 Form CO, paragraphs 1487-1497.
135 Replies to Q1 – Questionnaire to Customers, question 14.
136 Minutes of a call with a customer, 20 July 2018, 11:00 CET; See also Replies to Q3 – Questionnaire to Hearing Aid
    Batteries Customers, question 7.1.
137 Replies to Q1 – Questionnaire to Customers, question 14.1.
138 Form CO, paragraph 1316; Replies to Q1 – Questionnaire to Customers, question 16.1; Replies to Q2 –
    Questionnaire to Competitors, question 19.1.
                                                             25
 ---pagebreak---          customer must know exactly what type of hearing aid battery they need and should also be in
         the position to insert the battery by themselves. At the audiologist, the customer pays a higher
         price, but is however advised more intensively and in case of doubt, even gets the battery put
         in. Self-service vs. consultation".139 This is echoed by an Italian customer (a retailer): "To
         date, the customer purchases hearing aid batteries mainly from specialised operators for
         greater assistance in assembly and a sense of security."140 Ultimately, as another customer (a
         retailer) explained, the channel in which end-consumers choose to purchase hearing aid
         batteries is "based on end consumer needs if they need technical support they buy in sales
         channels as audiologists, doctor’s offices,....if they don't they go to mass [retail channel]."141
(104) Sixth, in channels other than the mass retail channel, the sale of hearing aid batteries is
         sometimes made complementary (and often at a significant discount) with the purchase of a
         hearing aid. The mass retail channel, therefore, can be seen as a replenishment channel
         only.142
(105) Seventh, many customers in the mass retail channel do not consider hearing aid batteries to
         be an essential product, but rather as a product to round off the product range. 143 Indeed,
         many customers in the mass retail channel that responded to the Commission's market
         investigation stated that they do not at present engage in the sale of hearing aid batteries. 144
         This is also the view of the Parties.145
(106) For these reasons, the Commission finds that the wholesale supply of hearing aid batteries to
         the mass retail channel constitutes a separate relevant product market, distinct from other
         retail channels.
4.2.2. Wholesale supply of portable battery chargers
(107) While portable battery chargers can take various forms, their fundamental function is to
         recharge empty household batteries. Chargers and rechargeable batteries do not need to have
         the same brand in order to be compatible and to charge a battery.
         (a) The Commission's past practice
(108) The Commission has not considered the market definition of battery chargers in previous
         cases. In its Berkshire Hathaway/Duracell decision146, the Commission made reference to
         battery chargers but did not assess those products due to the insignificant presence of
         Duracell in the sale of battery chargers.
139 Replies to Q1 – Questionnaire to Customers, question 16.1 (Traslation from German original: "Bei uns muss der
    Kunde ganz genau wissen, welchen Typ einer Hörgerätebatterie er braucht und sollte somit auch in der Lage sein,
    die Batterie selbstständig einzusetzen. Bei einem Hörakustiker bezahlt der Kunde einen höheren Preis, wird jedoch
    intensiver beraten und bekommt die Batterie im Zweifel noch eingesetzt. Selbstbedienung vs. Beratung.")
140 Replies to Q1 – Questionnaire to Customers, question 16.1 (Translation from Italian original: "Ad oggi il cliente
    acquista le pile per apparecchi acustici principalmente presso gli operatori specializzati per avere maggiore
    assistenza al montaggio e senso di sicurezza.")
141 Replies to Q1 – Questionnaire to Customers, question 16.1.
142 Replies to Q2 – Questionnaire to Competitors, question 19.1.
143 Replies to Q1 – Questionnaire to Customers, question 14.1.
144 Replies to Q1 – Questionnaire to Customers, question 6.1, question 7.1, question 14.1.
145 Form CO, paragraph 573; Parties' reply to RFI 3, paragraph 49.
146 Case M.7655 - Berkshire Hathaway/The Duracell Business.
                                                              26
 ---pagebreak---         (b) The Notifying Party's view
(109) The Notifying Party considers that the product market definition with respect to portable
        battery chargers can be left open in this case as, irrespective of the precise market definition,
        the Transaction cannot be considered to impede effective competition. However, the
        Notifying Party submits that the only level of trade that is relevant in the context of the
        Parties’ activities with respect to chargers is the wholesale supply of portable battery chargers
        to retailers and wholesalers.
        (c) The Commission's assessment
(110) The Commission considers that the relevant market consists of the wholesale supply of
        branded portable battery chargers without further subsegmentation, in particular because
        those chargers are compatible with rechargeable batteries of the same size regardless of the
        make or brand of the charger and the rechargeable battery. 147 As portable battery chargers are
        a closely related product to consumer batteries and are often sold in packs, together with a set
        of rechargeable batteries148, the Commission considers that branded portable battery chargers
        can be distinguished from private label portable battery chargers in the same way as for
        consumer batteries.
4.2.3. Wholesale supply of portable lighting products
(111) Portable lighting products can take various forms, ranging from handhelds/flashlights,
        lanterns, headlights to mini-lights and special lights.
        (a) The Notifying Party's view
(112) The Notifying Party considers that the product market definition with respect to lights can be
        left open in this case as, irrespective of the precise market definition adopted, the Transaction
        cannot reasonably be conceived as giving rise to any meaningful competition concerns.
        (b) The Commission's assessment
(113) The Commission considers that the relevant market consists of branded portable lighting
        products without further subsegmentation, in particular because they are substitutable in
        terms of running costs, price and intended use, namely to provide a portable source of light.
        In addition, internal documents from the Parties show that [Internal document].149
4.2.4. Conclusion on relevant product markets
(114) On the basis of the foregoing, the Commission finds that:
        (a)      The market for the wholesale supply of branded consumer batteries to the consumer
                 channel constitutes a distinct relevant product market, separate from the wholesale
                 supply of consumer batteries to the OEM channel.
147 Form CO, paragraph 1575.
148 Form CO, paragraph 1573.
149 Spectrum internal document " [Internal document]", slide 17, submitted as 5(4) Annex 14
                                                              27
 ---pagebreak---         (b)     The market for the wholesale supply of branded consumer batteries constitutes a
                distinct relevant product market, separate from the wholesale supply of private label
                consumer batteries.
        (c)     Within the market for the wholesale supply of branded consumer batteries, the
                wholesale supply of primary (disposable) batteries constitutes a distinct relevant
                product market, separate from the wholesale supply of secondary (rechargeable)
                batteries.
        (d)     The markets for the wholesale supply of (i) branded specialty batteries and (ii)
                branded hearing aid batteries, constitute distinct relevant product markets, separate
                from the wholesale supply of (iii) branded household batteries.
        (e)     The mass retail channel for hearing aid batteries constitutes a separate relevant
                product market from other sales channels for hearing aid batteries.
        (f)     With regard to the wholesale supply of household and specialty batteries to OEMs, it
                is appropriate to further subsegment the relevant product market according to
                chemistry.
        (g)     It is not necessary, for the purposes of the present Transaction, to further subsegment
                the market for the wholesale supply of branded consumer batteries to the retail
                channel according to chemistry.
        (h)     The market for branded portable chargers can be considered to constitute one relevant
                product market without further subsegmentation.
        (i)     The market for branded portable lighting products can be deemed to form one relevant
                product market without further subsegmentation.
4.3.    Geographic market definition
4.3.1. Wholesale supply of branded consumer batteries to the retail channel
        (a) The Commission's past practice
(115) In Panasonic/Sanyo150 the Commission considered that the geographic scope of cylindrical
        lithium batteries is at least EEA-wide in scope and assessed each affected market by reference
        to the parties’ shares at an EEA-level and at a worldwide level. However, this case focused on
        consumer batteries in the industrial (OEM) channel. The exact geographic market definition
        was ultimately left open.
        (b) The Notifying Party's view
(116) The Notifying Party submits that the geographic market for the supply of consumer batteries
        is wider than national in scope.151
150 Case M.5421 - Panasonic/Sanyo.
151 Form CO, paragraph 196
                                                       28
 ---pagebreak--- (117) First, the Notifying Party contends that manufacturing facilities are located around the world
        and supply is shipped from those facilities into the EEA. Indeed, Energizer has no
        manufacturing facilities in the EEA. In addition, many battery suppliers, including the
        Parties, are supplied by third-party manufacturers located in Asia.152
(118) Second, the Notifying Party claims that from a demand-side perspective, there are also
        several arguments to support a relevant geographic market that is broader than national.
        Customers (retailers) either buy directly from a manufacturer or via a European buying
        alliance. When customers buy directly, they reach out to consumer battery suppliers at both
        national and international levels.153
(119) Third, the Notifying Party submits that some customers also operate with a European
        warehouse system. For instance, when Spectrum supplied [Comments on distribution
        methods].154
(120) Nonetheless, the Notifying Party has provided market data and a competitive assessment at
        the national level.
        (c) The Commission's assessment
(121) Contrary to the arguments of the Notifying Party, the Commission's investigation did not
        confirm that the markets for consumer batteries, namely the relevant markets for branded
        household primary batteries, branded household secondary batteries, branded specialty
        batteries and branded hearing aid batteries, are wider than national. This is for the following
        reasons.
(122) First, the presence of different brands and consumers' brand perception varies across Member
        States. The market investigation confirmed that customer preferences differ materially in
        terms of preferred brands among EEA countries. Both customers and competitors stated that
        brand perception varies on a national basis.155 For example, a customer explained that "[…]
        consumers in different countries in the EU have different preferences for some hearing aid
        battery brands over others, which in […]'s view is driven by brand loyalty."156 A hearing aid
        battery customer stated that "[…] brand power and brand recognition matter to a certain
        extent." and that they were "[…] aware of geographical differences. For example, VARTA
        Microbattery is recognized as being very powerful in Germany".157
(123) Second, there appear to be material differences among Member States in business models,
        channels to market and distribution strategies. Internal documents show that [Internal
        document].158 The market investigation confirmed that suppliers sell their consumer batteries
        at different prices according to the country.159 For example, a competitor commented: "The
152 Form CO, paragraph 190
153 Form CO, paragraph 193
154 Form CO, paragraph 195
155 Replies to Q2 – Questionnaire to Competitors, question 22; Replies to Q1 – Questionnaire to Customers, question
    19.
156 Minutes of a call with a customer, 7 August 2018, 15:00 CET.
157 Minutes of a call with a customer, 23 July 2018, 12:00 CET.
158 See for instance internal Energizer document – [Internal document], submitted as 5(4) Annex 32.
159 Replies to Q2 – Questionnaire to Competitors, question 21.
                                                               29
 ---pagebreak---         pricing depends on the relevant country and is done market by market."160 Furthermore, a
        customer explained: "In the European Union, [the customer] is aware of some price
        differences from country to country, but is of the view that these price differences are
        becoming increasingly narrower."161
(124) Third, there seem to be substantial differences among Member States in terms of retailer
        landscape and procurement strategies of retailers. The market investigation clearly indicated
        that the typical scope of contracts with suppliers of consumer batteries is national.162 As a
        competitor commented: "Even for customers that are present in more than one country, the
        procurement often has a national element, which means that suppliers compete for selling
        batteries in individual countries."163 A customer explained: "Each of the EEA countries in
        which [customer] is present negotiates its own batteries supply contracts taking into
        consideration its domestic demand and procurement constraints."164
        (d) Conclusion on geographic market definition for the wholesale supply of consumer
              batteries to the retail channel
(125) For the purpose of this Decision and for the relevant markets for the wholesale supply of
        consumer batteries, the Commission will assess the effects of the Transaction at national level
        given the varying presence of different brands and consumers' brand perception across
        Member States, the material differences among Member States in business models, channels
        to market and distribution strategies, as well as the differences in retailer landscape and
        procurement strategies of retailers among Member States.
4.3.2. Wholesale supply of branded consumer batteries to the OEM channel
        (a) The Notifying Party's view
(126) The Notifying Party submits that the geographic market for the supply of consumer batteries
        to OEMs is at least in EEA-wide in scope, in line with the Commission decision in
        Panasonic/Sanyo165 166
        (b) The Commission's assessment
(127) The Commission considers that the geographic scope of the market for the supply of
        consumer batteries to OEMs is EEA in scope, in view of the conclusions of the
        Commission’s in-depth investigation in Panasonic/Sanyo167, which focused on the market for
        the supply of consumer batteries to OEMs.
160 Minutes of a call with a competitor, 8 August 2018, 14:00, paragraph 27.
161 Minutes of a call with a customer, 26 July 2018, 16:00 CET, paragraph 10.
162 Replies to Q2 – Questionnaire to Competitors, question 20; Replies to Q1 – Questionnaire to Customers, question
    17.
163 Replies to Q2 – Questionnaire to Competitors, question 20.1.
164 Replies to Q1 – Questionnaire to Customers, question 17.1.
165 Case M.5421 - Panasonic/Sanyo.
166 Form CO, paragraph 128.
167 Case M.5421 - Panasonic/Sanyo.
                                                              30
 ---pagebreak--- 4.3.3. Wholesale supply of branded battery chargers
       (a) The Notifying Party's view
(128) The Notifying Party submits that the market for the supply of branded battery chargers to
       retailers and wholesalers is at least EEA-wide, and probably worldwide in its geographic
       scope.168
(129) First, the Notifying Party argues that from a supply-side perspective manufacturing facilities
       are located around the world and supply is shipped from those facilities into the EEA.
       [Information on production facilities]. The Notifying Party claims that transportation costs
       are low relative to the value of the chargers, while tariff rates are set at very low levels
       worldwide.169
(130) Second, the Notifying Party submits that from a demand-side perspective, the geographic
       scope of the market for branded battery chargers is at least EEA-wide in scope, for the same
       reasons that are set out above in Section 4.3.1 with respect to consumer batteries.170
       (b) The Commission's assessment
(131) The Commission considers that the geographic scope of the market for branded battery
       chargers is national, based on the same supply-side and a demand-side considerations as set
       out in Section 4.3.1 with respect to consumer batteries.
4.3.4. Wholesale supply of branded portable lighting products
       (a) The Notifying Party's view
(132) The Notifying Party submits that from a supply-side perspective, the relevant markets where
       the Parties are active for the supply of lights to their customers are worldwide in scope.
       Manufacturing facilities are located around the world (mostly in Asia) and supply is shipped
       from those facilities into the EEA. For example, Energizer manufactures and sources lights
       from China.171
(133) The Notifying Party contends that from a demand-side perspective, in the circumstances of
       this case the geographic market definition can be left open, since irrespective of whether the
       relevant geographic market is considered to be national, EEA-wide or worldwide in scope, it
       is inconceivable that the Transaction would give rise to any competition concerns with
       respect to portable lighting products.172
       (b) The Commission's assessment
(134) The Commission considers that because the Transaction would not raise competition
       concerns with regard to the wholesale supply of branded portable lighting products, the exact
       scope of the geographic market can be left open.
168 Form CO, paragraph 1588.
169 Form CO, paragraph 1585.
170 Form CO, paragraph 1587.
171 Form CO, paragraph 1651.
172 Form CO, paragraph 1652.
                                                      31
 ---pagebreak---         4.4. Conclusion on market definition
(135) On the basis of the foregoing, the Commission finds that:
      (a)     The market for the wholesale supply of branded consumer batteries to the consumer
              channel constitutes a distinct relevant product market, separate from the wholesale
              supply of consumer batteries to the OEM channel. This market is national in
              geographic scope.
      (b)     The market for the wholesale supply of branded consumer batteries constitutes a
              distinct relevant product market, separate from the wholesale supply of private label
              consumer batteries.
      (c)     Within the market for the wholesale supply of branded consumer batteries, the
              wholesale supply of primary (disposable) batteries constitutes a distinct relevant
              product market, separate from the wholesale supply of secondary (rechargeable)
              batteries.
      (d)     The markets for the wholesale supply of (i) branded specialty batteries and (ii)
              branded hearing aid batteries, constitute distinct relevant product markets, separate
              from the wholesale supply of (iii) branded household batteries.
      (e)     The mass retail channel for hearing aid batteries constitutes a separate relevant
              product market from other sales channels for hearing aid batteries.
      (f)     With regard to the wholesale supply of household and specialty batteries to OEMs, it
              is appropriate to further subsegment the relevant product market according to
              chemistry. The market for the wholesale supply of household and specialty batteries to
              the OEMs is EEA-wide in geographic scope.
      (g)     It is not necessary, for the purposes of the present Transaction, to further subsegment
              the market for the wholesale supply of branded consumer batteries to the retail
              channel according to chemistry.
      (h)     The market for branded portable chargers can be considered to constitute one relevant
              product market without further subsegmentation. The market for branded portable
              chargers is national in geographic scope.
      (i)     The market for branded portable lighting products can be deemed to form one relevant
              product market without further subsegmentation. For the purposes of the present
              Transaction, the exact scope of the geographic market can be left open.
(136) Given the activities of Energizer and the Target Business (described above at section 4), the
      present Decision will assess the Transaction's impact on competition in the national markets
      for the wholesale supply to the retail channel of: (a) branded household primary batteries; (b)
      branded household secondary batteries, (c) branded specialty batteries, and (d) branded
      hearing aid batteries (to the mass retail channel), (e) branded portable battery chargers and (f)
      branded portable lighting products (the exact scope of the geographic market for which can
      be left open), as well as for the EEA-wide wholesale supply to the OEM channel of (g)
      branded household and specialty batteries.
                                                     32
 ---pagebreak--- 5.        COMPETITIVE ASSESSMENT
5.1.      Analytical framework
(137) Under Article 2(2) and 2(3) of the Merger Regulation, the Commission must assess whether a
          proposed concentration would significantly impede effective competition in the internal
          market or in a substantial part of it, in particular through the creation or strengthening of a
          dominant position.
(138) In this respect, a merger may entail horizontal and/or non-horizontal effects. Horizontal
          effects are those deriving from a concentration where the undertakings concerned are actual
          or potential competitors of each other in one or more of the relevant markets concerned. Non-
          horizontal effects are those deriving from a concentration where the undertakings concerned
          are active in different relevant markets.
(139) As regards non-horizontal mergers, two broad types of such mergers may be distinguished:
          vertical mergers and conglomerate mergers.173 Vertical mergers involve companies operating
          at different levels of the supply chain.174 Conglomerate mergers are mergers between firms
          that are in a relationship, which is neither horizontal (as competitors in the same relevant
          market) nor vertical (as suppliers or customers).175
(140) The Commission appraises horizontal effects in accordance with the guidance set out in the
          relevant notice, that is to say the Horizontal Merger Guidelines.176 Additionally, the
          Commission appraises non-horizontal effects in accordance with the guidance set out in the
          relevant notice, that is to say the Non-Horizontal Merger Guidelines.177
5.2.      Horizontal non-coordinated effects
(141) The Horizontal Merger Guidelines distinguish between two main ways in which mergers
          between actual or potential competitors on the same relevant market may significantly
          impede effective competition, namely non-coordinated and coordinated effects.178
(142) Under the substantive test set out in Article 2(2) and 2(3) of the Merger Regulation, mergers
          that do not lead to the creation or the strengthening of the dominant position of a single firm
          may also be incompatible with the internal market. The Merger Regulation provides that
          "under certain circumstances, concentrations involving the elimination of important
          competitive constraints that the merging parties had exerted upon each other, as well as a
          reduction of competitive pressure on the remaining competitors, may, even in the absence of
173     Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of
      concentrations between undertakings ("Non-Horizontal Merger Guidelines"), OJ C 265, 18.10.2008, paragraph 3.
174   Non-Horizontal Merger Guidelines, paragraph 4.
175   Non-Horizontal Merger Guidelines, paragraph 5.
176   Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of concentrations
      between undertakings ("Horizontal Merger Guidelines"), OJ C 31, 05.02.2004.
177      Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of
      concentrations between undertakings ("Non-horizontal Merger Guidelines"), OJ C 265/6, 18.10.2008.
178  In the present decision, the Commission has not found evidence that the Transaction would raise serious doubts as
      regards its compatibility with the internal market with respect to coordinated effects in any of the horizontally
      affected markets. During the market investigation, the Commission received no concerns about possible anti-
      competitive coordinated effects arising from the Transaction.
                                                                33
 ---pagebreak---          a likelihood of coordination between the members of the oligopoly, result in a significant
         impediment to effective competition".179
(143) The Horizontal Merger Guidelines list a number of factors which may influence whether or
         not significant horizontal non-coordinated effects are likely to result from a merger, such as
         the large market shares of the merging firms, the fact that the merging firms are close
         competitors, the limited possibilities for customers to switch suppliers, or the fact that the
         merger would eliminate an important competitive force. That list of factors applies equally,
         regardless of whether a merger would create or strengthen a dominant position, or would
         otherwise significantly impede effective competition due to non-coordinated effects.
         Furthermore, not all of these factors need to be present to make significant non-coordinated
         effects likely and it is not an exhaustive list.180
(144) Finally, the Horizontal Merger Guidelines describe a number of factors, which could
         counteract the harmful effects of the merger on competition, including the buyer power, entry
         and efficiencies.
5.3.     Wholesale supply of branded consumer batteries to the retail channel – overview of
         market dynamics across different national markets in the EEA181
(145) There are a number of common characteristics of the national markets for consumer batteries
         and their sub-markets across the EEA which will be discussed in sections 5.3.1 to 5.3.4: (i)
         the Parties are close and important competitors in an already concentrated industry; (ii)
         private label batteries only exercise a limited constraint on the Parties; (iii) e-commerce is
         unlikely to affect the Parties’ market position in the short- to medium term; and (iv)
         customers only exercise a limited constraint on the Parties' ability to increase prices.
5.3.1. The Parties are close and important competitors in most of the national markets in the EEA
         in an already concentrated industry with limited alternatives
         (a) The Notifying Party's view
(146) The Notifying Party argues that Energizer and Spectrum are often positioned differently in
         the market and are not close competitors. In the Notifying Party's view, the closest competitor
         to Energizer in the eyes of consumers is Duracell, whereas Spectrum's closest competitor may
         vary from country to country, but is not Energizer.182
         (b) The Commission's assessment
(147) The Commission considers the Parties to be close and important competitors in an already
         concentrated industry in many of the national markets in the EEA. This is for the following
         reasons.
(148) First, post-Transaction, the Parties would be the clear market leader across all consumer
         batteries in many of the national markets, which is illustrated by their combined share for all
         national markets aggregated of [30-40]% (Energizer [10-20]%, Spectrum [10-20]%),
179  Merger Regulation, recital 25. Similar wording is also found in paragraph 25 of the Horizontal Merger Guidelines.
180 Horizontal Merger Guidelines, paragraph 26.
181 Excluding hearing aid batteries which are discussed separately below.
182 Form CO, paragraphs 5(a).
                                                               34
 ---pagebreak---          followed by Duracell ([30-40]%), Panasonic ([5-10]%), and Gold Peak ([0-5]%).183 Likewise,
         the Parties would be the largest player across many of the national markets in each of the
         markets for primary ([30-40]%), secondary ([40-50]%), and specialty ([30-40]%) batteries
         followed by Duracell, as illustrated by the Parties' combined aggregated national market
         shares.
(149) Second, the aggregate national markets for branded consumer batteries at the EEA level are
         highly concentrated with HHI levels post-Transaction of [Above 2000] (primary batteries),
         [Above 2000] (secondary batteries), [Below 2000] (specialty batteries) and deltas of [Above
         250], respectively.
(150) Third, the Parties and Duracell are the main suppliers of branded consumer batteries in the
         EEA, which limits the number and strength of available alternative suppliers in each of the
         national markets. [Internal documents].184 [Competitors].185
Figure 1
[Competitors]
         Source [Internal documents]
(151) A majority of respondents from different EEA countries that expressed a view in response to
         the Commission’s market investigation consider Spectrum and Energizer as each other's
         closest competitors across primary, secondary, and specialty batteries in their national
         market,186 while Duracell is seen by many as addressing a higher price point.187 Moreover, a
         majority of respondents to the market investigation that expressed a view consider Varta,
         Energizer and Duracell as the main three battery suppliers in the different national markets in
         terms of brand strength and technological capacity to innovate.188
5.3.2. Private label batteries only exercise a limited constraint on the Parties
         (a) The Notifying Party's view
(152) The Notifying Party argues that private label batteries will continues to exercise a strong
         competitive constraint on the Parties post-Transaction.189
         (b) The Commission's assessment
(153) The Commission considers that private label batteries only exercise a limited constraint on
         the Parties. This is for the following reasons.
183 Form CO, Annex 6.I.3.
184 See, among other, the Parties’ internal documents [Internal documents].
185 M.8988- 5(4)-014 - [Internal documents].
186 Replies to Q2 – Questionnaire to Competitors, questions 26 and 27; Replies to Q1 – Questionnaire to Customers,
    questions 24 and 25.
187 Replies to Q2 – Questionnaire to Competitors, questions 26.1 and 27.1; Replies to Q1 – Questionnaire to Customers,
    questions 24.1 and 25.1.
188 Replies to Q2 – Questionnaire to Competitors, questions 29 and 30; Replies to Q1 – Questionnaire to Customers,
    questions 27 and 28.
189 Form CO, paragraph 5(b).
                                                               35
 ---pagebreak--- (154) First, private label batteries and branded batteries belong to separate product markets for the
       reasons set out in Section 4.2.1.5.
(155) Second, in their internal documents the Parties [Internal document].190 These considerations
       appear to be unaffected by competition from private label batteries and appear to apply across
       national markets in the EEA.
Figure 2
[Energizer’s revenues, sales policy and strategy]
       Source: [Energizer’s revenues, sales policy and strategy; internal documents names]
(156) Third, customers across the different national markets run separate tenders for private label
       and branded batteries, and supply agreements can provide that the vast majority of shelf space
       be reserved for branded batteries.191
(157) Fourth, when assessing competitive conditions in the market the Parties [Varta’s and other
       competitors market shares].
Figure 3
[Varta’s and other competitors market shares]
       Source: M.8988- 5(4)-014 - [internal document]
Figure 4
[Varta’s and other competitors market shares]
       Source: M.8988- 5(4)-23 - [Internal documents names]
5.3.3. E-commerce is unlikely to affect the Parties' market position in the short- to medium term
       (a) The Notifying Party's view
(158) The Notifying Party argues that the growth of e-commerce and the ability for consumers to
       buy batteries online from suppliers such as Amazon and retailer online shops make it easier
       for consumers to choose from a large variety of consumer batteries (branded and private
       label), which are available online in greater variety than in brick and mortar outlets and are
       only 'a click away' from home.192 In the Notifying Party's view, this availability of batteries
       online (often at lower prices) exercises a material constraint, because it reinforces the need
       for both retailer and suppliers to keep prices low in order to avoid consumers switching to
       online alternatives.193
190 M.8988- 5(4)-36 - [Internal document].
191 M.8988 - Reply to RFI3-Annex 20 - [Internal documents names].
192 Form CO, paragraph 5(c).
193 Form CO, paragraph 5(c).
                                                                     36
 ---pagebreak---        (b) The Commission's assessment
(159) The Commission considers that e-commerce is unlikely to affect the Parties' market position
       in the different national markets in the EEA in the short- to medium term. This is for the
       following reasons.
(160) First, e-commerce represents only a small share of total battery sales not only in the EEA
       (that is to say on average across the different national markets) but also in those national
       markets where sales of batteries online is more widespread. For instance, Energizer estimates
       that in 2015 its total online sales amounted to only [0-5%]% of its total retail shipments.194
       Moreover, while sales of batteries in the e-commerce channel are likely to increase in the
       coming years, they are expected to continue to be far lower than in the traditional brick-and-
       mortar outlets for the foreseeable future.195
(161) Second, the Parties appear to be significant players in the online sales channel across the
       different national markets196 [Position in online sales channel and strategic considerations].197
(162) Third, the impact of online sales on the traditional retail segment appears to be limited across
       the different national markets. As one customer explained, “internet sales are not generally
       relevant in the consumer batteries segment, which is very different to the other segments
       where Amazon (or online sales more generally) play a bigger role”. 198
5.3.4. Customers only exercise a limited constraint on the Parties' ability to increase prices
       (a) The Notifying Party's view
(163) The Notifying Party argues that the Parties’ customers are mainly large retail chains which
       negotiate with their suppliers for the listing of their brands on their shelves. Moreover, it
       points out that these retailers use sophisticated procurement methods such as tenders and
       other retail strategies which maximize their downstream profits and have the ability and the
       incentives to resist strongly any attempts exercised by suppliers to reduce their profits.
       (b) The Commission's assessment
(164) The Commission considers that customers only exercise a limited constraint on the Parties'
       ability to increase prices in the different national markets. This is for the following reasons.
(165) First, the Transaction would reduce the main suppliers of branded batteries from three (the
       Parties and Duracell) to two (the merged entity and Duracell) across the different national
       markets in the EEA, as set out in paragraph (150). This significant reduction in potential
       suppliers would materially affect retailers’ and distributors’ ability to negotiate prices with
       the Parties and their main competitor, Duracell in the different national markets.
(166) Second, the Parties appear able already today to generate considerable gross margins from the
       sale of their batteries without customers being able to negotiate a different distribution of
194 M.8988- 5(4)-20 - [Internal document].
195 M.8988- 5(4)-25 - [Internal document].
196 M.8988- 5(4)-41 - [Internal document].
197 M.8988- 5(4)-25 - [Internal document].
198 Minutes of a call with a customer, 31 July 2018, 16:00 CET.
                                                             37
 ---pagebreak---          profits. This is exemplified by the slide below which shows that in the last the years Varta’s
         European business has generated gross margins of about [Percentage]%.
Figure 5
[Sales and margins]
         Source: M.8988- 5(4)-10- - [Internal document]
(167) Third, as shown in the slide provided below, Energizer [Pricing].
Figure 6
[Pricing]
         Source: M.8988- 5(4)-32 - [Internal document]
         Fourth, some respondents to the market investigation pointed out that consumer battery prices
         have increased in recent years in different countries in the EEA. For instance one customer
         indicated that “[o]ne of the major brand increased the prices during 2017-2018,
         constantly”.199 Another customer reported instead that it was “surprise[d] to see our prices
         increases for 2019, regarding ranges that only ENERGIZER and VARTA are supplying”.200
5.4.     Assessment of potential horizontal non-coordinated effects on the national markets for
         the wholesale supply of branded household primary batteries to the retail channel
(168) Varta and Energizer are currently the second and third largest players in the EEA in
         disposable branded household batteries (with market shares of [10-20[% and [10-20]%
         respectively), behind Duracell at [30-40]%. The merged entity would become the clear
         market leader in a number of EEA countries with Duracell as a considerably smaller second
         player.
