CELEX: 32014M7155
Language: en
Date: 2014-07-14 00:00:00
Title: Commission Decision of 14/07/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7155 - SSAB / RAUTARUUKKI) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EN

      Case No COMP/M.7155 - SSAB / RAUTARUUKKI

                                                                                                Only the English text is available and authentic.

                                                                                                                      REGULATION (EC) No 139/2004
                                                                                                                                 MERGER PROCEDURE

                                                                                                     Article 6(1)(b) in conjunction with Art 6(2)
                                                                                                                                 Date: 14/07/2014

                                                                       In electronic form on the EUR-Lex website under document number 32014M7155

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 14.7.2014
C(2014) 5110 final

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|To the notifying party:                                               |                                                                      |
|                                                                      |                                                                      |

Dear Sir/Madam,

Subject:    Case No COMP/M.7155 - SSAB/ RAUTARUUKKI
Commission decision pursuant to Article 6(1)(b) in conjunction with Article 6(2) of Council Regulation No 139/2004[1]

 1. On 22 May 2014, the Commission received a notification of a proposed concentration pursuant to Article  4  of  Council  Regulation  (EC)  No
    139/2004, by which SSAB AB (“SSAB” or the "Notifying Party", Sweden) intends to acquire sole control of Rautaruukki Oyj (“Ruukki”,  Finland)
    within the meaning of Article 3(1)(b) of the Merger Regulation, by way of a public share exchange offer. SSAB and  Ruukki  are  collectively
    referred to as "the Parties".

The Parties

 2. SSAB is a Sweden-based steel manufacturer with approx. 8 700 employees, active in the production and distribution of (mainly  carbon)  steel
    and in the supply of steel products for the construction industry. SSAB  owns  steel  production  plants  in  Sweden  (Luleå,  Borlänge  and
    Oxelösund) and the US, as well as finishing units in China.

 3. Ruukki is a Finland-based steel manufacturer with approx. 8 700 employees, active in the production  and  distribution  of  (mainly  carbon)
    steel and in the supply of steel products for the construction  industry.  Ruukki's  steel  production  assets  are  located  in  Raahe  and
    Hämeenlinna (Finland).

 4. Both of the Parties' European carbon steel production facilities are in the Nordic countries, SSAB's in  Sweden  and  Ruukki's  in  Finland.
    Their production is mostly comprised of flat carbon steel products, for which they are today the 11th and 12th largest suppliers  in  Europe
    with combined deliveries of approx. 3 million tonnes of steel.

The OperatIon AND THE CONCENTRATION

 5. On 22 January 2014, the Parties announced that they had concluded a combination agreement setting out the terms of a public  share  exchange
    offer, by which the owners of Ruukki are offered SSAB shares in exchange for their Ruukki shares. The offer period for  the  share  exchange
    offer began on 14 April 2014 and should expire on 22 July 2014.

 6. Subject to the success of this public offer, Ruukki will be wholly owned by SSAB and no individual shareholder  will  have  the  ability  to
    control the merged entity. The proposed transaction therefore constitutes a concentration within the  meaning  of  Article  3(1)(b)  of  the
    Merger Regulation.

EU DIMENSION

 7. The undertakings concerned have a combined aggregate worldwide turnover of more than EUR 5 000 million [SSAB: 4 048 million EUR and  Ruukki:
    2 404 million EUR]. Each of them has an EU-wide turnover in excess of EUR 250 million [SSAB: […] million EUR and Ruukki: […]  million  EUR],
    but they do not achieve more than two-thirds of their aggregate EU-wide turnover within one and the same Member State.

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

RELEVANT MARKETS

 9. The Parties' activities primarily overlap in (i) the production and supply of carbon steel flat products, (ii)  the  distribution  of  steel
    products as well as in (iii) the production and supply of steel products for the construction industry.[2]

       Introduction to the carbon steel industry in the Nordic region

10. Carbon steel production consists of two main stages (i) the production of crude  steel  slabs  and  (ii)  processing  of  slabs  into  final
    products, both of which can have several stages.

11. The most common method of producing crude steel slabs is the production from iron ore. Ore-based hot metal is produced through reduction  of
    iron ore pellets in blast furnaces. The hot metal is then treated, scrap may be added to it and its composition  is  adjusted  to  give  the
    steel the desired qualities. This adjustment may include the use appropriate quantities of various alloying elements. The hot metal is  then
    cast and cooled in continuous casting machines to produce slabs of manageable sizes, usually weighing 25 tonnes.

12. Cooled slabs can be transported to rolling mills for further processing. In the rolling mills they are rolled into thinner, usable sheets or
    plates through a hot-rolling process that starts with re-heating of the slabs. Slabs can be rolled  into  different  thicknesses  through  a
    series of stands. If required, hot rolled coils can be rolled down further to thinner gauges by cold-rolling. Various treatments may also be
    applied to the coils, such as quenching and tempering to produce steel with specific qualities. Finally,  the  coils  can  be  coated,  e.g.
    galvanised or colour-coated.

13. The flow chart below illustrates one of the SSAB's carbon steel production processes in Sweden.

    Illustration of […]

    […]

    Source: Form CO, paragraph 94

14. The Parties produce their carbon steel in the Nordic countries by using the iron-ore  based  method  described  above.  They  operate  blast
    furnaces and produce carbon steel slabs in three sites in the Nordic countries: SSAB in Luleå and Oxelösund in Sweden and Ruukki  in  Raahe,
    Finland.

15. SSAB has two facilities in the Nordic countries for the processing of slabs into rolled flat products: one in Oxelösund (plate rolling)  and
    another one in Borlänge (hot and cold-rolling of coils, coating), both in Sweden. In addition,  SSAB  has  a  further  coating  facility  in
    Sandvika, Sweden.

16. Ruukki, on the other hand, processes the slabs at its production site in Raahe (plate rolling, hot rolling) and can do further processing in
    Hämeenlinna, Finland (cold rolling, coating). Ruukki also has an additional coating facility in Kankaanpää, Finland.

17. The Parties are the only slab producers located in the Nordic countries. Further processing of slabs for the merchant market is  nonetheless
    also done by NLMK / Dansteel in Denmark.

18. In addition to producing flat carbon steel, both Parties operate an extensive distribution network throughout the Nordic  region  for  those
    products. The Parties' assets cover both steel service centres ('SSCs') and stockholding centres ('SCs'). The traditional role of  SSCs  and
    SCs is to provide customers with flexible and quick deliveries of steel, including small batches that cannot economically be delivered  from
    a steel mill.

19. Moreover, steel service centres also provide further processing of coils by cutting them  to  length  and  slitting  them  according  to  an
    individual customer's demands. The distribution network however also acts as a significant route to market for even ex-mill deliveries  from
    steel works. The distribution facilities can on these occasions  facilitate  contacts  between  the  customers  and  steel  works,  optimise
    logistics by increasing transport volumes and enable the customer to have a one-stop-shop for all of his steel requirements.  This  approach
    is exemplified by Ruukki's business model in Finland, where it operates a fully integrated sales  organisation  with  no  clear  distinction
    between distribution sales force and ex-mill sales force.

20. The Parties are the only competitors to be active in the whole Nordic region at the level of steel distribution. Across Norway,  Sweden  and
    Finland, the Parties solely or jointly control five steel service centres and twenty-two stockholding centres through  SSAB's  wholly  owned
    subsidiary Tibnor, its joint ventures with Tata Steel (Norsk Stål, 'NS', and Norsk Stål Tynnplater, 'NST') as  well  as  the  Ruukki  Metals
    distribution network.[3] Besides the Parties, a number of independent steel distributors are present in the Nordic countries.  In  addition,
    ArcelorMittal has a steel service centre joint venture with the BE Group in Sweden (AMBESSC) and Tata Steel Europe has a 50% stake in NS and
    NST in Norway.

21. In addition to selling and distributing flat carbon steel products, the Parties are also further integrated into  certain  downstream  steel
    products markets, including steel construction products such as profiled steel construction sheets in the Nordic region.  SSAB  carries  out
    these activities through its fully-owned subsidiary Plannja, while Ruukki is active  in  steel  construction  products  through  its  Ruukki
    Building Products division. Steel construction products markets feature a number of independent competitors in the Nordic  countries,  while
    also both ArcelorMittal and Tata Steel Europe are active in the production and supply of these products in Sweden.

       Relevant product markets

Production and supply of carbon steel

22. In its decision practice, the Commission has consistently distinguished steel products based  on  the  chemical  composition  of  the  steel
    (metallurgical characteristics) on the one hand, and according to the physical shape of  the  products  on  the  other.  Based  on  chemical
    composition, the Commission has distinguished four broad categories of steel  products:  (i)  carbon  steel,  (ii)  stainless  steel,  (iii)
    specialty steels and (iv) electrical steel.

23. Carbon steel is carbon-based steel containing no or little amounts of alloying elements. The  Parties'  activities  in  the  production  and
    supply of steel only overlap as regards carbon steel.[4] In addition, the Commission has  consistently  held  that  carbon  steel  (i)  flat
    products and (ii) long products belong to separate product markets.[5]

24. The Parties' activities only overlap in the production and supply of carbon steel flat products. There are three stages  in  the  production
    process of flat carbon steel products: (i) hot-rolling, (ii) cold-rolling and (iii) coating.[6] In previous decisions,  the  Commission  has
    considered that the following carbon steel flat products constitute separate product  markets:  (i)  quarto  plate,  which  is  produced  in
    specific quarto (four-stand) mills[7] (ii) other hot-rolled products, (iii) cold-rolled products, (iv) steel for packaging,  (v)  galvanised
    steel and (vi) organic coated (i.e. painted) steel.[8] The Parties are not active in the production and supply of steel for packaging, which
    will not be further discussed in this decision.

25. The Parties agree with the above segmentations, which the market investigation has not called into question.[9]

High strength and wear resistant carbon steel

26. High strength steels ("HS") are carbon steels used in applications where high strength and low weight are required, such  as  in  cranes  or
    automotive components. Their strength is measured in terms of its yield strength and/or tensile strength[10] (in MegaPascals, "MPa").

27. Wear resistant steels ("WR") are carbon steels used in high abrasion environments, such as in mining equipment, shredders or dumper  bodies.
    Their wear resistance is typically measured in terms of indentation hardness[11] (in Brinells, "HBW").

28. Both Parties concentrate a significant part of their flat carbon steel capacity on the production and supply  of  those  two  categories  of
    specialty products. HS and WR specialty steels accounted for […]% of SSAB's deliveries and […]% of Ruukki steel sales in 2013,  while  these
    two niches account for only […]% of carbon steel flat products deliveries in the EEA.[12]

29. The Commission has not assessed in past decisions whether these niches constitute separate product markets.  The  Parties  submit  that  the
    production and supply  of  these  specialty  carbon  steels  do  not  constitute  separate  markets  due  to  both  demand  and  supply-side
    substitutability.

30. Respondents to the market investigation have however not confirmed the Parties' claims in this respect.

31. First, most of the Parties' competitors have confirmed that the production of HS  and  WR  carbon  steel  requires  specific  equipment  and
    machinery compared to standard steel grades.[13] At the level of hot-rolling, such equipment includes quenching lines,  tempering  furnaces,
    and/or thermo-mechanical rolling equipment. Each of these lines would cost approx. EUR […] million[14] and recent examples of  upgrading  or
    commissioning new lines at the Parties' facilities show that several years are required to build, commission and  ramp  up  such  production
    lines. In this respect, the Commission notes that the quenching and tempering equipment required at a quarto plate mill  is  different  from
    the one used in strip product mills.

32. Second, the production of HS and WR carbon steel requires significant know-how in terms of both metallurgy and production process,  as  also
    evidenced by the widespread use of patents by the Parties' competitors and by Ruukki in this field.[15] For  instance,  a  Swedish  customer
    stated in this respect that "High strength steels are more difficult to produce. They require more  R&D  and  a  more  qualified  production
    facility."[16]

33. The Parties' assessment of their own production facilities also reflects that  the  ability  to  produce  HS  and  WR  steel  at  particular
    production facilities depends on the overall setup of the steel mill, including at the slab-making level. The combination agreement  between
    the Parties recognises in this respect that […][17]

34. Third, a majority of competitors and customers disagree with the Parties' claim that most carbon steel mills in Europe would be  capable  of
    producing HS and/or WR carbon steel.[18] In addition, all competitors of the Parties responding to the market investigation  have  confirmed
    that a producer of standard carbon steel would not be able to start swiftly and without significant costs the production and sales of HS  or
    WR carbon steel products due to high capital investments, and to the necessity to develop know-how and brand awareness. Although the  market
    investigation was inconclusive as regards whether the same equipment can be used to produce HS and WR carbon steel,[19] most competitors  of
    the Parties consider that there are nevertheless significant differences in  terms  of  metallurgical  composition,  crystal  structure  and
    production process between HS and WR steel.[20]

35. Fourth, although the large majority of competitors and of customers considers that  product  brands  and  brand  awareness  do  not  play  a
    significant role with respect to standard steel, most competitors and customers have indicated  that  brands  and  brand  awareness  play  a
    significant role as regards high-strength and wear-resistant steel.[21] In this respect, the Commission notes that  the  Parties  and  their
    competitors use different brands for high-strength applications and for wear-resistant applications.

36. Fifth, the large majority of customers and competitors of the Parties considers that there is no demand-side  substitutability  between  (i)
    high-strength, (ii) wear-resistant and (iii) standard carbon steel products, and in particular that steel customers would  not  switch  away
    from HS or WR products in case of a 5-10% price increase.[22]

37. ThyssenKrupp stated for instance that "As to high strength and wear resistant steels, there is a separate demand for each of  them  and  the
    prices for these niche products vary independently. The products also have different end-uses: while high strength steel is  used,  e.g.  in
    construction, wear-resistant steels find their applications in e.g. mining."[23]

38. [Another European competitor] also stressed that "Contrary to HSS, WRS is not intended for structural applications, i.e. ensuring  integrity
    of construction / structure subject to static, dynamic or cyclic loads. - Equipment parts made from  high  strength  or  abrasion  are  very
    different. Usage is usually mutually exclusive."[24]

39. Against this backdrop, the vast majority of competitors and customers consider that HS and WR  carbon  steel  products  exhibit  significant
    price differences compared to the equivalent standard carbon steel products.[25] A number of customers referred to price differences ranging
    from 20 to 100% over standard steel of the same dimensions. This range of difference in prices […][26]

40. The Commission considers that it is likely that HS and WR carbon steel products belong to separate  product  markets  than  standard  carbon
    steel products. The question of whether HS and WR constitute two distinct product markets or are part of broader markets  for  quenched  and
    tempered carbon steel products can however be ultimately left open for the purposes of this case.

    Conclusion

41. For the purposes of this case, the Commission will assess flat carbon steel markets according to the  distinctions  between:  (i)  different
    shapes and finishing stages, i.e. (a) quarto plate ("QP"),  (b)  other  hot-rolled  products  ("HR"),  (c)  cold-rolled  steel  ("CR"),  (d)
    galvanised steel ("GS") and (e) organic-coated steel ("OC"), and (ii) standard steel, high-strength (“HS”) and wear-resistant (“WR”) steel.

Distribution of steel products

42. In addition to ex-mill sales, steel products may also be sold through various distribution channels. Mills tend to supply large orders  with
    longer lead times. Distribution centres typically supply smaller lot sizes and also have shorter lead times. Distribution  centres  also  do
    some processing for customers. Approximately 36% of steel volumes in the EU are sold by  mills  and  the  remaining  64%  are  sold  through
    distributors.

43. In earlier decisions,[27] the Commission has considered separate markets for distribution of steel products on the basis  of  the  following
    cumulative distinctions: (i) distribution of carbon steel products vs distribution of stainless steel products; (ii)  distribution  of  flat
    steel products vs distribution of long steel products; and (iii) distribution through  steel  service  centres  (SSCs)[28]  vs  distribution
    through stockholding centres (SCs)[29] vs distribution through oxy-cutting centres.[30]

44. The Parties do not dispute the Commission's previous approach to product market definition. They submit, however, that  oxy-cutting  centres
    now use several different methods for cutting plates, long products, stainless steel and sheets from strip products including  oxygen,  gas,
    laser, plasma or water. In addition, the Parties themselves do not have separate oxy-cutting centres.  The  assets  used  for  cutting  with
    various methods are integrated at the same sites as stockholding centres. The Parties therefore consider  that  such  centres  now  form  an
    integral part of the market for distribution of steel products through stockholding centres.

45. The results of the market investigation are generally in line with the Commission's precedents. A large majority of customers stated that ex-
    mill sales satisfy different needs than sales from distributors. In particular, customers referred to differences between the  two  channels
    in terms of lead time, average contracts duration, range of products available, prices and minimum order volumes.

46. As regards possible segmentations between carbon steel and stainless  steel,  and  between  flat  and  long  products,  a  large  number  of
    respondents identified differences between the different segments in terms of players  active  in  each  segment,  equipment,  and  specific
    expertise needed to distribute products in each segment.

47. As regards distribution sales channels, a large majority of respondents confirmed the distinction between SSCs and SCs, even if some players
    stated that this distinction is somewhat blurred. On the other hand, respondents have generally confirmed the Notifying Party's  views  that
    oxy-cutting centres do not constitute a separate market in the Nordic region, as processing of quarto plates at distribution level  requires
    similar equipment and know-how as other flat steel products.

48. In view of the above, the Commission considers that the following cumulative distinctions are appropriate in  identifying  separate  product
    markets: (i) distribution of carbon steel products vs distribution of stainless steel products; (ii) distribution of flat steel products  vs
    distribution of long steel products; and (iii) distribution through SSCs vs distribution through SCs.

Production and supply of carbon steel products for the construction industry

49. The Parties are active in the production and supply of (i) profiled steel construction sheets and (ii) steel rainwater systems.

    i) Profiled steel construction sheets

50. Profiled steel construction sheets are typically made from cold rolled galvanised or colour-coated flat carbon steel  and  they  come  in  a
    variety of types and shapes. They are used for roofing, cladding (facades) and decking purposes in the construction industry.  The  Parties'
    activities mostly overlap in the production and supply of profiled steel construction sheets for roofing purposes.

51. The Commission has previously considered that steel sheets for roofing, cladding and decking belong to  the  same  relevant  product  market
    because of a high level of supply-side substitutability.[31]

52. In addition to carbon steel, building products are manufactured from a large number of other materials as well. However, the Commission  has
    previously considered in Usinor / ARBED / Aceralia that steel products, including steel roofing products, only face limited competition from
    other materials because of the particular characteristics of the use of steel  products  (flexibility  of  use,  ease  of  replacements  and
    maintenance) as well as price differences, leaving the exact market definition nonetheless open.[32] In Umicore / Zinifex /  Neptune,  which
    concerned zinc-made roofing products, the Commission nonetheless considered that a product  market  consisting  of  only  zinc-made  roofing
    products was too narrow.[33]

53. The Notifying Party submits that the relevant product market consists of all profiled steel construction sheets regardless of their end-use.
    The Notifying Party further submits that, in the event the Commission would consider  roofing  sheets  to  constitute  a  separate  relevant
    product market, steel roofing sheets would compete with roofs made of other materials, such as  bitumen,  concrete  tiles,  clay  tiles  and
    various metals.

54. The results of the market investigation do not generally support the view that all profiled steel construction sheets would  belong  to  the
    same relevant product market regardless of their end-use although some level of substitutability was  acknowledged  by  market  participants
    particularly between sheets for roofing and those for cladding.[34] In any event, the question can be  left  open  as  the  outcome  of  the
    competitive assessment in the present case is the same regardless of whether all profiled steel  construction  sheets  belong  to  the  same
    relevant product market or not.

55. The results of the market investigation also do not support the view that other construction materials would  be  effective  substitutes  to
    steel roofing sheets in all applications. Numerous market participants noted that  steel  roofing  sheets  are  light  in  weight  and  that
    switching would not be possible particularly when renovating old buildings that have originally been designed and  constructed  using  steel
    roofing sheets. References were also made to differences in price levels between different materials and to building regulations that  often
    can determine the kind of roofing material to be used in a given building.[35] A clear majority of customers would also not switch to  other
    materials even if the prices of steel roofing sheets rose by 5–10%.[36] That pattern was particularly strong in Finland, Estonia and  Poland
    where none of the customers responded that they would switch when faced with such a price rise.[37]

56. The Commission thus concludes that other materials do not impose notable competitive constraints on steel roofing products.

    ii) Steel rainwater systems

57. Rainwater systems allow for the removal of rain- and melt water from rooftops. They consist of various components, such as gutters and  down
    pipes. The Parties are active in the production and supply of rainwater systems made of carbon steel.

58. The Commission has in a previous decision considered that rainwater systems constitute a separate market from roofing products as  such.[38]
    The Notifying Party agrees with this distinction, which the market investigation has not called into question.[39]

59. In addition to carbon steel, rainwater systems are manufactured from numerous other materials, such as PVC, zinc and copper, as well.  On  a
    general level, the Commission has previously considered in Usinor / ARBED / Aceralia that steel  construction  products  only  face  limited
    competition from other materials because of the particular characteristics of the use  of  steel  products  (flexibility  of  use,  ease  of
    replacements and maintenance) as well as price differences, leaving the exact market definition nonetheless open.[40] In Umicore / Zinifex /
    Neptune, which concerned zinc-made rainwater systems, the Commission nonetheless considered that a product market consisting of  only  zinc-
    made rainwater systems was too narrow.[41]

60. The Notifying Party submits that the relevant product market consists of rainwater systems made of various different materials.

61. While the responses to the market investigation indicate some  level  of  substitutability  between  rainwater  systems  made  of  different
    materials, a clear majority of customers nonetheless replied they would not switch to using rainwater systems of other materials even if the
    prices of steel rainwater systems rose by 5–10%.[42]

62. Nonetheless, the question can be ultimately left open as the proposed transaction does not give rise to competition concerns even under  the
    narrowest product market definition, namely rainwater systems made of carbon steel.

       Relevant geographic markets

      Production and supply of standard carbon steel

63. In its latest decision assessing carbon steel flat product markets, in 2006,[43] the Commission found that all markets for carbon steel flat
    products were EEA-wide or at least EEA-wide. The issue of a separate Nordic cluster did however not arise and was therefore never previously
    investigated.

64. In the present case, a number of customers have suggested that competitive conditions in the Nordic region may  be  significantly  different
    from the rest of the EEA, submitting in particular that (i) carbon steel flat product prices in the Nordic countries are often  higher  than
    in other parts of the EEA and that (ii) continental European suppliers have limited commercial activities in the Nordic countries so far. In
    addition, the Commission notes that the Parties have only limited market positions in the EEA as a whole,  but  achieve  significant  market
    positions in the Nordic countries, and in particular in Norway, Sweden and Finland.[44] Against this backdrop, the Commission  has  assessed
    whether the geographic scope of carbon steel flat product markets is in fact wider than the Nordic region.[45]

65. The Parties have claimed that the markets for carbon steel flat products are EEA-wide in scope on the basis of (i) significant trade  flows,
    (ii) low transport  cost  differentials[46]  and  (iii)  direct  presence  (through  sales  offices)  of  continental  European  competitors
    ArcelorMittal, Tata Steel, ThyssenKrupp, Salzgitter, Voestalpine, Dillinger and NLMK in the Nordic countries.

66. In addition, the Parties have submitted an econometric analysis of the evolution and correlation of prices in the Nordic  countries  on  the
    one hand, and in a number of Western European countries (France, Belgium, the Netherlands, Germany and the UK) on the other.

67. However, on the basis of the phase I investigation in the present  case,  the  Commission  considers  that  there  is  at  least  a  serious
    possibility that the geographic scope of carbon steel flat product markets is in fact not wider than the Nordic countries  (Finland,  Sweden
    and Norway), at least for hot-rolled ("HR"), cold-rolled ("CR") and organic coated ("OC) products, for the reasons outlined below.

68. The Commission notes as a preliminary point that SSAB has, during 2004-2008, stopped producing standard grades  of  QP,  and  has  therefore
    largely exited this market including in the Nordic countries.[47] Moreover, the Parties are not present in several segments of  GS.[48]  The
    lack of offering by the Parties in these segments has contributed to the penetration of European  imports  and  has  resulted  in  different
    competitive trends than for HR, CR and OC which are primarily discussed thereafter.

    The Parties consider the Nordic region as a separate business space

69. Both Parties consider that the Nordic countries constitute their "home market", whether in public presentations or as part of their internal
    strategy documents. SSAB thus states on its website, under the heading "Strong position in the home market", that "for  strip  products,[49]
    the cost factor is important in a close-to-customer production. That is why SSAB works continually to develop the company’s strong  position
    in the home markets of Scandinavia and North America."[50]

70. Similarly, Ruukki depicts the competitive strengths of its Metals division as lying in (i)  special  steel  products  and  (ii)  the  Nordic
    countries. Ruukki thus lists on its website the following "Competitive edges in the Nordic countries": (i) "strong  market  position,"  (ii)
    "comprehensive prefabrication and processing services", (iii) "extensive, flexible distribution network" and (iv) "steel  products  tailored
    to meet customer-specific needs".[51]

71. This focus on the Nordic countries is also reflected in the Parties' internal strategy documents. For instance, […][52] In addition, […].

72. Both Parties' sales organizations have separate divisions for the Nordic region on the one hand and for the rest of Europe on the other.[53]
    According to the Parties’ post-merger integration plan, the combined entity’s carbon steel businesses would also be organised according to a
    distinction between the Nordic countries and Western Europe or the rest of Europe going forward.[54]

73. As regards the Parties’ outlook on competition, Ruukki’s internal documents show that […][55] Similarly, the Commission notes that […].[56]

74. Overall, the Commission considers that the Parties view the Nordic region as a separate business space, […].[57]

75. Looking forward, according to the Parties' internal documents, […],[58] i.e. […].[59]

    Low and at best stagnating imports into the Nordics from the EEA

76. The level of EEA imports into Finland, Sweden and Norway varies depending on the flat product under consideration.

Table 1: Ex-mill deliveries by EEA producers into the Nordic countries (volume)

|2013                      |HR        |CR           |OC          |GS           |QP[60]      |
|EEA imports               |[10-20]%  |[20-30]%     |[20-30]%    |[60-70]%     |[40-50]%    |

      Source: Parties, including captive volumes

77. As discussed above, EEA imports achieve higher penetration in the product markets for  which  SSAB  and/or  Ruukki's  product  offering  are
    limited, namely GS and QP. EEA imports in HR, CR and OC remain below [30-40]% of deliveries to the Nordic countries.