(169) As shown in Table 1 below, the combined market shares of the merged entity would exceed
         [50-60]% in a number of countries (exceeding [80-90]% in Finland, [60-70]% in Germany,
         Norway and Sweden, [50-60]% in Czechia, Greece and Slovakia), and would exceed [40-
         50]% in Denmark, France, Hungary, Latvia and Slovenia. The market shares thus indicate
         that the Transaction could create or strengthen a dominant position in several EEA countries.
(170) There are horizontal overlaps that lead to (i) combined market shares above 25%, (ii) HHI
         levels post-Transaction of above 2,000 and a HHI delta of more than 150, or (iii) HHI levels
         post-Transaction of between 1 000 and 2 000 and a HHI delta of above 250,201 in 28 EEA
199 Q1 question 31.1.
200 Q1 question 31.1.
201 The Horizontal Merger Guidelines indicate that the Commisison is unlikely to identify horizontal competition
    concerns in a market: (i) with a post-merger HHI below 1 000, (ii) with a post-merger HHI between 1 000 and 2 000
    with a delta below 250; or (iii) with a post-merger HHI above 2 000 and a delta below 150, except where special
    circustances are present, such as (but not limited to): (a) a merger involving a potential entrant or a recent entrant
    with a small market share; (b) one or more merging parties being important innovators in ways not reflected in
    market shares; (c) there being significant cross-shareholdings among market participants; (d) one of the merging
    parties having a pre-merger market share of 50% or more.
                                                                38
 ---pagebreak---                    countries, and other horizontal overlaps with combined market shares and HHI levels below
                   those levels in 2 other EEA countries.
          Table 1 – Market shares in branded household primary batteries, 2017 by value202
                                Target                                                Third       Fourth        HHI Post-
 Country        Energizer                  Combined        Duracell    Panasonic                                                 Delta HHI
                               Business                                             supplier     supplier        Merger
  Austria         [0-5]%      [20-30]%      [30-40]%      [40-50]%      [5-10]%       [0-5]%       [0-5]%      [Above 2000]     [Below 250]
  Belgium        [5-10]%       [5-10]%      [10-20]%      [50-60]%     [20-30]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
  Bulgaria        [0-5]%      [10-20]%      [10-20]%      [20-30]%       [0-5]%     [20-30]%     [10-20]%      [Above 2000]     [Below 150]
  Croatia        [5-10]%      [20-30]%      [30-40]%      [20-30]%       [0-5]%     [10-20]%      [5-10]%      [Above 2000]     [Above 250]
  Cyprus        [30-40]%       [5-10]%      [30-40]%       [5-10]%      [5-10]%     [10-20]%      [5-10]%      [Above 2000]     [Above 250]
  Czechia       [10-20]%      [30-40]%      [50-60]%        [0-5]%       [0-5]%     [10-20]%      [5-10]%      [Above 2000]     [Above 250]
 Denmark        [20-30]%      [20-30]%      [40-50] %     [30-40]%       [0-5]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
  Estonia        [5-10]%       [5-10]%      [10-20]%      [10-20]%     [40-50]%      [5-10]%       [0-5]%      [Above 2000]     [Above 250]
  Finland       [20-30]%      [50-60]%      [80-90]%        [0-5]%       [0-5]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
   France       [20-30]%      [10-20]%      [40-50]%      [20-30]%      [5-10]%      [5-10]%       [0-5]%      [Above 2000]     [Above 250]
 Germany        [20-30]%      [40-50]%      [60-70]%       [5-10]%       [0-5]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
  Greece        [30-40]%      [10-20]%      [50-60]%        [0-5]%      [5-10]%     [10-20]%      [5-10]%      [Above 2000]     [Above 250]
 Hungary        [10-20]%      [30-40]%      [40-50]%      [10-20]%       [0-5]%     [10-20]%     [10-20]%      [Above 2000]     [Above 250]
  Iceland         [0-5]%        [0-5]%       [5-10]%      [40-50]%     [10-20]%      [5-10]%      [5-10]%      [Above 2000]     [Below 150]
  Ireland       [20-30]%        [0-5]%      [20-30] %     [20-30]%     [20-30]%      [5-10]%      [5-10]%      [Below 2000]     [Above 250]
    Italy       [10-20]%      [10-20]%      [30-40]%      [30-40]%     [10-20]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
   Latvia       [20-30]%      [20-30]%      [40-50] %     [10-20]%     [10-20]%      [5-10]%      [5-10]%      [Above 2000]     [Above 250]
 Lithuania      [10-20]%      [10-20]%      [30-40]%      [20-30]%     [10-20]%      [5-10]%      [5-10]%      [Above 2000]     [Above 250]
Luxembourg      [10-20]%        [0-5]%      [10-20]%      [60-70]%     [10-20]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
   Malta        [20-30]%       [5-10]%      [30-40]%      [40-50]%     [10-20]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
Netherlands       [0-5]%      [10-20]%      [10-20]%      [40-50] %    [10-20]%     [10-20]%       [0-5]%      [Above 2000]     [Below 250]
  Norway        [60-70]%       [5-10]%      [60-70]%      [10-20]%       [0-5]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
   Poland       [10-20]%      [10-20]%      [20-30]%      [10-20]%     [10-20]%     [10-20]%      [5-10]%      [Below 2000]     [Above 250]
  Portugal      [10-20]%      [10-20]%      [20-30]%      [20-30]%      [5-10]%     [10-20]%      [5-10]%      [Above 2000]     [Above 250]
 Romania          [0-5]%      [10-20]%      [10-20]%      [20-30]%       [0-5]%     [30-40]%       [0-5]%      [Below 2000]     [Above 250]
 Slovakia       [10-20]%      [30-40]%      [50-60]%       [5-10]%      [5-10]%      [5-10]%      [5-10]%      [Above 2000]     [Above 250]
 Slovenia         [0-5]%      [40-50]%      [40-50]%      [20-30]%      [5-10]%      [5-10]%      [5-10]%      [Above 2000]     [Below 250]
   Spain        [10-20]%       [5-10]%      [20-30]%      [10-20]%       [0-5]%     [30-40]%      [5-10]%      [Above 2000]     [Above 250]
  Sweden        [20-30]%      [40-50]%      [60-70]%        [0-5]%     [10-20]%      [5-10]%       [0-5]%      [Above 2000]     [Above 250]
     UK         [10-20]%        [0-5]%      [20-30]%      [50-60]%      [5-10]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
    EEA         [10-20]%      [10-20]%      [30-40]%      [30-40]%      [5-10]%       [0-5]%       [0-5]%      [Above 2000]     [Above 250]
                   Source: Parties' reply to RFI 5, Annex 14.1
          202 Rounding errors may occur. Duracell is present in all countries. Panasonic is present in almost all countries. "Third
              supplier" and "fourth supplier" stands for the largest and second-largest suppliers other than the Parties, Duracell and
              Panasonic. The identity of the third and fourth suppliers varies by country. There are no horizontal overlaps in EEA
              countries that are not listed in the table.
                                                                            39
 ---pagebreak--- 5.4.1. Finland
(171) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household primary
       batteries in Finland.
(172) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household primary batteries in Finland with a combined share of
       [80-90]% (Energizer [20-30]%, Spectrum [50-60]%), followed by Duracell ([0-5]%),
       Panasonic ([0-5]%), and Gold Peak ([0-5]%).
(173) Second, the market for the wholesale supply of branded household primary batteries in
       Finland is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250 ].
(174) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household primary
       batteries.
(175) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded household primary batteries.
(176) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded household primary batteries.
(177) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded household primary batteries.
(178) Seventh, the Parties submit that because of Energizer’s reliance on third-party wholesalers
       and distributors in Finland, there is only limited direct competition between Energizer and
       Spectrum. However, the Commission considers that the reliance on third-party wholesalers
       and distributors does not alter Energizer's market position or the competitive dynamics in the
       Finnish market.
5.4.2. Germany
(179) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household primary
       batteries in Germany.
(180) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household primary batteries in Germany with a combined share
       of [60-70]% (Energizer [20-30]%, Spectrum [40-50]%), followed by Duracell ([5-10]%),
       Panasonic ([0-5]%), and Philips ([0-5]%).
(181) Second, the market for the wholesale supply of branded household primary batteries in
       Germany is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250] respectively.
                                                      40
 ---pagebreak--- (182) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household primary
        batteries.
(183) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household primary batteries.
(184) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household primary batteries.
(185) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household primary batteries.
(186) Seventh, several respondents to the Commission's market investigation expect the
        Transaction to have a negative impact on the market for the wholesale supply of branded
        household primary batteries in Germany.203 One German customer in particular commented:
        "Varta and Energizer are by far the biggest and most important suppliers in Germany in
        particular with respect to branded batteries for normal customer purposes. The market share
        of the remaining two competitors, Panasonic and Duracell, is far behind that of Energizer or
        Varta. It is foreseeable, that competition would be limited if not totally neutralised as a
        consequence of the proposed transaction."204
5.4.3. Norway
(187) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded household primary
        batteries in Norway.
(188) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household primary batteries in Norway with a combined share
        of [60-70]% (Energizer [60-70]%, Spectrum [5-10]%), followed by Duracell ([10-20]%),
        Gold Peak ([0-5]%), Panasonic ([0-5]%) and Philips ([0-5]%).
(189) Second, the market for the wholesale supply of branded household primary batteries in
        Norway is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
        delta of [Above 250] respectively.
(190) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household primary
        batteries.
(191) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household primary batteries.
203 Replies to Q1 – Questionnaire to Customers, questions 33 to 39.
204 Replies to Q1 – Questionnaire to Customers, question 33.1.
                                                             41
 ---pagebreak--- (192) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded household primary batteries.
(193) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded household primary batteries.
5.4.4. Sweden
(194) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household primary
       batteries in Sweden.
(195) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household primary batteries in Sweden with a combined share
       of [60-70]% (Energizer [20-30]%, Spectrum [40-50]%), followed by Panasonic ([10-20]%),
       Gold Peak ([5-10]%), Duracell ([0-5]%) and Philips ([0-5]%).
(196) Second, the market for the wholesale supply of branded household primary batteries in
       Sweden is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250] respectively.
(197) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household primary
       batteries.
(198) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded household primary batteries.
(199) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded household primary batteries.
(200) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded household primary batteries.
5.4.5. Czechia
(201) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household primary
       batteries in Czechia.
(202) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household primary batteries in Czechia with a combined share
       of [50-60]% (Energizer [10-20]%, Spectrum [30-40]%), followed by Gold Peak ([10-20]%),
       Philips ([5-10]%), Panasonic ([0-5]%) and Duracell ([0-5]%).
                                                      42
 ---pagebreak--- (203) Second, the market for the wholesale supply of branded household primary batteries in
       Czechia is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250].
(204) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household primary
       batteries.
(205) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded household primary batteries.
(206) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded household primary batteries.
(207) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded household primary batteries.
5.4.6. Greece
(208) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household primary
       batteries in Greece.
(209) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household primary batteries in Greece with a combined share of
       [50-60]% (Energizer [30-40]%, Spectrum [10-20]%), followed by Sony ([10-20]%), Gold
       Peak ([5-10]%), Panasonic ([5-10]%) and Duracell ([0-5]%).
(210) Second, the market for the wholesale supply of branded household primary batteries in
       Greece is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250].
(211) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household primary
       batteries.
(212) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded household primary batteries.
(213) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded household primary batteries.
(214) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded household primary batteries.
                                                      43
 ---pagebreak--- 5.4.7. Slovakia
(215) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household primary
       batteries in Slovakia.
(216) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household primary batteries in Slovakia with a combined share
       of [50-60]% (Energizer [10-20]%, Spectrum [30-40]%), followed by Gold Peak ([5-10]%),
       Panasonic ([5-10]%), Philips ([5-10]%) and Duracell ([5-10]%).
(217) Second, the market for the wholesale supply of branded household primary batteries in
       Slovakia is highly concentrated with an HHI level post-Transaction of [ Above 2000] and a
       delta of [Above 250] respectively.
(218) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household primary
       batteries.
(219) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded household primary batteries.
(220) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded household primary batteries.
(221) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded household primary batteries.
5.4.8. Denmark
(222) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household primary
       batteries in Denmark.
(223) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household primary batteries in Denmark with a combined share
       of [40-50]% (Energizer [20-30]%, Spectrum [20-30]%), followed by Duracell ([30-40]%),
       Gold Peak ([0-5]%), Panasonic ([0-5]%) and Philips ([0-5]%).
(224) Second, the market for the wholesale supply of branded household primary batteries in
       Denmark is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250] respectively.
(225) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household primary
       batteries.
                                                      44
 ---pagebreak--- (226) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household primary batteries.
(227) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household primary batteries.
(228) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household primary batteries.
5.4.9. Slovenia
(229) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded household primary
        batteries in Slovenia.
(230) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household primary batteries in Slovenia with a combined share
        of [40-50]% (Energizer [0-5]%, Spectrum [40-50]%), followed by Duracell ([20-30]%), Gold
        Peak ([5-10]%), Atc ([5-10]%) and Panasonic ([5-10]%).
(231) Second, the market for the wholesale supply of branded household primary batteries in
        Slovenia is highly concentrated with an HHI level post-Transaction of [ Above 2000] and a
        delta of [Between 150 and 250] respectively.
(232) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household primary
        batteries.
(233) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household primary batteries.
(234) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household primary batteries.
(235) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household primary batteries.
5.4.10. Hungary
(236) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded household primary
        batteries in Hungary.
(237) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household primary batteries in Hungary with a combined share
                                                       45
 ---pagebreak---         of [40-50]% (Energizer [10-20]%, Spectrum [30-40]%), followed by Duracell ([10-20]%),
        Sony ([10-20]%), Atc ([10-20]%) and Panasonic ([0-5]%).
(238) Second, the market for the wholesale supply of branded household primary batteries in
        Hungary is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
        delta of [Above 250] respectively.
(239) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household primary
        batteries.
(240) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household primary batteries.
(241) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household primary batteries.
(242) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household primary batteries.
(243) Seventh, several respondents to the Commission's market investigation expect the
        Transaction to have a negative impact on the market for the wholesale supply of branded
        household primary batteries in Hungary.205 In particular, one customer indicated that
        “Energizer and Varta competition in the country was one of the key to keep the battery
        consumer prices down”.206
5.4.11. Latvia
(244) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded household primary
        batteries in Latvia.
(245) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household primary batteries in Latvia with a combined share of
        [40-50]% (Energizer [20-30]%, Spectrum [20-30]%), followed by Duracell ([10-20]%),
        Panasonic ([10-20]%), Camelion ([5-10]%) and Gold Peak ([5-10]%).
(246) Second, the market for the wholesale supply of branded household primary batteries in Latvia
        is highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
        [Above 250] respectively.
(247) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household primary
        batteries.
205 Replies to Q1 – Questionnaire to Customers, questions 33 to 39.
206 Replies to Q1 – Questionnaire to Customers, question 39.
                                                             46
 ---pagebreak--- (248) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household primary batteries.
(249) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household primary batteries.
(250) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household primary batteries.
5.4.12. France
(251) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded household primary
        batteries in France.
(252) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household primary batteries in France with a combined share of
        [40-50]% (Energizer [20-30]%, Spectrum [10-20]%), followed by Duracell ([20-30]%),
        Panasonic ([5-10]%), Philips ([5-10]%) and Sony ([0-5]%).
(253) Second, the market for the wholesale supply of branded household primary batteries in
        France is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
        delta [Above 250] respectively.
(254) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household primary
        batteries.
(255) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household primary batteries.
(256) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household primary batteries.
(257) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household primary batteries.
(258) Seventh, several respondents to the Commission's market investigation expect the
        Transaction to have a negative impact on the market for the wholesale supply of branded
        household primary batteries in France.207 A customer in particular commented that the impact
207 Replies to Q1 – Questionnaire to Customers, questions 33 to 39.
                                                             47
 ---pagebreak---         of the Transaction on the sourcing of consumer batteries would be to lead to a "monopoly of
        the group".208
5.4.13. Other affected markets
(259) With regards to the wholesale supply of branded household primary batteries in Austria,
        Croatia, Cyprus, Italy, Ireland, Lithuania, Malta, Poland, Portugal, Spain and the UK, the
        Commission notes, on the one hand, that:
        (a)      First, the Parties have sizable combined market shares on those markets: [30-40]% in
                 Austria, [30-40]% in Croatia, [30-40]% in Cyprus, [30-40]% in Italy, [20-30]% in
                 Ireland, [30-40]% in Lithuania, [30-40]% in Malta, [20-30]% in Poland, [20-30]% in
                 Portugal, [20-30]% in Spain and [20-30]% in the UK.
        (b)      Second, as shown in Table 1 above, all of those markets are concentrated, with HHI
                 levels post-Transaction of between [Below 2000] and [Above 2000] and HHI delta of
                 between [Below 250] and [Above 250].
        (c)      Third, the Transaction would create the largest (in the case of Croatia, Cyprus,
                 Lithuania, Poland and Portugal) or the second largest (in the case of Austria, Italy,
                 Malta, Spain and the UK) supplier, thereby also reducing the number of suppliers on
                 these already concentrated markets. In Ireland the Transaction would create the third-
                 largest supplier, which very closely follows Panasonic ([20-30]%) and Duracell ([20-
                 30]%).
        (d)      Fourth, the market dynamics identified by the Commission at 5.3.1 to 5.3.4, apply
                 equally to the markets for household primary batteries in these countries.
        (e)      Fifth, several market participants have raised concerns about potential price increases
                 or decreases in quality or innovation in these markets.209
(260) On the other hand, the Commission also notes that:
        (a)      First, there are significant alternative suppliers of branded household primary batteries
                 on those markets. Duracell is, and will post-Transaction remain, the market leader in
                 Austria ([40-50]%), Malta ([40-50]%), Italy ([30-40]%), UK ([50-60]%) and Cegasa
                 is, and will post-Transaction remain, the market leader in Spain ([30-40]%). Duracell
                 will also remain a close second competitor to the merged entity in Croatia ([20-30]%),
                 Lithuania ([20-30]%) and Portugal ([20-30]%).
        (b)      Second, in addition to the above-mentioned closest competitors to the merged entity,
                 there are three other alternative suppliers of branded household primary batteries
                 active on each of those markets, including suppliers such as Panasonic, Camelion,
                 Gold Peak, Sony, Philips, Kodak, Toshiba and Atc.
        (c)      Third, a number of market participants have indicated that they do not anticipate any
                 price increase or decreases in quality or innovation in those markets.210
208 Replies to Q1 – Questionnaire to Customers, question 33.1.
209 Replies to Q1 – Questionnaire to Customers; question 35; Replies to Q2 – Questionnaire to Competitors, question
    35.
                                                             48
 ---pagebreak--- (261) Ultimately, the question of whether serious doubts arise in Austria, Croatia, Cyprus, Italy,
        Ireland, Lithuania, Malta, Poland, Portugal, Spain and the UK can be left open as the
        commitments discussed in Chapter 6 include all of the activities of Spectrum's Varta Business
        in Europe, Middle East and Africa ("EMEA") and therefore entirely remove the overlap in the
        markets for branded household primary batteries in those countries.
5.4.14. Other horizontal overlaps
(262) With regard to the wholesale supply of branded household primary batteries in Belgium,
        Bulgaria, Estonia, Iceland, Luxembourg, Netherlands and Romania, the Commission notes
        that the horizontal overlaps between the Parties in these countries do not lead to combined
        market shares above [10-20]%. Therefore, in these markets, the Transaction does not raise
        serious doubts as regards its compatibility with the internal market.
5.4.15. Conclusion on the assessment of potential horizontal non-coordinated effects on the
          national markets for the wholesale supply of branded household primary batteries to the
          retail channel
(263) On the basis of the above, the Commission concludes that:
        (a)      the Transaction raises serious doubts as regards its compatibility with the internal
                 market due to horizontal non-coordinated effects in the markets for the wholesale
                 supply of branded household primary batteries in Czechia, Denmark, Finland, France,
                 Germany, Greece, Hungary, Latvia, Norway, Slovakia, Slovenia and Sweden;
        (b)      the question of whether serious doubts arise in Austria, Croatia, Cyprus, Ireland, Italy,
                 Lithuania, Malta, Poland, Portugal, Spain and the UK can be left open as the
                 commitments include all of the activities of Spectrum's Varta Business in the EMEA
                 region and therefore entirely remove the overlap in the markets for branded household
                 primary batteries in those countries; and
        (c)      the Transaction does not raise serious doubts as regards its compatibility with the
                 internal market due to horizontal non-coordinated effects in the markets for the
                 wholesale supply of branded household primary batteries in Belgium, Bulgaria,
                 Estonia, Iceland, Luxembourg, Netherlands, and Romania.
5.5.    Assessment of potential horizontal non-coordinated effects on the national markets for
        the wholesale supply of branded household secondary batteries to the retail channel
(264) In relation to the wholesale supply of household secondary batteries Spectrum and Energizer
        are currently the first and third largest players in the EEA (with market shares of [20-30]%
        and [20-30]% respectively), with Duracell as the second-largest player ([20-30]%). The
        merged entity would become the clear market leader in a number of Member States.
210 Replies to Q1 – Questionnaire to Customers; question 35; Replies to Q2 – Questionnaire to Competitors, question
    35.
                                                           49
 ---pagebreak--- (265) As shown in Table 2 below, the Parties' combined market shares would exceed [50-60]% in
      six countries and [40-50]% in an additional six countries. The market shares indicate that the
      Transaction could create or strengthen the merged entity's dominant position in several
      Member States, with a much smaller market share for its next competitor, Duracell.
(266) There are horizontal overlaps that lead to (i) combined market shares above 25%, (ii) HHI
      levels post-Transaction of above 2 000 and a HHI delta of more than 150, or (iii) HHI levels
      post-Transaction of between 1 000 and 2 000 and a HHI delta of above 250, in 26 EEA
      countries, and other horizontal overlaps with combined market shares and HHI levels below
      those levels in 3 other EEA countries.
                                                   50
 ---pagebreak--- Table 2: Market shares in branded household secondary batteries, 2017 by value211
                                                                                                              HHI
                                Target                               Panasoni       Third        Fourth                   Delta
  Country      Energizer                     Combined     Duracell                                            Post-
                               Business                                   c       supplier      supplier                  HHI
                                                                                                             Merger
                                                                                                            [Above      [Above
  Austria       [5-10]%       [40-50]%       [50-60]%    [20-30]%      [0-5]%     [5-10]%       [0-5]%
                                                                                                             2000]        250]
                                                                                                            [Above      [Above
  Belgium      [10-20]%       [10-20]%       [20-30]%    [40-50]%     [5-10]%    [10-20]%      [5-10]%
                                                                                                             2000]        250]
                                                                     [10-20]%    [10-20]%     [10-20]%      [Above      [Below
  Bulgaria       [0-5]%        [5-10]%        [5-10]%    [30-40]%
                                                                                                             2000]        150]
                                                                                                            [Above      [Below
  Croatia        [0-5]%         [0-5]%         [0-5]%    [50-60]%      [0-5]%    [10-20]%      [5-10]%
                                                                                                             2000]        150]
                                                                      [5-10]%     [5-10]%       [0-5]%      [Above      [Above
  Cyprus       [10-20]%         [0-5]%       [10-20]%    [40-50]%
                                                                                                             2000]        250]
                                                                                                [0-5]%      [Above      [Above
  Czechia        [0-5]%       [20-30]%       [20-30]%     [5-10]%    [10-20]%    [30-40]%
                                                                                                             2000]        250]
                [5-10]%       [10-20]%       [10-20]%                                                       [Above      [Below
 Denmark                                                 [10-20]%      [0-5]%    [40-50]%      [5-10]%
                                                                                                             2000]        250]
                [5-10]%                                                          [30-40]%                   [Above      [Above
  Estonia                      [5-10]%       [10-20]%    [10-20]%    [20-30]%                   [0-5]%
                                                                                                             2000]        250]
                [5-10]%       [20-30]%                                           [30-40]%       [0-5]%      [Above      [Below
  Finland                                    [20-30]%    [20-30]%     [5-10]%
                                                                                                             2000]        250]
                              [20-30]%                   [10-20]%                               [0-5]%      [Above      [Above
   France      [40-50]%                      [60-70]%                  [0-5]%      [0-5]%
                                                                                                             2000]        250]
                                                         [10-20]%                                           [Above      [Above
 Germany       [10-20]%       [40-50]%       [50-60]%                 [5-10]%    [10-20]%      [5-10]%
                                                                                                             2000]        250]
               [20-30]%       [20-30]%                                            [5-10]%                   [Above      [Above
  Greece                                     [50-60]%    [20-30]%      [0-5]%                   [0-5]%
                                                                                                             2000]        250]
                                                         [10-20]%                 [5-10]%                   [Above      [Above
 Hungary        [5-10]%       [50-60]%       [60-70]%                  [0-5]%                   [0-5]%
                                                                                                             2000]        250]
                 [0-5]%         [0-5]%                   [10-20]%                                           [Above      [Above
  Iceland                                      [0-5]%                [10-20]%    [40-50]%       [10-20]
                                                                                                             2000]        250]
                                                                       [0-5]%      [0-5]%       [0-5]%      [Above      [Above
    Italy      [20-30]%       [10-20]%       [40-50]%    [40-50]%
                                                                                                             2000]        250]
                 [0-5]%                                              [20-30]%    [30-40]%       [0-5]%      [Above      [Below
   Latvia                     [10-20]%       [10-20]%    [10-20]%
                                                                                                             2000]        150]
                 [0-5]%                                              [20-30]%    [30-40]%       [0-5]%      [Above      [Above
 Lithuania                      [0-5]%        [5-10]%    [20-30]%
                                                                                                             2000]        250]
Luxembou        [5-10]%        [5-10]%                   [50-60]%                               [0-5]%      [Above      [Below
                                             [10-20]%                [10-20]%     [5-10]%
      rg                                                                                                     2000]        250]
                                                         [50-60]%      [0-5]%                   [0-5]%      [Above      [Above
   Malta       [30-40]%       [10-20]%       [40-50]%                              [0-5]%
                                                                                                             2000]        250]
Netherland                    [50-60]%       [50-60]%                  [0-5]%                   [0-5]%      [Above      [Above
                [5-10]%                                  [10-20]%                [10-20]%
       s                                                                                                     2000]        250]
                                                                                                [0-5]%      [Above      [Above
  Norway        30-40]%        [5-10]%       [40-50]%    [40-50]%     [5-10]%      [0-5]%
                                                                                                             2000]        250]
                                                         [10-20]%    [10-20]%                               [Above      [Above
   Poland       [5-10]%       [20-30]%       [30-40]%                            [20-30]%      [5-10]%
                                                                                                             2000]        250]
                                                                       [0-5]%      [0-5]%       [0-5]%      [Above      [Above
  Portugal       [10-20]        [0-5]%       [10-20]%    [60-70]%
                                                                                                             2000]        250]
211  Rounding errors may occur. Duracell is present in all countries. Panasonic is present in almost all countries. "Third
     supplier" and "fourth supplier" stands for the largest and second-largest suppliers other than the Parties, Duracell and
     Panasonic. The identity of the third and fourth suppliers varies by country. There are no horizontal overlaps in EEA
     countries that are not listed in the table.
                                                                  51
 ---pagebreak---                                                                                               HHI
              Energize        Target                             Panason     Third   Fourth          Delta
 Country                                 Combined    Duracell                                 Post-
                   r        Business                                  ic   supplier supplier         HHI
                                                                                             Merger
                                          [40-50]%                                           [Above [Above
 Romania       [5-10]%      [40-50]%                 [10-20]%    [0-5]%%  [10-20]%  [5-10]%
                                                                                              2000]  250]
              [20-30]%      [20-30]%      [40-50]%                [5-10]%            [0-5]%  [Above [Above
 Slovakia                                             [5-10]%             [20-30]%
                                                                                              2000]  250]
                            [30-40]%      [30-40]%                [5-10]%            [0-5]%  [Above [Below
 Slovenia       [0-5]%                               [10-20]%             [30-40]%
                                                                                              2000]  150]
               [5-10]%       [5-10]%                                                 [0-5]%  [Above [Above
   Spain                                  [10-20]%    [5-10]%    [50-60]%  [5-10]%
                                                                                              2000]  250]
                                          [30-40]%                                   [0-5]%  [Above [Above
  Sweden      [20-30]%      [10-20]%                   [0-5]%    [10-20]%  30-40]%
                                                                                              2000]  250]
                                          [30-40]%                                   [0-5]%  [Above [Below
    UK        [30-40]%        [0-5]%                 [50-60]%      [0-5]%   [0-5]%
                                                                                              2000]  250]
              [20-30]%      [20-30]%                              [5-10]%  [5-10]%           [Above [Above
   EEA                                    [40-50]%   [20-30]%                        [0-5]%
                                                                                              2000]  250]
         Source: Parties' reply to RFI 5, Annex 14.1
5.5.1. France
(267) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to the wholesale supply of branded household secondary
         batteries in France.
(268) First, post-Transaction, the Parties would be the clear market leader in the market for the
         wholesale supply of branded household secondary batteries in France with a combined share
         of [60-70]% (Energizer [40-50]%, Spectrum [20-30]%), followed by Duracell ([10-20]%),
         Panasonic ([0-5]%), and Gold Peak ([0-5]%).
(269) Second, the market for the wholesale supply of branded household secondary batteries in
         France is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
         delta of [Above 250] respectively.
(270) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
         important competitors in relation to the wholesale supply of branded household secondary
         batteries.
(271) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
         exercise only a limited constraint on the Parties in the markets for the wholesale supply of
         branded household secondary batteries.
(272) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
         affect the Parties' market position in the short- to medium term in the markets for the
         wholesale supply of branded household secondary batteries.
(273) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
         limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
         supply of branded household secondary batteries.
                                                              52
 ---pagebreak--- (274) Seventh, several respondents to the Commission's market investigation expect the
         Transaction to have a negative impact on the market for the wholesale supply of branded
         household secondary batteries in France.212 One customer in particular commented:
         "Reducing the number of players in the battery market will lead to less competition in that
         market, in terms of both buying and selling".213
5.5.2. Hungary
(275) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to the wholesale supply of branded household secondary
         batteries in Hungary.
(276) First, post-Transaction, the Parties would be the clear market leader in the market for the
         wholesale supply of branded household secondary batteries in Hungary with a combined
         share of [60-70]% (Energizer [5-10]%, Spectrum [50-60]%), followed by Duracell ([10-
         20]%), Gold Peak ([5-10]%), Panasonic ([0-5]%) and Philips ([0-5]%).214
(277) Second, the market for the wholesale supply of branded household secondary batteries in
         Hungary is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
         delta of [Above 250] respectively.