78. The Commission further notes that European imports of HR into the Nordics have significantly decreased in the last 6 years (by [5-10] p.p.).
    During the same period, imports of CR have mildly decreased (by [0-5] p.p.) while imports of OC  have  significantly  increased  (by  [5-10]
    p.p.) in particular into Sweden. However, the import developments in OC appear to be linked  to  ArcelorMittal  and  Tata  Steel's  vertical
    integration into steel construction products in Sweden, with captive OC deliveries being used as an input for their downstream production in
    Sweden.

79. The limited and stable import penetration is also confirmed by the Parties' internal documents, with one of the SSAB documents […][61]  This
    applies in particular […].

80. In this respect, a number of customers also indicated that the Nordic region was not a  priority  for  continental  European  suppliers  but
    rather an export market, and that the competitiveness of their  offers  accordingly  deteriorated  whenever  demand  conditions  improve  in
    continental Europe.[62] A customer stated in this respect that "Competitors from Europe provide attractive offers during  market  downturns,
    but when demand picks up these suppliers have the reputation of prioritising their home markets over  exporting  to  Scandinavia.  In  those
    circumstances deliveries become less frequent and reliable, and prices may even become worse."[63] The non-strategic nature  of  the  Nordic
    markets was also confirmed by a number of European competitors.[64]

    Transport costs are a significant barrier to imports from the rest of the EEA into the Nordic region

81. Transport costs from continental Europe into the Nordics account for approx. 10% of final prices and a majority of competitors consider that
    transport costs are a constraining factor for sales to the Nordics.[65] A majority of customers of the parties have also confirmed that non-
    Nordic suppliers face higher transport costs to supply into the Nordics compared to the Parties.[66]

    Table 2: Transport costs for European mill deliveries into the Nordic countries[67]

|Transport cost               |Denmark          |Finland       |Norway        |Sweden        |
|EUR / tonne                  |[…]              |[…]           |[…]           |[…]           |
|% of HR price                |[…]%             |[…]%          |[…]%          |[…]%          |

82. The Commission also notes that national regulations regarding maximum weight limits for  truck  transportation  may  grant  Nordic  mills  a
    further advantage when delivering close to their mills given that maximum weights are higher in the  Nordics  than  in  continental  Europe,
    thereby reducing transport costs per tonne.[68]

83. In this respect, some European competitors of the Parties have also highlighted that the Nordic mills' relative transport cost advantage  is
    in itself a constraining factor for sales in the Nordics, in particular in Sweden and Finland where the Parties' production  facilities  are
    located.[69] The Commission notes that this barrier to trade between the Nordic countries and the rest  of  the  EEA  is  likely  higher  as
    regards HR and CR, which exhibit higher relative transport costs than other carbon steel flat products due to their lower average prices.

84. A number of customers of the Parties also consider that Nordic mills have an advantage in terms of minimum batch size to be able to  supply,
    efficiently, directly from carbon steel mills.[70] In order to achieve shipping to Nordic delivery locations, the minimum efficient scale of
    orders appears to be larger from European mills than from Nordic mills. For instance, a Swedish customer stated in this respect that "Ruukki
    and SSAB are flexible due to minimum order size. The European mills normally require higher order sizes to reach  more  competitive  freight
    solutions."[71]

    European importers face other barriers to expansion in the Nordics, in particular access to efficient local supply chains

85. The majority of HR, CR and OC competitors responding to the market investigation have also stated that setting up local supply chains  is  a
    stronger driver of competition in the Nordics compared to the rest of Europe.  Competitor  Voestalpine  thus  stated  that  "In  respect  to
    directly reach the end customer it is necessary to establish a distribution network. Thereby the dependencies on these distribution networks
    is higher in the Nordic countries than in the rest of the EEA." [72]

86. Similarly, the majority of Nordic customers have stated that there are differences  between  the  Nordic  steel  mills  and  other  European
    suppliers in terms of supply chain reliability and just-in-time deliveries.[73] A Nordic customer stated in this respect that "Nordics mills
    are having a local distribution network to support quick deliveries and small batch sizes".

87. A number of Nordic customers also consider that switching part of their carbon steel flat product purchases to  continental  European  mills
    would entail higher inventory, and therefore higher working capital in order to address both the higher minimum batch size and the  loss  of
    delivery reliability. A Norwegian customer stated for instance that "ThyssenKrupp can  be  an  alternative,  but  then  we  need  [enormous]
    qty".[74]

88. In this respect, the Commission further notes that Nordic mills  have  an  advantage  over  their  European  competitors  in  terms  of  the
    reliability of their supply chain and agility of deliveries (including just in time). Lundberg & Kullberg AB for instance  stated  that  the
    Nordic steel mills have an advantage in "Supply reliability".[75]

89. As regards OC, Nordic producers of strip products may have more closely differentiated their products to suit the Nordic markets in  OC,  in
    particular as regards the specific demand of the steel roofing industry.[76]

    Price differences are substantial

90. Around half of the Parties’ HR, CR and OC competitors and a plurality of customers responding to the  market  investigation  indicated  that
    flat carbon steel ex-mill prices in the Nordic countries significantly differ from continental European prices.[77] A Swedish customer of HR
    stated in this respect that "Typically steel is approx. EUR 50 per ton (….) more expensive in Sweden and Scandinavia  than  for  example  in
    Germany. Italian steel prices are even lower due to the possibility to import steel from Turkey."[78] This was also confirmed by  large  and
    representative Nordic customers. A number of competitors of the Parties also indicated that prices in the Nordic countries were higher  than
    on the continent, in particular due to logistical costs for shipments from European mills.[79]

91. The Commission considers that the market investigation has shown that potential price differences between the Nordic region and the rest  of
    the EEA are not uniform across flat products, but depend on the specific product at stake.

92. The Parties have submitted price data from a third-party data provider, focussing on the most standard  grades  of  each  type  of  product.
    Accordingly, this price data eliminates any potential price differences linked to different product mixes between producers or countries.

    […]

93. According to this data, prices in Finland and Sweden appear to be currently substantially higher than in Germany for HR (EUR  70  per  tonne
    for Finland and EUR 20 per tonne for Sweden) and CR (EUR 40 per ton for both Sweden and Finland). Moreover, these differences seem  to  have
    increased since 2009, suggesting price divergence between the Nordic and mainland European prices of these products. On the other hand,  the
    Nordic and mainland European prices of QP, where the parties have less strong positions, are closely aligned, with differences of less  than
    EUR 10 per tonne between both Finland and Sweden on the one hand, and Germany on  the  other.[80]  No  indication  of  price  divergence  is
    observed for QP.

    Price correlation analysis is at best inconclusive

94. The Parties submitted a series of price correlation analyses for HR, CR, HDG and QP in order to assess in detail the  divergence/co-movement
    of prices between the Nordic countries, mainland Europe (Germany, France, Belgium  and  the  Netherlands)  and  the  UK.[81]  This  evidence
    consisted of correlation of prices in levels and first differences, stationarity analysis  of  the  log  price  ratios,  residual-based  co-
    integration tests, cyclical decomposition of the time series and conditional price correlation analysis. The Parties claim  that  the  price
    correlation analysis provides evidence for co-movement of prices between the Nordic region and the rest of  Europe.  They  argue  that  this
    finding indicates price arbitrage between carbon steel produced in the Nordics and imported carbon steel from the rest of Europe. Therefore,
    the Parties argue that the carbon steel markets are EEA wide.

95. The Commission notes that in general evidence on price correlation can only provide indirect evidence of market definition, given that it is
    not directly informative about the outcome of the demand substitution test as set out in paragraphs  15  to  18  of  the  Notice  on  Market
    Definition.[82]

96. The Commission further points out that the evidentiary value of price correlation analysis in general is highly dependent on controlling for
    common cost and demand factors that determine prices in the relevant regions. Price level and price difference correlations analysis do  not
    control for these factors. Therefore these methods are unable to identify whether price co-movement is due to common cost and demand  trends
    or to genuine substitution as a result of import competition.[83] Also co-integration between two price series can be the result  of  common
    demand and cost trends for otherwise completely unrelated markets. Therefore the Commission does not regard these methods as informative  on
    their own about the existence and the extent of price arbitrage across regions, especially in light of the qualitative evidence pointing  in
    the opposite sense, and in light of the evidence on price divergence across regions.

97. The conditional correlation analysis, submitted by the Parties on 24 June 2014, accounts for certain common cost elements,  i.e.  iron  ore,
    scrap metal and coking coal.[84] This conditional correlation analysis provides some  evidence  that  HR  and  CR  prices  within  are  more
    homogenous within the Nordic region when compared to the continental Europe. Indeed,  for  these  products  the  average  conditional  price
    correlation within the Nordics is 95%, while it is only 85% between the countries of the Nordics and mainland Europe. No such difference can
    be observed for QP, for which product also the qualitative evidence points towards a common market (average correlation within  the  Nordics
    is 92% while between the Nordics and mainland Europe it is 90%). Therefore, using QP as a benchmark raises doubts as to whether there  is  a
    common market for HR and CR.[85]

98. A further indication for a separate Nordic market was established by the further price analysis  carried  out  by  the  Commission.  In  its
    further analysis, the Commission removed monthly time fixed effects from the price series and repeated the conditional correlation  exercise
    on the resulting residuals. The advantage of this method is that it controls for both common cost and demand trends. It will, however,  also
    remove on average the price movements due to substitution. Therefore, this method works as a one sided test for geographic  clustering:  for
    common markets it produces low or even negative correlations and generates positive correlations only for clusters that are more  correlated
    with each other than the average. The results show geographic clustering for CR: correlation within Nordic countries is  positive  (40-60%),
    just as within mainland Europe (15-70%), while there is zero or negative correlation between the countries of the two clusters. For  HR  the
    Nordics still show the same clustering, although Finland seems to be less correlated with the other Nordic countries. Moreover, for  HR  the
    Netherlands is more correlated with Denmark, Sweden and Norway than with the countries of mainland Europe. In contrast, no clear  geographic
    clustering can be established for QP. This is in line with the qualitative finding that the market for QP is EEA-wide.

99. Overall, the econometric evidence submitted by the Parties in general is not conclusive either for or against a separate Nordic  market.  If
    anything, it indicates substantial geographic differentiation in the Nordic countries for  HR  and  CR,  with  Norway,  Sweden  and  Finland
    constituting a comparatively homogenous cluster.

100. This is also consistent with replies to the market investigation. For instance, a Danish distributor stated  that  "Because  Denmark  is  so
    close to Germany, we often have a lower price than Norway and Sweden, and we often feel the fluctuations faster than the rest of the  Nordic
    countries. In markets where SSAB and RUUKKI have their biggest positions (Sweden and Finland), the prices tend to  fluctuate  less  and  are
    generally higher."[86]

    Conclusion

101. In light of the above, the Commission considers for the purposes of the present case that there is at least a serious possibility  that  the
    geographic scope of carbon steel flat product markets is not wider than the Nordic countries (i.e. Finland, Sweden and Norway) at least  for
    HR, CR and OC.

102. In any event, even if it cannot be excluded that the geographic scope of carbon steel flat product markets could be wider  than  the  Nordic
    countries, the Commission considers that the strong geographic differentiation evidenced by the above elements warrants an assessment of the
    impact of the Transaction on competitive conditions in the Nordic countries.

      Production and supply of HS and WR carbon steel

103. The Parties have submitted that the geographic scope of potential HS and WR markets is worldwide.

104. The market investigation was inconclusive as regards the possibility for customers  of  HS  and  WR  products  to  source  efficiently  from
    geographic areas outside the EEA. A number of customers mentioned transport costs, delivery times, minimum batch sizes, quality and  payment
    terms as barriers to sourcing outside the EEA,[87] while a plurality of HS and WR  customers  considered  that  there  are  no  barriers  to
    sourcing HS and WR products from outside the EEA.[88] A majority of competitors of the Parties also mentioned certain barriers to  expansion
    from one geographic area (such as the EEA, the US, etc.) to another for  high-strength  and  wear-resistant  steel,  including  anti-dumping
    margins and import tariffs in certain geographic areas.[89]

105. Regarding price differences, a large majority of customers and competitors considered that  there  are  significant  differences  in  prices
    between the EEA and other regions for HS and WR, but no significant price differences inside the EEA. Dillinger stated in this respect  that
    "Outside EEA markets could be influenced by steel products from China and Japan with other Price Level (example: Chile, lower Price  due  to
    Japanese Imports) Price Level in US due to high competition, influence of currency." The small number  of  customers  reporting  significant
    price differences inside the EEA considered these differences to be mostly related to brand and product quality rather  than  to  geographic
    differentiation.[90]

106. The Commission notes that the significantly higher  prices  of  HS  and  WR  carbon  steel[91]  imply  that  relative  transport  costs  are
    significantly lower than for standard carbon steel flat products. This is also evidenced by the substantial market position achieved by  the
    Parties in regions where they do not have production facilities, such as Asia or Australia.[92]

107. While the parties, and in particular SSAB, are seen as having a global business and global brands in HS and WR, other  European  competitors
    in these niches appear to be mostly focused on one region. Similarly, while Japanese producers such as JFE and Nippon  Steel  Sumitomo  have
    strong positions in Asia and Australia,[93] these players only achieve minimal market presence in Europe.[94] A European  competitor  stated
    in this respect that "SSAB is also present in North America, together with a number of local suppliers. Producers in Asia  are  mostly  from
    Japan, Korea and Europe (SSAB is the reference). Japanese and Korean producers do not however achieve a significant presence in Europe."[95]

108. The Commission concludes that the geographic scope of potential HS and WR markets is at  least  EEA-wide.  The  precise  definition  of  the
    relevant geographic market regarding the production and supply of HS and WR can be left open, as the Transaction  would  not  give  rise  to
    serious doubts under any plausible market definition.

      Distribution of carbon steel

109. The Commission found in previous cases that the markets for the distribution of steel products are national or at most regional, because  of
    barriers such as transport costs and lead time.[96]

110. The Parties consider the markets for the distribution of steel products through steel service centres and stockholding centres to be Nordic-
    wide (i.e. a single market encompassing Denmark, Finland, Norway and Sweden). This is in particular because of the presence  of  significant
    trade flows between countries in the Nordic region, moderate transport costs, and uniformity of prices in the region.

111. The Commission considers that the results of the market investigation do not support the views of the  Notifying  Party.  Between  […]%  and
    […]% of the sales for each of the parties' distribution centres are concentrated within the Member State where the  distribution  centre  is
    located. The only "exception" to this pattern is constituted by NST's SSC in Friedrikstad, which is located  in  Norway  but  close  to  the
    border with Sweden, and therefore sells […] of its output in the latter country. These figures have been confirmed by  customers'  responses
    to the Commission's questionnaires, which indicate that a large majority of customers in each of Finland, Norway and  Sweden  sources  their
    steel requirements only or predominantly at national level.

112. A large majority of customers also perceive that a distributor's location within  a  given  Member  State  provides  it  with  an  important
    strategic advantage to supply customers in that country. Among the reasons for this advantage, customers refer to local knowledge  including
    language, lead time and logistics, as well as lower transport costs.

113. The existence of national markets for the distribution of steel products in  each  of  Finland,  Norway  and  Sweden  is  supported  by  the
    different competitive landscapes in these Member States. Each of these markets has a different market leader (respectively,  Ruukki,  NS/NST
    and SSAB's subsidiary Tibnor), which controls a large share of the market. In addition, the majority of distributors have concentrated their
    activities in only one of these Member States. Only three players have significant activities in  more  than  one  of  these  Member  States
    (Tibnor, also through NS/NST, Ruukki and the BE Group).

114. The Commission has confirmed the above findings also on the basis of the parties' internal documents, […].[97]

115. In view of the above, the Commission considers that each of the relevant markets for the distribution of  steel  products  are  national  in
    scope.

Production and supply of carbon steel products for the construction industry

    Profiled steel construction sheets

116. In previous decisions, the Commission has considered the relevant geographic market for profiled steel construction sheets  to  be  national
    or regional depending on the size of the countries: larger countries (such as Germany and France) have  been  considered  to  have  national
    markets because of, for instance, delivery time questions, while the Benelux-countries together have been considered to constitute a  single
    regional market.[98]

117. The Notifying Party submits that the relevant geographic market for profiled steel construction sheets  should  be  the  Nordics,  including
    Denmark, Finland, Norway and Sweden. The Notifying Party supports its view by referring to, e.g. limited transport  costs  constituting  [5-
    10]% of the final product price and notable amounts of cross-border trade.

118. While the replies to the Commission's market investigation show factors that could indicate regional cross-border markets, such  as  limited
    differences in customer preferences or regulatory requirements,[99] the Commission considers that numerous factors  point  towards  national
    markets.

119. First, the Commission observes that a clear majority of both competitors and customers consider that a physical presence in a given  country
    is needed, and competitors have also usually organised their distribution on a national level. Reasons for this include, for  instance;  the
    need to provide technical assistance to customers at construction sites as well as delivery lead times.[100] The Commission  has  also  been
    told that the physical presence should include a production facility.[101]

120. Second, the Parties have themselves organised their production mainly on a national basis for their main markets: The  Parties  are  selling
    profiled steel construction sheets mainly in Finland, Sweden, the Baltic countries (Estonia, Latvia  and  Lithuania),  Poland  and  Romania.
    These are also the locations of the Parties' production facilities: SSAB has two production facilities in Sweden, one  in  Finland,  one  in
    Poland and one in Romania while Ruukki has one production facility in Finland, Estonia, Poland and  Romania  each.  With  the  exception  of
    Ruukki's Estonian production facility, the supply patterns seem to be strongly national:

  • Finland: SSAB's Finnish production facility supplies […]% of its production (in volume) to Finland, which constitutes close to […]%  of  all
    of SSAB's supplies to Finland. For Ruukki, its Finnish production facility supplies […]% of its production (in  volume)  to  Finland,  which
    constitutes […]% of all of Ruukki's supplies to Finland.

  • Sweden: SSAB's Swedish production facilities supply […]% of their production (in volume) to Sweden and  this  constitutes  […]%  of  all  of
    SSAB's supplies to Sweden. Ruukki does not have a production facility in Sweden, and also its market share is  considerably  lower  than  in
    countries where it has a production facility.

  • Poland: SSAB's Polish production facility supplies […]% of its production (in volume) to Poland, which constitutes […]% of  SSAB's  supplies
    to Poland. For Ruukki, the figures are […]% and […]% respectively.

  • Romania: SSAB's Romanian production facility supplies […]% of its production to Romania and that also  makes  […]%  of  SSAB's  supplies  to
    Romania. For Ruukki, the corresponding figures are […]% and […]%.

121. As to Ruukki's Estonian production facility, it however only supplies […]% of its production (in volume) to Estonia.  Nonetheless,  […]%  of
    its supplies go to the Baltic countries (Estonia, Latvia and Lithuania) together. Of all supplies to  the  Baltic  countries,  the  Estonian
    production facility supplies […]%. SSAB does not have a production facility in the Baltic countries and also its sales to and market  shares
    in those countries are notably small.

122. Third, it appears typical for even major suppliers to be only present in some of the Nordic countries. This is reflected in, for example  in
    the fact that the Parties are the only major producers having a notable presence and market share in both Finland and Sweden while the other
    major competitors, including for instance Weckman, Lindab, Areco, ArcelorMittal and Tata Steel, appear to have  a  meaningful  presence  and
    market share in only one of the two countries.

123. Fourth, as discussed in recital 116, the Commission  has  previously  found  national  markets  with  respect  to  Member  States  that  are
    geographically large, such as Germany and France  but  regional  cross-border  markets  with  respect  to  the  Benelux-countries  that  are
    geographically smaller. In this respect, the Commission notes that, for instance, Finland and Sweden are of a  comparable  size,  or  larger
    than, Germany and France and producers there face comparable or longer transport distances and times. The Baltic  countries,  on  the  other
    hand, are significantly smaller in geographic size.

124. In light of the above, the Commission considers that the relevant geographic markets for profiled steel construction  sheets  are  national.
    However, with respect to the Baltic countries it can be left open whether the markets are national or cross-border  regional  consisting  of
    all the Baltic countries as the notified transaction does not give rise to competition concerns with respect to the  Baltic  countries  even
    under the narrowest feasible, that is national, market definition.

    Steel rainwater systems

125. In a previous decision, the Commission has considered that the relevant geographic market for (zinc)  rainwater  systems  was  not  narrower
    than national and probably not wider than EEA-wide, leaving the exact definition open.[102]

126. The Notifying Party submits that the market is EEA-wide, or at least cross-border regional consisting of all Nordic countries.

127. In line with the findings concerning profiled steel construction sheets, respondents to the market investigation referred to a need to  have
    national presence with respect to steel rainwater systems.[103] On the other hand, the Commission notes that for instance the  Parties  have
    not organised their production of rainwater systems on a national basis but have concentrated  their  production  to  a  limited  number  of
    locations: SSAB produces everything in Sweden while Ruukki produces in Finland and Romania.

128. In any event, the exact geographic market definition can be left open as  the  notified  transaction  does  not  give  rise  to  competition
    concerns with respect to steel rainwater systems even under the narrowest feasible, that is national, market definition.

       Competitive assessment

      Production and supply of carbon steel

129. The combined sales of the Parties in 2013 in the Nordic countries amounted to […] kt for a value of approx. EUR […] million  for  HR,  […]kt
    and approx. EUR […] million for OC and[…]kt and approx. EUR […] million for CR.

    Arguments of the notifying party

130. In addition to the arguments presented in section IV.C.1 above, the Notifying Party essentially submits  that  (i)  there  is  enough  spare
    capacity in the EEA to serve Nordic demand several times over, and that (ii) import pressure,  including  from  non-EEA  producers  such  as
    Severstal (Russia), is already today a sufficiently strong constraint on the Parties so as to prevent any price increase as a result of  the
    Transaction.

    The Parties have high market shares in the Nordic countries

131. The Commission has carried out a market reconstruction of the Nordic  carbon  steel  flat  product  markets  at  stake.  In  line  with  its
    precedents in the steel industry, the Commission has assessed sales market  shares  including  captive  sales  to  the  Parties'  and  their
    competitors' own downstream businesses. However, given the important outlet that Ruukki's tube-making and construction businesses  represent
    for HR and CR in particular, the Commission has reported below, on a conservative basis, sales market shares excluding captive sales to non-
    distribution businesses.[104]

    Table 3: Parties' market shares of ex-mill deliveries, including to captive distribution (2013, volumes)[105]

|             |HR                                         |CR                                            |OC                                            |
|                          |SSAB                                            |Ruukki                                           |
|                     |SSAB                 |Ruukki               |Combined             |SSAB                 |
|Finland                                                                                                       |
|Tibnor               |[0-5]%               |[0-5]%               |[5-10]%              |[10-20]%             |
|NS+NST               |N.A.                 |N.A.                 |N.A.                 |N.A.                 |
|Ruukki               |[30-40]%             |[20-30]%             |[10-20]%             |[30-40]%             |
|Combined             |[40-50]%             |[20-30]%             |[10-20]%             |[50-60]%             |
|Norway                                                                                                        |
|Tibnor               |[5-10]%              |[0-5]%               |[0-5]%               |[0-5]%               |
|NS+NST               |[30-40]%             |[30-40]%             |[20-30]%             |[10-20]%             |
|Ruukki               |[30-40]%             |[40-50]%             |[10-20]%             |[40-50]%             |
|Combined             |[70-80]%             |[70-80]%             |[40-50]%             |[60-70]%             |
|Sweden                                                                                                        |
|Tibnor               |[20-30]%             |[20-30]%             |[30-40]%             |[20-30]%             |
|NS+NST               |[10-20]%             |N.A.                 |N.A.                 |N.A.                 |
|Ruukki               |[10-20]%             |[0-5]%               |[0-5]                |[10-20]%             |
|Combined             |[50-60]%             |[30-40]%             |[30-40]%             |[30-40]%             |

                                                                Parties' estimates

132. The competitive impact of the proposed transaction in each of Norway, Sweden and Finland will be discussed below.

    Norway

133. The addition of Tibnor, NS/NST and Ruukki would lead to combined market shares of [70-80]% in the market  for  the  distribution  of  carbon
    steel flat products through SSCs, [70-80]% in the market for the distribution of carbon steel flat products through SCs, and [60-70]% in the
    distribution of stainless steel products through SCs.

134. A majority of customers responding to the Commission's questionnaires and customers interviewed by the Commission in conference  calls  have
    submitted that the proposed transaction would result in a price increase at the level of distribution of steel products in Norway. Customers
    have for instance stated that "[post-transaction] in Norway SSAB and Ruukki would have a very dominant position and that competition at  the
    distribution level would be limited."[154], and that "Norsk Stål / Tibnor and Ruukki N will dominate in N[orway].".[155] A large  number  of
    customers referred to SSAB or NS/NST as the closest competitor to Ruukki, and vice-versa.

135. NS/NST is perceived as the clear market leader in Norway, […].[156] Ruukki, the clear number two in the market, considers  in  its  internal
    documents that […].[157] NST internal documents confirm in this respect that […][158]

136. In view of the above, the Commission considers that the proposed transaction  raises  serious  doubts  as  to  its  compatibility  with  the
    Internal Market with regard to the markets for the distribution of carbon steel flat products  through  SSCs,  carbon  steel  flat  products
    through SCs, and stainless steel products through SCs in Norway.

137. The Commission also notes that the parties' market shares would also be significant with  regard  to  the  distribution  of  long  products.
    However, there is no need to conclude as to whether serious doubts would arise in this  area,  given  that  the  remedies  proposed  by  the
    Notifying Party to remove serious doubts as regards the distribution of flat products through SSCs and SCs eliminate  the  overlap  in  long
    products in its entirety.