(278) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
         important competitors in relation to the wholesale supply of branded household secondary
         batteries.
(279) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
         exercise only a limited constraint on the Parties in the markets for the wholesale supply of
         branded household secondary batteries.
(280) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
         affect the Parties' market position in the short- to medium term in the markets for the
         wholesale supply of branded household secondary batteries.
(281) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
         limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
         supply of branded household secondary batteries.
(282) Seventh, several respondents to the Commission's market investigation expect the
         Transaction to have a negative impact on the market for the wholesale supply of branded
         household secondary batteries in Hungary.215
212 Replies to Q1 – Questionnaire to Customers, questions 33 to 39.
213 Replies to Q1 – Questionnaire to Customers, question 33.1, translation from the French original "La réduction du
    nombre d'intervenants sur le marché de piles aura pour effet de restreindre la compétition sur ce même marché, tant
    à l'achat qu'à la vente".
214 Form CO, Annex 6.I.3.
215 Replies to Q1 – Questionnaire to Customers, questions 33 to 39.
                                                              53
 ---pagebreak--- 5.5.3. Netherlands
(283) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household secondary
       batteries in the Netherlands.
(284) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household secondary batteries in the Netherlands with a
       combined share of [50-60]% (Energizer [5-10]%, Spectrum [50-60]%), followed by Gold
       Peak ([10-20]%) and Duracell ([10-20]%).216
(285) Second, the market for the wholesale supply of branded household secondary batteries in the
       Netherlands is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250] respectively.
(286) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household secondary
       batteries.
(287) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded household secondary batteries.
(288) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded household secondary batteries.
(289) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded household secondary batteries.
5.5.4. Austria
(290) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded household secondary
       batteries in Austria.
(291) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household secondary batteries in Austria with a combined share
       of [50-60]% (Energizer [5-10]%, Spectrum [40-50]%), followed by Duracell ([20-30]%),
       Gold Peak ([5-10]%) and Ansmann ([0-5]%).
(292) Second, the market for the wholesale supply of branded household secondary batteries in
       Austria is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250] respectively.
(293) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household secondary
       batteries.
216 Form CO, Annex 6.I.3.
                                                      54
 ---pagebreak--- (294) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household secondary batteries.
(295) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household secondary batteries.
(296) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household secondary batteries.
5.5.5. Germany
(297) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded household secondary
        batteries in Germany.
(298) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household secondary batteries in Germany with a combined
        share of [50-60]% (Energizer [10-20]%, Spectrum [40-50]%), followed by Ansmann ([10-
        20]%), Duracell ([10-20]%), Panasonic ([5-10]%) and Gold Peak ([5-10]%).217
(299) Second, the market for the wholesale supply of branded household secondary batteries in
        Germany is highly concentrated with an HHI level post-Transaction of [Above 2000 ] and a
        delta of [Above 250] respectively.
(300) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household secondary
        batteries.
(301) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household secondary batteries.
(302) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household secondary batteries.
(303) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household secondary batteries.
(304) Seventh, several respondents to the Commission's market investigation expect the
        Transaction to have a negative impact on the market for the wholesale supply of branded
        household secondary batteries in Germany.218
217 Form CO, Annex 6.I.3.
218 Replies to Q1 – Questionnaire to Customers, questions 33 to 39.
                                                             55
 ---pagebreak--- 5.5.6. Greece
(305)   For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of the branded household
       secondary batteries in Greece.
(306) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household secondary batteries in Greece with a combined share
       of [50-60]% (Energizer [20-30]%, Spectrum [20-30]%), followed by Duracell ([20-30]%),
       Gold Peak ([5-10]%), Panasonic ([0-5]%) and C.F.L ([0-5]%).
(307) Second, the market for the wholesale supply of branded household secondary batteries in
       Greece is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
       delta of [Above 250] respectively.
(308) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household secondary
       batteries.
(309) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded household secondary batteries.
(310) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded household secondary batteries.
(311) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded household secondary batteries.
5.5.7. Slovakia
(312) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of the branded household
       secondary batteries in Slovakia.
(313)   First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household secondary batteries in Slovakia with a combined
       share of [40-50]% (Energizer [20-30]%, Spectrum [20-30]%), followed by Gold Peak ([20-
       30]%), Duracell ([5-10]%) and Panasonic ([5-10]%).
(314) Second, the market for the wholesale supply of branded household secondary batteries in
       Slovakia is highly concentrated with an HHI level post-Transaction of Above 2000] and a
       delta of [Above 250] respectively.
(315) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded household secondary
       batteries.
                                                      56
 ---pagebreak--- (316) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household secondary batteries.
(317) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household secondary batteries.
(318) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household secondary batteries.
5.5.8. Romania
(319) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of the branded household
        secondary batteries in Romania.
(320) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household secondary batteries in Romania with a combined
        share of [40-50]% (Energizer [5-10]%, Spectrum [40-50]%), followed by Duracell ([10-
        20]%), Gold Peak ([10-20]%), Toshiba ([5-10]%) and Panasonic ([0-5]%).
(321) Second, the market for the wholesale supply of branded household secondary batteries in
        Romania is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
        delta of [Above 250] respectively.
(322) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household secondary
        batteries.
(323) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household secondary batteries.
(324) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household secondary batteries.
(325) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household secondary batteries.
(326) Seventh, several respondents to the Commission's market investigation expect the
        Transaction to have a negative impact on the market for the wholesale supply of branded
        household secondary batteries in Romania.219
219 Replies to Q1 – Questionnaire to Customers, questions 33 to 39.
                                                             57
 ---pagebreak--- 5.5.9. Malta
(327) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of the branded household
        secondary batteries in Malta.
(328) First, post-Transaction, the Parties would have a significant position in the market for the
        wholesale supply of branded household secondary batteries in Malta with a combined share
        of [40-50]% (Energizer [30-40]%, Spectrum [10-20]%), with Duracell at [50-60]% and
        Panasonic at [0-5]%.
(329) Second, the market for the wholesale supply of branded household secondary batteries in
        Malta is highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta
        of [Above 250] respectively.
(330) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household secondary
        batteries.
(331) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household secondary batteries.
(332) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household secondary batteries.
(333) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household secondary batteries.
5.5.10. Norway
(334) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded household secondary
        batteries in Norway.
(335) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household secondary batteries in Norway with a combined share
        of [40-50]% (Energizer [30-40]%, Spectrum [5-10]%), followed by Duracell ([40-50]%) and
        Panasonic ([5-10]%).220
(336) Second, the market for the wholesale supply of branded household secondary batteries in
        Norway is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
        delta of [Above 250] respectively.
(337) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household secondary
        batteries.
220 Form CO, Annex 6.I.3.
                                                       58
 ---pagebreak--- (338) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household secondary batteries.
(339) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household secondary batteries.
(340) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household secondary batteries.
5.5.11. Italy
(341) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of the branded household
        secondary batteries in Italy.
(342) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household secondary batteries in Italy with a combined share of
        [40-50]% (Energizer [20-30]%, Spectrum [10-20]%), followed by Duracell ([40-50]%) and
        Panasonic ([0-5]%).
(343) Second, the market for the wholesale supply of branded household secondary batteries in
        Italy is highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta
        of [Above 250] respectively.
(344) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded household secondary
        batteries.
(345) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded household secondary batteries.
(346) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded household secondary batteries.
(347) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded household secondary batteries.
5.5.12. Other affected markets
(348) With regard to the wholesale supply of branded household secondary batteries in Belgium,
        Czechia, Finland, Poland, Slovenia, Sweden and the UK, the Commission notes, on the one
        hand, that:
        (a)     First, the Parties have sizeable combined market shares on those markets: [20-30]% in
                Belgium, [20-30]% in Czechia, [20-30]% in Finland, [30-40]% in Poland, [30-40]% in
                Slovenia, [30-40]% in Sweden and [30-40]% in the UK.
                                                       59
 ---pagebreak---         (b)     Second, as shown in Table 1 above, all of those markets are concentrated, with HHI
                levels post-Transaction of between [Above 2000] and [Above 2000] and HHI delta of
                between [Below 250] and [DAbove 250] (with the exception of Slovenia, where the
                HHI delta is [Below 150] with post-Transaction HHI level of [Above 2000]).
        (c)     Third, the Transaction would create the largest (in the case of Poland, Slovenia and
                Sweden) or the second largest (in the case of Belgium, Czechia, Finland and the UK)
                supplier, thereby also reducing the number of suppliers on these already concentrated
                markets.
        (d)     Fourth, the market dynamics identified by the Commission at 5.3.1 to 5.3.4, apply
                equally to the markets for household secondary batteries in these countries.
        (e)     Fifth, several market participants have raised concerns about potential price increases
                or decreases in quality or innovation in these markets.221
(349) On the other hand, the Commission also notes that:
        (a)     First, there are significant alternative suppliers of branded household secondary
                batteries on those markets. Duracell is, and will post-Transaction remain, the market
                leader in Belgium ([40-50]%) and the UK ([50-60]%), Gold Peak is, and will post-
                Transaction remain, the market leader in Czechia ([30-40]%) and Finland ([30-40]%).
                Duracell will also remain a close second competitor to the merged entity in Finland
                ([20-30]%) and Slovenia ([10-20]%).
        (b)     Second, in addition to the above-mentioned closest competitors to the merged entity,
                there are two or three other alternative suppliers of branded household secondary
                batteries active on each of those markets, including suppliers such as Panasonic,
                Philips and Camelion.
        (c)     Third, a number of market participants have indicated that they do not anticipate any
                price increase or decreases in quality or innovation in those markets.222
(350) Ultimately, the question of whether serious doubts arise in Belgium, Czechia, Finland,
        Poland, Slovenia, Sweden and the UK can be left open as the commitments discussed in
        section 6 include all of the activities of Spectrum's Varta Business in the EMEA region and
        therefore entirely remove the overlap in the markets for branded household secondary
        batteries in those countries.
5.5.13. Other horizontal overlaps
(351) With regards to the wholesale supply of household secondary batteries in Bulgaria, Croatia,
        Cyprus, Denmark, Estonia, Iceland, Latvia, Lithuania, Luxembourg, Portugal and Spain, the
        Commission notes that the horizontal overlaps between the Parties in these countries do not
        lead to combined market shares above [10-20]%. Therefore, in these markets, the Transaction
        does not raise serious doubts as regards its compatibility with the internal market.
221 Replies to Q1 – Questionnaire to Customers; question 35; Replies to Q2 – Questionnaire to Competitors, question
    35.
222 Replies to Q1 – Questionnaire to Customers; question 35; Replies to Q2 – Questionnaire to Competitors, question
    35.
                                                           60
 ---pagebreak--- 5.5.14. Conclusion on the assessment of potential horizontal non-coordinated effects on the
         branded household secondary batteries markets
(352) On the basis of the above, the Commission concludes that:
       (a)      the Transaction raises serious doubts as regards its compatibility with the internal
                market due to horizontal non-coordinated effects in the markets for the wholesale
                supply of branded household secondary batteries in Austria, France, Germany,
                Greece, Hungary, Italy, Malta, Netherlands, Norway, Romania and Slovakia;
       (b)      the question of whether serious doubts arise in Belgium, Czechia, Finland, Poland,
                Slovenia, Sweden and the UK can be left open as the commitments include all of the
                activities of Spectrum's Varta Business in the EMEA region and therefore entirely
                remove the overlap in the markets for the wholesale supply of branded household
                secondary batteries in those countries; and
       (c)      the Transaction does not raise serious doubts as regards its compatibility with the
                internal market due to horizontal non-coordinated effects in the markets for the
                wholesale supply of branded household secondary batteries in Bulgaria, Croatia,
                Cyprus, Denmark, Estonia, Iceland, Latvia, Lithuania, Luxembourg, Portugal and
                Spain.
5.6.   Assessment of potential horizontal non-coordinated effects on the national markets for
       the wholesale supply of branded specialty batteries to the retail channel
(353) On the attribution of Spectrum's sales of branded specialty batteries sourced from [Supplier],
       several elements suggest that those sales should be included in the assessment of Spectrum's
       position on the markets for specialty batteries, namely the long-standing nature of this
       distribution agreement, the fact that Spectrum seems to control packaging, marketing,
       portfolio selection of those products [Comments on distribution structure].223
(354) In branded specialty batteries, Energizer and Spectrum are currently the second and third
       largest players in the EEA (with market shares of [10-20]% and [10-20]% respectively), with
       Duracell as the market leader ([10-20]%). The Transaction would create or strengthen a
       leading position for the merged entity in several Member States, with a much smaller market
       share for the combined entity's next competitor, Duracell.
(355) As shown in Table 3 below, combined market shares would exceed [40-50]% in six
       countries. The market shares indicate that the Transaction could create or strengthen the
       merged entity's dominant position in several Member States, with a much smaller market
       share for its next competitor, Duracell.
(356) There are horizontal overlaps that lead to (i) combined market shares above 25%, and (ii)
       HHI levels post-Transaction of above 2 000 and a HHI delta of more than 150, or (iii) HHI
       levels post-Transaction of between 1 000 and 2 000 and a HHI delta of above 250, in 17 EEA
       countries, and other horizontal overlaps with combined market shares and HHI levels below
       those levels in 12 other EEA countries.
223 Annexes 44 to 48 of the Parties' reply to RFI 1.
                                                       61
 ---pagebreak--- Table 3: Market shares in branded specialty batteries, 2017 by value224
                                                                                                             HHI
                                Target                                             Third          Fourth                Delta
  Country      Energizer                   Combined    Duracell      Panasonic                               Post-
                              Business                                            supplier      supplier                HHI
                                                                                                           Merger
                                                                                  [5-10]%        [5-10]%    [Below     [Below
   Austria       [5-10]%      [20-30]%      [30-40]%   [20-30]%      [10-20]%
                                                                                                             2000]      150]
                                                                                   [0-5]%         [0-5]%    [Above     [Above
  Belgium       [20-30]%      [10-20]%      [30-40]%   [30-40]%       [5-10]%
                                                                                                             2000]      250]
                                                                                 [20-30]%                   [Below    Below
  Bulgaria        [0-5]%        [0-5]%       [5-10]%   [10-20]%       [5-10]%                   [10-20]%
                                                                                                             2000]    250]
                  [0-5]%       [5-10]%                 [10-20]%      [10-20]%    [20-30]%        [5-10]%    [Below     [Below
   Croatia                                  [10-20]%
                                                                                                             2000]      150]
                  [0-5]%        [0-5]%                               [10-20]%    [10-20]%        [5-10]%    [Above     [Above
   Cyprus                                     [0-5]%   [20-30]%
                                                                                                             2000]      250]
                [10-20]%      [10-20]%      [20-30]%                                             [5-10]%    [Below     [Above
  Czechia                                              [10-20]%       [5-10]%    [20-30]%
                                                                                                             2000]      250]
                                            [20-30]%                             [10-20]%        [5-10]%    [Below     [Above
  Denmark       [10-20]%       [5-10]%                 [10-20]%        [0-5]%
                                                                                                             2000]      250]
                                                                                 [10-20]%        [5-10]%    [Below     [Below
   Estonia       [5-10]%        [0-5]%       [5-10]%   [20-30]%      [20-30]%
                                                                                                             2000]      150]
                [20-30]%      [20-30]%                                [5-10]%     [5-10]%        [5-10]%    [Above     [Above
  Finland                                   [50-60]%    [5-10]%
                                                                                                             2000]      250]
                                            [40-50]%                  [5-10]%     [5-10]%        [5-10]%    [Above     [Above
   France       [30-40]%      [10-20]%                 [10-20]%
                                                                                                             2000]      250]
                                            [40-50]%                   [0-5]%    [10-20]%        [5-10]%    [Above     [Above
  Germany       [10-20]%      [20-30]%                  [5-10]%
                                                                                                             2000]      250]
                                            [20-30]%                   [0-5]%    [10-20]%       [10-20]%    [Above     [Below
   Greece       [10-20]%        [0-5]%                 [10-20]%
                                                                                                             2000]      150]
                                            [20-30]%   [10-20]%      [10-20]%    [10-20]%       [10-20]%    [Above     [Above
  Hungary        [5-10]%      [10-20]%
                                                                                                             2000]      250]
                [10-20]%        [0-5]%      [20-30]%                 [10-20]%    [10-20]%         [0-5]%    [Below     [Below
   Ireland                                             [30-40]%
                                                                                                             2000]      250]
                                                       [20-30]%                                             [Above     [Above
    Italy       [20-30]%       [5-10]%      [20-30]%                  [5-10]%    [10-20]%        [5-10]%
                                                                                                             2000]      250]
                                                       [20-30]%                                             [Above     [Above
   Latvia        [5-10]%      [50-60]%      [50-60]%                   [0-5]%      [0-5]%         [0-5]%
                                                                                                             2000]      250]
                [10-20]%      [10-20]%      [20-30]%   [20-30]%                                             [Below     [Below
 Lithuania                                                            [5-10]%    [10-20]%        [5-10]%
                                                                                                             2000]      250]
                                                                                  [5-10]%        [5-10]%    [Below     [Below
Luxembourg       [5-10]%        [0-5]%       [5-10]%   [40-50]%      [10-20]%
                                                                                                             2000]      150]
                                            [20-30]%                              [5-10]%        [5-10]%    [Above     [Above
    Malta       [10-20]%       [5-10]%                 [30-40]%       [5-10]%
                                                                                                             2000]      250]
                                            [20-30]%                              [5-10]%        [5-10]%    [Above     [Above
Netherlands       [0-5]%      [20-30]%                 [10-20]%       [5-10]%
                                                                                                             2000]      250]
                               [5-10]%                 [10-20]%      [10-20]%     [5-10]%                   [Above     [Above
  Norway        [30-40]%                    [40-50]%                                             [5-10]%
                                                                                                             2000]      250]
                               [5-10]%      [10-20]%   [10-20]%      [10-20]%    [10-20]%                   [Below     [Below
   Poland        [5-10]%                                                                         [5-10]%
                                                                                                             2000]      150]
                                            [10-20]%   [10-20]%      [10-20]%                   [10-20]%    [Above     [Above
  Portugal       [5-10]%      [10-20]%                                           [10-20]%
                                                                                                             2000]      250]
                                                       [10-20]%        [0-5]%    [10-20]%       [10-20]%    [Below     [Below
  Romania         [0-5]%       [5-10]%       [5-10]%
                                                                                                             2000]      150]
                 [5-10]%       [5-10]%      [10-20]%   [10-20]%        [0-5]%    [20-30]%                   [Below     [Below
  Slovakia                                                                                       [5-10]%
                                                                                                             2000]      250]
                                                                                                 [5-10]%    [Above     [Above
  Slovenia        [0-5]%      [10-20]%      [10-20]%   [20-30]%      [10-20]%    [20-30]%
                                                                                                             2000]      250]
224  Rounding errors may occur. Duracell is present in all countries. Panasonic is present in almost all countries. "Third
     supplier" and "fourth supplier" stands for the largest and second-largest suppliers other than the Parties, Duracell and
     Panasonic. The identity of the third and fourth suppliers varies by country. There are no horizontal overlaps in EEA
     countries that are not listed in the table.
                                                                  62
 ---pagebreak---                                                                                                HHI
                              Target                                          Third   Fourth          Delta
  Country      Energizer                Combined      Duracell    Panasonic                    Post-
                             Business                                       supplier supplier         HHI
                                                                                              Merger
                                                                                     [5-10]%  [Below [Below
    Spain      [10-20]%      [5-10]%     [20-30]%     [10-20]%    [20-30]%  [10-20]%
                                                                                               2000]  250]
                                                                             [5-10]% [5-10]%  [Above [Above
  Sweden       [20-30]%     [10-20]%     [40-50]%      [5-10]%    [10-20]%
                                                                                               2000]  250]
                                                                   [5-10]%   [5-10]% [5-10]%  [Below [Below
     UK        [10-20]%       [0-5]%     [20-30]%     [30-40]%
                                                                                               2000]  250 ]
               [10-20]%     [10-20]%     [30-40]%                  [5-10]%   [5-10]% [5-10]%  [Below [Above
    EEA                                               [10-20]%
                                                                                               2000]  250]
          Source: Parties' reply to RFI 5, Annex 14.1
5.6.1.      Latvia
(357) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
          with the internal market with respect to the wholesale supply of branded specialty batteries in
          Latvia.
(358) First, post-Transaction, the Parties would be the clear market leader in the market for the
          wholesale supply of branded household specialty batteries in Latvia with a combined share of
          [50-60]% (Energizer [5-10]%, Spectrum [50-60]%), followed by Duracell ([20-30]%);
          Camelion ([0-5]%) and Philips ([0-5]%).225
(359) Second, the market for the wholesale supply of branded specialty batteries in Latvia is highly
          concentrated with an HHI level post-Transaction of [Above 2000] and a delta of [Above 250]
          respectively.
(360) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
          important competitors in relation to the wholesale supply of branded specialty batteries.
(361) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
          exercise only a limited constraint on the Parties in the markets for the wholesale supply of
          branded specialty batteries.
(362) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
          affect the Parties' market position in the short- to medium term in the markets for the
          wholesale supply of branded specialty batteries.
(363) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
          limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
          supply of branded specialty batteries.
5.6.2. Finland
(364) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
          with the internal market with respect to the wholesale supply of branded specialty batteries in
          Finland.
(365) First, post-Transaction, the Parties would be the clear market leader in the market for the
          wholesale supply of branded household specialty batteries in Finland with a combined share
225  Form CO, Annex 6.I.3.
                                                               63
 ---pagebreak---        of [50-60]% (Energizer [20-30]%, Spectrum [20-30]%), followed by Gold Peak ([5-10]%),
       Duracell ([5-10]%), Panasonic ([5-10]%) and Maxell ([5-10]%).226
(366) Second, the market for the wholesale supply of branded specialty batteries in Finland is
       highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
       [Above 250] respectively.
(367) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded specialty batteries.
(368) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded specialty batteries.
(369) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded specialty batteries.
(370) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded specialty batteries.
5.6.3. France
(371) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded specialty batteries in
       France.
(372) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded household specialty batteries in France with a combined share of
       [40-50]% (Energizer [30-40]%, Spectrum [10-20]%), followed by Duracell ([10-20]%),
       Renata ([5-10]%),Panasonic ([5-10]%) and Sony ([5-10]%).227
(373) Second, the market for the wholesale supply of branded specialty batteries in France is highly
       concentrated with an HHI level post-Transaction of [Above 2000] and a delta of [Above 250]
       respectively.
(374) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded specialty batteries.
(375) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded specialty batteries.
(376) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded specialty batteries.
226 Form CO, Annex 6.I.3.
227 Form CO, Annex 6.I.3.
                                                      64
 ---pagebreak--- (377) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded specialty batteries.
(378) Seventh, several respondents to the Commission's market investigation expect the
        Transaction to have a negative impact on the market for the wholesale supply of branded
        specialty batteries in France.228
5.6.4. Germany
(379) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded specialty batteries in
        Germany.
(380) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded household specialty batteries in Germany with a combined share
        of [40-50]% (Energizer [10-20]%, Spectrum [20-30]%), followed by Ansmann ([10-20]%),
        Duracell ([5-10]%) and Gold Peak ([5-10]%).229
(381) Second, the market for the wholesale supply of branded specialty batteries in Germany is
        highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
        [Above 250] respectively.
(382) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
        important competitors in relation to the wholesale supply of branded specialty batteries.
(383) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
        exercise only a limited constraint on the Parties in the markets for the wholesale supply of
        branded specialty batteries.
(384) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded specialty batteries.
(385) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded specialty batteries.
(386) Seventh, several respondents to the Commission's market investigation expect the
        Transaction to have a negative impact on the market for the wholesale supply of branded
        specialty batteries in Germany.230
5.6.5. Norway
(387) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded specialty batteries in
        Norway.
228 Replies to Q1 – Questionnaire to Customers, questions 33 to 39
229 Form CO, Annex 6.I.3.
230 Replies to Q1 – Questionnaire to Customers, questions 33 to 39.
                                                             65
 ---pagebreak--- (388) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded specialty batteries in Norway with a combined share of [40-
       50]% (Energizer [30-40]%, Spectrum [5-10]%), followed by Duracell ([10-20]%), Panasonic
       ([10-20]%), Sony ([5-10]%) and Gold Peak ([5-10]%).231
(389) Second, the market for the wholesale supply of branded specialty batteries in Norway is
       highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
       [Above 250] respectively.
(390) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded specialty batteries.
(391) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded specialty batteries.
(392) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
       affect the Parties' market position in the short- to medium term in the markets for the
       wholesale supply of branded specialty batteries.
(393) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded specialty batteries.
5.6.6. Sweden
(394) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded specialty batteries in
       Sweden.
(395) First, post-Transaction, the Parties would be the clear market leader in the market for the
       wholesale supply of branded specialty batteries in Sweden with a combined share of [40-
       50]% (Energizer [20-30]%, Spectrum [10-20]%), followed by Panasonic ([10-20]%), Sony
       ([5-10]%), Duracell ([5-10]%) and Gold Peak ([5-10]%).232
(396) Second, the market for the wholesale supply of branded specialty batteries in Sweden is
       highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
       [Above 250] respectively.
(397) Third, as discussed in Section 5.3.1, the Commission considers the Parties to be close and
       important competitors in relation to the wholesale supply of branded specialty batteries.
(398) Fourth, as discussed in Section 5.3.2, the Commission considers that private label batteries
       exercise only a limited constraint on the Parties in the markets for the wholesale supply of
       branded specialty batteries.
231 Form CO, Annex 6.I.3.
232 Form CO, Annex 6.I.3.
                                                      66
 ---pagebreak--- (399) Fifth, as discussed in Section 5.3.3, the Commission considers that e-commerce is unlikely to
        affect the Parties' market position in the short- to medium term in the markets for the
        wholesale supply of branded specialty batteries.
(400) Sixth, as discussed in Section 5.3.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded specialty batteries.
5.6.7. Other affected markets
(401) With regard to the wholesale supply of branded specialty batteries in Austria, Belgium,
        Czechia, Ireland, Italy, Lithuania, Malta, the Netherlands and Spain, the Commission notes,
        on the one hand, that:
        (a)     First, the Parties have sizable combined market shares on those markets: [30-40]% in
                Austria, [30-40]% in Belgium, [20-30]% in Czechia, [20-30]% in Ireland, [20-30]% in
                Italy, [20-30]% in Lithuania, [20-30]% in Malta, [20-30]% in the Netherlands and
                [20-30]% in Spain.
        (b)     Second, as shown in Table 3 above, all of those markets are concentrated, with HHI
                levels post-Transaction of between [Below 2000] and [Above 2000] and with an HHI
                delta of between [Below 250] and [Above 250] (with the exception of Austria, where
                the HHI delta is [Below 150] with post-Transaction HHI of [HHI Below 2000]).
        (c)     Third, the Transaction would create the largest (in the case of Austria, Belgium,
                Czechia and the Netherlands) or the second largest (in the case of Ireland, Italy,
                Lithuania, Malta and Spain) supplier, thereby also reducing the number of suppliers
                on these already concentrated markets.
        (d)     Fourth, the market dynamics identified by the Commission at 5.3.1 to 5.3.4, apply
                equally to the markets for branded specialty batteries in these countries.
        (e)     Fifth, several market participants have raised concerns about potential price increases
                or decreases in quality or innovation in these markets.233
(402) On the other hand, the Commission also notes that:
        (a)     First, there are significant alternative suppliers of branded specialty batteries on those
                markets. Duracell is, and will post-Transaction remain, the market leader in Ireland
                ([30-40]%), Italy ([20-30]%), Lithuania ([20-30]%) and Malta ([30-40]%) and
                Panasonic is and will post-Transaction remain the market leader in Spain ([20-30]%).
                Duracell will also remain a close competitor to the merged entity in Austria ([20-
                30]%), Belgium ([30-40]%) and the Netherlands ([10-20]%) and Gold Peak will
                remain a close competitor to the merged entity in Czechia ([20-30]%).
        (b)     Second, in addition to the above-mentioned closest competitors to the merged entity,
                there are three other alternative suppliers of branded specialty batteries active on each
233 Replies to Q1 – Questionnaire to Customers; question 35; Replies to Q2 – Questionnaire to Competitors, question
    35.
                                                           67
 ---pagebreak---                 of those markets, including suppliers such as Panasonic, Sony, Philips, Maxell and
                Renata.
        (c)     Third, a number of market participants have indicated that they do not anticipate any
                price increase or decreases in quality or innovation in those markets.234
(403) Ultimately, the question of whether serious doubts arise in Austria, Belgium, Czechia,
        Ireland, Italy, Lithuania, Malta, the Netherlands and Spain can be left open as the
        commitments discussed in section 6 include all of the activities of Spectrum's Varta Business
        in the EMEA region and therefore entirely remove the overlap in the markets for branded
        specialty batteries in those countries.
5.6.8.    Other horizontal overlaps
(404) With regards to the wholesale supply of specialty batteries in Bulgaria, Croatia, Cyprus,
        Denmark, Estonia, Greece, Hungary, Luxembourg, Poland, Portugal, Romania, Slovakia,
        Slovenia and the UK, the Commission notes that the horizontal overlaps between the Parties
        in these countries do not lead to combined market shares above [10-20]%. Therefore, in these
        markets, the Transaction does not raise serious doubts as regards its compatibility with the
        internal market.
5.6.9.    Conclusion on the assessment of potential horizontal non-coordinated effects on the
          national markets for the wholesale of branded specialty batteries to the retail channel
(405) On the basis of the above, the Commission concludes that:
        (a)     the Transaction raises serious doubts as regards its compatibility with the internal
                market due to horizontal non-coordinated effects in the markets for the wholesale
                supply of branded specialty batteries in Finland, France, Germany, Latvia, Norway
                and Sweden;
        (b)     the question of whether serious doubts arise in Austria, Belgium, Czechia, Ireland,
                Italy, Lithuania, Malta, the Netherlands and Spain can be left open as the
                commitments include all of the activities of Spectrum's Varta Business in the EMEA
                region and therefore entirely remove the overlap in the markets for the wholesale
                supply of branded specialty batteries in those countries; and
        (c)     the Transaction does not raise serious doubts as regards its compatibility with the
                internal market due to horizontal non-coordinated effects in the markets for the
                wholesale supply of branded specialty batteries in Bulgaria, Croatia, Cyprus,
                Denmark, Estonia, Greece, Hungary, Luxembourg, Poland, Portugal, Romania,
                Slovakia, Slovenia and the UK.