    Sweden

138. The market shares of the combined entity in Sweden at the level of the distribution of carbon steel products through SSCs would exceed  [50-
    60]%.

139. A number of customers have raised concerns and stated that the proposed transaction would result in  a  price  increase.  In  addition,  the
    Swedish Association for Material Sourcing (SAMS), a Swedish customer association representing 23 companies in Sweden which together purchase
    approx. 800 000 tons of carbon steel, stated that the proposed transaction would lead to a "dominating market shares of the parties  on  the
    distribution market", and therefore give rise to anticompetitive effects.[159]

140. Internal documents of the parties also confirm that […],[160] […].[161] […][162] Moreover, […].[163]

141. With regard to the other distribution markets in Sweden, the overlap between the parties would be limited or the combined market  shares  of
    the parties would remain below [40-50]%. In the absence of substantiated concerns raised by market players, the Commission considers that no
    competition concerns arise in these markets.

142. In view of the above, the Commission considers that the proposed transaction  raises  serious  doubts  as  to  its  compatibility  with  the
    Internal Market with regard to the market for the distribution of carbon steel flat products through SSCs in Sweden.

    Finland

143. According to the Notifying Party, Ruukki's share in the market for the distribution of carbon steel flat products through  SSCs  amounts  to
    [30-40]%. The Commission notes, however, that the Notifying Party's estimates of its competitors' sales appear to overestimate substantially
    the position of its competitors. When taking into account sales figures submitted by the parties' competitors in the course  of  the  market
    investigation, Rukki's sales appear to be much higher, and closer to [50-60]%.

144. A large number of market participants refer to Ruukki as being dominant at the level of distribution in Finland. Important elements of  this
    alleged dominance appear to be: (i) Ruukki's unmatched presence in Finland in terms of distribution locations and share; and  (ii)  Ruukki's
    strong position at the level of production and supply of flat steel products, which increases its market power at distribution level.

145. SSAB's activities in Finland at the level of sales of flat carbon steel products appear to be relatively limited, with a market share of [0-
    5]%. In spite of this, the Commission notes that […]. Moreover, several customers considered Tibnor as the closest competitor of  Ruukki  at
    distribution level in Finland. Finally, internal documents from SSAB show that […].[164]

146. On the basis of the above, the Commission considers that even  the  limited  addition  in  terms  of  market  share  brought  about  by  the
    combination could result in the strengthening of Ruukki's possible dominance. This is even more the case considering that even "independent"
    distributors in Finland currently source approx. […]% of their carbon steel needs from the parties.

147. This conclusion would be supported by a large majority of customers who have submitted that the  proposed  transaction  would  result  in  a
    price increase at the level of steel distribution in Finland, with  customers  for  instance  stating  that  "I'm  afraid  that  after  this
    transaction there will be no competition in the distribution of steel products in Finland. In particular, I am afraid that this happens with
    the metal strip products. They are very important products for us and there is no other distributors in Finland.",[165]  and  comparing  the
    possible price effects of the proposed transaction to "a catastrophe to our business".[166]

148. In any event, there is no need to conclude as to whether serious doubts would arise in this area, given that the remedies  proposed  by  the
    Notifying Party eliminate the overlap at the level of sales of carbon steel flat products through SSCs in its entirety.

149. As regards the distribution of stainless steel products through SCs, a majority of customers purchasing stainless  steel  from  the  Parties
    have raised concerns on the impact of the transaction. The Parties are the two largest distributors in Finland, and  the  transaction  would
    lead to combined market shares of [50-60]%. With the exception of the BE Group, remaining competitors are independent distributors with  low
    market shares, and are unlikely to constitute a viable option for stainless steel customers.

150. The Commission therefore considers that the proposed transaction raises serious doubts as to its  compatibility  with  the  Internal  Market
    with regard to the market for the distribution of stainless steel products through SCs in Finland.

      Production and supply of carbon steel products for the construction industry

    Profiled steel construction sheets

151. The proposed transaction gives rise to affected markets in Finland, Sweden and Poland with respect to profiled  steel  construction  sheets.
    In addition, the proposed transaction gives rise to affected markets in the potential national markets of Estonia and Latvia.

    Finland

152. The Finnish market is characterised by the presence of numerous small, often local, competitors. The merged  entity  would  become  a  clear
    market leader as shown in the table below.

    Table 6: Finnish market shares (2013, value)

|Company                                   |Share (%) profiled steel construction     |Share (%) steel roofing sheets           |
|                                          |sheets                                    |                                         |
|SSAB                                      |[10-20]                                   |[10-20]                                  |
|Ruukki                                    |[30-40]                                   |[30-40]                                  |
|SSAB + Ruukki                             |[40-50]                                   |[40-50]                                  |
|Weckman                                   |[10-20]                                   |[10-20]                                  |
|Poimukate                                 |[0-5]                                     |[0-5]                                    |
|Hämeen Laaturemontti                      |[0-5]                                     |[0-5]                                    |
|Others                                    |[30-40]                                   |[30-40]                                  |

    Source: The Notifying Party

153. During the market investigation, customers indicated that technical support from the sheet producer is often required  at  the  construction
    sites which is why a nationwide presence is required at least by customers who themselves operate on a nationwide level.[167] In addition to
    the Parties, only  Weckman  has  a  practicable  nationwide  presence.[168]  Among  the  nationwide  competitors,  the  Commission's  market
    reconstruction shows that the merged entity would achieve a market share of 80–90% in profiled steel construction sheets as well as  in  the
    potential market for steel roofing sheets.

154. The market investigation also indicated that branding has importance in Finland with respect to consumer customers. The Parties have  strong
    brands, and in particular Ruukki was referred to be particularly strong in this respect by market participants.[169]

155. During the market investigation, a number of customers raised concerns that the notified transaction could result in  competition  concerns,
    such as increased prices in Finland. Those  customers  also  included  major  purchasers  with  notable  negotiation  power.[170]  Customers
    commented, for instance that:[171]

  • 'I am afraid that prices may change significantly when the two market leaders no longer compete with each other'[172]

  • '[T]he proposed transaction could result into higher prices in the Nordics for profiled steel construction sheets - - while  - - might as  a
    big purchaser be somewhat shielded from part of the negative effects of the proposed transaction and  be  able  to  find  at  least  partial
    alternative suppliers, smaller companies and private home-owners could be hit harder.'

  • 'There is a risk for higher prices in these products in future since one major company away from the market.'

156. While many customers nonetheless thought they might find alternative suppliers, they also expressed doubts about the  competitors'  capacity
    to meet the volumes required.[173] The Commission also notes that a many of the remaining small competitors at present rely on raw  material
    supplies from the Parties. The Commission considers that this is likely to decrease their viability as competitors at  least  in  the  short
    term to some extent.[174]

157. In light of the above, the Commission considers that the notified transaction is likely to raise serious  doubts  as  to  its  compatibility
    with the internal market with respect to the production and supply of profiled steel construction sheets in Finland. However,  there  is  no
    need to conclude on the matter as the commitments submitted by the Notifying Party remove the overlap between  the  Parties'  activities  in
    profiled steel construction sheets in Finland.

    Sweden

158. The Notifying Party's estimates of the most important suppliers' market shares in Sweden are presented in the table below.

    Table 7: Swedish market shares (2013, value)

|Company                                   |Share (%) profiled steel construction     |Share (%) steel roofing sheets           |
|                                          |sheets                                    |                                         |
|SSAB                                      |[20-30]                                   |[30-40]                                  |
|Ruukki                                    |[5-10]                                    |[5-10]                                   |
|SSAB + Ruukki                             |[30-40]                                   |[30-40]                                  |
|Lindab                                    |[20-30]                                   |[20-30]                                  |
|Areco                                     |[10-20]                                   |[5-10]                                   |
|Armat                                     |[5-10]                                    |[10-20]                                  |
|Others                                    |[20-30]                                   |[10-20]                                  |

    Source: The Notifying Party

159. The Commission's market reconstruction has confirmed that  the  above  market  shares  somewhat  overestimate  the  merged  entity's  market
    position. The merged entity would also continue to meet competition in profiled steel construction sheets and in the  potential  market  for
    steel roofing sheets by a number of strong competitors such as Lindab and Areco that will command a market share of 10–20% each. In addition
    some of the main steel producers, such as ArcelorMittal and Tata Steel, are also present on the market.

160. While singular customers expressed concerns during the market investigation, customers in Sweden did  not  in  general  raise  substantiated
    doubts about the notified transaction.[175] Customers also named many alternative Swedish suppliers.[176]

161. In light of the above, the Commission considers that the notified transaction does not  raise  doubts  as  to  its  compatibility  with  the
    internal market with respect to the production and supply of profiled steel construction sheets, or the potential market for  steel  roofing
    sheets, in Sweden.

    Poland

162. The Notifying Party's estimates of the most important suppliers' market shares in Poland are presented in the table below.

    Table 8: Polish market shares (2013, value)

|Company                                   |Share (%) profiled steel construction     |Share (%) steel roofing sheets           |
|                                          |sheets                                    |                                         |
|SSAB                                      |[5-10]                                    |[5-10]                                   |
|Ruukki                                    |[10-20]                                   |[20-30]                                  |
|SSAB + Ruukki                             |[20-30]                                   |[30-40]                                  |
|Pruszynski                                |[20-30]                                   |[10-20]                                  |
|Budmat                                    |[10-20]                                   |[10-20]                                  |
|Balex                                     |[5-10]                                    |[10-20]                                  |
|Others                                    |[30-40]                                   |[20-30]                                  |

    Source: The Notifying Party

163. The Commission's market reconstruction has confirmed that the above market shares overestimate the merged entity's market position and  that
    the merged entity would not become the market leader in profiled steel construction sheets or the potential market for steel roofing sheets.
    Instead, Pruszynski would remain bigger than the merged entity in both markets and also Balex would remain ahead of the Parties in the total
    market for profiled steel construction sheets.

164. While singular customers expressed concerns during the market investigation, customers in Poland did  not  in  general  raise  substantiated
    doubts about the proposed transaction.[177] Customers also thought they would have alternative suppliers they could  switch  to  should  the
    merged entity try to raise prices.[178]

165. In light of the above, the Commission considers that the notified transaction does not  raise  doubts  as  to  its  compatibility  with  the
    internal market with respect to the production and supply of profiled steel construction sheets, or the potential market for  steel  roofing
    sheets, in Poland.

    Estonia and Latvia

166. The Notifying Party estimates that Ruukki has a market share of [40-50]% (2013, value) in Estonia for  profiled  steel  construction  sheets
    and [40-50]% (2013, value) for steel roofing sheets. For Latvia, the figures are [20-30]% and [30-40]% respectively. However, although  SSAB
    has some sales in these countries, the market share increment brought by the notified transaction would be less than [0-5] percentage points
    in both Estonia and Latvia.

167. In light of the above, the Commission considers that the notified transaction does not  raise  doubts  as  to  its  compatibility  with  the
    internal market with respect to the production and supply of profiled steel construction sheets, or the potential market for  steel  roofing
    sheets, in the potential national markets of Estonia and Latvia.

    Steel rainwater systems

168. The proposed transaction only gives rise to an affected market in the potential national markets of  Sweden  and  Estonia  with  respect  to
    steel rainwater systems.

    Sweden

169. The Notifying Party's estimates of the most important suppliers' market shares in Sweden are presented in the table below.

    Table 9: Swedish market shares (2013, value)

|Company                                   |Share (%)                                 |
|SSAB                                      |[30-40]                                   |
|Ruukki                                    |[0-5]                                     |
|SSAB + Ruukki                             |[30-40]                                   |
|Lindab                                    |[30-40]                                   |
|Icopal / Wijo                             |[10-20]                                   |
|Areco                                     |[0-5]                                     |
|Others                                    |[10-20]                                   |

    Source: The Notifying Party

170. The Commission's market reconstruction has confirmed that the increment brought about by the merger is limited (0–5 percentage  points)  and
    that the merged entity will continue to meet competition in steel rainwater systems by numerous competitors, including  Lindab  (30–40%)  as
    well as Icopal, Areco and ArcelorMittal (0–10% each).

171. During the market investigation, no customer raised substantiated concern with respect to steel rainwater systems in Sweden.[179]

172. In light of the above, the Commission considers that the notified transaction does not  raise  doubts  as  to  its  compatibility  with  the
    internal market with respect to the potential market of production and supply of steel rainwater systems in Sweden.

    Estonia

173. The Notifying Party estimates that Ruukki has a market share of [30-40]% (2013, value) in Estonia  for  steel  rainwater  systems.  However,
    although SSAB has some sales in Estonia, the market share increment brought by the notified transaction would be less than [0-5]  percentage
    points. Consequently, the Commission considers that the notified transaction does not raise doubts as to its compatibility with the internal
    market with respect to the potential market of the production and supply of steel rainwater systems in Estonia.

      Vertically affected markets

174. Colour-coated steel is a significant input into the production of profiled steel construction sheets, including  steel  roofing  sheets,  as
    well as steel rainwater systems. Given the Parties' market shares both in the upstream and in the downstream  markets,  this  vertical  link
    results in vertically affected markets.

175. A vertical merger may result in two types of competition concerns:  input  foreclosure  and  customer  foreclosure.[180]  Input  foreclosure
    arises where, post-merger, the merged entity would be likely to restrict access to the products that it would otherwise supplied absent  the
    merger. In assessing the likelihood of anti-competitive effects of a foreclosure scenario, the Commission examines whether the merged entity
    would, post-merger, have (i) the ability to foreclose access to inputs, (ii) whether it would have the incentive to do so and (iii)  whether
    such foreclosure would have a significant detrimental effect on competition in the downstream market.[181]

176. For input foreclosure to be a concern, the merged entity must have a significant market power upstream. As discussed in  paragraphs  131–132
    above, the merged entity would have a significant market share and market power in the supply of organic colour coated steel in the Nordics.
    Downstream competitors have also raised concerns with respect to their access to this raw material.[182]

177. In addition to ability, the merged entity will need to have an incentive to foreclose for a foreclosure to be a  concern.  Essentially,  the
    merged entity may face a trade-off between profits lost in the upstream market due to reduction of input sales to rivals and the profit gain
    in the downstream market.[183] In the present case, the Commission considers that it is likely that the merged entity could be in a position
    to increase its sales or prices in the downstream market for profiled steel construction sheets as a result of the merger. This results  not
    only from the high market shares upstream but from the Parties significant presence in the downstream markets. Downstream  competitors  have
    also indicated previous attempts by the Parties to engage in such behaviour.[184]

178. In light of the above, the Commission considered that it cannot be excluded that the proposed transaction could raise serious doubts  as  to
    its compatibility with the internal market with respect to input foreclosure of colour-coated carbon steel to the merged entity's downstream
    competitors. However, there is no need to conclude on the matter as the commitments submitted by  the  Notifying  Party  reduce  the  merged
    entity's ability to engage in such behaviour.

179. As to customer foreclosure, it may occur when the merged entity could foreclose its upstream rivals' access to sufficient customer base  and
    reduce their ability or incentive to compete. In turn, this may raise downstream rivals' costs by  making  it  harder  for  them  to  obtain
    supplies of input under similar prices and conditions as absent the merger. For a customer foreclosure to result in  a  competition  concern
    the merged entity will need to have both the ability and the incentive to engage in such a behaviour and it would have to have a significant
    detrimental effect on consumers in the downstream market.[185]

180. In the present case, such effects appear unlikely. This is mainly due to the fact that the Parties  are  already  at  present  mostly  using
    their own raw materials in their downstream construction materials production in countries  where  they  have  any  notable  markets  shares
    downstream: […]. […].[186] The Commission thus considers that the notified transaction does not raise serious doubts as to its compatibility
    with the internal market with respect to customer foreclosure of competing flat carbon steel suppliers.

       PROPOSED commitments

       Procedure

181. Where a concentration raises serious doubts which could lead to a  significant  impediment  to  effective  competition,  the  Parties  to  a
    transaction may seek to modify the concentration so as to address the serious doubts identified by the Commission with a view to having  the
    merger cleared.

182. In order to address the concerns identified  following  the  first  phase  market  investigation  and  therefore  render  the  concentration
    compatible with the internal market, the Notifying Party submitted commitments pursuant to Article 6(2) of the Merger Regulation on 24  June
    2014 (the "24 June 2014 Commitments").

183. Upon comments from the Commission case team, the Notifying Party submitted revised commitments on 27 June (the "27 June 2014  Commitments"),
    essentially introducing a stricter purchaser requirement. The Commission launched a market test of the 27 June 2014 Commitments on the  same
    day.

184. The Notifying Party submitted a final set of commitments on 10 July 2014 (the "Final Commitments").

       Description of the 27 June 2014 Commitments

185. The 27 June 2014 Commitments consist of the divestment of:

       SSAB's stake in NS/NST;

       Ruukki's SSC in Halmstad, Sweden;

       Tibnor Oy, the entire steel distribution organisation of SSAB in Finland, including the SC in Tampere;

       Ruukki's SSC in Naantali, Finland; and

       Plannja, SSAB's profiled construction sheet business in Finland.

186. These assets are together referred hereinafter as the "Divestment Businesses".

187. Pursuant to the 27 June 2014 Commitments, the Divestment Businesses include all assets and staff that contribute to  the  current  operation
    or are necessary to ensure the viability and competitiveness of the Divestment Businesses, in particular:

    (a) all tangible and intangible assets (including intellectual property rights);

    (b) all licences, permits and authorisations issued by any governmental organisation for the benefit of the Divestment Businesses;

    (c) all contracts, leases, commitments and customer orders of the Divestment Business;  all  customer,  credit  and  other  records  of  the
    Divestment Businesses; and

    (d) the personnel currently employed by the Divestment Businesses, including staff seconded to the Divestment Businesses,  shared  personnel
    as well as the additional personnel listed in the Schedule attached to the 27 June 2014 Commitments.

188. In addition, the Divestment Businesses include the benefit, for a transitional period after closing (as detailed in  the  Schedule  attached
    to the 27 June 2014 Commitments) and on terms and conditions equivalent to those at present afforded to the Divestment  Businesses,  of  all
    current arrangements under which SSAB or its affiliated undertakings supply products  or  services  to  the  Divestment  Businesses,  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 production mill.

189. As regards the purchaser requirements, the Notifying Party committed to the following: (i) in relation to the assets described at points  b.
    and d. above, the purchaser must be a flat carbon steel producer […]; (ii) in relation to the asset  described  at  point  a.  above,  after
    divestment NS and NST must be wholly owned or jointly controlled by a flat carbon steel producer […].

       The results of the market test

190. On balance, the results of the market test on the suitability of a remedy based on  the  divestiture  of  SSCs  to  remove  the  competition
    problem at the level of supply of steel products in the Nordic region have been positive.

191. According to the majority of both customers and competitors, in the specific circumstances of this case, a remedy based on  divestitures  of
    SSCs is in principle suitable to remove a competition problem at the level of supply of carbon steel flat products in the Nordic region.  On
    balance, feedback from customers and competitors confirmed that SSCs assets in the Nordic region are  capable  of  providing  a  continental
    producer with a route to market to enter this region.

192. The market test also confirmed that the Divestment Businesses are viable. Even if a large majority of  the  respondents  in  this  case  has
    admitted that they could not provide their views for lack of sufficient information, a majority of the respondents who have  provided  their
    views confirmed the viability of the assets. Feedback from competitors, in particular, confirmed the viability of the assets.

193. As to the purchaser requirements, the result of the market test have on balance confirmed the importance  of  strong  links  (for  instance,
    through full or partial ownership) between the SSCs Divestment Businesses and a steel producer. A distributor without strong  links  with  a
    producer would likely only be capable of removing doubts at the distribution level, but not at the level of  supply  of  carbon  steel  flat
    products in the Nordic region.

194. While customer and distributor replies suggest that the divested assets are in principle attractive, during the market test only two of  the
    flat steel producers that would be likely suitable have openly stated a potential interest in purchasing the assets. Of these two producers,
    only one has expressed an equal interest in acquiring all the assets composing the Divestiture Business, while the other has stated that the
    comparatively least attractive of the assets was the Naantali SSC in Finland, because of strong current dependency on Ruukki and uncertainty
    on the willingness of local customers to switch to a non-Nordic supplier.  Other  producers  have  explicitly  excluded  their  interest  in
    acquiring the whole Divestment Business, of part of it.

195. As regards the size and scope of the 27 June 2014 Commitments, the results of the market test have been positive for Norway, but less clear-
    cut for Finland and Sweden.

196. In Finland, a relatively large number of customers raised concerns that the remedy would be insufficient in scope.  The  Commission  however
    considers that these results should be interpreted with care. In this Member State, it is likely that the results of the  market  test  have
    been affected by the pre-existing situation of possible dominance by Ruukki at the level of distribution of carbon steel products.  Removing
    such possible dominance, which is not merger-specific (in the sense of not being caused by the merger), would be beyond what can be asked by
    way of commitments in a merger control procedure.

197. In Sweden, a number of customers also raised concerns that the commitments would not be sufficient to remove the  competition  problem.  The
    extent of the concerns raised by market players, however, has been smaller than in Finland.

198. Finally, as regards profiled construction sheets, the results of the market test show that the remedy is likely to  remove  the  competition
    problem and that the divested assets are able to function as a viable competitor in Finland. The results of the market test  also  indicated
    that it is not necessary that the divested assets are operated by a flat carbon steel producer but that an  independent  operator  can  also
    compete effectively on the market.

       Final Commitments

199. On 10 July 2014, having received feedback from the Commission on its assessment of the 27 June 2014  Commitments  and  the  results  of  the
    market test, the Notifying Party submitted the Final Commitments.

200. The Final Commitments include, in addition to the 27 June 2014 Commitments:

 a. […]

 b. The amendment of the purchaser requirements for SSAB's stake in NS/NST, Halmstad, Naantali  […].  In  particular,  after  divestment,  these
    Divestment Businesses must be at least partially owned by a flat carbon steel producer […].

 c. Improvements to the scope and size of the Finnish and Swedish parts of the remedies, consisting in particular of the inclusion of: (i) sales
    personnel dealing with ex-mill sales; (ii) contracts for the sale of ex-mill consignment stocks currently invoiced at Halmstad and Naantali;
    and (iii) contracts between Ruukki and its customers for ex-mill sales.

       Commission's assessment of the Final Commitments

201. The Commission considers that the Final Commitments remove the serious doubts raised by the proposed transaction.

202. In light of the particular nature of the competition concerns at the level of the supply of carbon steel in this case, the remedy  submitted
    by the Notifying Party are capable of removing the serious doubts raised by the transaction in the Nordic region.

203. The Commission considers that the remedy would work as a route to market, providing the purchaser with increased ability  and  incentive  to
    establish and develop a presence in the Nordic region, also at the level of ex-mill sales.

204. The Commission notes that the purchaser requirements included in the Final Commitments ensure that either a steel producer would  solely  or
    jointly acquire ownership of the SSCs composing the Divestment Business. The full or partial ownership over the SSCs by such producer  would
    considerably increase its incentives to develop the divested assets and use them as a route to market to penetrate the Nordic region.

205. As discussed above, a major obstacle for rival carbon steel producers to enter the Nordic markets appears to be constituted  by  the  strong
    presence of the Parties at the level of steel distribution. The total volumes at distribution level which  are  divested  by  the  Notifying
    Party as part of the Divestment Business are significant, insofar as the divestitures would result in the  elimination  of  the  overlap  in
    Norway, and the elimination of much more than the overlap in Sweden and Finland. The Commission considers that  the  divestment  of  such  a
    significant share of the Parties' distribution network would open up the market, and facilitate import  competition,  including  for  direct
    sales.

206. By entering the market at SSC level, a rival steel producer would be gradually capable of increasing its presence also at the level  of  ex-
    mill sales, given that: (i) customers buying ex-mill are often also purchasing some qualities and quantities from SSCs; (ii) local  presence
    at SSC level makes it easier for the purchaser to develop an efficient logistic chain; (iii) ex-mill deliveries could be shipped in  batches
    together with shipments to the Nordic SSCs, which would proportionally decrease transport costs for ex-mill deliveries;[187]  and  (iv)  the
    purchaser could more effectively compete with ex-mill deliveries of processed material by the Parties by  shipping  unprocessed  material  –
    which is more cost efficient – to its local SSC for processing and delivery (local service centre as finishing  centres  for  coils  shipped
    from the continent).

207. The Commission also considers that the addition of ex-mill sales personnel to the Divestment Businesses, together  with  contracts  for  the
    supply of consignment stocks and other ex-mill orders, would increase the likelihood that the remedy would be  effective  at  the  level  of
    supply of carbon steel flat products in the Nordic region. These improvements would further increase the purchaser's ability  and  incentive
    to compete with the merged entity for substantial volumes of orders from ex-mill customers, thereby  removing  the  remaining  uncertainties
    raised by market players in the market test.

208. As a result of these improvements, the Commission notes that the total volumes of carbon steel flat  products  which  are  divested  by  the
    Notifying Party as part of the Divestment Businesses amount to […] kt. This figure is significant, and accounts for more  than  the  overlap
    between the parties in the Nordic Region at the level of ex-mill sales to end customers.

209. The remedies submitted by the notifying party are also suitable to remove serious doubts  in  all  the  distribution  markets,  as:  (a)  in
    Norway, the divestment of SSAB's stake in NS/NST removes essentially the whole overlap at the level of sales through SCs and  SSCs;  (b)  in
    Sweden, the divestment of Ruukki's SSC in Halmstad, together with the divestment of SSAB's stake in NS/NST, removes more  than  the  overlap
    between the parties; and (c) in Finland, the divestment of Ruukki's SSC in Naantali and the divestment of Tibnor's SC in Tampere as part  of
    Tibnor Oy remove more than the overlap in carbon steel and the entire overlap in stainless steel.

210. As regards profiled construction sheets, the remedies submitted by the notifying party are also suitable to remove serious  doubts  as  they
    remove the entire overlap between the Parties.

211. The Commission also notes that the assets which are part of the Final Commitments are viable assets, which would be able  to  compete  on  a
    standalone basis in the hands of a suitable purchaser.