5.7.    Assessment of potential horizontal non-coordinated effects on the national markets for
        the wholesale supply of branded hearing aid batteries to the mass retail channel
(406) Spectrum (with its Rayovac brand) is currently the market leader in branded hearing aid
        batteries in a number of EEA countries. In comparison, Energizer is a less significant supplier
234 Replies to Q1 – Questionnaire to Customers; question 35; Replies to Q2 – Questionnaire to Competitors, question
    35.
                                                           68
 ---pagebreak---          of branded hearing aid batteries at the EEA level (with [20-30]% market share in the mass
         retail channel). Nevertheless, its presence achieves more than [30-40]% market share in 11
         EEA countries and more than [20-30]% in 2 further EEA countries.
(407) As shown in Table 4 below, the merged entity would be the largest player in the EEA (with a
         [50-60]% combined market share) followed by Duracell ([20-30]%) and would become the
         only supplier of branded hearing aid batteries in the mass retail channel in 9 national markets
         (Bulgaria, Czechia, Denmark, Finland, Hungary, Ireland, Luxembourg, Norway and
         Slovakia). The merged entity would also have combined market shares above [90-100]% in 3
         further markets (Netherlands, Poland and Slovenia), very high combined market shares
         (between [40-50]% and [80--90%) in 8 further national markets, in 6 of which this transaction
         would constitute a 3 to 2 merger (Austria, Belgium, Italy, Romania, Spain and the UK).
Table 4: Market shares in branded hearing aid batteries in the mass retail channel, 2017 by
  Country                    Target                                                              HHI Post-
              Energizer                 Combined       Duracell      Panasonic       Sony                          Delta HHI
                            Business                                                               Merger
                 [5-10]%    [40-50]%      [50-60]%        [0-5]%        [0-5]%    [40-50]%      [Above 2000]       [Above 250]
Austria
                [30-40]%    [40-50]%      [70-80]%      [20-30]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Belgium
                  [0-5]%   [90-100]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Below 150]
Bulgaria
                [60-70]%    [30-40]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Czechia
               [90-100]%     [0-5]%      [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Denmark
                [40-50]%    [50-60]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Finland
                  [0-5]%    [30-40]%      [30-40]%      [40-50]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
France
                [20-30]%    [20-30]%      [50-60]%      [30-40]%       [5-10]%     [5-10]%      [Above 2000]       [Above 250]
Germany
                [50-60]%    [40-50]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Hungary
                [60-70]%    [30-40]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Ireland
                  [0-5]%    [70-80]%      [70-80]%      [10-20]%        [0-5]%      [0-5]%      [Above 2000]       [Below 250]
Italy
                [50-60]%    [40-50]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Luxembourg
                  [0-5]%   [90-100]%     [90-100]%       [5-10]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Netherlands
                [40-50]%    [50-60]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Norway
                [30-40]%    [50-60]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Poland
                 [5-10]%    [30-40]%      [40-50]%        [0-5]%      [50-60]%      [0-5]%      [Above 2000]       [Above 250]
Romania
                [30-40]%    [60-70]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Slovakia
                 [5-10]%   [90-100]%     [90-100]%        [0-5]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Slovenia
                [20-30]%    [50-60]%      [70-80]%      [10-20]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
Spain
                [10-20]%    [30-40]%      [40-50]%      [30-40]%        [0-5]%    [10-20]%      [Above 2000]       [Above 250]
Sweden
                [40-50]%    [30-40]%      [70-80]%      [20-30]%        [0-5]%      [0-5]%      [Above 2000]       [Above 250]
UK
value235
         Source: Parties' reply to RFI 5, Annex 14.1
235   Rounding errors may occur. There are no horizontal overlaps in EEA countries that are not listed in the table.
                                                                69
 ---pagebreak--- (408) There are a number of common characteristics of the markets for the wholesale supply of
        hearing aid batteries in the mass retail channel across the EEA which will be discussed in
        sections 5.7.1 to 5.7.5.
5.7.1. The Parties are close and important competitors in most of the national markets in the EEA
        in an already concentrated industry with limited alternatives
        (a) The Notifying Party's view
(409) The Notifying Party argues that the Parties are not close competitors236 and that the merged
        entity will face fierce competition from other strong branded suppliers.237 The Notifying
        Party identifies Duracell (with its Easytab brand), Gold Peak, Panasonic, Sony, Philips and
        Ansmann as alternative suppliers to the merged entity in the EEA.
        (b) The Commission's assessment
(410) The vast majority of retailer and wholesaler customers that responded to the Commission's
        market investigation stated that Rayovac is Energizer's closest competitor in the supply of
        hearing aid batteries.238 Duracell and Varta Microbattery's PowerOne brand were ranked on
        average as the next closest competitors, followed by Panasonic. The results were similar with
        regard to the market participants' views of Rayovac's closest competitors: the majority deem
        Energizer to be Rayovac's closest competitor in the supply of hearing aid batteries.239
(411) Other than the market participants' views of the Parties' closest competitors, the Commission,
        in the course of its market investigation, has found that suppliers of branded hearing aid
        batteries (other than the Parties, Varta Microbattery240 and Duracell), are perceived by
        customers as being of lower, or less consistently reliable, quality. For example, one customer
        ranked hearing aid batteries produced by the Chinese company ZhuHai Zhi Li Battery (the
        ZeniPower brand) in the last place due to "considerable quality fluctuations".241
(412) Furthermore, there is a perception among some customers that only Varta Microbattery and
        Spectrum's Rayovac operate a global distribution and sales network. Some of the other non-
        EEA based suppliers, especially those not yet establishd with a distribution network for other
        types of batteries, are not seen to be (at least at present) capable of supplying significant
        customers in the EEA due to capacity limitations, geographical reach, financial resources and
        a lack of an international supply network.242 As one hearing aid customer explained: "The
        Chinese ZeniPower has so far not made the huge investments accompanied with the
        operation of a comparable network."243
(413) Furthermore, the barriers to entry appear to be relatively high. The production of hearing aid
        batteries requires significant investments in R&D and production lines over a number of
236 Form CO, paragraphs 1406, 1414.
237 Form CO, paragraphs 1415, 1425-1433.
238 Replies to Q1 – Questionnaire to Customers, question 24.
239 Replies to Q1 – Questionnaire to Customers, question 25.
240 As explained in section 4, Varta Microbattery, which is a separate entity not connected to the Parties, [Information
    on Varta Microbattery].
241 Minutes of a call with a customer, 26 July 2018, 15:30 CET.
242 Minutes of a call with a customer, 26 July 2018, 15:30 CET.
243 Minutes of a call with a customer, 20 July 2018, 11:00 CET.
                                                             70
 ---pagebreak---         years, in order to optimize the battery with regard to size and performance. Significant
        investment into a distribution network would also be required to enter the market. For these
        reasons, some market participants have indicated that they would not have the ability to
        manufacture hearing aid batteries themselves. 244 As one hearing aid batteries customer
        explains: "What would be needed is technology, capacity and the interest of entering a market
        which is still small in terms of volume and size."245 A competitor also explained that "[a]
        supplier will be required to have and maintain the manufacturing and/or sales operation for
        starting making sales of hearing aid batteries, too, and it takes lots of costs and man
        power".246
(414) Even entering the market as a supplier (and not a manufacturer) alone can be resource-
        intensive. As a competitor explained, in order to start making sales of hearing aid batteries, a
        supplier would need to be able to source all the different battery categories and technologies
        and would have to adapt and manufacture different packaging, manage logistics, conduct
        internal qualification and negotiate business conditions with manufacturers of hearing aid
        batteries, which the competitor estimates can take a year.247 On the other hand, the incentives
        for new entry may be limited, since, as one competitor explained, "hearing batteries is a
        specialized field with limited supplier base. As such it requires a long term commitment".248
(415) For these reasons, the Commission finds that the Parties are close and important competitors
        in most of the national markets in the EEA in an already concentrated industry with limited
        alternatives.
5.7.2. Private label batteries only exercise a limited constraint on the Parties
        (a) The Notifying Party's view
(416) The Notifying Party argues that hearing aid batteries are supplied to retailers that are not
        audiologists (i.e. the mass retail channel) as a part of battery suppliers' consumer battery
        offering and that, accordingly, the impact of private label on the supply of branded hearing
        aid batteries in the mass retail channel is similar to that of private label on other branded
        consumer batteries.249
        (b) The Commission's assessment
(417) With regard to other consumer batteries, the Commission has found at 5.3.2 that private label
        batteries exercise only a limited constraint on the Parties. The Commission refers to the
        arguments set out in section 5.3.2, which apply equally to hearing aid batteries sold in the
        mass retail channel.
(418) Furthermore, market participants that responded to the Commission's market investigation
        have stated that brand recognition is very important in the hearing aid battery market
        specifically. As one hearing aid battery customer explained: "The battery business is a brand
244 See e.g. Minutes of a call with a customer, 20 July 2018, 11:00 CET.
245 Minutes of a call with a customer, 26 July 2018, 15:30 CET.
246 Replies to Q2 – Questionnaire to Competitors, question 14.2.
247 Replies to Q2 – Questionnaire to Competitors, question 14.2.
248 Replies to Q2 – Questionnaire to Competitors, question 14.2.
249 Form CO, paragraph 1434.
                                                               71
 ---pagebreak---          business." 250 Another customer active on the Finnish market for hearing aid batteries
         explained: "Big brand have made a lot of marketing in Finland so they are well known."251
         Another customer active on the French market for hearing aid batteries expressed a similar
         view: "Brand awareness is important in the battery sector because there is a lot of marketing
         on some national brands and consumers are reassured and more easily buy the more well-
         known brands".252 According to one Hungarian customer, brands may matter more for
         hearing aid batteries, since the product for which they are needed is of a medical nature:
         "Consumers follow doctor's advise and therefore purchase recommended brands and
         types."253
(419) For these reasons, the Commission finds that private label hearing aid batteries only exercise
         a limited constraint on the Parties in their supply of branded hearing aid batteries to the mass
         retail channel.
5.7.3. E-commerce is unlikely to affect the Parties' market position in the short- to medium term
         (a) The Notifying Party's view
(420) The Notifying Party argues that the importance of e-commerce on hearing aid batteries is
         further accentuated by the fact that hearing aid batteries are a high-frequency sales product
         compared to regular consumer batteries, which in the Notifying Party's view means that e-
         commerce (in particular subscription services such as Amazon's subscription service) are
         particular relevant with respect to hearing aid batteries.254
         (b) The Commission's assessment
(421) The Commission has found at 5.3.3 that e-commerce is unlikely to affect the Parties' market
         position in consumer batteries in the short- to medium term. The same arguments apply to
         hearing aid batteries.
(422) Furthermore, the results of the market investigation suggest that in regard to hearing aid
         batteries specifically, e-commerce is likely to play an even less significant role than for other
         types of consumer batteries, in view of the more specific demographic of a typical hearing aid
         batteries consumer. For example, one customer explained that "elderly customers (who are
         the majority of hearing aid consumers) tend not to trust online channels and would much
         rather buy directly from an in-store environment."255
250 Minutes of a call with a customer, 26 July 2018, 15:30 CET.
251 Replies to Q1 – Questionnaire to Customers, question 26.1.
252 Replies to Q1 – Questionnaire to Customers, question 26.1. (Translation from French original: "La notoriété de la
    marque est importante dans le secteur des piles car il y a beaucoup de marketing sur certaines marques nationales
    et les consommateurs sont rassurés et achètent plus facilement les marques davantage connues.")
253 Replies to Q1 – Questionnaire to Customers, question 16.1.
254 Form CO, paragraph 1438.
255 Replies to Q1 – Questionnaire to Customers, question 16.1.
                                                               72
 ---pagebreak--- 5.7.4. Customers only exercise a limited constraint on the Parties' ability to increase prices
        (a) The Notifying Party's view
(423) The Notifying Party argues that the merged entity will not be in a position to exert market
        power vis-à-vis its customers (retailers) and will instead face significant countervailing buyer
        power both from traditional retailers and online retailers and platforms. In the Notifying
        Party's view, sales of hearing aid batteries to the mass retail channel form part of the overall
        offering of consumer batteries, with customers, especially traditional large retailers,
        controlling the number and mix of category players that the customers offer to their
        customers (including the focus on brand and product placement, shelf space, pricing levels
        and promotions). The Notifying Party further argues that in tenders concerning hearing aid
        batteries alone, competition among suppliers is fierce, with retailers often playing suppliers
        off against one another. 256
        (b) The Commission's assessment
(424) The Commission has found at 5.3.4 that customers exercise only a limited constraint on the
        Parties' ability to increase prices for consumer batteries. The same arguments apply with
        respect to hearing aid batteries. Furthermore, the markets for the wholesale supply of hearing
        aid batteries to the mass retail channel are highly concentrated, where there are limited (or no)
        alternative suppliers to the merged entity in a number of EEA countries.257 In those countries,
        therefore, the merged entity's customers would not be in the position to exercise a significant
        degree of countervailing buyer power.
5.7.5. Concerns raised by market participants in the course of the market investigation
(425) The Commission's market investigation revealed that a significant number of customers and
        competitors expect prices of branded hearing aid batteries to increase as a result of the
        Transaction.
(426) The Commission has furthermore received complaints from 14 consumer associations from
        various Member States representing the interests of the deaf and the hard of hearing, all
        expressing concerns about the effects of this Transaction on the market for hearing aid
        batteries, mainly as a result of: (i) the Parties' creation or strengthening of market dominance,
        and (ii) eventual increases in the prices of hearing aid batteries.
5.7.6. Bulgaria
(427) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Bulgaria.
(428) First, post-Transaction, the merged entity would be the only supplier of branded hearing aid
        batteries in the mass retail channel in Bulgaria with a combined market share of 100%.
256 Form CO, paragraphs 1440-1443.
257 See Table 4.
                                                         73
 ---pagebreak--- (429) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
       only a limited constraint on the Parties in the markets for the wholesale supply of branded
       hearing aid batteries in the mass retail channel.
(430) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
       the Parties' market position in the short- to medium term in the markets for the wholesale
       supply of branded hearing aid batteries in the mass retail channel.
(431) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded hearing aid batteries in the mass retail channel.
(432) Fifth, the Notifying Party argues that the Transaction will not have any impact on the
       segment for the supply of hearing aid batteries to the mass retail channel in Bulgaria despite
       the Parties' high combined market shares, since Energizer only made sales worth of EUR
       [Sales information] in 2017 (and had no sales in the two preceding years), which accounts for
       [0-5]% of overall hearing aid battery sales.258 The Notifying Party further argues that [Sales
       strategy].259 However, the Commission finds that by creating a single supplier of branded
       hearing aid batteries in the mass retail channel in Bulgaria, the Transaction would eliminate
       the only potential challenger to Spectrum's dominant position in this channel on the Bulgarian
       market.
5.7.7. Czechia
(433) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded hearing aid batteries
       in the mass retail channel in Czechia.
(434) First, post-Transaction, the merged entity would be the only supplier of branded hearing aid
       batteries in the mass retail channel in Czechia with a combined market share of 100%.
(435) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
       only a limited constraint on the Parties in the markets for the wholesale supply of branded
       hearing aid batteries in the mass retail channel.
(436) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
       the Parties' market position in the short- to medium term in the markets for the wholesale
       supply of branded hearing aid batteries in the mass retail channel.
(437) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded hearing aid batteries in the mass retail channel.
(438) Fifth, the Notifying Party argues that since Energizer [Distribution strategy], its ability to
       compete locally with Spectrum in Central and Easter Europe (including Czechia) is
       limited.260 However, the Commission finds that by creating a [single supplier of branded
       hearing aid batteries in the mass retail channel in Czechia, the Transaction would eliminate
258 Form CO, paragraph 1462.
259 Form CO, paragraph 1463.
260 Form CO, paragraph 1463.
                                                      74
 ---pagebreak---        the only potential challenger to each other's very strong market position in this channel on the
       Czech market.
5.7.8. Denmark
(439) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded hearing aid batteries
       in the mass retail channel in Denmark.
(440) First, post-Transaction, the merged entity would be the only supplier of branded hearing aid
       batteries in the mass retail channel in Denmark with a combined market share of 100%.
(441) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
       only a limited constraint on the Parties in the markets for the wholesale supply of branded
       hearing aid batteries in the mass retail channel.
(442) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
       the Parties' market position in the short- to medium term in the markets for the wholesale
       supply of branded hearing aid batteries in the mass retail channel.
(443) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
       limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
       supply of branded hearing aid batteries in the mass retail channel.
(444) Fifth, the Notifying Party argues that the Transaction will not have a significant impact on the
       segment for the supply of branded hearing aid batteries to the mass retail channel in Denmark
       despite the Parties' high combined market shares, as there is virtually no overlap in the sales
       of hearing aid batteries in this channel. Spectrum only carried out sales worth EUR [Sales
       information] in 2017, accounting for [0-5]% of the sales of hearing aid batteries to the mass
       retail channel.261 The Notifying Party further argues that the sales of hearing aid batteries via
       the mass retail channel in Denmark is constrained by the supply of hearing aid batteries
       through the Danish national healthcare providers.262 However, the Commission finds that by
       creating a single supplier of branded hearing aid batteries in the mass retail channel in
       Denmark, the Transaction would eliminate the only competitor to Energizer's dominant
       position in this channel on the Danish market.
5.7.9. Finland
(445) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
       with the internal market with respect to the wholesale supply of branded hearing aid batteries
       in the mass retail channel in Finland.
(446) First, the Parties are currently the number one (Spectrum – [50-60]%) and number two
       (Energizer – [40-50]%) wholesale suppliers of hearing aid batteries to the mass retail channel
       in Finland, with no other suppliers present on the market. Post-Transaction, the merged entity
       would be the only supplier of branded hearing aid batteries in the mass retail channel in
       Finland with a combined market share of 100%.
261 Form CO, paragraph 1464.
262 Form CO, paragraph 1465.
                                                      75
 ---pagebreak--- (447) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(448) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(449) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(450) Fifth, by creating a single supplier of branded hearing aid batteries in the mass retail channel
        in Finland, the Transaction would eliminate Spectrum's only competitor in this channel on the
        Finnish market.
(451) Sixth, as one Finnish customer observed, "[u]sers of hearing aid batteries are buying it
        mostly from supermarkets in Finland".263 This Transaction would therefore significantly
        affect not only the competitive dynamics on the Finnish wholesale supply market, but also
        consumer choice in the mass retail channel.
5.7.10. Hungary
(452) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Hungary.
(453) First, the Parties are currently the number one (Energizer – [50-60]%) and number two
        (Spectrum – [40-50]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Hungary, with no other suppliers present on the market. Post-Transaction, the merged
        entity would be the only supplier of branded hearing aid batteries in the mass retail channel in
        Hungary with a combined market share of 100%.
(454) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(455) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of hearing aid batteries in the mass retail channel.
(456) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(457) Fifth, the Notifying Party argues that the Transaction will not have a significant impact on the
        segment for the supply of hearing aid batteries to the mass retail channel in Hungary despite
        the Parties' high combined market shares, as there is virtually no overlap in the sales of
        hearing aid batteries in Hungary. Energizer only carried out sales worth EUR [Sales
263 Replies to Q1 – Questionnaire to Customers, question 16.1.
                                                             76
 ---pagebreak---          information] in 2017 and of approximately EUR [Sales information] in 2016, accounting for
         only [5-10]% of the overall hearing aid battery sales.264 However, the Commission finds that
         by creating a single supplier of branded hearing aid batteries in the mass retail channel in
         Hungary, the Transaction would eliminate Energizer's only competitor in this channel on the
         Hungarian market.
5.7.11. Ireland
(458) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to the wholesale supply of branded hearing aid batteries
         in the mass retail channel in Ireland.
(459) First, the Parties are currently the number one (Energizer – [60-70]%) and number two
         (Spectrum – [30-40]%) wholesale suppliers of hearing aid batteries to the mass retail channel
         in Ireland, with no other suppliers present on the market. Post-Transaction, the merged entity
         would be the only supplier of branded hearing aid batteries in the mass retail channel in
         Ireland with a combined market share of 100%.
(460) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
         only a limited constraint on the Parties in the markets for the wholesale supply of branded
         hearing aid batteries in the mass retail channel.
(461) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
         the Parties' market position in the short- to medium term in the markets for the wholesale
         supply of branded hearing aid batteries in the mass retail channel.
(462) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
         limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
         supply of branded hearing aid batteries in the mass retail channel.
(463) Fifth, the Commission finds that by creating a single supplier of branded hearing aid batteries
         in the mass retail channel in Ireland, the Transaction would eliminate Energizer's only
         competitor in this channel on the Irish market.
5.7.12. Luxembourg
(464) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to the wholesale supply of branded hearing aid batteries
         in the mass retail channel in Luxembourg.
(465) First, the Parties are currently the number one (Energizer – [50-60]%) and number two
         (Spectrum – [40-50]%) wholesale suppliers of hearing aid batteries to the mass retail channel
         in Luxembourg, with no other suppliers present on the market. Post-Transaction, the merged
         entity would be the only supplier of branded hearing aid batteries in the mass retail channel in
         Luxembourg with a combined market share of 100%.
264 Form CO, paragraph 1464. The Commission notes, however, that according to the market share data provided by the
    Parties (Parties' reply to RFI 5, Annex 14.1), Energizer's sales accounted for [50-60]% of the sales in this channel
    and that Spectrum's sales in this channel in 2017 amounted to EUR [Number] and accounted for [40-50]% of sales in
    this channel in 2017.
                                                               77
 ---pagebreak--- (466) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
         only a limited constraint on the Parties in the markets for the wholesale supply of branded
         hearing aid batteries in the mass retail channel.
(467) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
         the Parties' market position in the short- to medium term in the markets for the wholesale
         supply of branded hearing aid batteries in the mass retail channel.
(468) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
         limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
         supply of branded hearing aid batteries in the mass retail channel.
(469) Fifth, the Notifying Party argues that the Transaction will not have a significant impact on the
         segment for the supply of hearing aid batteries to the mass retail channel in Luxembourg
         despite the Parties' high combined market shares, as there is virtually no overlap in the sales
         of hearing aid batteries in Luxembourg. Energizer only made sales worth EUR [Sales
         information] in 2017 (and of approximately EUR [Sales information] in 2015 and in 2016),
         accounting for only [0-5]% of the overall hearing aid market.265 However, the Commission
         finds that by creating a single supplier of branded hearing aid batteries in the mass retail
         channel in Luxembourg, the Transaction would eliminate Energizer's only competitor in this
         channel on the Luxembourg market.
5.7.13. Norway
(470) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to the wholesale supply of branded hearing aid batteries
         in the mass retail channel in Norway.
(471) First, the Parties are currently the number one (Spectrum – [50-60]%) and number two
         (Energizer – [40-50]%) wholesale suppliers of hearing aid batteries to the mass retail channel
         in Norway, with no other suppliers present on the market. Post-Transaction, the merged entity
         would be the only supplier of branded hearing aid batteries in the mass retail channel in
         Norway with a combined market share of 100%.
(472) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
         only a limited constraint on the Parties in the markets for the wholesale supply of branded
         hearing aid batteries in the mass retail channel.
(473) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
         the Parties' market position in the short- to medium term in the markets for the wholesale
         supply of branded hearing aid batteries in the mass retail channel.
(474) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
         limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
         supply of branded hearing aid batteries in the mass retail channel.
265 Form CO, paragraph 1470. The Commission notes, however, that according to the market share data provided by the
    Parties (Parties' reply to RFI 5, Annex 14.1), Energizer's sales accounted for [50-60]% of the sales in this channel
    and that Spectrum's sales in this channel in 2017 amounted to EUR [Number] and accounted for [40-50]% of sales in
    this channel in 2017.
                                                               78
 ---pagebreak--- (475) Fifth, the Commission finds that by creating a single supplier of branded hearing aid batteries
        in the mass retail channel in Norway, the Transaction would eliminate Energizer's only
        competitor in this channel on the Norwegian market.
5.7.14. Slovakia
(476) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Slovakia.
(477) First, the Parties are currently the number one (Spectrum – [60-70]%) and number two
        (Energizer – [30-40]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Slovakia, with no other suppliers present on the market. Post-Transaction, the merged
        entity would be the only supplier of branded hearing aid batteries in the mass retail channel in
        Slovakia with a combined market share of 100%.
(478) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(479) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(480) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(481) Fifth, the Commission finds that by creating a single supplier of branded hearing aid batteries
        in the mass retail channel in Slovakia, the Transaction would eliminate Energizer's only
        competitor in this channel on the Slovakian market.
5.7.15. Slovenia
(482) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Slovenia.
(483) First, the Parties are currently the number one (Spectrum – [90-100]%) and number two
        (Energizer – [5-10]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Slovenia, with no other suppliers present on the market. Post-Transaction, the merged
        entity would effectively be the only supplier of branded hearing aid batteries in the mass
        retail channel in Slovenia with a combined market share of [90-100]%.
(484) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(485) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
                                                       79
 ---pagebreak--- (486) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(487) Fifth, the Commission finds that by creating a single supplier of branded hearing aid batteries
        in the mass retail channel in Slovenia, the Transaction would eliminate the only potential
        challenger to Spectrum's dominant position in this channel on the Slovenian market.
5.7.16. Poland
(488) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Poland.
(489) First, the Parties are currently the number one (Spectrum – [50-60]%) and number two
        (Energizer – [30-40]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Poland, with [Market position] Duracell ([0-5]%) as the third supplier present on the
        market. Post-Transaction, the merged entity would be the dominant supplier of branded
        hearing aid batteries in the mass retail channel in Poland with a combined market share of
        [90-100]%.
(490) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(491) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(492) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(493) Fifth, the Commission finds that by creating a single supplier from the current number one
        and number two suppliers of branded hearing aid batteries in the mass retail channel in
        Poland, the Transaction would eliminate Spectrum's closest and only significant competitor in
        this channel on the Polish market.
5.7.17. Netherlands
(494) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in the Netherlands.
(495) First, the Parties are currently the number one (Spectrum – [90-100]%) and number three
        (Energizer – [0-5]%) wholesale suppliers of hearing aid batteries to the mass retail channel in
        the Netherlands, with [Market position] Duracell ([5-10]%) and Panasonic ([0-5]%) as
        alternative suppliers present on the market. Post-Transaction, the merged entity would be the
        dominant supplier of branded hearing aid batteries in the mass retail channel in the
        Netherlands with a combined market share of [90-100]%.
                                                       80
 ---pagebreak--- (496) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(497) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(498) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(499) Fifth, the Notifying Party argues that the Transaction will not have a significant impact on the
        segment for the supply of hearing aid batteries to the mass retail channel in the Netherlands
        despite the Parties' high combined market shares, as there is virtually no overlap in the sales
        of hearing aid batteries in the mass retail channel. Energizer only made sales worth worth
        EUR [Number] in 2017, accounting for only [0-5]% of hearing aid battery sales to the mass
        retail channel.266 However, the Commission finds that the Transaction would further
        strengthen the dominant position enjoyed by Spectrum on the Dutch market, with Duracell's
        modest presence on this market not being likely to exercise a sufficient competitive constraint
        on the merged entity post-Transaction.
5.7.18. United Kingdom
(500) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in the UK.
(501) First, the Parties are currently the number one (Energizer – [40-50]%) and number two
        (Spectrum – [30-40]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in the UK, with [Market position] Duracell ([20-30]%) as the third supplier present on the
        market. Post-Transaction, the merged entity would be the dominant supplier of branded
        hearing aid batteries in the mass retail channel in the UK with a combined market share of
        [70-80]%.
(502) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(503) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(504) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
266 Form CO, paragraph 1471.
                                                       81
 ---pagebreak--- (505) Fifth, the Commission finds that by creating a single supplier from the current number one
        and number two suppliers of branded hearing aid batteries in the mass retail channel in the
        UK, the Transaction would eliminate Spectrum's closest competitor in this channel on the UK
        market, reducing the number of suppliers from three to two.
5.7.19. Spain
(506) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Spain.
(507) First, the Parties are currently the number one (Spectrum – [50-60]%) and number two
        (Energizer – [20-30]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Spain, with [Market position] Duracell ([10-20]%) as the third supplier present on the
        market. Post-Transaction, the merged entity would be the dominant supplier of branded
        hearing aid batteries in the mass retail channel in Spain with a combined market share of [70-
        80]%.
(508) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(509) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(510) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(511) Fifth, the Notifying Party argues that, despite the Parties' high combined market shares, the
        merged entity will face significant competition from Duracell post-Transaction.267 However,
        the Commission finds that by creating a single supplier from the current number one and
        number two suppliers of branded hearing aid batteries in the mass retail channel in Spain, the
        Transaction would eliminate Spectrum's closest competitor in this channel on the Spanish
        market, reducing the number of suppliers from three to two. Duracell, as the only remaining
        alternative supplier on the market, accounting for only a fifth of the market, is not likely to
        exert sufficient competitive pressure on the merged entity post-Transaction.
5.7.20. Belgium
(512) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Belgium.
(513) First, the Parties are currently the number one (Spectrum – [40-50]%) and number two
        (Energizer – [30-40]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Belgium, with only Duracell ([20-30]%) as the third supplier present on the market. Post-
267 Form CO, paragraph 1473.
                                                       82
 ---pagebreak---         Transaction, the merged entity would be the dominant supplier of branded hearing aid
        batteries in the mass retail channel in Belgium with a combined market share of [70-80]%.
(514) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(515) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(516) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(517) Fifth, the Notifying Party argues that, despite the Parties' high combined market shares, the
        merged entity will face significant competition from Duracell post-Transaction.268 However,
        the Commission finds that by creating a single supplier from the current number one and
        number two suppliers of branded hearing aid batteries in the mass retail channel in Belgium,
        the Transaction would eliminate Spectrum's closest competitor in this channel on the Belgian
        market, reducing the number of suppliers from three to two. Duracell as the only remaining
        alternative supplier on the market, accounting for only a quarter of the market, is not likely to
        exert sufficient competitive pressure on the merged entity post-Transaction.
5.7.21. Italy
(518) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Italy.
(519) First, the Parties are currently the number one (Spectrum – [70-80]%) and number three
        (Energizer – [0-5]%) wholesale suppliers of hearing aid batteries to the mass retail channel in
        Italy, with Duracell ([10-20]%) as number two and the only other supplier present on the
        market. Post-Transaction, the merged entity would be the dominant supplier of branded
        hearing aid batteries in the mass retail channel in Italy with a combined market share of [70-
        80]%.
(520) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(521) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(522) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
268 Form CO, paragraph 1461.
                                                       83
 ---pagebreak--- (523) Fifth, the Notifying Party argues that the Transaction will not have a significant impact on the
        segment for the supply of hearing aid batteries to the mass retail channel in Italy despite the
        Parties' high combined market shares, as there is virtually no overlap in the sales of hearing
        aid batteries in Italy. Energizer only made sales worth Energizer only made sales worth EUR
        [Number] in 2017, accounting for only [0-5]% of hearing aid battery sales to the mass retail
        channel. The Notifying Party further argue that the merged entity will face significant
        competition from Duracell post-Transaction.269 However, the Commission finds that the
        Transaction would further strengthen the dominant position enjoyed by Spectrum on the
        Italian market. Duracell as the only remaining alternative supplier on the market, accounting
        for only [10-20]% of the market, is not likely to exert sufficient competitive pressure on the
        merged entity post-Transaction.
5.7.22. Austria
(524) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Austria.
(525) First, the Parties are currently the number one (Spectrum – [40-50]%) and number three
        (Energizer – [5-10]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Austria, with Sony ([40-50]%) as number two and the only other supplier present on the
        market. Post-Transaction, the merged entity would be the dominant supplier of branded
        hearing aid batteries in the mass retail channel in Austria with a combined market share of
        [50-60]%.
(526) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(527) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(528) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(529) Fifth, the Notifying Party argues that the Transaction will not have a significant impact on the
        segment for the supply of hearing aid batteries to the mass retail channel in Austria despite
        the Parties' high combined market shares, as there is virtually no overlap in the sales of
        hearing aid batteries in Austria. Energizer only made sales worth Energizer only made sales
        worth EUR [Number] in 2017, accounting for only [5-10]% of hearing aid battery sales to the
        mass retail channel.270 However, the Commission finds that the Transaction would further
        strengthen the dominant position enjoyed by Spectrum on the Austrian market, and would
        reduce the number of suppliers from three to two. Sony will remain the only other alternative
        supplier on the market.
269 Form CO, paragraph 1469.
270 Form CO, paragraph 1460.
                                                       84
 ---pagebreak--- 5.7.23. Germany
(530) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Germany.
(531) First, the Parties are currently the number two (Energizer – [20-30]%) and number three
        (Spectrum – [20-30]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Germany. Duracell ([30-40]%) is currently the market leader. Panasonic ([5-10]%) and
        Sony ([5-10]%) are also present on the German market.
(532) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(533) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(534) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(535) Fifth, the Notifying Party argues that, despite the Parties' high combined market shares, the
        merged entity will face significant competition from suppliers such as Duracell, Panasonic
        and Sony post-Transaction.271 However, The Transaction would create a market leader, with
        a combined market share [50-60]%, with the next significant competitor having a sizeably
        lower market share and with no other significant competitors present on the market. These
        other suppliers are therefore not very likely to exercise a sufficient competitive constraint on
        the merged entity post-Transaction.
5.7.24. Sweden
(536) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded hearing aid batteries
        in the mass retail channel in Sweden.
(537) First, the Parties are currently the number two (Spectrum – [30-40]%) and number three
        (Energizer – [10-20]%) wholesale suppliers of hearing aid batteries to the mass retail channel
        in Sweden. Duracell ([30-40]%) is currently the market leader. Sony ([10-20]%) is the only
        other supplier present on the Swedish market.
(538) Second, as discussed at 5.7.2, the Commission considers that private label batteries exercise
        only a limited constraint on the Parties in the markets for the wholesale supply of branded
        hearing aid batteries in the mass retail channel.
(539) Third, as discussed at 5.7.3, the Commission considers that e-commerce is unlikely to affect
        the Parties' market position in the short- to medium term in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
271 Form CO, paragraph 1467.
                                                       85
 ---pagebreak--- (540) Fourth, as discussed at 5.7.4, the Commission considers that customers exercise only a
        limited constraint on the Parties’ ability to increase prices in the markets for the wholesale
        supply of branded hearing aid batteries in the mass retail channel.
(541) Fifth, the Notifying Party argues that, despite the Parties' high combined market shares, the
        merged entity will face significant competition from suppliers such as Duracell and Sony
        post-Transaction.272 However, The Transaction would create a market leader, with a
        combined market share [40-50]%, with the next significant competitor having a sizeably
        lower market share ([30-40]%) and with no other significant competitors present on the
        market (Sony's market share being [10-20]%). These other suppliers are therefore not very
        likely to exercise a sufficient competitive constraint on the merged entity post-Transaction.
5.7.25. France and Romania
(542) With regard to the wholesale supply of branded hearing aid batteries in France and Romania,
        the Commission notes, on the one hand, that:
        (a)      First, the Parties have sizable combined market shares on those markets: [30-40]% in
                 France and [40-50]% in Romania.
        (b)      Second, as shown in Table 4 above, all of those markets are concentrated, with HHI
                 levels post-Transaction of [Above 2000]] in France and [Above 2000] in Romania and
                 HHI delta of [Above 250] and [Above 250], respectively.
        (c)      Third, the Transaction would create the second-largest supplier in each of these
                 countries, thereby also reducing the number of suppliers on these already very
                 concentrated markets. In France, the Transaction would reduce the number of
                 suppliers from four to three, and in Romania, from three to two.
        (d)      Fourth, the market dynamics identified by the Commission at 5.7.1 to 5.7.4 apply
                 equally to the markets for hearing aid batteries in these countries.
        (e)      Fifth, several market participants have raised concerns about potential price increases
                 or decreases in quality or innovation in these markets.273
(543) On the other hand, the Commission also notes that:
        (a)      First, Duracell is a significant alternative supplier of hearing aid batteries in France
                 ([40-50]%) and Panasonic is a significant alternative supplier of hearing aid batteries
                 in Romania ([50-60]%).
        (b)      Second, Panasonic is also present in France as a third supplier with a [0-5]% market
                 share (which is currently just slightly below Energizer's market share in France).
        (c)      Third, a number of market participants have indicated that they do not anticipate any
                 price increase or decreases in quality or innovation in those markets.274
272 Form CO, paragraph 1474.
273 Replies to Q1 – Questionnaire to Customers; Replies to Q2 – Questionnaire to Competitors.
274 Replies to Q1 – Questionnaire to Customers; Replies to Q2 – Questionnaire to Competitors.
                                                             86
 ---pagebreak--- (544) Ultimately, the question of whether serious doubts arise in France and Romania can be left
        open as the commitments discussed in section 6 include an exclusive license for the
        distribution and marketing of Spectrum's Rayovac hearing aid battery in the mass retail
        channel in the EMEA region, and therefore entirely remove the overlap in the markets for
        branded hearing aid batteries in those countries for a period of [Information on scope of the
        commitment].
5.7.26. Conclusion on the assessment of potential horizontal non-coordinated effects on the
          national markets for the wholesale supply of branded hearing aid batteries to the mass
          retail channel
(545) On the basis of the above, the Commission concludes that:
        (a)      the Transaction raises serious doubts as regards its compatibility with the internal
                 market due to horizontal non-coordinated effects in the markets for the wholesale
                 supply of branded hearing aid batteries in Austria, Belgium, Bulgaria, Czechia,
                 Denmark, Finland, Germany, Hungary, Ireland, Italy, Luxembourg, Netherlands,
                 Norway, Poland, Slovakia, Slovenia, Spain, Sweden and the UK.
        (b)      the question of whether serious doubts arise in France and Romania can be left open
                 as the commitments include an exclusive license for the distribution and marketing of
                 Spectrum's Rayovac hearing aid battery in the mass retail channel in the EMEA
                 region, and therefore entirely remove the overlap in the markets for branded hearing
                 aid batteries in those countries for a period of [Information on scope of the
                 commitment].
5.8.    Assessment of potential horizontal non-coordinated effects on the EEA-wide markets
        for the wholesale supply of branded household and specialty batteries to OEMs
5.8.1.1. The Notifying Party's view
(546) The Parties submit that the Transaction is not expected to have a significant impact on
        competition and cannot be conceived to give rise to competition concerns in the markets for
        the supply of household and specialty batteries to the OEM channel.275
(547) First, the Notifying Party states that the combined share of sales of the Parties in the EEA will
        remain modest, or the increment in share brought about by the Transaction will be
        immaterial.276
(548) Second, the Notifying Party submits that they will continue to face significant competition
        within the EEA. 277
(549) Third, the Notifying Party contends that customers are sophisticated purchasers that face no
        significant barriers to switching supplier.278
275 Form Co, paras 129 and 1111
276 Form Co, paras 1113-1115
277 Form Co, paras 1116-1121
278 Form Co, paras 1122-1123
                                                       87
 ---pagebreak--- 5.8.1.2. The Commission's assessment
(550) For the reasons set out below, the Transaction does not raise serious doubts as to its
        compatibility with the internal market with respect to the wholesale supply of household and
        specialty batteries to the OEM channel in the EEA.
(551) First, when segmenting the market for the supply of household and specialty batteries to
        OEM customers within the EEA on the basis of rechargeability, chemistry and shape, and
        allocating to Spectrum sales of specialty batteries under the distribution agreement with
        [Supplier], the Parties’ combined share exceeded [20-30]% in 2017 in four segments, namely
        (i) primary alkaline cylinder batteries; (ii) primary lithium cylinder batteries; (iii) primary
        alkaline coin and (iv) primary lithium coin. However, the Parties' combined market shares are
        either modest or show a limited increment, or both.
        (a)       In the primary alkaline cylinder segment, the Parties’ combined share in 2017 was
                  modest, at [20-30]% (Energizer [5-10]% and Spectrum [10-20]%). The Parties will
                  continue to be constrained by competitors with significant markets shares such as
                  Duracell ([40-50]%) and Panasonic ([10-20]%).
        (b)       In the primary lithium cylinder segment the Parties’ combined share reached [40-
                  50]% in 2017, but the increment in share brought about by the Proposed Transaction
                  is limited, at [0-5]%. The Parties will continue to be constrained by competitors with
                  non-negligible market shares such as Panasonic ([10-20]%) and Gold Peak ([5-10]%).
        (c)       In the primary alkaline coin batteries segment, the Parties’ combined share in 2017
                  was below [20-30]% on either a volume or value bases, with a limited addition of
                  share, at [0-5]%. The Parties will continue to be constrained by competitors with
                  significant markets shares such as Duracell ([20-30]%), Panasonic ([10-20]%) and
                  Varta Microbattery ([10-20]%).
        (d)       In the primary lithium coin segment, the Parties’ combined share in 2017 was slightly
                  above [20-30]%, with virtually no overlap, at less than [0-5]%. The Parties will
                  continue to be constrained by competitors with significant markets shares such as
                  Duracell ([20-30]%), Panasonic ([10-20]%) and Varta Microbattery ([10-20]%).
(552) Second, the Parties supply very small amounts of batteries that are specifically targeted at
        OEM customers, [Information on supply strategy], which means that their OEM customers
        are also treated in the same manner as non-OEM customers so that they are not positioned as
        specialist suppliers to the OEM channel, unlike competitors such as Panasonic and
        Duracell.279
(553) Third, customers in the OEM sales channel are large, often multinational players with the
        ability to switch easily between suppliers, which is much more the case than in the retail sales
        channel.280
279 Form CO, Parties' reply to RFI 3
280 Parties' reply to RFI 3
                                                         88
 ---pagebreak--- (554) Fourth, the majority of respondents to the Commission's market investigation who expressed
        a view did not expect the Transaction to have a negative impact on the sale of consumer
        batteries to OEMs.281
(555) A competitor commented: "The Transaction does not have an impact on the OEM business
        market."282
5.8.1.3. Conclusion
(556) On the basis of the above, the Commission concludes that the Transaction does not raise
        serious doubts as to its compatibility with the internal market as regards its impact on
        competition in the markets for the supply of primary alkaline cylinder batteries, primary
        lithium cylinder batteries, primary alkaline coin batteries or primary lithium coin batteries to
        the OEM channel in the EEA.
5.9.    Wholesale supply of branded portable battery chargers – overview of market dynamics
        across different national markets in the EEA
5.9.1.1. The Notifying Party's view
(557) The Notifying Party submits that the Transaction will not impede effective competition as
        regards the sale of portable battery chargers to retailers and wholesalers in the EEA.
(558) First, the Notifying Party states that the combined share of sales of the Parties, which they
        claim should at least be considered to be EEA-wide in scope and to include private label,
        cannot, at [30-40]%, be considered to be able to impede competition in any material
        respect.283
(559) Second, the Notifying Party submits that the merged entity will continue to face fierce
        competition from other strong suppliers post-Transaction.284
(560) Third, the Notifying Party contends that the impact of private label on portable battery
        chargers is similar to that of private label on other products, including consumer batteries.285
(561) Fourth, they submit that the effect of e-commerce on portable battery chargers is comparable
        to that experienced with respect to consumer batteries.286
(562) Fifth, they claim that Energizer will face the same strong countervailing buyer power post-
        transaction with respect to portable battery chargers as in relation to consumer batteries.287
281 Replies to Q2 – Questionnaire to Competitors, question 39
282 Replies to Q2 – Questionnaire to Competitors, question 39.1
283 Form CO, par. 1595
284 Form CO, par. 1596-1599
285 Form CO, par. 1600
286 Form CO, par. 1601-1602
287 Form CO, par. 1602
                                                              89
 ---pagebreak--- 5.9.1.2. The Commission's assessment
(563) The Commission considers that, as the Parties suggest, similar market dynamics apply to
        branded portable battery chargers compared to branded consumer batteries. This is for the
        following reasons.
(564) First, most suppliers of branded consumer batteries also sell branded portable battery
        chargers: a clear majority of competitors responding to the market investigation replied that
        they also sold branded portable battery chargers in the EEA.288
(565) Second, the competitive landscape in branded portable battery chargers in the EEA is very
        similar to that in branded household batteries. At the EEA level, the same top five players,
        namely Duracell, Energizer, Spectrum, Panasonic and Gold Peak, have very similar positions
        (around [30-40]%, [20-30]%, [20-30]%, [10-20]% and [5-10]% respectively).
(566) Third, most customers of branded consumer batteries also sell branded portable battery
        chargers: a clear majority of customers responding to the market investigation replied that
        they also purchased branded battery chargers in the EEA.289
(567) Fourth, portable battery chargers are products that are closely related to consumer batteries.
        In retail stores they are most commonly displayed alongside consumer batteries and are often
        sold in packs together with a set of rechargeable batteries. 290
(568) The Commission considers that there are a number of common characteristics of the markets
        for branded portable battery chargers across the EEA, which will be discussed in paragraphs
        (569) to (574).
(569) First, the Commission considers that the Parties are important competitors in the already
        concentrated market for branded portable battery chargers.
(570) Post-Transaction, the Parties would be the clear market leader in branded portable battery
        chargers with a combined share at the EEA level of [40-50]% (Energizer [20-30]%, Spectrum
        [10-20]%), followed by Duracell ([20-30]%), Panasonic ([10-20]%), and Gold Peak ([5-
        10]%).291
(571) The aggregate national markets for branded portable battery chargers at the EEA level are
        highly concentrated with HHI levels post-Transaction of [Above 2000] and a delta of [Above
        250].
(572) Second, considering that similar market dynamics apply to branded portable battery chargers
        compared to branded consumer batteries, as discussed in paragraphs (563) to (567), the
        Commission is of the view that private label battery chargers exercise only a limited
        constraint on the Parties in the markets for the wholesale supply of branded chargers, as
        discussed with regard to consumer batteries in Section 5.3.2.
288 Replies to Q2 – Questionnaire to Competitors, question 4
289 Replies to Q1 – Questionnaire to Customers, question 5
290 Form CO, par. 1573
291 Form CO, Annex 7.III.1.
                                                             90
 ---pagebreak--- (573) Third, considering that similar market dynamics apply to branded portable battery chargers
      compared to branded consumer batteries, as discussed in paragraphs (563) to (567), the
      Commission is of the view that e-commerce is unlikely to affect the Parties' market position
      in the short- to medium term in the markets for the wholesale supply of branded chargers, as
      discussed with regard to consumer batteries in Section 5.3.3.
(574) Fourth, considering that similar market dynamics apply to branded portable battery chargers
      compared to branded consumer batteries, as discussed in paragraphs (563) to (567), the
      Commission is of the view that customers exercise only a limited constraint on the Parties’
      ability to increase prices in the markets for the wholesale supply of branded chargers, as
      discussed with regard to consumer batteries in Section 5.3.4.
5.10. Assessment of potential horizontal non-coordinated effects on the national markets for
      the wholesale supply of branded portable battery chargers
(575) Energizer and Spectrum are currently the second and third largest players in the EEA in
      branded portable battery chargers (with market shares of [20-30]% and [10-20]%
      respectively), with Duracell ([20-30]%) as the number one player. The merged entity would
      become the clear market leader in a number of EEA countries, with Duracell and other
      players as considerably smaller players.
(576) As shown in Table 5 below, the combined market shares of the merged entity would exceed
      [50-60]% in three countries, namely Germany ([70-80]%), France ([60-70]%), Hungary ([50-
      60]%), and would exceed [40-50]% in an additional three countries, namely Poland ([40-
      50]%), the Netherlands ([40-50]%) and the UK ([40-50]%). The market shares thus indicate
      that the Transaction could create or strengthen a dominant position in several EEA countries.
(577) There are further horizontal overlaps that lead to (i) combined market shares above 25% and
      (ii) HHI levels post-Transaction of above 2,000 and an HHI delta of more than 150 in 10
      EEA countries, and horizontal overlaps with combined market shares below 25% in 12 other
      EEA countries.
                                                    91
 ---pagebreak--- Table 5: Market shares in branded portable battery chargers, 2017 by value292
   Country                                                                                     Fourth       HHI
                               Target                                              Third
                 Energizer               Combined      Duracell    Panasonic                  supplier /    Post-    Delta HHI
                             Business                                           supplier
                                                                                                Other      Merger
                                          [30-40]%     [30-40]%                                            [Above      [Above
    Austria        [5-10]%   [20-30]%                                [5-10]%    [10-20]%      [0-5]%**
                                                                                                            2000]       250]
                                          [20-30]%     [40-50]%                 [10-20]%     [10-20]%*     Above       [Above
   Belgium         [5-10]%   [10-20]%                                [5-10]%
                                                                                                            2000        250]
                                          [20-30]%     [40-50]%       [0-5]%    [10-20]%                   Above       [Below
   Bulgaria         [0-5]%   [10-20]%                                                         [0-5]%**
                                                                                                            2000        150]
                    [0-5]%   [20-30]%     [20-30]%     [40-50]%                 [10-20]%    [10-20]% **    Above       [Below
    Croatia                                                           [0-5]%
                                                                                                            2000        150]
                    [0-5]%   [20-30]%                   [5-10]%      [5-10]%    [30-40]%      [0-5]%**     Above       [Below
    Czechia                               [30-40]%
                                                                                                            2000        250]
                    [0-5]%    [5-10]%                                                                      Above       [Below
   Denmark                                [10-20]%     [20-30]%       [0-5]%    [30-40]%    [20-30]%**
                                                                                                            2000        150]
                    [0-5]%     [0-5]%                  [20-30]%     [20-30]%    [30-40]%                   Above       [Below
    Estonia                                [5-10]%                                           [5-10]% **
                                                                                                            2000        150]
                             [20-30]%     [30-40]%     [20-30]%     [20-30]%                               Above       [Above
    Finland        [5-10]%                                                       [5-10]%      [0-5]% **
                                                                                                            2000        250]
                             [20-30]%     [60-70]%                    [0-5]%      [0-5]%     [10-20]%*     Above       [Above
     France       [40-50]%                             [10-20]%
                                                                                                            2000        250]
                                                                      [0-5]%      [0-5]%      [0-5]%**     Above       [Above
   Germany        [10-20]%   [60-70]%     [70-80]%      [5-10]%
                                                                                                            2000        250]
                                                                                              [0-5]%**     Above       [Above
    Greece        [10-20]%   [20-30]%     [30-40]%     [20-30]%     [10-20]%     [5-10]%
                                                                                                            2000        250]
                                                                                              [0-5]%**     Above       [Above
   Hungary         [5-10]%   [40-50]%     [50-60]%      [5-10]%       [0-5]%    [10-20]%
                                                                                                            2000        250]
                    [0-5]%     [0-5]%       [0-5]%     [20-30]%                                            Above       [Below
    Iceland                                                         [10-20]%    [30-40]%     [5-10]%**
                                                                                                            2000        150]
                  [10-20]%   [10-20]%     [20-30]%                    [0-5]%      [0-5]%     [10-20]%*     Above       [Above
      Italy                                            [50-60]%
                                                                                                            2000        250]
                             [10-20]%     [10-20]%     [20-30]%                                            Above       [Below
     Latvia         [0-5]%                                          [20-30]%    [30-40]%      [5-10]%*
                                                                                                            2000        150]
                                                                    [30-40]%    [30-40]%      [5-10]%*     Above       [Below
   Lithuania       [5-10]%     [0-5]%      [5-10]%     [20-30]%
                                                                                                            2000        150]
                  [10-20]%   [10-20]%     [20-30]%     [50-60]%     [10-20]%    [10-20]%      [5-10]%*     Above       [Above
 Luxembourg
                                                                                                            2000        250]
                                                       [50-60]%      [5-10]%     [5-10]%     [10-20]%*     Above       [Below
     Malta        [10-20]%     [0-5]%     [20-30]%
                                                                                                            2000        250]
                                                                                              [5-10]%*     Above       [Above
  Netherlands       [0-5]%   [30-40]%     [40-50]%     [30-40]%       [0-5]%    [10-20]%
                                                                                                            2000        250]
                                                                                              [5-10]%*     Above       [Below
    Norway         [5-10]%     [0-5]%      [5-10]%     [40-50]%     [20-30]%    [10-20]%
                                                                                                            2000        150]
                                                                                                           Above       [Above
     Poland       [10-20]%   [30-40]%     [40-50]%      [5-10]%     [10-20]%    [20-30]%      [0-5]%**
                                                                                                            2000        250]
                                          [20-30]%     [30-40]%                   [0-5]%      [0-5]%**     Above       [Below
    Portugal      [20-30]%    [5-10]%                               [20-30]%
                                                                                                            2000        250]
                                          [20-30]%     [30-40]%     [10-20]%    [10-20]%    [10-20]%**     Above       [Below
   Romania          [0-5]%   [20-30]%
                                                                                                            2000        250]
                                                       [10-20]%      [5-10]%    [30-40]%                   Above       [Above
   Slovakia       [20-30]%   [10-20]%     [30-40]%                                            [5-10]%*
                                                                                                            2000        250]
                                                       [10-20]%      [5-10]%    [30-40]%                   Above       [Below
   Slovenia         [0-5]%   [20-30]%     [20-30]%                                           [10-20]%*
                                                                                                            2000        150]
292   Rounding errors may occur. Duracell is present in all countries. Panasonic is present in almost all countries. "Third
      supplier" and "fourth supplier" stands for the largest and second-largest suppliers other than the Parties, Duracell and
      Panasonic. The identity of the third and fourth suppliers varies by country. Where the Notifying Party has not
      provided the identity of the fourth supplier, but has attributed a market share to "other" suppliers, this figure is
      provided in the table, followed by an asterisk (*). Where there is a market share attributed to a fourth supplier, but
      there is also a market share attributed to "other" suppliers by the Notifying Party, the figure provided in the table is
      the market share attributed to the fourth supplier, followed by two asterisks (**).There are no horizontal overlaps in
      EEA countries that are not listed in the table.
                                                                   92
 ---pagebreak---                                                                              Fourth      HHI
                          Target                                   Third
  Country     Energizer           Combined    Duracell Panasonic           supplier /    Post-  Delta HHI
                         Business                                supplier
                                                                              Other     Merger
                                                                                        Above     [Below
    Spain      [10-20]%  [5-10]%  [20-30]%     [5-10]%  [50-60]%  [5-10]%   [0-5]%**
                                                                                         2000      150]
               [10-20]% [10-20]%  [20-30]%                                              Above     [Above
   Sweden                                     [10-20]%  [20-30]% [30-40]%  [5-10]%**
                                                                                         2000      250]
                                  [40-50]%    [40-50]%            [5-10]%   [5-10]%*    Above     [Below
     UK        [30-40]%   [0-5]%                         [5-10]%
                                                                                         2000      250]
                                                                                        Above     [Above
    EEA        [20-30]% [10-20]%  [40-50]%    [20-30]%  [10-20]%  [5-10]%    [0-5]%
                                                                                         2000      250]
         Source: Form CO, Annex 7.III.1
5.10.1. France
(578) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to the wholesale supply of branded portable battery
         chargers in France.
(579) First, post-Transaction, the Parties would be the clear market leader in the market for the
         wholesale supply of branded portable battery chargers in France with a combined share of
         [60-70]% (Energizer [40-50]%, Spectrum [20-30]%), followed by Duracell ([10-20]%) and
         Panasonic ([0-5]%).
(580) Second, the market for the wholesale supply of branded portable battery chargers in France is
         highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
         [Above 250].
(581) Third, private label battery chargers exercise only a limited constraint on the Parties, as
         discussed in Section 5.9.1.2.
(582) Fourth, e-commerce is unlikely to affect the Parties’ market position in the short- to medium
         term, as discussed in Section 5.9.1.2.
(583) Fifth, customers exercise only a limited constraint on the Parties' ability to increase prices, as
         discussed in Section 5.9.1.2.
5.10.2. Germany
(584) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to the wholesale supply of branded portable battery
         chargers in Germany.
(585) First, post-Transaction, the Parties would be the clear market leader in the market for the
         wholesale supply of branded portable battery chargers in Germany with a combined share of
         [70-80]% (Energizer [10-20]%, Spectrum [60-70]%), followed by Duracell ([5-10]%) and
         Panasonic ([0-5]%).
(586) Second, the market for the wholesale supply of branded portable battery chargers in Germany
         is highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
         [Above 250].
                                                       93
 ---pagebreak--- (587) Third, private label battery chargers only exercise a limited constraint on the Parties, as
        discussed in Section 5.9.1.2.
(588) Fourth, e-commerce is unlikely to affect the Parties’ market position in the short- to medium
        term, as discussed in Section 5.9.1.2.
(589) Fifth, customers only exercise a limited constraint on the Parties' ability to increase prices, as
        discussed in Section 5.9.1.2.
5.10.3. Hungary
(590) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded portable battery
        chargers in Hungary.
(591) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded portable battery chargers in Hungary with a combined share of
        [50-60]% (Energizer [5-10]%, Spectrum [40-50]%), followed by Gold Peak ([10-20]%) and
        Duracell ([5-10]%).
(592) Second, the market for the wholesale supply of branded portable battery chargers in Hungary
        is highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
        [Above 250].
(593) Third, private label battery chargers only exercise a limited constraint on the Parties, as
        discussed in Section 5.9.1.2.
(594) Fourth, e-commerce is unlikely to affect the Parties’ market position in the short- to medium
        term, as discussed in Section 5.9.1.2.
(595) Fifth, customers only exercise a limited constraint on the Parties' ability to increase prices, as
        discussed in Section 5.9.1.2.
5.10.4. Netherlands
(596) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded portable battery
        chargers in the Netherlands.
(597) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded portable battery chargers in the Netherlands with a combined
        share of [40-50]% (Energizer [0-5]%, Spectrum [30-40]%), followed by Duracell ([30-40]%)
        and Gold Peak ([10-20]%).
(598) Second, the market for the wholesale supply of branded portable battery chargers in the
        Netherlands is highly concentrated with an HHI level post-Transaction of [Above 2000] and a
        delta of [Above 250].
(599) Third, private label battery chargers only exercise a limited constraint on the Parties, as
        discussed in Section 5.9.1.2.
                                                    94
 ---pagebreak--- (600) Fourth, e-commerce is unlikely to affect the Parties’ market position in the short- to medium
        term, as discussed in Section 5.9.1.2.
(601) Fifth, customers only exercise a limited constraint on the Parties' ability to increase prices, as
        discussed in Section 5.9.1.2.
5.10.5. Poland
(602) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded portable battery
        chargers in Poland.
(603) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded portable battery chargers in Poland with a combined share of
        [40-50]% (Energizer [10-20]%, Spectrum [30-40]%), followed by Gold Peak ([20-30]%) and
        Panasonic ([10-20]%).
(604) Second, the market for the wholesale supply of branded portable battery chargers in Poland is
        highly concentrated with an HHI level post-Transaction of [Above 2000] and a delta of
        [Above 250].
(605) Third, private label battery chargers only exercise a limited constraint on the Parties, as
        discussed in Section 5.9.1.2.
(606) Fourth, e-commerce is unlikely to affect the Parties’ market position in the short- to medium
        term, as discussed in Section 5.9.1.2.
(607) Fifth, customers only exercise a limited constraint on the Parties' ability to increase prices, as
        discussed in Section 5.9.1.2.
5.10.6. United Kingdom
(608) For the reasons set out below, the Transaction raises serious doubts as to its compatibility
        with the internal market with respect to the wholesale supply of branded portable battery
        chargers in the United Kingdom.
(609) First, post-Transaction, the Parties would be the clear market leader in the market for the
        wholesale supply of branded portable battery chargers in the United Kingdom with a
        combined share of [40-50]% (Energizer [30-40]%, Spectrum [0-5]%), followed by Duracell
        ([40-50]%) and Panasonic ([5-10]%).
(610) Second, the market for the wholesale supply of branded portable battery chargers in the
        United Kingdom is highly concentrated with an HHI level post-Transaction of [Above 2000]
        and a delta of [Below 250].
(611) Third, private label battery chargers exercise only a limited constraint on the Parties, as
        discussed in Section 5.9.1.2.
(612) Fourth, e-commerce is unlikely to affect the Parties’ market position in the short- to medium
        term, as discussed in Section 5.9.1.2.
                                                    95
 ---pagebreak--- (613) Fifth, customers exercise only a limited constraint on the Parties' ability to increase prices, as
        discussed in Section 5.9.1.2.
5.10.7. Other affected markets
(614) With regard to the wholesale supply of branded portable battery chargers in Austria, Belgium,
        Bulgaria, Croatia, Czechia, Finland, Greece, Italy, Luxembourg, Malta, Portugal, Romania,
        Slovenia, Slovakia and Sweden, the Commission notes, on the one hand, that:
        (a)    First, the Parties have sizeable combined market shares on those markets: [30-40]% in
               Austria, [20-30]% in Belgium, [20-30]% in Bulgaria, [20-30]% in Croatia, [30-40]%
               in Czechia, [30-40]% in Finland, [30-40]% in Greece, [20-30]% in Italy, [20-30]% in
               Luxembourg, [20-30]% in Malta, [20-30]% in Portugal, [20-30]% in Romania, [20-
               30]% in Slovenia, [30-40]% in Slovakia and [20-30]% in Sweden.