212. The Commission also takes into account the expression of interest for the purchase of the Divestment Businesses  that  the  Notifying  Party
    has received from […] steel producers. This element, together with the fact that the Divestment Businesses has been  improved  after  market
    test, supports the conclusion that the Divestment Businesses, including Naantali, are attractive for a suitable purchaser.

213. The attractiveness of the Naantali SSC, in particular, has been strengthened by the addition of ex-mill sales personnel, and  ex-mill  sales
    contracts. Moreover, financial information submitted by the Notifying Party confirms that Naantali is the most profitable  SSC  among  those
    operated by Ruukki, and should be therefore attractive for a suitable purchaser with interest to enter the Nordic region. The existence of a
    transitory agreement for the supply of steel products on terms and conditions equivalent to those at present afforded by Naantali also makes
    sure that any transitory disruption in the SSC's activities will likely be avoided.

214. […]

       CONDITIONS AND OBLIGATIONS

215. Under the first sentence of the second subparagraph of Article 6(2) of the Merger Regulation, the Commission  may  attach  to  its  decision
    conditions and obligations intended to ensure that the undertakings concerned comply with the commitments they have entered  into  vis-à-vis
    the Commission with a view to rendering the concentration compatible with the internal market.

216. The fulfilment of the measure that gives rise to the structural change of the market is a condition, whereas the  implementing  steps  which
    are necessary to achieve this result are generally obligations on the parties. Where a condition is not fulfilled, the Commission’s decision
    declaring the concentration compatible with the internal market and the EEA Agreement no longer stands.  Where  the  undertakings  concerned
    commit a breach of an obligation, the Commission may revoke the clearance  decision  in  accordance  with  Article  8(6)(b)  of  the  Merger
    Regulation. The undertakings concerned may also be subject to fines and periodic penalty payments under Articles  14(2)  and  15(1)  of  the
    Merger Regulation.

217. In accordance with the basic distinction between conditions and obligations, the decision in this case is  conditional  on  full  compliance
    with the requirements set out in Section B of the Final Commitments, which constitute conditions, whereas Sections  C  to  F  of  the  Final
    Commitments constitute obligations on the Notifying Party.

218. The full text of the Final Commitments is annexed to this Decision as Annex I and forms an integral part thereof.

       CONCLUSION

219. 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 section
    B 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.

For the Commission
(signed)
Joaquín ALMUNIA
Vice-President

                                                                                                                                       10/07/2014

                                                          Case M.7155 – SSAB/Rautaruukki

                                                      COMMITMENTS TO THE EUROPEAN COMMISSION

Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “Merger Regulation”), SSAB AB (publ) (the “Notifying  Party”)  enters  into
the following Commitments (the “Commitments”) vis-à-vis the European Commission (the “Commission”) with a view to rendering the  acquisition  of
Rautaruukki OYJ  (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 9 (a), (b) and (c) and described more in detail in the Schedule.

   Closing: the transfer of the legal title to the Divestment Business to the Purchaser.

   Closing Period: the period of 3 months 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  SSAB  and  who  has/have
   received from SSAB 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.

   First Divestiture Period: the period of […] from the Effective Date.

   […]

   Hold Separate Manager: the person appointed by SSAB 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 SSAB, and who  has/have  the
   duty to monitor SSAB’s compliance with the conditions and obligations attached to the Decision.

   Parties: the Notifying Party 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.

   Purchaser Criteria: the criteria laid down in paragraph 20 of these Commitments that the Purchaser must fulfil in order to be approved by  the
   Commission.

   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 […] from the end of the First Divestiture Period.

   […]

   SSAB: SSAB AB (publ), incorporated under the laws of Sweden, with its registered office at P.O. Box  70,  SE-101  21,  Stockholm,  Sweden  and
   registered with the Swedish Companies Registration Office under registration number 556016-3429.

Section B.  The commitment to divest and the Divestment Business

      Commitment to divest

2. In order to maintain effective competition, SSAB 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 21 of these Commitments.  To carry out the divestiture, SSAB 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 SSAB has not entered into
   such an agreement at the end of the First Divestiture Period, SSAB shall grant the Divestiture  Trustee  an  exclusive  mandate  to  sell  the
   Divestment Business in accordance with the procedure described in paragraph 33 in the Trustee Divestiture Period.

3. SSAB shall be deemed to have complied with this commitment if:

      (a)   by the end of the Trustee Divestiture Period, SSAB 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 21; and

      (b)   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 47 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
     a) Plannja Oy – SSAB’s construction business in Finland, as described in Schedule 1.

     b) Norsk Stål and Norsk Stål Tynnplater – SSAB’s 50% share in two joint ventures with Tata Steel Europe.  The joint ventures are active  in
        distribution in Norway and Sweden, as described in Schedules 2 and 3.

     c) Halmstad SSC – Ruukki’s steel service centre in Sweden, as described in Schedule

     d) Tibnor Oy – SSAB’s distribution subsidiary in Finland, including stainless steel stockholding centre, as described in Schedule 5.

     e) Naantali SSC – Ruukki’s steel service centre in Finland, as described in Schedule

6. […]

7. […]

8. […]

9. 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:

      (a)   all tangible and intangible assets (including intellectual property rights);

      (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; all customer, credit  and  other  records  of  the
           Divestment Business; and

      (d)   the Personnel.

10. In addition, the Divestment Business includes the benefit, for a transitional period after Closing (as  detailed  in  the  Schedule)  and  on
   terms and conditions equivalent to those at present afforded to the Divestment Business, of all current arrangements under which SSAB  or  its
   Affiliated Undertakings 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 production mill.

Section C.   Related commitments

      Preservation of viability, marketability and competitiveness

11. 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 SSAB 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), to encourage all Key Personnel to remain with the Divestment Business, and not to solicit or move  any  Personnel
           to SSAB’s remaining business. Where, nevertheless, individual members  of  the  Key  Personnel  exceptionally  leave  the  Divestment
           Business, SSAB shall provide a reasoned proposal to replace the person or persons concerned to  the  Commission  and  the  Monitoring
           Trustee. SSAB 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.

    […]

      Hold-separate obligations

12. The Notifying Party commits, from the Effective Date until Closing, to keep the Divestment  Business  separate  from  the  businesses  it  is
   retaining and to ensure that unless explicitly permitted under these Commitments: (i)  management and staff of the businesses retained by SSAB
   have no involvement in the Divestment Business; (ii) the Key Personnel and Personnel of the Divestment Business have  no  involvement  in  any
   business retained by SSAB and do not report to any individual outside the Divestment Business.

13. Until Closing, SSAB shall assist the Monitoring Trustee in ensuring that the Divestment Business  is  managed  as  a  distinct  and  saleable
   entity separate from the businesses which SSAB is retaining. Immediately after the adoption  of  the  Decision,  SSAB  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 SSAB. The Hold Separate Manager shall closely cooperate with and report to the Monitoring Trustee
   and, if applicable, the Divestiture Trustee. Any replacement of the Hold Separate Manager shall be subject  to  the  procedure  laid  down  in
   paragraph 11(c) of these Commitments. The Commission may, after having heard SSAB, require SSAB to replace the Hold Separate Manager.

   […]

14. To ensure that the Divestment Business described at paragraph 5(b) comprising NS and NST is  held  and  managed  as  a  separate  entity  the
   Monitoring Trustee shall exercise SSAB’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  SSAB’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 SSAB. Upon request of the Monitoring Trustee, SSAB shall resign as a member of
   the boards or shall cause such members of the boards to resign.

      Ring-fencing

15. SSAB 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 SSAB before the  Effective
   Date will be eliminated and not be used by SSAB. This includes measures  vis-à-vis  SSAB’s  appointees  on  the  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. SSAB 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  SSAB  is
   required by law.

      Non-solicitation clause

16. The Parties undertake, 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 […] after Closing.

      Due diligence

17. In order to enable potential purchasers to carry out a reasonable due diligence of the Divestment Business, SSAB 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

18. SSAB 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). SSAB 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.

19. SSAB 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.

Section D.  The Purchaser

20. 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/their 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 Parties 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.
    d) After divestment, the Divestment Business described at paragraphs 5 (b), 5(c) and 5(e) […] must ultimately be at least partly owned by  a
    flat carbon steel producer […].

21. 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 SSAB 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. SSAB must be able
   to demonstrate to the Commission that the purchaser fulfils the Purchaser Criteria and that the Divestment Business is being sold 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

22. SSAB 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.

23. If SSAB 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 SSAB at that time or thereafter, SSAB shall appoint a Divestiture
   Trustee.  The appointment of the Divestiture Trustee shall take effect upon the commencement of the Trustee Divestiture Period.

24. The Trustee shall:
             i) at the time of appointment, be independent of the Notifying Party and its Affiliated Undertakings;
            ii) possess the necessary qualifications to carry out its mandate, for example have sufficient relevant experience as  an  investment
                banker or consultant or auditor; and
           iii)  neither have nor become exposed to a Conflict of Interest.

25. 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.

            Proposal by SSAB

26. No later than two weeks after the Effective Date, SSAB shall submit the name or names of one or more  natural  or  legal  persons  whom  SSAB
   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, SSAB shall submit a list of one or more persons whom SSAB 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 24 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.

            Approval or rejection by the Commission

27. 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, SSAB 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, SSAB 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 SSAB

28. If all the proposed Trustees are rejected, SSAB 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 22 and 27 of these Commitments.

            Trustee nominated by the Commission

29. If all further proposed Trustees are rejected by the Commission, the Commission shall nominate a Trustee, whom SSAB shall appoint,  or  cause
   to be appointed, in accordance with a trustee mandate approved by the Commission.

      II.   Functions of the Trustee

30. 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 SSAB, 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

31. 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.

    ii) oversee, in close co-operation with the Hold Separate Manager, the on-going management  of  the  Divestment  Business  with  a  view  to
        ensuring its continued economic viability, marketability and competitiveness and monitor compliance by  SSAB  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 11 and  12  of
             these Commitments;

            (b)   supervise the management of the Divestment Business as a distinct and saleable entity, in accordance with paragraph 13 of these
             Commitments;

            (c)   with respect to Confidential Information:

               – determine all necessary measures to ensure that SSAB 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 SSAB before the Effective  Date  is
                 eliminated and will not be used by SSAB and
               – decide whether such information may be disclosed to or kept by SSAB as the disclosure is reasonably necessary to allow SSAB  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  SSAB  or  Affiliated
             Undertakings;

   iii) propose to SSAB such measures as the Monitoring Trustee considers  necessary  to  ensure  SSAB’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 SSAB 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 SSAB a non-confidential copy at the same  time,  if  it  concludes  on  reasonable
        grounds that SSAB is failing to comply with these Commitments;

  viii) within one week after receipt of the documented proposal referred to in paragraph 21 of these Commitments,  submit  to  the  Commission,
        sending SSAB 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.

32. 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

33. 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 20 and 21  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 SSAB, subject to the Notifying  Party’s  unconditional  obligation  to
   divest at no minimum price in the Trustee Divestiture Period.

34. 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.

      III.  Duties and obligations of the Parties

35.  SSAB shall provide and shall cause its advisors to provide the Trustee with  all  such  co-operation,  assistance  and  information  as  the
   Trustee may reasonably require to perform its tasks.  The Trustee shall have full and complete  access  to  any  of  SSAB  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 SSAB and the Divestment Business shall provide the Trustee upon request with copies of  any  document.   SSAB
   and the Divestment Business shall make available to the Trustee one or more offices on their premises and shall be available for  meetings  in
   order to provide the Trustee with all information necessary for the performance of its tasks.

36. SSAB 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.  SSAB 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.  SSAB 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.

37. SSAB 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, SSAB shall cause the documents required for effecting the sale and the Closing to be duly executed.

38. SSAB shall indemnify the Trustee and its employees and agents (each  an  “Indemnified  Party”)  and  hold  each  Indemnified  Party  harmless
   against, and hereby agrees that an Indemnified Party shall have no liability to SSAB for, any liabilities arising out of  the  performance  of
   the Trustee’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, its employees, agents or advisors.

39. At the expense of SSAB, the Trustee may appoint advisors (in particular for corporate finance or legal advice), subject  to  SSAB’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 SSAB refuse to approve the advisors proposed by the Trustee the Commission may approve the appointment  of  such  advisors
   instead, after having heard SSAB.  Only the Trustee shall be  entitled  to  issue  instructions  to  the  advisors.   Paragraph  38  of  these
   Commitments shall apply mutatis mutandis.  In the Trustee Divestiture Period, the Divestiture Trustee may use advisors who served SSAB  during
   the Divestiture Period if the Divestiture Trustee considers this in the best interest of an expedient sale.

40. SSAB agrees that the Commission may share Confidential Information proprietary to SSAB with the Trustee.   The  Trustee  shall  not  disclose
   such information and the principles contained in Article 17 (1) and (2) of the Merger Regulation apply mutatis mutandis.

41. 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.

42. For a period of 10 years from the Effective Date the Commission may request all information from the Parties that is reasonably necessary  to
   monitor the effective implementation of these Commitments.

      IV.   Replacement, discharge and reappointment of the Trustee

43. 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 SSAB, require SSAB to replace the Trustee; or

   (b)      SSAB may, with the prior approval of the Commission, replace the Trustee.