        (b)    Second, as shown in Table 1 above, all of those markets are concentrated, with HHI
               levels post-Transaction of [Above 2000] and HHI delta of between [Below 250] and
               [Above 250] (with the exception of Croatia and Slovenia, where the delta is [Below
               150] respectively).
        (c)    Third, the Transaction would create the largest (in the case of Finland, Greece and
               Slovenia) or the second largest (in the case of Austria, Belgium, Bulgaria, Croatia,
               Czechia, Italy, Luxembourg, Malta, Portugal, Romania, Slovakia and Sweden)
               supplier, thereby also reducing the number of suppliers on these already concentrated
               markets.
        (d)    Fourth, the market dynamics identified by the Commission in Section 5.9.1.2, apply
               equally to the markets for branded portable battery chargers in these countries.
On the other hand, the Commission also notes that:
        (a)    First, there are significant alternative suppliers of branded portable battery chargers on
               those markets. Duracell is, and will post-Transaction remain, the market leader in
               Austria ([30-40]%), Belgium ([40-50]%), Bulgaria ([40-50]%), Croatia ([40-50]%),
               Italy ([50-60]%), Luxembourg ([50-60]%), Malta ([50-60]%), Portugal ([30-40]%),
               Romania ([30-40]%), and Gold Peak is, and will post-Transaction remain, the market
               leader in Czechia ([30-40]%), Slovakia ([30-40]%), Slovenia ([30-40]%) and Sweden
               ([30-40]%). Duracell will also remain a close second competitor to the merged entity
               in Finland ([20-30]%), Greece ([20-30]%), Slovenia ([10-20]%).
        (b)    Second, in addition to the above-mentioned closest competitors to the merged entity,
               there are several other alternative suppliers of branded portable battery chargers active
               on those markets, including suppliers such as Panasonic, Philips, Ansmann, Cegasa
               and Toshiba.
(615) Ultimately, the question of whether serious doubts arise in Austria, Belgium, Bulgaria,
        Croatia, Czechia, Finland, Greece, Italy, Luxembourg, Malta, Portugal, Romania, Slovakia,
        Slovenia and Sweden can be left open as the commitments discussed in Chapter 7 include all
        of the activities of Spectrum's Varta business in the EMEA region and therefore entirely
        remove the overlap in the markets for branded portable battery chargers in those countries.
                                                        96
 ---pagebreak--- 5.10.8. Other horizontal overlaps
(616) With regard to the wholesale supply of branded portable battery chargers in, Denmark,
        Estonia, Iceland, Latvia, Lithuania, Norway and Spain, the Commission notes that the
        horizontal overlaps between the Parties in these countries do not lead to combined shares
        above [20-30]%. Therefore, in these markets, the Transaction does not raise serious doubts as
        regards its compatibility with the internal market.
5.10.9. Conclusion on the assessment of potential horizontal non-coordinated effects on the
          national markets for the wholesale supply of branded portable battery chargers
(617) On the basis of the above, the Commission concludes that:
        (a)       the Transaction raises serious doubts as to its compatibility with the internal market as
                  regards its impact on competition for branded portable battery chargers in France,
                  Germany, Hungary, Netherlands, Poland and the United Kingdom, due to horizontal
                  non-coordinated effects.
        (b)       the question of whether serious doubts arise in Austria, Belgium, Bulgaria, Croatia,
                  Czechia, Finland, Greece, Italy, Luxembourg, Malta, Portugal, Romania, Slovakia,
                  Slovenia and Sweden can be left open as the commitments include all of the activities
                  of Spectrum's Varta Business in the EMEA region and therefore entirely remove the
                  overlap in the markets for the wholesale supply of branded portable battery chargers
                  in those countries.
        (c)       the Transaction does not raise serious doubts as regards its compatibility with the
                  internal market due to horizontal non-coordinated effects in the markets for the
                  wholesale supply of branded portable battery chargers in Denmark, Estonia, Iceland,
                  Latvia, Lithuania, Norway and Spain.
5.11. Assessment of potential horizontal non-coordinated effects on the markets for the
        wholesale supply of branded portable lighting products
5.11.1.1. The Notifying Party's view
(618) The Notifying Party submits that the Transaction does not give rise to affected markets with
        respect to the wholesale supply of branded portable lighting products in the EEA.
(619) First, Notifying Party submits that the Parties are small market players with modest EEA-
        wide shares, at [5-10]% each and [10-20]% combined.293 However, they were not able to
        provide data more recent than 2014.294
(620) Second, Notifying Party contends that the lights sector is characterised by its numerous
        competitors, including both large corporations and smaller specialized companies. They have
        identified over 200 competitors that are active worldwide.295
293 Form CO, paras 1634 and 1653-1655
294 2014 figures from Spectrum internal document "[Internal document] ", slide 17, submitted as 5(4) document Annex
    14; in reply to RFI 16 the Parties confirmed that this document was the most recent source they could identify
    regarding market share estimates in portable lighting products, according to which the Parties' combined market
    share in this market would be around [10-20]%.
                                                             97
 ---pagebreak--- 5.11.1.2. The Commission's assessment
(621) On the basis of the EEA-wide data provided by the Parties they would continue to be
       constrained by other branded suppliers of portable lighting products, such as Maglite ([0-
       5]%) and Duracell ([0-5]%). However, the Parties were not able to provide any data at
       national level or data more recent than 2014.
5.11.1.3. Conclusion
(622) Considering the absence of national data and data more recent than 2014 the Commission
       does not make any conclusive findings with regard to markets for the wholesale supply of
       branded portable lighting products.. In any event, there is no need for the Commission to
       conclude on whether the Transaction would significantly impede effective competition on
       those markets, as the commitments include all of the activities of Spectrum's Varta Business
       in the EMEA region and therefore entirely remove the overlap in these markets.
6.     PROPOSED REMEDIES
6.1.   Introduction
(623) In order to remove the serious doubts arising from the Transaction described in Section 5, the
       Notifying Party submitted commitments modifying the Transaction on 20 November 2018
       (the "Initial Commitments").
(624) The Commission launched a market test of the Initial Commitments on 22 November 2018,
       seeking responses from competitors, customers and potential purchasers for the business to be
       divested under the Initial Commitments. The Commission informed the Notifying Party of
       the results of the market test on 3 December 2018. Following the feedback received from
       market participants in the market test and the Commission's initial assessment, the Notifying
       Party submitted a revised set of commitments on 5 December 2018 (the "Final
       Commitments").
(625) The Final Commitments are annexed to this decision and form an integral part thereof.
6.2.   Initial Commitments
6.2.1. Description of the Initial Commitments
(626) First, the Initial Commitments consist of the divestment of Spectrum's Varta consumer battery,
       chargers and portable power and lighting business (including the private label and OEM
       business) in EMEA (the "Divestment Business"), which includes:
          (a)  the relevant legal entities and/or the assets of the relevant legal entities currently part
               of the Divestment Business;
295 Form CO, para 1630
                                                       98
 ---pagebreak---         (b)   all intangible assets (including the Varta trademarks and other intellectual property
              rights) and know-how necessary for use by the Divestment Business. Energizer would
              retain the exclusive right to use the Varta brand outside of the EMEA region;
        (c)   all R&D equipment, materials, personnel and projects. The Divestment Business
              would also be granted temporary access to shared R&D assets and personnel;
        (d)   legal title and all real estate rights related to the manufacturing facility at Dischingen,
              Germany;
        (e)   all facilities used by the Divestment Business, [Information on facilities];
        (f)   all dedicated Spectrum personnel;
        (g)   key personnel, which includes central management, regional managers [Information
              on key personnel];
        (h)   all licences, permits and authorisations issued by any governmental organisation for
              the benefit of the Divestment Business;
        (i)   all contracts, leases, commitments and customer orders of the Divestment Business;
        (j)   all customer, credit and other records of the Divestment Business; and
        (k)   the benefit, for a transitional period of [Time period] after the transfer of the legal title
              to the Divestment Business to the purchaser, and on terms and conditions equivalent to
              those at present afforded to the Divestment Business, of all current arrangements under
              which Spectrum or its affiliated undertakings supply products or services to the
              Divestment Business.
(627) Second, with regard to the hearing aid batteries business, the Initial Commitments include the
      commitment by Energizer to enter, upon the request of the purchaser, for a period of [Time
      period] into an exclusive supply agreement with the Divestment Business for Rayovac-
      branded hearing aid batteries [Cost formula], to be agreed with the Purchaser. The supply
      agreement will include a licence for the sale, advertising and marketing of Rayovac-branded
      hearing aid batteries in the non-audiologist retail channel in EMEA. Moreover, the Notifying
      Party commits to supply annually to the Divestment Business a quantity of up to
      [Percentage]% of the Divestment Business's net sales in 2018. In addition, the Notifying
      Party also commits not to use the Rayovac brand for sales of hearing aid batteries in the non-
      audiologist retail channel in EMEA for an additional period of [Time period] after the
      expiration of the supply agreement ("black-out period").
(628) Third, the Initial Commitments contain related commitments, including those regarding the
      separation of the Divestment Business from the businesses retained, the preservation of the
      viability, marketability and competitiveness of the Divestment Business, including the
      appointment of a monitoring trustee and, if necessary, a divestiture trustee.
(629) The Notifying Party considers that the Initial Commitments would eliminate the entire
      overlap across the EEA in the markets for consumer batteries and battery chargers in which
      the Commission has preliminarily expressed competition concerns and thus remove any
      significant impediment to effective competition. According to the Notifying Party, the
      Divestment Business is largely an autonomous business within Spectrum. It includes all the
                                                        99
 ---pagebreak---          necessary tangible and intangible assets that enable it to compete effectively on a stand-alone
         basis (with manufacturing and distribution facilities, supply chain organisation, research and
         development (“R&D”) capability, personnel [including sales, distribution, management and
         corporate functions], customer and sourcing contracts and intellectual property rights). The
         Notifying Party submits that, with around EUR [Number] in annual turnover in 2017 and
         approximatively [Number] employees across EMEA, the Divestment Business represents a
         scale competitor in the consumer battery category.296
6.2.2.     Results of the market test
(630) The results of the market test were generally positive and several companies expressed an
         interest in purchasing the Divestment Business.
(631) The vast majority of respondents that expressed a view indicated that (i) the Initial
         Commitments should reproduce Spectrum's position in the EEA market for consumer
         batteries and battery chargers sufficiently so that the identified competition concerns will be
         eliminated,297 (ii) the Initial Commitments were adequate for the Purchaser to become a
         viable competitor in the EEA market for consumer batteries and battery chargers, 298 and (iii)
         the Divestment Business would enable the Purchaser to establish itself as an independent
         competitor.299 Furthermore, the vast majority of customers that expressed a view indicated
         that they would continue to buy consumer batteries from the Divestment Business.300
(632) With respect to the scope of the Divestment Business and, in particular, the fact that the
         Notifying Party would retain the rights to the Varta brand for use outside of the EMEA
         region, the respondents for the Commission's market test replied as follows:
         (a)     The replies of the respondents that provided a view were split as to whether the
                 restriction to the use of the Varta brand outside of the EMEA region would adversely
                 affect the Divestment Business’ ability to compete with other suppliers that can offer
                 branded batteries at the worldwide level.301 As regards the competitiveness of the
                 Divestment Business in the EEA region specifically, however, a large majority of the
                 respondents that provided a view considered that the restriction to the use of the Varta
                 brand outside of the EMEA region would not adversely affect the Divestment
296 Form RM, paragraph 6.
297 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 1; Q5 - questionnaire
    to competitors and potential purchasers on the commitments offered by Energizer, question 1.
298 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, questions 2, 15 and 16; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, questions 2, 17 and
    18.
299 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 3; Q5 - questionnaire
    to competitors and potential purchasers on the commitments offered by Energizer, question 3.
300 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 4. Most of the
    customers who indicated that they would not purchase consumer batteries from the Divestment Business gave
    reasons unrelated to the Divestment Business, indicating as reasons mainly that they were currently not purchasing
    Varta batteries or had recently completed a tender process so that no change in supplier was expected for the next
    years.
301 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 5.3; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 4.3.
                                                              100
 ---pagebreak---                  Business’ ability to compete for the business of EEA customers with other suppliers
                 that can offer branded batteries at the worldwide level.302
         (b)     The clear majority of respondents considered that the restriction to the use of the
                 Varta brand outside of the EMEA region would not limit its ability to grow its
                 business at the worldwide level in the future while a sizable minority considered that
                 this would be the case303 and, within that minority, some respondents considered this
                 to adversely affect the viability and competitiveness of the Divestment Business
                 (while the overall majority did not raise this concern).304
         (c)     A minority of the customers that responded to the market test indicated that they
                 request quotes for consumer batteries which cover countries outside the EMEA
                 region305 and some – albeit few – of those customers that request international quotes
                 indicated that the Divestment Business’ inability to sell Varta's branded batteries at
                 the worldwide level would affect its ability to compete for their business.306
(633) As regards intellectual property (IP) and know-how (other than the restriction of the Varta
         brand discussed in paragraph (632)), while the vast majority of respondents to the market test
         that provided a view considered the IP rights and know-how transferred with the Divestment
         Business to be sufficient to allow it to manufacture consumer batteries and compete
         effectively with the merged entity in the EEA, a small number of respondents did not.307
(634) With regard to hearing aid batteries, the respondents for the Commission's market test replied
         as follows:
         (a)     The majority of respondents that provided an answer indicated that the Initial
                 Commitments would provide the Purchaser with the ability and the incentive to
                 establish itself as an independent competitor in the EEA hearing aid batteries market
                 within a [Time period] timeframe.308 Moreover, the majority of respondents also
                 indicated that the length of the black-out period was sufficient, while a minority of
                 respondent suggested a longer period than [Time period] to avoid consumer
                 confusion.309
         (b)     However, around half of the competitors that provided an answer indicated that it
                 would be either difficult or very difficult for the purchaser of the Divestment Business
                 to enter into a supply contract with a suitable producer of hearing aid batteries after
302 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 5.4; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 4.4.
303 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 6; Q5 - questionnaire
    to competitors and potential purchasers on the commitments offered by Energizer, question 5.
304 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 6.2; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 5.2.
305 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 5.2.
306 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 5.4.
307 Replies to Q5 - questionnaire to competitors and potential purchasers, question 10.
308 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 8; Q5 - questionnaire
    to competitors and potential purchasers on the commitments offered by Energizer, question 7.
309 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 9; Q5 - questionnaire
    to competitors and potential purchasers on the commitments offered by Energizer, question 8.
                                                               101
 ---pagebreak---                  the expiry of the [Time period] supply agreement, pointing to the limited number of
                 producers of hearing aid batteries and therefore of alternative suppliers.310
         (c)     Other points of criticism, brought forward in particular by one competitor (and
                 generally not brought forward by other market participants), concerned mainly (i) the
                 alleged need to replicate Spectrum's position through the commitments, (ii) the fact
                 that the hearing aid supply agreement would only be entered into upon request of the
                 purchaser, (iii) the alleged high costs for the Divestment Business going forward,
                 including for marketing and advertising and for setting up a distribution network, (iv)
                 the unlikelihood of hearing aid customers switching to a new brand since the re-
                 branding period (supply agreement and black-out period) was too short and the
                 Divestment Business would allegedly continue to face competition for Rayovac
                 branded batteries, and (v) the cost formula for the supply agreement ("[Cost
                 formula]") which was to be ultimately agreed with the Purchaser.
(635) As regards R&D capabilities, the majority of competitors and customers that provided a view
         indicated that the proposed carve-out and transfer of R&D assets is sufficient to enable the
         purchaser to innovate so as to compete effectively with the merged entity in the EEA
         markets.311 Some respondents pointed out, however, that since the branded consumer battery
         business is R&D intensive, access to the same R&D capabilities would be key for the
         Divestment Business and questioned the effectiveness of the envisioned temporary sharing of
         R&D capabilities312 as well as the number of R&D personnel included in the Initial
         Commitments.313
(636) With regard to the envisaged transfer of existing supply and distribution agreements, at least
         one respondent noted that the Divestment Business might not be able to obtain the same
         terms as Spectrum, in light of its more limited scale.314
(637) As to personnel, the majority of respondents that expressed a view (among many that did not
         express a view on this specific point) stated that all country managers should be included as
         key personnel of the Divestment Business.315
(638) As regards potential purchasers, the vast majority of respondents that expressed a view
         considered that the Initial Commitments were sufficiently attractive for potential
         purchasers316 with a number of companies contacted in the market test already expressing
         their interest in purchasing the Divestment Business.317 Many respondents also considered it
         necessary for a suitable purchaser to be already active in consumer batteries, in batteries in
310 Q5 - questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 9.
311 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 11; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 11.
312 Ibid.
313 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 11; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, questions 11, 14
    and 15.
314 Q5 - questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 1.
315 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 13; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 13.
316 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 20; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 22.
317 Q5 - questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 24.
                                                              102
 ---pagebreak---         general and/or in consumer goods while a sizable minority considered that no specific
        industry experience was necessary.318
6.2.3.    Commission’s assessment of the Initial Commitments
6.2.3.1. Scope of the Divestment Business and removal of competition concerns
(639) The Initial Commitments include the entire activities of Spectrum in household batteries,
        specialty batteries and battery chargers in the EEA (and even go beyond that by including the
        entire activities of Spectrum in household batteries, specialty batteries and battery chargers in
        the Middle East and Africa, leading to divestments in a total of 103 countries).
(640) The Initial Commitments also include the activities of Spectrum in the sale of hearing aid
        batteries in the non-audiologist channel in the EEA by granting the Purchaser a license for the
        use of the Rayovac brand for [Time period] (followed by a [Time period] black-out period),
        together with a supply agreement for the hearing aid batteries for a [Time period] period (and
        even go beyond that by including the activities of Spectrum in the sale of hearing aid batteries
        in the non-audiologist channel in the Middle East and Africa). The supply agreement and
        brand license will allow the Purchaser to continue the existing Rayovac business in selling
        hearing aid batteries in the non-audiologist channel for a [Time period] period, giving it time
        to re-brand and to establish its own supply source for hearing aid batteries.
(641) The Initial Commitments therefore remove the entire overlap between the Parties’ activities
        in each of the national markets for the wholesale supply of (i) branded household primary
        batteries to the retail channel, (ii) branded household secondary batteries to the retail channel,
        (iii) branded specialty batteries to the retail channel, (iv) branded hearing aid batteries to the
        mass retail channel, and (v) branded battery chargers, in which the Commission has raised
        serious doubts as to the compatibility of the Transaction with the internal market.
(642) Nevertheless, the Commission considers that the Initial Commitments are not sufficiently
        clear with regard to the products covered by the Initial Commitments. In particular, while the
        Form RM and the Schedule to the Initial Commitments referred to the Spectrum Varta battery
        charger business in the EMEA region being divested, there was no reference to battery
        chargers in the text of the Initial Commitments.
6.2.3.2. Viability and competitiveness of the Divestment Business
(643) The Commission considers that, based on the evidence on file and the results of the market
        test, the Initial Commitments are in general suitable to lead to the divestment of a viable and
        competitive business. The Spectrum Varta business has operated as a stand-alone business
        within the Spectrum organisation in many ways, [Comments on Spectrum’s organization].
(644) Furthermore, the Divestment Business is likely to be profitable going forward. Historical
        financial profit and loss information for the Divestment Business indicates net sales of close
        to EUR [Number], EUR [Number] gross profits ([Percentage]% of net sales) and EUR
318 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 18; Q5 -
    questionnaire to competitors and potential purchasers on the commitments offered by Energizer, question 20.
                                                              103
 ---pagebreak---          [Number] million EBITDA ([Percentage]% of net sales) in 2017 and similar performance in
         2015 and 2016.319
(645) As regards the points raised by respondents to the market test, summarized in paragraphs
         (630) to (638), the Commission will assess the most important of those in paragraphs (646) to
         (671).
Limitation of the use of the Varta brand outside of EMEA
(646) As regards the limitation of the use of the Varta brand outside of EMEA, the Commission
         finds that, contrary to feedback received from some market participants, the Divestment
         Business’ viability and competitiveness will not be negatively affected by the limitation of
         the use of the Varta brand outside of EMEA. The Commission considers that the divestment
         of the Varta brand in EMEA to the Divestment Business sufficiently ensures that the
         Divestment Business would be a viable competitor, capable of replicating Spectrum's current
         competitive position in the EEA markets where the Transaction raised serious doubts as to its
         compatibility with the internal market. In particular, the limitation on the use of the Varta
         brand outside the EMEA region is unlikely to affect the sales of the Divestment Business in
         any material way and would also not affect in any material way the capacity utilisation of the
         production facility in Germany, for the following reasons.
(647) First, almost all sales of the Divestment Business are currently achieved within the EMEA
         region which represents [Percentage]% of the Divestment Business’ current business.320
(648) Second, only a minority of the Divestment Business' customers currently acquire consumer
         batteries from Spectrum both within the EEA and outside the EEA ([Limited number]
         customers). If sales to EEA customers in non-EEA countries other than [Countries] are
         considered, the number of customers purchasing consumer batteries from Spectrum both
         within and outside the EEA is reduced to [Limited number].321
(649) Third, [Number] current customers of Spectrum in the EEA negotiate conditions for the
         supply outside the EEA jointly with the EEA.322 Similarly, only a minority of buying
         alliances active in the EEA negotiate conditions that are applicable outside the EEA.323
(650) Fourth, feedback received in the market test indicates that, among those customers that
         currently ask for quotes which cover countries outside the EMEA region324, most are not
         concerned about a lack of competitiveness of the Divestment Business without a global brand
         licence325 and most will continue buying from the Divestment Business in the future.326
319 Form RM, Annex 2.
320 Memo on Varta Brand Ownership Outside EMEA, paragraph 8, and Reply to the RFI 11, question 2 and Annex 1.
    Similarly, the Divestment Business’ activities in e-commerce outside EMEA [Qualification], see reply to RFI 18,
    question 3.
321 Reply to the RFI 11, question 2.
322 Ibid.
323 Ibid.
324 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 5.2.
325 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 5.4.
326 Replies to Q4 – questionnaire to customers on the commitments offered by Energizer, question 4.
                                                            104
 ---pagebreak--- (651) Fifth, the limitation on the use of the Varta brand is unlikely to have a material impact on the
        growth opportunities of the Divestment Business.327
(652) In the first place, the Divestment Business can continue growing in those EEA countries
        where already today it focusses its growth. As can be seen in, the Divestment Business’s sales
        in [Country] have grown at an average rate of [Number]% over the past few years and, pre-
        Transaction, were expected to continue growing at a similar pace at least until [Year]. These
        additional sales volumes would mitigate the effects of any potential loss of customers due to
        the scope of the Divestment Business.
Figure 7 – Varta actual and expected growth rates
[Spectrum data on growth]
        Source: M.8988- 5(4)-013 - Alkaline Strategy Meeting Europe (04 and 05.04.2017)
(653) In the second place, as submitted by the Notifying Party, Varta Branded batteries hold a
        relatively low share of sales in several EEA countries which could be the target of future
        marketing efforts to increase sales.
(654) In the third place, the EMEA region as defined in the Initial Commitments encompasses 103
        countries,328 including economies with a particular potential for growth in Central Europe,
        Eastern Europe, Russia and Turkey, and therefore scope for growth of the sale of Varta
        branded products in the future.
(655) In the fourth place, in those countries outside EMEA where Spectrum is currently not
        particularly successful with either the Varta or the Rayovac brands, the Divestment Business
        will be able to introduce a new brand and will not be put in a significantly more difficult
        position than Spectrum's before the Transaction.
(656) Sixth, the Divestment Business is currently profitable as set out in paragraph (644), which,
        together with the other factors mentioned in paragraphs (647) to (655), make it unlikely that
        the limitation in the Varta brand license would impair the Divestment Business' viability.
Other IP rights and know-how
(657) The Divestment Business includes the IP [Information on IP rights] necessary for it to operate
        [Information on IP rights].329 Moreover, the Notifying Party commits to transfer any
        intangible asset that is i) used by the Divestment Business; and (ii) contributes to the
        continued viability and competitiveness of the Divestment Business.330 The Commission
        therefore does not identify any need to change the scope of the Initial Commitments as
        regards other IP rights and know-how.
327 The arguments set out in paragraphs (652) to (656) apply equally to growth in e-commerce within and outside
    EMEA, see reply to RFI 18, question 3.
328 Annex 16 to the Initial Commitments.
329 Schedule to the Initial Commitments, page 2, definition of "Other IP rights and information", clause 4.2.
330 Schedule to the Initial Commitments, page 4, clause 4.3.
                                                                 105
 ---pagebreak--- Supply agreement, brand licensing period and brand black-out period for the sale of hearing aid
batteries
(658) With respect to hearing aid batteries, the Commission notes that the commitment to enter into
        a supply agreement would only be optional and entered into at the request of the purchaser.
        However, the serious doubts arising from the Transaction in the market for hearing aid
        batteries can only be adequately addressed by a mandatory commitment, which would ensure
        that the solution to those competition concerns does not depend on the will of the purchaser.
(659) Furthermore, a number of respondents to the market test raised concerns with respect to the
        duration of the supply agreement, brand licensing period and black-out period for the sale of
        hearing aid batteries, as summarized in paragraph (634), taking into account in particular that
        the Divestment Business does not have its own hearing aid battery production and that the
        number of producers and therefore of potential suppliers of hearing aid batteries is limited.
        The Commission notes, however, that Energizer has been in a similar position before the
        Transaction as it does not have its own production of hearing aid batteries but relies on
        supplies from third party suppliers. Moreover, Varta Microbattery, one of the two main
        producers of hearing aid batteries worldwide, indicated that it would be very easy to reach an
        agreement with itself to supply such batteries to the Divestment Business.331 Nevertheless,
        and taking into account the requirement to re-brand, the Commission considered that the
        Purchaser should have the option to request more time to re-brand and find its own sources of
        hearing aid batteries before allowing the merged entity to use the Rayovac brand in the
        EMEA region.
(660) Moreover, the Commission considered that the cap on the volumes that can be purchased by
        the Divestment Business in the Initial Commitments ([Percentage]% of the net sales achieved
        during the previous year), which is applicable for the entire duration of the supply agreement,
        risked impairing the growth opportunities and competitiveness of the Divestment Business,
        which as a consequence and in light of the abovementioned scarcity of possible suppliers
        might find it difficult to meet a possible increase in demand for hearing aid batteries in the
        EEA. The Commission also considered that the negotiation of the cost terms should not be
        left entirely to the negotiations between the Notifying Party and the purchaser but should
        include an element of oversight by the Commission and the Monitoring Trustee.
(661) As regards the additional points of concerns brought forward in the market test (summarized
        in paragraph (634)(c)) not yet addressed, the Commission finds that (i) it is sufficient to
        replicate the competitive pressure that Energizer (as the smaller of the two Parties) exerted on
        the national markets for the wholesale supply of branded hearing aid batteries in the mass
        retail channel (taking into account Energizer’s lack of production assets and lack of own
        R&D department for hearing aid batteries as well as the fact that it operated a competitive
        business focussing only on the mass retail channel), and (ii) the Divestment Business will be
        able to use the same marketing, advertising and distribution332 assets for the household,
        specialty and hearing aid batteries going forward, limiting the costs.
331 Replies to Q5 - questionnaire to competitors and potential purchasers, questions 9 and 9.1.
332 For the distribution assets specifically, see reply to RFI 18, question 5.
                                                                 106
 ---pagebreak--- R&D capabilities
(662) As regards the Divestment Business’ R&D capabilities, the Commission finds that, contrary
         to feedback received from some market participants, the Divestment Business’ viability and
         competitiveness will not be negatively affected by the transfer and splitting of R&D
         capabilities between Spectrum and the Divestment Business.
(663) First, the Divestment Business includes all R&D equipment, materials, personnel and projects
         so that the Divestment Business continues to have access to the same R&D and sourcing
         capabilities that it currently has access to.333 [Regarding all the assets that will be transferred,
         Energizer will put in place all the measures to ensure that the Divestment Business has access to
         the R&D assets. The Notifying Party will assist the Purchaser with the transfer of the assets ].
(664) Second, [Intellectual property and R&D projects will be transferred to the Divestment
         Business. The shared use will be made available by different means to the Divestment
         Business and the Notifying Party].334
(665) Third, [Given that the majority of R&D staff is not based in Europe, Energizer will make
         available some of these employees that will be transferred to the Divestment Business].
(666) Fourth, the Monitoring Trustee will appoint an R&D technical expert who will report to the
         Monitoring Trustee and who will assist and advise the Monitoring Trustee with regard to all
         R&D related questions concerning the Divestment Business.335
(667) Fifth, if there is any tangible or intangible asset or personnel which is not covered by the
         Schedule of the Initial Commitments Schedule but which is used by the Divestment Business
         and contributes to the continued viability and competitiveness of the Divestment Business,
         that asset or adequate substitute shall be transferred to the Purchaser. This includes all the
         R&D personnel that is deemed necessary to the Divestment Business, under the supervision
         of the Monitoring Trustee with the support of the R&D Technical Expert.336
Supply and distribution agreements
(668) The Commission finds that the Initial Commitments are sufficient with respect to the transfer
         of supply and distribution agreements337 so as not to impair the viability or competitiveness
         of the Divestment Business.
(669) First, in relation to global procurement, the Notifying Party will split global direct supply
         agreements between the Divestment Business and the merged entity, both for raw material
         sourcing and for third-party finished goods sourcing. Where necessary, each party would
         provide the other party an appropriate transitional period, which would give, directly or
333 Initial Commitments, clause 5(a), and Schedule, pages 2-3.
334 Initial Commitments, clause 5(a).
335 Initial Commitments, clauses 27 and 33(i).
336 Initial Commitments, Schedule, clause 4.3
337 There are no specific third-party rights that may prevent the transfer of the Divestment Business as is to any
    purchaser, other than the standard change of control provisions in commercial contracts concluded by entities
    included in the Divestment Business (for which there will be the back-up solution of the back-to-back agreement)
    and approvals from applicable works councils. The Commission notes, in particular, that the [Supply and distribution
    agreements].
                                                             107
 ---pagebreak---          indirectly, the other party the benefit of any global procurement contracts. This would allow
         the Divestment Business to develop their own supply agreements. Overall, the projected loss
         of global sourcing (and the switch to regional sourcing) due to the loss in volume discounts is
         estimated to be less than EUR [Number] ([Percentage]% of annual EBITDA) and is therefore
         not material.
(670) Second, in relation to the distribution agreements, the Divestment Business includes the
         benefit of all distribution contracts which are usually entered into at the national level. Insofar
         as those contracts include the supply of consumer batteries, chargers and lighting products,
         the scope of the distribution agreement would remain unchanged and thus not entail any
         changes in volume (and in pricing linked to those volumes). Insofar as the distribution
         contracts would in the future not include any other of Spectrum Brands' products, such as
         products from Spectrum Brands' appliances business, this effect is not expected to be
         material.338
Key personnel
(671) In light of the results of the market test, the Commission considers that the list of key
         personnel included in the Initial Commitments is not sufficiently comprehensive, as it should
         include [Information on key personnel] ensuring that the Divestment Business has sufficient
         resources to effectively compete in those territories. As to the number of R&D personnel, the
         Commission notes that further personnel could be added to the Divestment Business, under
         the supervision of the monitoring trustee, pursuant to paragraph 4.3 of the schedule to the
         Initial Commitments.
Purchasers
(672) In the light of the scope and self-standing nature of the Divestment Business, the Commission
         considers the feedback received from the market test, summarized in paragraph (638), to be
         sufficient to conclude that the Notifying Party is likely to find a suitable purchaser for the
         Divestment Business, including its hearing aid battery business, within the divestiture period.
         The Commission will assess during the purchaser approval process whether the purchaser
         criteria are fulfilled, including whether the purchaser has the required proven expertise to
         maintain and develop the Divestment Business as a viable and active competitive force in
         competition with the Notifying Party and other competitors,339 taking into account the
         feedback received in its market test.
6.2.3.3. Conclusion
(673) The Commission therefore considers that the Initial Commitments would not be suitable to
         remove the serious doubts raised by the Transaction in a clear-cut manner.
338 The same reasoning applies to the use of the [Storage facilities]. See reply to RFIs 17 and 18.
339 Initial Commitments, clause 21(b).
                                                               108
 ---pagebreak--- 6.3.    Final Commitments
6.3.1. Description of the Final Commitments
(674) The Final Commitments consist of a revised version of the Initial Commitments. The main
        modifications included in the Final Commitments with respect to the Initial Commitments are
        the following:
          (a)   The explicit reference to Spectrum's Varta chargers business in the Commitments to
                clarify that that business falls within the scope of the Divestment Business;340
          (b)   The supply of hearing aid batteries [Cost formula];341
          (c)   The mandatory commitment to enter into a supply agreement for hearing aid batteries,
                not dependent on a request from the purchaser;342
          (d)   The replacement of the fixed volume cap for the hearing aid batteries' supply
                arrangement by a mechanism according to which, in case of conflict between the
                Purchaser and the merged entity, the Commission will decide, after hearing the
                opinion of the Monitoring Trustee, on any request for supply that
                [Percentage]exceeds% of the prior year’s net sales of Rayovac branded hearing aid
                batteries;343
          (e)   The possibility to extend, at the request of the purchaser and to be agreed in
                consultation with the Monitoring Trustee and the Commission, by up to [Time period]
                the duration of the hearing aid batteries' supply agreement and the license to use the
                Rayovac brand for hearing aid batteries in the non-audiologist channel;344 the
                extension of the Black-Out period for the use of the Rayovac brand for hearing aid
                batteries in the non-audiologist channel by the merged entity to up to [Time period];345
                and the introduction of an overall duration of [Time period] for supply/licensing and
                black-out period;346
          (f)   The inclusion, within the key personnel, of the [Information on scope of the
                commitment].347
6.3.2.    The Commission’s assessment of the Final Commitments
6.3.2.1. Scope of the Divestment Business
(675) The Commission considers that the explicit reference to the divestment of Spectrum's Varta
        battery chargers business in clause 5 of the Final Commitments ensures with sufficient clarity
340 Final Commitments, clause 5.
341 Final Commitments, clause 16.
342 Final Commitments, clause 16.
343 Final Commitments, clause 16.
344 Final Commitments, clause 17.
345 Final Commitments, clause 18.
346 Final Commitments, clause 18.
347 Final Commitments, Schedule, Annex 10.
                                                         109
 ---pagebreak---         that all markets on which the Transaction raised serious doubts are included within the scope
        of the Final Commitments.
6.3.2.2. Viability and competitiveness of the Divestment Business
(676) With regard to the amendments included in the Final Commitments to the hearing aid supply
        agreement, the Commission considers the following:
          (a)    The clarification that the entering into the supply and licence agreements for hearing
                 aid batteries is mandatory addresses the Commission's concern as to the potentially
                 non-binding nature of this clause;
          (b)    [Information on contractual terms];
          (c)    The possible longer duration of the agreement and the overall duration of the
                 commitment adequately addresses the possible problems that the Divestment Business
                 might face to find alternative suppliers, by allowing it to choose to extend the
                 agreement if it needs to do so;
          (d)    The higher cap over the quantities requested by the Divestment Business and the
                 mechanism whereby the Commission ultimately decides on requests exceeding such
                 cap adequately address the risk that an insufficient supply might hamper the growth
                 possibilities of the Divestment Business;
          (e)    The inclusion of additional sales team members, appointed [Information on scope of
                 the commitment], in the key personnel ensures that the Divestment Business can
                 effectively compete in those territories.
6.4.      Conclusion
(677) In light of the foregoing, the Commission therefore considers that the Final Commitments are
        capable of removing the Commission’s serious doubts as to the compatibility of the
        Transaction with the internal market.
7.   CONDITIONS AND OBLIGATIONS
(678) The commitments in clause 5 of section B and in clauses 16 to 19 of Section C of the Annex
        constitute conditions attached to this decision, as only through full compliance therewith can
        the structural changes in the relevant markets be achieved. The other commitments set out in
        the Annex constitute obligations, as they concern the implementing steps which are necessary
        to achieve the modifications sought in a manner compatible with the internal market.
                                                        110
 ---pagebreak--- 8.    CONCLUSION
(679) For the above reasons, the Commission has decided not to oppose the notified operation as
      modified by the commitments and to declare it compatible with the internal market and with
      the functioning of the EEA Agreement, subject to full compliance with the conditions in
      clause 5 of section B and in clauses 16 to 19 of Section C of the commitments annexed to the
      present decision and with the obligations contained in the other sections of the said
      commitments. This decision is adopted in application of Article 6(1)(b) in conjunction with
      Article 6(2) of the Merger Regulation and Article 57 of the EEA Agreement.
                                                    For the Commission
                                                    (Signed)
                                                    Margrethe VESTAGER
                                                    Member of the Commission
                                                   111
 ---pagebreak---                         Dated 5 December 2018
                      Energizer Holdings, Inc.
                                  and
Spectrum Brands Holdings’ Global Battery And Portable Lighting Business
  CASE NO. COMP/M.8988 – Energizer / Spectrum Brands
                Commitments to the European Commission
 ---pagebreak---    CASE NO. COMP/M.8988 – ENERGIZER / SPECTRUM
                                             BRANDS
               Commitments to the European Commission
Pursuant to Article 6(2) of Council Regulation (EC) No. 139/2004 (the “Merger Regulation”),
Energizer Holdings, Inc. (“Energizer” or the “Notifying Party”) hereby enters into the following
Commitments (the “Commitments”) vis-à-vis the European Commission (the “Commission”) with
a view to rendering the acquisition by Energizer Holdings, Inc. of the global battery and lighting
business of Spectrum Brands Holdings, Inc. (the “Concentration”) compatible with the internal
market and the functioning of the EEA Agreement.
This text shall be interpreted in light of the Commission’s decision pursuant to Article 6(1)(b) of
the Merger Regulation to declare the Concentration compatible with the internal market and the
functioning of the EEA Agreement (the “Decision”), in the general framework of European Union
law, in particular in light of the Merger Regulation, and by reference to the Commission Notice on
remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission
Regulation (EC) No 802/2004 (the “Remedies Notice”).
Section A.        Definitions
1.       For the purpose of the Commitments, the following terms shall have the following
         meaning:
Affiliated Undertakings: undertakings controlled by the Parties and/or by the ultimate parents of
the Parties, whereby the notion of control shall be interpreted pursuant to Article 3 of the Merger
Regulation and in light of the Commission Consolidated Jurisdictional Notice under Council
Regulation (EC) No 139/2004 on the control of concentrations between undertakings (the
“Consolidated Jurisdictional Notice”).
Assets: the assets that contribute to the current operation or are necessary to ensure the viability
and competitiveness of the Divestment Business as indicated in Section B, paragraph 5 (a), (b)
and (c) and described more in detail in the Schedule.
Closing: the transfer of the legal title of the Divestment Business to the Purchaser.
Closing Period: the period of [Duration] from the approval of the Purchaser and the terms of sale
by the Commission.
Confidential Information: any business secrets, know-how, commercial information, or any
other information of a proprietary nature that is not in the public domain.
Conflict of Interest: any conflict of interest that impairs the Trustee's objectivity and
independence in discharging its duties under the Commitments.
Divestment Business: the business or businesses as defined in Section B and in the Schedule
which the Notifying Party commits to divest.
Divestiture Trustee: one or more natural or legal person(s) who is/are approved by the
Commission and appointed by the Notifying Party and who has/have received from the Notifying
Party the exclusive Trustee Mandate to sell the Divestment Business to a Purchaser at no
minimum price.
Effective Date: the date of adoption of the Decision.
                                                       2
 ---pagebreak--- Energizer: Energizer Holdings, Inc., incorporated under the laws of the state of Missouri, United
States, with its registered office at 533 Maryville University Drive, St. Louis, Missouri 63141,
United States.
EMEA: includes all of Europe, the Middle East and Africa. A full list of the 103 countries included
in EMEA is provided in Annex 16.
First Divestiture Period: the period of [Duration] from the Effective Date.
Hold Separate Manager: the person appointed by the Notifying Party for the Divestment
Business to manage the day-to-day business under the supervision of the Monitoring Trustee.
Key Personnel: all personnel necessary to maintain the viability and competitiveness of the
Divestment Business, as listed in the Schedule, including the Hold Separate Manager.
Monitoring Trustee: one or more natural or legal person(s), who is/are approved by the
Commission and appointed by the Notifying Party, and who has/have the duty to monitor the
Notifying Party’s compliance with the conditions and obligations attached to the Decision.
Non-Audiologist Retail Channel: those customers (namely, retailers, wholesalers and
distributors) that are not specialised in the primary or sole sourcing and resale of hearing aid
batteries (“HAB”) (as opposed to other consumer batteries). For the avoidance of doubt, the Non-
Audiologist Retail Channel excludes original equipment manufacturers, governmental health care
organizations and audiologists, irrespective of whether those customers source HABs directly
from the Divestment Business or indirectly through wholesalers or distributors.
Parties: Energizer and the undertaking that is the target of the concentration.
Personnel: all staff currently employed by the Divestment Business, including staff seconded to
the Divestment Business, shared personnel as well as the additional personnel listed in the
Schedule.
Purchaser: the entity approved by the Commission as acquirer of the Divestment Business in
accordance with the criteria set out in Section D. [Information on the identity of a potential
Purchaser].
Purchaser Criteria: the criteria laid down in paragraph 21 of these Commitments that the
Purchaser must fulfil in order to be approved by the Commission.
R&D Technical Expert: one or more natural or legal person(s), appointed by and reporting to the
Monitoring Trustee, who has/have R&D expertise relevant to the Divestment Business. If the
Monitoring Trustee has the necessary technical expertise, the Monitoring Trustee and Technical
Expert can be the same natural or legal person.
Spectrum: Spectrum Brands Holdings, Inc., incorporated under the laws of the State of
Delaware, United States, with its principal executive office at 3001 Deming Way, Middleton,
Wisconsin, WI 53562, United States and registered with the Commercial/Company Register
under number 4720870.
Schedule: the schedule to these Commitments describing more in detail the Divestment
Business.
Trustee(s): the Monitoring Trustee and/or the Divestiture Trustee as the case may be.
Trustee Divestiture Period: the period of [Duration]from the end of the First Divestiture Period.
Varta® Trademarks: all trademark rights owned by Spectrum currently used for EMEA,
[Information on contractual relations].
                                                     3
 ---pagebreak--- Section B.       The commitment to divest and the Divestment Business
Commitment to divest
2.    In order to maintain effective competition, the Notifying Party commits to divest, or
      procure the divestiture of the Divestment Business by the end of the Trustee Divestiture
      Period as a going concern to a purchaser and on terms of sale approved by the
      Commission in accordance with the procedure described in paragraph 22 of these
      Commitments. To carry out the divestiture, the Notifying Party commits to find a
      purchaser and to enter into a final binding sale and purchase agreement for the sale of
      the Divestment Business within the First Divestiture Period. If the Notifying Party has not
      entered into such an agreement at the end of the First Divestiture Period, the Notifying
      Party shall grant the Divestiture Trustee an exclusive mandate to sell the Divestment
      Business in accordance with the procedure described in paragraph 35 in the Trustee
      Divestiture Period.
3.    The Notifying Party shall be deemed to have complied with this commitment if:
      (a)      by the end of the Trustee Divestiture Period, the Notifying Party or the Divestiture
               Trustee has entered into a final binding sale and purchase agreement and the
               Commission approves the proposed purchaser and the terms of sale as being
               consistent with the Commitments in accordance with the procedure described in
               paragraph 22; and
      (b)      if the Closing of the sale of the Divestment Business to the Purchaser takes place
               within the Closing Period.
4.    In order to maintain the structural effect of the Commitments, the Notifying Party shall, for
      a period of 10 years after Closing, not acquire, whether directly or indirectly, the possibility
      of exercising influence (as defined in paragraph 43 of the Remedies Notice, footnote 3)
      over the whole or part of the Divestment Business, unless, following the submission of a
      reasoned request from the Notifying Party showing good cause and accompanied by a
      report from the Monitoring Trustee (as provided in paragraph 72 of these Commitments),
      the Commission finds that the structure of the market has changed to such an extent that
      the absence of influence over the Divestment Business is no longer necessary to render
      the proposed concentration compatible with the internal market.
Structure and definition of the Divestment Business
5.    The Divestment Business consists of Spectrum’s Varta® consumer battery, chargers and
      portable power as well as portable lighting business in EMEA. For the avoidance of
      doubt, (a) this business includes the chargers business that forms an integral part of the
      Divestment Business and in particular it includes the supply and distribution contracts
      covering chargers identified in Annexes 11 and 13 to the Schedule, (b) but this business
      does not include Spectrum’s hearing aid batteries business, which is primarily marketed
      under the Rayovac® brand and has no sales of Varta® branded product. The Divestment
      Business shall nonetheless benefit, on the terms set out in paragraphs 16-19 below, of an
      exclusive supply agreement for Rayovac®-branded HAB in the Non‐Audiologist Retail
      Channel in EMEA. The legal and functional structure of the Divestment Business as
      operated to date is described in the Schedule. The Divestment Business, described in
      more detail in the Schedule, includes all assets and staff that contribute to the current
      operation or are necessary to ensure the viability and competitiveness of the Divestment
      Business, in particular:
                                                     4
 ---pagebreak---       (a)     all tangible and intangible assets (including the Varta® Trademarks, other
              intellectual property rights and Know-How necessary for use by the Divestment
              Business, subject to the arrangements set out in the Schedule; as well as all R&D
              equipment, materials, personnel and projects so that the Divestment Business
              continues to have access to the same R&D capabilities that it currently has
              access to); [Information on trademarks and R&D projects];
      (b)     all licences, permits and authorisations issued by any governmental organisation
              for the benefit of the Divestment Business;
      (c)     all contracts, leases, commitments and customer orders of the Divestment
              Business (including those for consumer battery, chargers and portable power as
              well as portable lighting); all customer, credit and other records of the Divestment
              Business (it being understood that the Notifying Party shall use its best efforts to
              obtain all consents where applicable, and, to the extent any such consents could
              not be obtained, or any contract could not be otherwise (partially) transferred, the
              Notifying Party shall enter into back-to-back agreements with the Divestment
              Business [Information on contractual terms]. In the case of supply contracts, the
              duration of the back-to-back agreements should be [Duration] after Closing, if a
              longer duration is not provided for in the original contract); and
      (d)     the Personnel.
6.    In addition, the Divestment Business includes the benefit, for a transitional period of
      [Duration] after Closing and on terms and conditions equivalent to those at present
      afforded to the Divestment Business, of all current arrangements under which Spectrum
      or its Affiliated Undertakings (outside the Divestment Business) supply products or
      services to the Divestment Business, as detailed in the Schedule, unless otherwise
      agreed with the Purchaser. Strict firewall procedures will be adopted so as to ensure that
      any competitively sensitive information related to, or arising from such supply
      arrangements (for example, product roadmaps) will not be shared with, or passed on to,
      anyone outside the relevant business division providing the products or services.
Section C.     Related commitments
Preservation of viability, marketability and competitiveness
7.    From the Effective Date until Closing, the Notifying Party shall preserve or procure the
      preservation of the economic viability, marketability and competitiveness of the
      Divestment Business, in accordance with good business practice, and shall minimise as
      far as possible any risk of loss of competitive potential of the Divestment Business. In
      particular, the Notifying Party undertakes:
      (a)     not to carry out any action that might have a significant adverse impact on the
              value, management or competitiveness of the Divestment Business or that might
              alter the nature and scope of activity, or the industrial or commercial strategy or
              the investment policy of the Divestment Business;
      (b)     to make available, or procure to make available, sufficient resources for the
              development of the Divestment Business, on the basis and continuation of the
              existing business plans;
      (c)     to take all reasonable steps, or procure that all reasonable steps are being taken,
              including appropriate incentive schemes (based on industry practice and up to a
              period of [Duration] after the Effective Date), to encourage all Key Personnel to
                                                    5
 ---pagebreak---                remain with the Divestment Business, and not to solicit or move any Personnel to
               Energizer’s remaining business. Where, nevertheless, individual members of the
               Key Personnel exceptionally leave the Divestment Business, the Notifying Party
               shall provide a reasoned proposal to replace the person or persons concerned to
               the Commission and the Monitoring Trustee. The Notifying Party must be able to
               demonstrate to the Commission that the replacement is well suited to carry out
               the functions exercised by those individual members of the Key Personnel. The
               replacement shall take place under the supervision of the Monitoring Trustee, who
               shall report to the Commission. [Information on scope of the commitment].
Hold-separate obligations
8.    The Notifying Party commits, from the Effective Date until Closing, to keep the
      Divestment Business separate from the business(es) it is retaining and to ensure that
      unless explicitly permitted under these Commitments:
      (a)      management and staff of the business(es) retained by the Notifying Party have no
               involvement in the Divestment Business;
      (b)      the Key Personnel and Personnel of the Divestment Business have no
               involvement in any business retained by the Notifying Party and do not report to
               any individual outside the Divestment Business;
      (c)      with respect to R&D employees, all appropriate measures will be taken, under the
               supervision of the Monitoring Trustee and the R&D Technical Expert, [Information
               on transitional measures], in order to ensure that there is no interruption of the
               R&D function for the Divestment Business.
9.    Until Closing, the Notifying Party shall assist the Monitoring Trustee in ensuring that the
      Divestment Business is managed as a distinct and saleable entity separate from the
      business(es) which the Notifying Party is retaining. Immediately after the adoption of the
      Decision, the Notifying Party shall appoint a Hold Separate Manager. The Hold Separate
      Manager, who shall be part of the Key Personnel, shall manage the Divestment Business
      independently and in the best interest of the business with a view to ensuring its
      continued economic viability, marketability and competitiveness and its independence
      from the businesses retained by the Notifying Party. The Hold Separate Manager shall
      closely cooperate with and report to the Monitoring Trustee, who may be assisted by the
      R&D Technical Expert, and, if applicable, the Divestiture Trustee. Any replacement of the
      Hold Separate Manager shall be subject to the procedure laid down in paragraph 7(c) of
      these Commitments. The Commission may, after having heard the Notifying Party, require
      the Notifying Party to replace the Hold Separate Manager.
10.   To ensure that the Divestment Business is held and managed as a separate entity the
      Monitoring Trustee shall exercise the Notifying Party’s rights as shareholder in the legal
      entity or entities that constitute the Divestment Business (except for its rights in respect of
      dividends that are due before Closing), with the aim of acting in the best interest of the
      business, which shall be determined on a stand-alone basis, as an independent financial
      investor, and with a view to fulfilling the Notifying Party’s obligations under the
      Commitments. Furthermore, the Monitoring Trustee shall have the power to replace
      members of the supervisory board or non-executive directors of the board of directors,
      who have been appointed on behalf of the Notifying Party. Upon request of the Monitoring
      Trustee, the Notifying Party shall resign as a member of the boards or shall cause such
      members of the boards to resign.
                                                    6
 ---pagebreak--- Ring-fencing
11.   The Notifying Party shall implement, or procure to implement, all necessary measures to
      ensure that it does not, after the Effective Date, obtain any Confidential Information
      relating to the Divestment Business and that any such Confidential Information obtained
      by the Notifying Party before the Effective Date will be eliminated and not be used by the
      Notifying Party. This includes measures vis-à-vis the Notifying Party’s appointees on the
      supervisory board and/or board of directors of the Divestment Business. In particular, the
      participation of the Divestment Business in any central information technology network
      shall be severed to the extent possible, without compromising the viability of the
      Divestment Business. The Notifying Party may obtain or keep information relating to the
      Divestment Business which is reasonably necessary for the divestiture of the Divestment
      Business or the disclosure of which to the Notifying Party is required by law.
Non-solicitation clause
12.   The Notifying Party undertakes, subject to customary limitations, not to solicit, and to
      procure that Affiliated Undertakings do not solicit, the Key Personnel transferred with the
      Divestment Business for a period of [Duration] after Closing.
Due diligence
13.   In order to enable potential purchasers to carry out a reasonable due diligence of the
      Divestment Business, the Notifying Party shall, subject to customary confidentiality
      assurances and dependent on the stage of the divestiture process:
      (a)     provide to potential purchasers sufficient information as regards the Divestment
              Business;
      (b)     provide to potential purchasers sufficient information relating to the Personnel and
              allow them reasonable access to the Personnel.
Reporting
14.   The Notifying Party shall submit written reports in English on potential purchasers of the
      Divestment Business and developments in the negotiations with such potential
      purchasers to the Commission and the Monitoring Trustee no later than 10 days after the
      end of every month following the Effective Date (or otherwise at the Commission’s
      request). The Notifying Party shall submit a list of all potential purchasers having
      expressed interest in acquiring the Divestment Business to the Commission at each and
      every stage of the divestiture process, as well as a copy of all the offers made by
      potential purchasers within five days of their receipt.
15.   The Notifying Party shall inform the Commission and the Monitoring Trustee on the
      preparation of the data room documentation and the due diligence procedure and shall
      submit a copy of any information memorandum to the Commission and the Monitoring
      Trustee before sending the memorandum out to potential purchasers.
Other Related Commitments
16.  The Notifying Party commits to enter into an exclusive supply agreement with the
     Divestment Business for Rayovac®-branded HAB [Information on contractual terms]. The
     purpose of the supply agreement is to allow the Purchaser to continue the supply of
     Rayovac® HAB in the Non‐Audiologist Retail Channel in EMEA, on an exclusive basis. For
                                                    7
 ---pagebreak---     the avoidance of doubt, it shall be a condition of the supply agreement entered into with
    the Purchaser that these Rayovac®-branded HAB can only be resold in the Non-
    Audiologist Retail Channel in EMEA (accordingly the Notifying Party is only required to
    supply insofar the customer commits to resell the HABs in question in the Non-Audiologist
    Retail Channel or (for wholesalers and distributors) to retailers in the Non-Audiologist
    Retail Channel). Under the supply agreement, the Notifying Party will supply the
    Divestment Business with sufficient quantities of HAB, including all current HAB models
    and future HAB models that will be commercialized by the Notifying Party under the
    Rayovac® brand during the term of the supply agreement to allow the Divestment
    Business to satisfy demand in the Non-Audiologist Retail Channel in EMEA.
    The supply agreement referred to above will include the following thresholds and
    mechanism for adaptation:
    a) For all current and future HAB models, the Notifying Party will supply up to [Information
         on contractual terms] of the prior year net sales of Rayovac® branded HABs to the
         Divestment Business under the terms set out below and this [Information on
         contractual terms] threshold will be set on a rolling annual basis during the term of the
         supply agreement.
    b) If the request of the Divestment Business for the supply of HAB exceeds [Information
         on contractual terms] of the net sales achieved during the prior financial year and the
         fulfilment of such request imposes unreasonable costs on the Notifying Party, the
         Notifying Party commits to discuss with the Divestment Business in good faith, in
         consultation with the Monitoring Trustee, a means of resolving such supply request. If
         the Notifying Party and the Purchaser do not reach an agreement, the Commission
         will, after hearing the opinion of the Monitoring Trustee, determine whether the supply
         request beyond this threshold should be maintained. In doing so, due account will be
         taken of the reasonableness of the request of the Divestment Business, any capacity
         constraint encountered by the Notifying Party, and any additional necessary
         expenditures that may be borne by the Notifying Party in the fulfilment of such request.
17.   The supply agreement will be granted for a period of [Duration of the supply agreement]
      from the date of Closing. This period can be extended for a period of [Duration of the
      supply agreement] at the request of the Purchaser (the period of extension to be agreed
      in consultation with the Monitoring Trustee and the Commission, taking into account that
      such extension will have an impact on the duration of the period referred to in paragraph
      18 below). The supply agreement will include a limited licence to use the Rayovac®
      brand for sales, advertising and marketing of HAB in the Non-Audiologist Retail Channel
      in EMEA. The terms of the supply agreement shall be approved by the Commission in
      accordance with the procedure described in paragraph 22 of these Commitments. This
      will provide the Divestment Business with the opportunity to develop its own branded
      HAB supply, via a re-branding strategy, in order to replace the Rayovac® brand for
      hearing aid batteries by the end of the supply period.
18.   The Notifying Party also commits not to use the Rayovac® brand for sales of HAB in the
      Non‐Audiologist Retail Channel in EMEA for an additional period of [Duration] ("Black-out
      Period") after the expiration of the supply agreement. If the supply agreement is extended
      [Duration], the duration of the Black-out Period will be shortened accordingly so that, in
      any event, the supply agreement and the Black-out Period together do not exceed
      [Duration]. For the avoidance of doubt, the Notifying Party may supply HAB that are not
      Rayovac®-branded to the Non-Audiologist Retail Channel in EMEA during the term of the
      supply agreement and the Black-out Period.
                                                    8
 ---pagebreak--- 19.   The Notifying Party shall disclose to the Purchaser the Divestment Business’
      corresponding customer records and will transfer to the Purchaser the Divestment
      Business’ corresponding current customer contracts regarding the supply of HAB in the
      Non‐Audiologist Retail Channel in EMEA (to the extent not yet covered by the disclosure
      of records in paragraph 13 of these Commitments).
20.   Where requested by the Purchaser and needed for the operation of the Divestment
      Business, the Notifying Party will provide for appropriate transitional service or supply
      arrangements, for appropriate duration [Duration and information on contractual terms]. A
      non-exhaustive list of possible TSAs is provided in Annex 17 to the Schedule.
Section D.        The Purchaser
21.   In order to be approved by the Commission, the Purchaser must fulfil the following
      criteria:
      (a)       The Purchaser shall be independent of and unconnected to the Notifying Party
                and its Affiliated Undertakings (this being assessed having regard to the situation
                following the divestiture).
      (b)       The Purchaser shall have the financial resources, proven expertise and incentive
                to maintain and develop the Divestment Business as a viable and active
                competitive force in competition with the Notifying Party and other competitors;
      (c)       The acquisition of the Divestment Business by the Purchaser must neither be
                likely to create, in light of the information available to the Commission, prima facie
                competition concerns nor give rise to a risk that the implementation of the
                Commitments will be delayed. In particular, the Purchaser must reasonably be
                expected to obtain all necessary approvals from the relevant regulatory
                authorities for the acquisition of the Divestment Business.
22.   The final binding sale and purchase agreement (as well as ancillary agreements) relating
      to the divestment of the Divestment Business shall be conditional on the Commission’s
      approval. When the Notifying Party has reached an agreement with a purchaser, it shall
      submit a fully documented and reasoned proposal, including a copy of the final
      agreement(s), within one week to the Commission and the Monitoring Trustee. The
      Notifying Party must be able to demonstrate to the Commission that the purchaser fulfils
      the Purchaser Criteria and that the Divestment Business is being divested to a purchaser
      in a manner consistent with the Commission's Decision and the Commitments. For the
      approval, the Commission shall verify that the purchaser fulfils the Purchaser Criteria and
      that the Divestment Business is being sold in a manner consistent with the Commitments
      including their objective to bring about a lasting structural change in the market. The
      Commission may approve the sale of the Divestment Business without one or more
      Assets or parts of the Personnel, or by substituting one or more Assets or parts of the
      Personnel with one or more different assets or different personnel, if this does not affect
      the viability and competitiveness of the Divestment Business after the sale, taking
      account of the proposed purchaser.
Section E.        Trustee
I.     Appointment procedure
23.   The Notifying Party shall appoint a Monitoring Trustee to carry out the functions specified
      in these Commitments for a Monitoring Trustee. The Notifying Party commits not to close
      the Concentration before the appointment of a Monitoring Trustee.
                                                        9
 ---pagebreak--- 24. If the Notifying Party has not entered into a binding sale and purchase agreement
    regarding the Divestment Business one month before the end of the First Divestiture
    Period or if the Commission has rejected a purchaser proposed by the Notifying Party at
    that time or thereafter, the Notifying Party shall appoint a Divestiture Trustee. The
    appointment of the Divestiture Trustee shall take effect upon the commencement of the
    Trustee Divestiture Period.
25. The Trustee shall:
    (a)      at the time of appointment, be independent of the Notifying Party and its Affiliated
             Undertakings;
    (b)      possess the necessary qualifications to carry out its mandate, for example have
             sufficient relevant experience as an investment banker or consultant or auditor;
             and
    (c)      neither have nor become exposed to a Conflict of Interest.
26. The Trustee shall be remunerated by the Notifying Party in a way that does not impede
    the independent and effective fulfilment of its mandate. In particular, where the
    remuneration package of a Divestiture Trustee includes a success premium linked to the
    final sale value of the Divestment Business, such success premium may only be earned if
    the divestiture takes place within the Trustee Divestiture Period.
27. An R&D Technical Expert shall be appointed by and report to the Monitoring Trustee. The
    R&D Technical Expert will be independent of and will not have or be exposed to any
    conflict of interest in relation to the Parties. The Notifying Party and the Purchaser shall
    have the right to be heard with any reasoned objections as to the suitability of any R&D
    Technical Expert candidates, e.g., lack of competence or conflict of interest. In cases of
    controversy between the Notifying Party and the Monitoring Trustee, and/or the
    Purchaser and the Monitoring Trustee as to the suitability of the R&D Technical Expert
    candidate, the Commission will decide on the matter.
    Proposal by the Notifying Party
28. No later than two weeks after the Effective Date, the Notifying Party shall submit the
    name or names of one or more natural or legal persons whom the Notifying Party
    proposes to appoint as the Monitoring Trustee to the Commission for approval. No later
    than one month before the end of the First Divestiture Period or on request by the
    Commission, the Notifying Party shall submit a list of one or more persons whom the
    Notifying Party proposes to appoint as Divestiture Trustee to the Commission for
    approval. The proposal shall contain sufficient information for the Commission to verify
    that the person or persons proposed as Trustee fulfil the requirements set out in
    paragraph 25 and shall include:
    (a)      the full terms of the proposed mandate, which shall include all provisions
             necessary to enable the Trustee to fulfil its duties under these Commitments;
    (b)      the outline of a work plan which describes how the Trustee intends to carry out its
             assigned tasks;
    (c)      an indication whether the proposed Trustee is to act as both Monitoring Trustee
             and Divestiture Trustee or whether different trustees are proposed for the two
             functions.
                                                   10
 ---pagebreak---     Approval or rejection by the Commission
29. The Commission shall have the discretion to approve or reject the proposed Trustee(s)
    and to approve the proposed mandate subject to any modifications it deems necessary
    for the Trustee to fulfil its obligations. If only one name is approved, the Notifying Party
    shall appoint or cause to be appointed the person or persons concerned as Trustee, in
    accordance with the mandate approved by the Commission. If more than one name is
    approved, the Notifying Party shall be free to choose the Trustee to be appointed from
    among the names approved. The Trustee shall be appointed within one week of the
    Commission’s approval, in accordance with the mandate approved by the Commission.
    New proposal by the Notifying Party
30. If all the proposed Trustees are rejected, the Notifying Party shall submit the names of at
    least two more natural or legal persons within one week of being informed of the
    rejection, in accordance with paragraphs 23 and 29 of these Commitments.
    Trustee nominated by the Commission
31. If all further proposed Trustees are rejected by the Commission, the Commission shall
    nominate a Trustee, whom the Notifying Party shall appoint, or cause to be appointed, in
    accordance with a trustee mandate approved by the Commission.
II.  Functions of the Trustee
32. The Trustee shall assume its specified duties and obligations in order to ensure
    compliance with the Commitments. The Commission may, on its own initiative or at the
    request of the Trustee or the Notifying Party, give any orders or instructions to the Trustee
    in order to ensure compliance with the conditions and obligations attached to the
    Decision.
    Duties and obligations of the Monitoring Trustee
33. The Monitoring Trustee shall:
    (i)       propose in its first report to the Commission a detailed work plan describing how it
              intends to monitor compliance with the obligations and conditions attached to the
              Decision. The Monitoring Trustee may, if he deems necessary, be assisted and
              advised by the R&D Technical Expert with regard to all R&D related questions
              concerning the Divestment Business. Any information provided to the Monitoring
              Trustee may also be exchanged with the R&D Technical Expert.
    (ii)      oversee, in close co-operation with the Hold Separate Manager and the R&D
              Technical Expert, the on-going management of the Divestment Business with a
              view to ensuring its continued economic viability, marketability and
              competitiveness and monitor compliance by the Notifying Party with the
              conditions and obligations attached to the Decision. To that end the Monitoring
              Trustee shall:
              (a)     monitor the preservation of the economic viability, marketability and
                      competitiveness of the Divestment Business, and the keeping separate of
                      the Divestment Business from the business retained by the Parties, in
                      accordance with paragraphs 7 and 8 of these Commitments;
                                                    11
 ---pagebreak---       (b)      supervise the management of the Divestment Business as a distinct and
               saleable entity, in accordance with paragraph 9 of these Commitments;
      (c)      with respect to Confidential Information:
                     determine all necessary measures to ensure that the Notifying
                      Party does not after the Effective Date obtain any Confidential
                      Information relating to the Divestment Business,
                     in particular strive for the severing of the Divestment Business’
                      participation in a central information technology network to the
                      extent possible, without compromising the viability of the
                      Divestment Business,
                     make sure that any Confidential Information relating to the
                      Divestment Business obtained by the Notifying Party before the
                      Effective Date is eliminated and will not be used by the Notifying
                      Party and
                     decide whether such information may be disclosed to or kept by the
                      Notifying Party as the disclosure is reasonably necessary to allow
                      the Notifying Party to carry out the divestiture or as the disclosure is
                      required by law;
      (d)      monitor the splitting of assets and the allocation of Personnel between the
               Divestment Business and the Notifying Party or Affiliated Undertakings;
(iii) propose to the Notifying Party such measures as the Monitoring Trustee
      considers necessary to ensure the Notifying Party’s compliance with the
      conditions and obligations attached to the Decision, in particular the maintenance
      of the full economic viability, marketability or competitiveness of the Divestment
      Business, the holding separate of the Divestment Business and the non-
      disclosure of competitively sensitive information;
(iv)  review and assess potential purchasers as well as the progress of the divestiture
      process and verify that, dependent on the stage of the divestiture process:
      (a)      potential purchasers receive sufficient and correct information relating to
               the Divestment Business and the Personnel in particular by reviewing, if
               available, the data room documentation, the information memorandum
               and the due diligence process, and
      (b)      potential purchasers are granted reasonable access to the Personnel;
(v)   act as a contact point for any requests by third parties, in particular potential
      purchasers, in relation to the Commitments;
(vi)  provide to the Commission, sending the Notifying Party a non-confidential copy at
      the same time, a written report within 15 days after the end of every month that
      shall cover the operation and management of the Divestment Business as well as
      the splitting of assets and the allocation of Personnel so that the Commission can
      assess whether the business is held in a manner consistent with the
      Commitments and the progress of the divestiture process as well as potential
      purchasers;
(vii) promptly report in writing to the Commission, sending the Notifying Party a non-
      confidential copy at the same time, if it concludes on reasonable grounds that the
      Notifying Party is failing to comply with these Commitments;
                                             12
 ---pagebreak---     (viii)    within one week after receipt of the documented proposal referred to in
              paragraph 22 of these Commitments, submit to the Commission, sending the
              Notifying Party a non-confidential copy at the same time, a reasoned opinion as to
              the suitability and independence of the proposed purchaser and the viability of the
              Divestment Business after the sale and as to whether the Divestment Business is
              sold in a manner consistent with the conditions and obligations attached to the
              Decision, in particular, if relevant, whether the sale of the Divestment Business
              without one or more Assets or not all of the Personnel affects the viability of the
              Divestment Business after the sale, taking account of the proposed purchaser;
    (ix)      assume the other functions assigned to the Monitoring Trustee under the
              conditions and obligations attached to the Decision.
34. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the
    Monitoring Trustee and the Divestiture Trustee shall cooperate closely with each other
    during and for the purpose of the preparation of the Trustee Divestiture Period in order to
    facilitate each other's tasks.
    Duties and obligations of the Divestiture Trustee
35. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no minimum
    price the Divestment Business to a purchaser, provided that the Commission has
    approved both the purchaser and the final binding sale and purchase agreement (and
    ancillary agreements) as in line with the Commission's Decision and the Commitments in
    accordance with paragraphs 21 and 22 of these Commitments. The Divestiture Trustee
    shall include in the sale and purchase agreement (as well as in any ancillary agreements)
    such terms and conditions as it considers appropriate for an expedient sale in the Trustee
    Divestiture Period. In particular, the Divestiture Trustee may include in the sale and
    purchase agreement such customary representations and warranties and indemnities as
    are reasonably required to effect the sale. The Divestiture Trustee shall protect the
    legitimate financial interests of the Notifying Party, subject to the Notifying Party’s
    unconditional obligation to divest at no minimum price in the Trustee Divestiture Period.
36. In the Trustee Divestiture Period (or otherwise at the Commission’s request), the
    Divestiture Trustee shall provide the Commission with a comprehensive monthly report
    written in English on the progress of the divestiture process. Such reports shall be
    submitted within 15 days after the end of every month with a simultaneous copy to the
    Monitoring Trustee and a non-confidential copy to the Notifying Party.
                                                    13
 ---pagebreak--- III.  Duties and obligations of the Parties
37.  The Notifying Party shall provide and shall cause its advisors to provide the Trustee and
     the R&D Technical Expert with all such co-operation, assistance and information as the
     Trustee may reasonably require to perform its tasks. The Trustee and the R&D Technical
     Expert shall have full and complete access to any of the Notifying Party’s or the
     Divestment Business’ books, records, documents, management or other personnel,
     facilities, sites and technical information necessary for fulfilling its duties under the
     Commitments and Energizer and the Divestment Business shall provide the Trustee and
     the R&D Technical Expert upon request with copies of any document. The Notifying Party
     and the Divestment Business shall make available to the Trustee and the R&D Technical
     Expert one or more offices on their premises and shall be available for meetings in order
     to provide the Trustee and the R&D Technical Expert with all information necessary for
     the performance of their tasks.
38.  The Notifying Party shall provide the Monitoring Trustee with all managerial and
     administrative support that it may reasonably request on behalf of the management of the
     Divestment Business. This shall include all administrative support functions relating to the
     Divestment Business which are currently carried out at headquarters level. The Notifying
     Party shall provide and shall cause its advisors to provide the Monitoring Trustee, on
     request, with the information submitted to potential purchasers, in particular give the
     Monitoring Trustee access to the data room documentation and all other information
     granted to potential purchasers in the due diligence procedure. The Notifying Party shall
     inform the Monitoring Trustee on possible purchasers, submit lists of potential purchasers
     at each stage of the selection process, including the offers made by potential purchasers
     at those stages, and keep the Monitoring Trustee informed of all developments in the
     divestiture process.
39.  The Notifying Party shall grant or procure Affiliated Undertakings to grant comprehensive
     powers of attorney, duly executed, to the Divestiture Trustee to effect the sale (including
     ancillary agreements), the Closing and all actions and declarations which the Divestiture
     Trustee considers necessary or appropriate to achieve the sale and the Closing, including
     the appointment of advisors to assist with the sale process. Upon request of the
     Divestiture Trustee, the Notifying Party shall cause the documents required for effecting
     the sale and the Closing to be duly executed.
40.  The Notifying Party shall indemnify the Trustee and its employees and agents and the
     R&D Technical Expert (each an “Indemnified Party”) and hold each Indemnified Party
     harmless against, and hereby agrees that an Indemnified Party shall have no liability to
     the Notifying Party for, any liabilities arising out of the performance of the Trustee’s and
     the R&D Technical Expert’s duties under the Commitments, except to the extent that such
     liabilities result from the wilful default, recklessness, gross negligence or bad faith of the
     Trustee, the R&D Technical Expert, their employees, agents or advisors.
41.  At the expense of the Notifying Party, the Trustee may appoint advisors (in particular for
     corporate finance or legal advice), subject to the Notifying Party’s approval (this approval
     not to be unreasonably withheld or delayed) if the Trustee considers the appointment of
     such advisors necessary or appropriate for the performance of its duties and obligations
     under the Mandate, provided that any fees and other expenses incurred by the Trustee
     are reasonable. Should the Notifying Party refuse to approve the advisors proposed by
     the Trustee the Commission may approve the appointment of such advisors instead, after
     having heard the Notifying Party. Only the Trustee shall be entitled to issue instructions to
     the advisors. Paragraph 40 of these Commitments shall apply mutatis mutandis. In the
     Trustee Divestiture Period, the Divestiture Trustee may use advisors who served the
                                                     14
 ---pagebreak---       Notifying Party during the Divestiture Period if the Divestiture Trustee considers this in the
      best interest of an expedient sale.
 42.  The Notifying Party agrees that the Commission may share Confidential Information
      proprietary to the Notifying Party with the Trustee and the R&D Technical Expert. The
      Trustee and the R&D Technical Expert shall not disclose such information and the
      principles contained in Article 17 (1) and (2) of the Merger Regulation apply mutatis
      mutandis.
 43.  The Notifying Party agrees that the contact details of the Monitoring Trustee are
      published on the website of the Commission's Directorate-General for Competition and
      they shall inform interested third parties, in particular any potential purchasers, of the
      identity and the tasks of the Monitoring Trustee.
 44.  For a period of 10 years from the Effective Date the Commission may request all
      information from the Notifying Party that is reasonably necessary to monitor the effective
      implementation of these Commitments.
 IV.   Replacement, discharge and reappointment of the Trustee
 45.  If the Trustee ceases to perform its functions under the Commitments or for any other
      good cause, including the exposure of the Trustee to a Conflict of Interest:
      (a)       the Commission may, after hearing the Trustee and the Notifying Party, require
                the Notifying Party to replace the Trustee; or
      (b)       the Notifying Party may, with the prior approval of the Commission, replace the
                Trustee.
 46.  If the Trustee is removed according to paragraph 45 of these Commitments, the Trustee
      may be required to continue in its function until a new Trustee is in place to whom the
      Trustee has effected a full hand over of all relevant information. The new Trustee shall be
      appointed in accordance with the procedure referred to in paragraphs 23-31 of these
      Commitments.
 47.  Unless removed according to paragraph 45 of these Commitments, the Trustee shall
      cease to act as Trustee only after the Commission has discharged it from its duties after
      all the Commitments with which the Trustee has been entrusted have been implemented.
      However, the Commission may at any time require the reappointment of the Monitoring
      Trustee if it subsequently appears that the relevant remedies might not have been fully
      and properly implemented.
SECTION F.       Arbitration
 48.  In the event that the Purchaser claims that the Notifying Party or any Affiliated
      Undertaking is failing to comply with the requirements of the commitment described in
      paragraphs 16-19 above, the third party may choose to utilise the fast track dispute
      resolution procedure as described in this Section.
  I.   Fast Track Dispute Resolution
 49.  If the Purchaser wishes to avail itself of the fast track dispute resolution procedure, it shall
      send a written request to the Notifying Party (with a copy to the Monitoring Trustee)
      setting out in detail the reasons leading the Purchaser to believe that the Notifying Party
      is failing to comply with the requirements of these Commitments. The Purchaser and the
      Notifying Party will use their best efforts to resolve all differences of opinion and to settle
                                                     15
 ---pagebreak---      all disputes that may arise through cooperation and consultation within a reasonable
     period of time not exceeding fifteen (15) working days after receipt of the request.
50.  The Monitoring Trustee shall present its own proposal (the “Trustee Proposal”) for
     resolving the dispute within seven (7) business days, specifying in writing the action, if
     any, to be taken by the Notifying Party in order to ensure compliance with the
     Commitments vis-à-vis the Purchaser, and be prepared, if requested, to facilitate the
     settlement of the dispute.
51.  Should the Purchaser and the Notifying Party (together “Parties to the Arbitration”) fail to
     resolve their differences of opinion in the consultation phase, the Requesting Party shall
     serve a notice (the “Notice”), in the sense of a request for arbitration, to the London Court
     of International Arbitration (hereinafter the “Arbitral Institution”) with a copy of such Notice
     to the Notifying Party.
52.  The Notice shall set out in detail the dispute, difference or claim (the “Dispute”) and shall
     contain, inter alia, all issues of both fact and law, including any suggestions as to the
     procedure, and all documents relied upon shall be attached, e.g. documents,
     agreements, expert reports, and witness statements. The Notice shall also contain a
     detailed description of the action to be undertaken by the Notifying Party.
53.  The Notifying Party shall, within thirty (30) days from receipt of the Notice, submit its
     answer (the “Answer”), which shall provide detailed reasons for its conduct and set out,
     inter alia, all issues of both fact and law, including any suggestions as to the procedure,
     and all documents relied upon, e.g. documents, agreements, expert reports, and witness
     statements. The Answer shall, if appropriate, contain a detailed description of the action
     which the Notifying Party proposes to undertake vis-à-vis the Purchaser.
II.   Appointment of the Arbitrators
54.  The Arbitral Tribunal shall consist of three (3) persons. The Purchaser shall nominate its
     arbitrator in the Notice; the Notifying Party shall nominate its arbitrator in the Answer. The
     arbitrators nominated by the Purchaser and by the Notifying Party shall, within five (5)
     working days of the nomination of the latter, nominate the chairman, making such
     nomination known to the Parties to the Arbitration and the Arbitral Institution which shall
     forthwith confirm the appointment of all three (3) arbitrators.
55.  Should the Parties to the Arbitration fail to nominate an arbitrator, or if the two (2)
     arbitrators fail to agree on the chairman the default appointment(s) shall be made by the
     Arbitral Institution.
56.  The three-person arbitral tribunal is herein referred to as the “Arbitral Tribunal”.
III.  Arbitration Procedure
57.  The Dispute shall be finally resolved by arbitration under the rules of the Arbitral
     Institution, with such modifications or adaptations as foreseen herein or necessary under
     the circumstances (the “Rules”). The arbitration shall be conducted in London, England,
     in the English language.
58.  The procedure shall be a fast-track procedure. For this purpose, the Arbitral Tribunal shall
     shorten all applicable procedural time-limits under the Rules as far as admissible and
     appropriate in the circumstances. Parties to the Arbitration shall consent to the use of e-
     mail for the exchange of documents.
59.  The Arbitral Tribunal shall, as soon as practical after the confirmation of the Arbitral
     Tribunal, hold an organisational conference to discuss any procedural issues with the
     Parties to the Arbitration. Terms of reference shall be drawn up and signed by the Parties
                                                    16
 ---pagebreak---     to the Arbitration and the Arbitration Tribunal at the organisational meeting or thereafter
    and a procedural time-table shall be established by the Arbitral Tribunal. An oral hearing
    shall, as a rule, be established within two months of the confirmation of the Arbitral
    Tribunal.
60. In order to enable the Arbitral Tribunal to reach a decision, it shall be entitled to request
    any relevant information from the Parties to the Arbitration, to appoint experts and to
    examine them at the hearing, and to establish the facts by all appropriate means. The
    Arbitral Tribunal is also entitled to ask for assistance by the Monitoring Trustee in all
    stages of the procedure.
61. The Arbitral Tribunal shall not disclose Confidential Information and apply the standards
    attributable to Confidential Information under the Merger Regulation. The Arbitral Tribunal
    may take the measures necessary for protecting confidential information in particular by
    restricting access to Confidential Information to the Arbitral Tribunal, the Monitoring
    Trustee and outside counsel and experts of the opposing party.
62. The burden of proof in any dispute under these Rules shall be borne as follows: (i) the
    Purchaser must produce evidence of a prima facie case and (ii) if the Purchaser produces
    evidence of a prima facie case, the Arbitral Tribunal must find in favour of the Purchaser
    unless the Notifying Party can produce evidence to the contrary.
IV.  Involvement of the Commission
63. The Commission shall be allowed and enabled to participate in all stages of the
    procedure by:
    (i)      Receiving all written submissions (including documents and reports, etc.) made
             by the Parties to the Arbitration;
    (ii)     Receiving all orders, interim and final awards and other documents exchanged by
             the Arbitral Tribunal with the Parties to the Arbitration (including Terms of
             reference and procedural timetable);
    (iii)    Having the opportunity to file amicus curiae briefs; and
    (iv)     Being present at the hearing(s) and being allowed to ask questions to the Parties
             to the Arbitration, witnesses and experts.
64. The Arbitral Tribunal shall forward, or shall order the Parties to the Arbitration to forward,
    the documents mentioned to the Commission without delay.
65. In the event of disagreement between the Parties to the Arbitration regarding the
    interpretation of the Commitments, the Arbitral Tribunal may seek the Commission’s
    interpretation of the Commitments before finding in favour of any Party to the Arbitration
    and shall be bound by the interpretation.
V.   Decisions of the Arbitral Tribunal
66. The Arbitral Tribunal shall decide the dispute on the basis of the Commitments and the
    Decision. Issues not covered by these Commitments and the Decision shall be decided
    (in the order as stated) by reference to the Merger Regulation, EU law and the general
    principles of law common to the legal orders of the Member States without a requirement
    to apply a particular national system. The Arbitral Tribunal shall take all decisions by
    majority vote.
67. Upon request of the Purchaser, the Arbitral Tribunal may make a preliminary ruling on the
    Dispute. The preliminary ruling shall be rendered within one month after the confirmation
                                                  17
 ---pagebreak---         of the Arbitral Tribunal, shall be applicable immediately and, as a rule, remain in force
        until a final decision is rendered.
68.     The Arbitral Tribunal shall, in the preliminary ruling as well as in the final award, specify
        the action, if any, to be taken by the Notifying Party or any Affiliated Undertaking in order
        to comply with these Commitments vis-à-vis the Purchaser (e.g. specify a contract
        including all relevant terms and conditions). The final award shall be final and binding on
        the Parties to the Arbitration and shall resolve the Dispute and determine any and all
        claims, motions or requests submitted to the Arbitral Tribunal. The arbitral award shall
        also determine the reimbursement of the costs of the successful Party to the Arbitration
        and the allocation of the arbitration costs. In case of granting a preliminary ruling or if
        otherwise appropriate, the Arbitral Tribunal shall specify that terms and conditions
        determined in the final award apply retroactively.
69.     The final award shall, as a rule, be rendered within six (6) months after the date of the
        terms of reference. The time-frame shall, in any case, be extended by the time the
        Commission takes to submit an interpretation of these Commitments if asked by the
        Arbitral Tribunal.
70.     The Parties to the Arbitration shall prepare a non-confidential version of the final award,
        without business secrets. The Commission may publish the non-confidential version of
        the award. Nothing in the arbitration procedure shall affect the power to the Commission
        to take decisions in relation to the Commitments in accordance with its powers under the
        Merger Regulation.
Section G          The review clause
71.     The Commission may extend the time periods foreseen in the Commitments in response
        to a request from the Notifying Party or, in appropriate cases, on its own initiative. Where
        the Notifying Party requests an extension of a time period, it shall submit a reasoned
        request to the Commission no later than one month before the expiry of that period,
        showing good cause. This request shall be accompanied by a report from the Monitoring
        Trustee, who shall, at the same time send a non-confidential copy of the report to the
        Notifying Party. Only in exceptional circumstances shall the Notifying Party be entitled to
        request an extension within the last month of any period.
72.     The Commission may further, in response to a reasoned request from the Notifying Party
        showing good cause waive, modify or substitute, in exceptional circumstances, one or
        more of the undertakings in these Commitments. This request shall be accompanied by a
        report from the Monitoring Trustee, who shall, at the same time send a non-confidential
        copy of the report to the Notifying Party. The request shall not have the effect of
        suspending the application of the undertaking and, in particular, of suspending the expiry
        of any time period in which the undertaking has to be complied with.
Section H.         Entry into force
73.     The Commitments shall take effect upon the date of adoption of the Decision.
duly authorised for and on behalf of the Notifying Party
                                                      18
 ---pagebreak--- […]
Authorized to sign on behalf of Energizer Holdings, Inc.
Based on a power of attorney dated 10 October 2018
                                                   19
 ---pagebreak---                              Schedule to the EEA Commitments
1   The Divestment Business consists of Spectrum’s Varta® consumer battery, chargers and
    portable power and lighting business in the EMEA region (“Europe, Middle East and
    Africa”). For the avoidance of doubt, this business does not include Spectrum’s hearing
    aid batteries business, which is primarily marketed under the Rayovac® brand and has
    no sales of Varta® branded product. “EMEA” includes all of Europe, the Middle East and
    Africa. A full list of the 103 divestment countries is included in Annex 16.
2   The legal ownership structure and organisational structure of the Divestment Business is
    laid out in Annex 1[Detailed description of Annex 1].
3   The functional structure charts of the Divestment Business, [Detailed description of Annex
    2] are provided in Annex 2.
4   In accordance to paragraph 5 of the Commitments, the Divestment Business includes,
    but is not limited to, the following tangible and intangible assets:
4.1 Main tangible assets included in the Divestment Business:
            Dischingen production facility. The alkaline production facility in Dischingen
             (Germany), [Detailed description of Annex 3].
            Facilities. A complete list of the facilities used by the Divestment Business,
             [Detailed description of Annex 4] is provided in Annex 4.
            IT organisation/infrastructure. A description of the functional structure of the IT
             organisation, the IT applications and the IT infrastructure and hardware used by
             the Divestment Business, [Detailed description of Annex 5], is provided in Annex
             5.
            Raw materials/inventories/work in progress. The Divestment Business will also
             include all existing raw material, work in progress, and semi-finished and finished
             goods inventory of the Divestment Business as of the Effective Date of the
             Commitments.
4.2 Main Intangible assets included in the Divestment Business:
            Varta® trademarks [Detailed description of Annex 6]             A complete list these
             trademarks is included in Annex 6.
            Other IP rights and Information. The Divestment Business will also include
             Information, IP Rights necessary for use by the Divestment Business [Information
             on IP Rights and Information included in the Divestment]. These patents are
             listed in Annex 7.
            Data, books and records. All relevant data, books and records, including but not
             limited to business records, personnel records, supplier and customer records
             pertaining to the Divestment Business (in full or in part, but excluding all
             information in relation to activities not included in the Divestment Business).
            Customers. A list of the EEA customers of the Divestment Business for FY2017
             [Information on contractual relations with third parties] is provided in Annex 8.
 ---pagebreak---             Personnel / Key Personnel. A breakdown of the headcount of the Divestment
             Business is provided in Annex 9 and a list of the key personnel of the Divestment
             Business [Information on strategy] is provided in Annex 10.
            Government licenses/permits/authorisations. All governmental licenses, permits
             and authorisations related to the Divestment Business, including but not limited to
             marketing authorisations and manufacturing licenses.
            Supply contracts. The finished products and raw material supply contracts shall
             be transferred to the Divested Business by way of partial or complete assignment
             (as applicable) or back-to-back arrangements as set out in Section 5(c) of the
             Commitments.
                     A list of all finished products supply arrangements of the Divestment
                      Business is provided in Annex 11.
                     A list of the raw material supply arrangements of the Divestment
                      Business [Information on contractual relations with third parties]          is
                      provided in Annex 12.
            Distribution agreements. A list of the distribution arrangements of the Divestment
             Business is provided in Annex 13.
            IT applications. All the IT applications / software tools listed in Annex 5 (already
             provided above in connection with the IT organisation/infrastructure) or
             alternatively a non-exclusive, perpetual, irrevocable, royalty-free (sub)license to
             use the software tools that are currently in use by the Divestment Business. In
             the event that materials to be transferred contain information that is confidential to
             any retained business and not relevant for the Divestment Business, this
             information shall be redacted as appropriate.
            R&D. The tangible and intangible assets used in the R&D function of Spectrum’s
             global battery business, [Localisation of Spectrum’s global battery business]. An
             overview of the R&D costs and the R&D equipment of the Divestment Business is
             provided in Annex 14.
             With respect to R&D, Energizer commits to grant the Divestment Business access
             to the same capabilities that it currently enjoys. [Detailed description of the
             commitment].
            A list of the R&D projects of the Divestment Business is provided in Appendix
             14.1.
            A list of the R&D personnel with responsibilities to the Divestment Business
             [Detailed description of Appendix 14.2], as well as the percentage of time they
             spend on Varta® Europe projects is provided as Appendix 14.2. [Information on
             R&D]1;
            Customer contracts. All customer contracts, framework agreements and orders
             pertaining to the Divestment Business.
            Insurance policies. The Divestment Business will include insurance policies
             primarily related to the business.
1 [Information on R&D].
                                                   2
 ---pagebreak--- 4.3 If there is any tangible or intangible asset or personnel which is not covered by
    paragraphs 4.1 and 4.2 of this Schedule but which is (i) used by the Divestment
    Business; and (ii) contributes to the continued viability and competitiveness of the
    Divestment Business, that asset or adequate substitute shall be transferred to the
    Purchaser. This includes all the R&D personnel that is deemed necessary to the
    Divestment Business, under the supervision of the Monitoring Trustee with the support of
    the R&D Technical Expert.
5   With respect to Spectrum’s hearing aid batteries business, Energizer commits to enter
    into an exclusive supply agreement with the Divestment Business for Rayovac®-branded
    hearing aid batteries [Information on contractual terms]. The purpose of the Supply
    Agreement is to allow the Purchaser to continue to supply Rayovac® branded hearing aid
    batteries to the Non‐Audiologist Retail Channel in EMEA, on an exclusive basis.
    Annex 15 provides a list of the relevant customers in relation to the proposed remedy in
    the Non‐Audiologist Retail Channel in EMEA.
6   Where requested by the Purchaser and needed for the operation of the Divestment
    Business, Energizer will provide for appropriate transitional service or supply
    arrangements (“TSAs”), [Information on duration and contractual terms] A non-exhaustive
    list of possible TSAs is provided in Annex 17.
                                                3
 ---pagebreak---                                            Annex 1
Legal ownership structure and organisational structure chart of the Divestment Business
                                        [Confidential]
                                               *
                                           Annex 2
                    Functional Structure Charts of Divestment Business
                                        [Confidential]
                                               *
                                           Annex 3
                    Description of the Dischingen manufacturing facility
                                        [Confidential]
                                               *
                                           Annex 4
                                       List of Facilities
                                        [Confidential]
                                               *
                                           Annex 5
                     IT Organisation / IT applications / IT Infrastructure
                                        [Confidential]
                                               *
                                           Annex 6
                   List of Trademarks used by the Divestment Business
                                        [Confidential]
                                               *
                                           Annex 7
      List of Consumer Battery Patents to be Assigned to the Divestment Business
                                        [Confidential]
                                               *
                                           Annex 8
                 List of customers of the Divestment Business in the EEA
                                        [Confidential]
 List of customers of the Divestment Business in the EMEA region (excluding the EEA)
                                        [Confidential]
                                               *
                                           Annex 9
                           Headcount of the Divestment Business
                                        [Confidential]
 ---pagebreak---                                            *
                                      Annex 10
                    Key Personnel of the Divestment Business
                                    [Confidential]
                                           *
                                      Annex 11
List of all finished products supply arrangements of the Divestment Business
                                    [Confidential]
                                           *
                                      Annex 12
     List of raw material supply arrangements of the Divestment Business
                                    [Confidential]
                                           *
                                      Annex 13
            List of Distribution arrangements of Divestment Business
                                    [Confidential]
                                           *
                                      Annex 14
                          R&D of the Divestment Business
                                    [Confidential]
                                           *
                                    Appendix 14.1
                                    [Confidential]
                                           *
                                    Appendix 14.2
                                    [Confidential]
                                           *
                                      Annex 15
List of the relevant customers in the Non‐Audiologist Retail Channel in EMEA
                                    [Confidential]
                                           *
                                      Annex 16
                            Countries included in EMEA
                                    [Confidential]
                                           *
                                      Annex 17
                                     List of TSAs
                                    [Confidential]
                                               2