44. If the Trustee is removed according to paragraph 43 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 22-29 of these Commitments.

45. Unless removed according to paragraph 43 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.  The review clause

46. The Commission may extend the time periods foreseen in the Commitments in response to a request from SSAB or, in appropriate  cases,  on  its
   own initiative.  Where SSAB 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  SSAB  be
   entitled to request an extension within the last month of any period.

47. 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 G.  Entry into force

48. The Commitments shall take effect upon the date of adoption of the Decision.

      Duly authorised for and on behalf of SSAB AB (publ)

      ……………………………………
      [...]

      ……………………………………
      [...]

      Date: 10/07/2014

-----------------------
[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]   For the sake of completeness, the Parties' activities also overlap in the production and supply  of  carbon  steel  tubes.  However,  their
combined market share remains below [5-10]% at EEA level under any plausible market definition.  Carbon  steel  tubes  will  accordingly  not  be
further discussed in this decision.
[3]   Form CO, paragraphs 952–5.

[4]   SSAB is active in the production and supply of tool steel, but Ruukki is not.

[5]   COMP/M.7138 – Thyssenkrupp / Acciai Speciali Terni / Outukumpu VDM, paragraph 7,  COMP/M.6471  –  Outokumpu  /  Inoxum,  paragraphs  116–7,
COMP/M.4137 – Mittal / Arcelor, paragraphs 8 and 17.
[6]   The parties' activities also overlap in the supply of carbon steel slabs, the semi-finished steel  product  which  is  further  rolled  and
processed into finished carbon steel flat products. However, the Parties' combined market share for carbon steel slabs would remain below  [0-5]%
at EEA level and the Parties themselves are the only potential purchasers of slabs in Norway, Finland and Sweden.
[7]   Quarto plates are non-coiled products with very different dimensions, in particular in  term  of  thickness,  from  other  hot-rolled  flat
products.

[8]   COMP/M.4137 – Mittal / Arcelor, paragraphs 18 to 37.
[9]   See replies to questions 5 and 6 of the Commission's request for information  addressed  to  competitors  (Q1)  on  23  May  2014,  and  to
questions 8 and 9 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[10]  A material's yield strength corresponds to the maximum stress  it  can  withstand  without  permanent  deformation.  Its  tensile  strength
corresponds to the maximum stress it can withstand without breaking.

[11]  A material's indentation hardness corresponds to its resistance  to  penetration  by  an  indenter  under  pre-determined  conditions.  For
instance, hardness in HBW is measured by indenting the tested material with a tungsten carbide sphere.

[12]  Parties' estimates.
[13]  See replies to questions 8 and 15.1 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[14]  Parties' estimates.

[15]  See replies to question 54 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[16]  See replies to question 13 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[17]  See Annex 6 to the Form CO, page 39.

[18]  See replies to questions 9 and 16 of the Commission's request for information  addressed  to  competitors  (Q1)  on  23  May  2014  and  to
questions 11 and 16 of the Commission's request for information addressed to customers (Q2) on 23 May 2014. NLMK Europe stated  in  this  respect
that "several plate mills do not have the required heat-treatment line to produce wear-resistant steels".

[19]  See replies to questions 15.2 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[20]  See replies to question 16.2 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[21]  See replies to question 51 of the Commission's request for information addressed to competitors (Q1) and customers (Q2) on 23 May 2014.

[22]  See replies to questions 8, 15.1, 19.2 and 20 of the Commission's request for information addressed to competitors (Q1)  on  23  May  2014,
and replies to questions 12, 14, 17 and 19 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[23]  See non-confidential minutes of conference call with ThyssenKrupp.

[24]  See reply to question 19.2 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[25]  See replies to questions 19.1 and 19.2 of the Commission's request for information addressed to competitors (Q1) on  23  May  2014  and  to
questions 13 and 18 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[26]  See annexes 27 and 28 to the Form CO.

[27]  See e.g. Case COMP/M.4137 Mittal/Arcelor, Case COMP/M.6471 Outokumpu/Inoxum.
[28]  SSCs purchase from steel manufacturers strip mill products, which they then slit and cut to customers’ requirements.
[29]  Stockholding centres are active as wholesalers in the steel  industry,  purchasing  steel  products  in  bulk  and  re-selling  in  smaller
quantities.
[30]  Oxycutting centres purchase quarto plate from steel manufacturers, which they then cut to  particular  sizes  and  shapes  as  required  by
customers using oxyhydrogen blowtorches.
[31]  COMP/M.2382 – Usinor / ARBED / Aceralia, paragraph 15; Case No IV/M.1595 – British Steel / Hoogovens, paragraph  8;  Case  No  IV/M.1329  –
Usinor/Cockerill, paragraphs 12–4; and Case No IV/M.1080 – Thyssen / Krupp paragraph 14.
[32]  COMP/M.2382 – Usinor / ARBED / Aceralia, paragraph 13. See also Case No. IV/M.1329 - Usinor / Cockerill Sambre.

[33]  COMP/M.4450 – Umicore / Zinifex / Neptune, paragraphs 51–3.

[34]  Replies to questions 6–9 of the Commission's request for information addressed to competitors – steel construction materials (Q5);  replies
to questions 5–7 of the Commission's requests for information addressed to customers – steel construction materials (Q6a – Q6c); and  replies  to
question 5 of the Commission's requests for information addressed to customers – steel construction materials (Q6d and Q6e).

[35]  Replies to questions 10–4 of the Commission's request for information  addressed  to  competitors  –  steel  construction  materials  (Q5);
replies to questions 8–12 of the Commission's requests for information addressed to customers – steel construction materials (Q6a–Q6c).

[36]  Replies to question 11 of the Commission's requests for information addressed to customers – steel  construction  materials  (Q6a–Q6c)  and
replies to question 6 of the Commission's request for information addressed to customers – steel construction materials (Q6d and Q6e).

[37]  Replies to question 11 of the Commission's request for information addressed to customers – steel construction materials (Q6a and Q6c)  and
replies to question 6 of the Commission's request for information addressed to customers – steel construction materials (Q6d).

[38]  COMP/M.4450 – Umicore / Zinifex / Neptune, paragraph 53.

[39]  See, e.g. Replies to questions 34–5 of the Commission's request for information addressed to competitors  –  steel  construction  materials
(Q5) and replies to questions 32–3 of the Commission's request for information addressed to customers – steel construction materials (Q6a–Q6c).

[40]  COMP/M.2382 – Usinor / ARBED / Aceralia, paragraph 13. See also Case No. IV/M.1329 - Usinor / Cockerill Sambre.

[41]  COMP/M.4450 – Umicore / Zinifex / Neptune, paragraphs 51–3.

[42]  Replies to questions 18–22 of the Commission's request for information addressed  to  competitors  –  steel  construction  materials  (Q5);
replies to questions 16–20 of the Commission's requests for information addressed to customers –  steel  construction  materials  (Q6a–Q6c);  and
replies to question 7 of the Commission's requests for information addressed to customers – steel construction materials (Q6d and Q6e).

[43]  COMP/M.4137 – Mittal/Arcelor, paragraphs 63–5.
[44]  See market shares in section IV.D.1 below.

[45]  See Commission Notice on the definition of relevant market for the purposes of Community competition law, OJ C 372,  09.12.1997,  paragraph
28: "[The Commission] will take a preliminary view of the scope  of  the  geographic  market  on  the  basis  of  broad  indications  as  to  the
distribution of market shares between the parties and their competitors, as well as a preliminary analysis of pricing and  price  differences  at
national and Community or EEA level."

[46]  The Parties submit in this respect that the transport cost advantage of the furthest of the Parties over continental  European  competitors
(i.e. SSAB delivering in Finland or Ruukki delivering in Sweden) is approx. […]% or less of the price of carbon steel flat products.

[47]  See Annex 6 to the Form CO, page 44. The Industrial Plan of the Combination Agreement between the  Parties  states  in  this  respect  that
"during the strong economy 2004-2008 Oxelösund steel works converted completely to Q&T [quenched and tempered] plate production".

[48]  For instance, Ruukki does not produce electro-galvanized products and SSAB does not produce Galvanneal and Galvalume products.

[49]  Strip products refer to all carbon steel flat products except QP.

[50]  http://www.ssab.com/en/Products--Services/About-SSAB/Vision-Strategy--Values/Strategy/ Retrieved on 7 July 2014.

[51]  http://www.ruukki.com/About-Ruukki/Market-position/Competitive-edges-and-competitors Retrieved on 7 July 2014.

[52]  See Annex 17 to the Form CO, […].

[53]  See Annexes 3 and 5 to the Form CO.

[54]  See Annex 17 to the Form CO, […].

[55]  See Annex 17 to the Form CO, […].

[56]  See for instance […].

[57]  See Annex 17 to the Form CO, […].

[58]  […](Annex 17 to the Form CO, […].

[59]  […](Annex 17 to the Form CO, […].

[60]  It should be noted that the Dansteel mill, located in Denmark, produces exclusively QP.

[61]  See Annex 17 to the Form CO, […].

[62]  See for instance minutes of calls with Press Kogyo Sweden and MSK Group.

[63]  See minutes of conference call with customer on 2 May 2014.

[64]  See minutes of conference calls with European competitors.

[65]  See replies to question 25 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[66]  See replies to question 24 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[67]  Source: replies to question 23 of the Commission's request for information addressed to competitors (Q1) on 23 May  2014,  trimmed  average
of European competitors' average transport costs for actual deliveries into the Nordic countries, average 2013 price data from […].

[68]  The Parties have stated in this respect that the national limitations are 36 tons for Sweden and 25 tons for Germany (see  footnote  70  to
paragraph 259 of the Form CO).

[69]  See replies to question 25 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[70]  See replies to question 36 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[71]  See reply to question 21.4 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[72]  See replies to questions 26.1 and 26.3 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014

[73]  See replies to question 21.3 of the Commission's request for information addressed to customers (Q2) on 23 May 2014. A  Nordic  distributor
stated in this respect that "Both SSAB and RUUKKI have developed a unique just-in-time delivery."

[74]  See reply to question 42 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[75]  See reply to question 48 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[76]  See replies to question 21.2 of the Commission's request for information addressed to customers (Q2) on 23 May  2014.  A  Swedish  customer
stated for instance that "Soft material for roof cladding (PLX (SSAB), Tin Smith Pro (Ruukki)) are somewhat different" between Nordic  mills  and
European mills. Another customer stated during a conference call on 19 June 2014 that, with respect to OC,  "If  SSAB  prices  increased  by  5%,
[customer] would likely not switch to European suppliers, but would seriously consider switching if prices increased by 10%."

[77]  See replies to question 26.5 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014 and  to  question  23
of the Commission's request for information addressed to customers (Q2) on  23  May  2014.  These  customers  also  indicated  that  prices  were
consistently higher in the Nordic region compared to the rest of the EEA.

[78]  See minutes of conference call with a Swedish customer on 2 May 2014.

[79]  See non-confidential minutes of conference call with ThyssenKrupp: "TKS views the difference  in  price  in  the  Nordics  and  continental
Europe as being mainly linked to the influence of logistics costs for continental European producers. In practice, the prices in the Nordics  are
thus somewhat higher due to the logistics costs."

[80]  […].

[81]  The Parties did not submit an analysis of price trends for OC.

[82]  OJ C 372 of 9.12.1997, p. 5.

[83]  The Parties report correlations in price levels. However, these prices are not stationary. Non-stationary prices  result  automatically  in
high correlations. These correlations therefore do not constitute evidence of a common market.

[84]  The Commission notes that other potential common cost elements such as energy costs and common demand  shocks  have  not  been  taken  into
account in this analysis.

[85]  The appropriate benchmarks to be used in a conditional correlation  analysis  should  be  based  on  similar  markets  to  the  ones  under
examination and using the same methods. This is because the general level of correlation across prices will depend on how well the  common  costs
and demand shocks are controlled for. Therefore, the Commission notes that relying on QP is a  superior  benchmark  for  HR  and  CR  than  using
correlation coefficients from another case and industry (namely the M.6663 - Ryanair/AerLingus III case)  as suggested by the Parties.

[86]  See replies to question 23 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[87]  A Swedish customer stated in this respect that "The competition is high but normally we/customers prefer to buy European due to quality."

[88]  See replies to question 29 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[89]  See replies to question 31 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[90]  See replies to questions 29 and 30 of the Commission's request for information addressed  to  competitors  (Q1)  on  23  May  2014  and  to
questions 30 and 31 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[91]  See section IV.B.2 above.

[92]  SSAB has a finishing line in China, but no steelmaking or hot-rolling capabilities. Approx. […]% of both Ruukki’s and SSAB's sales of  high
strength steel from their Nordic production facilities are outside the EEA.

[93]  See submissions in Australian anti-dumping case brought forward by the Australian producer Bisalloy.

[94]  The Parties estimate the combined market share of Asian producers to at most [5-10]% for all potential HS product markets,  and  less  than
[20-30]% for all potential WR product markets.

[95]  See non-confidential minutes of conference call with European competitor.

[96]  See e.g. Case COMP/M.4137 Mittal/Arcelor, Case COMP/M.6471 Outokumpu/Inoxum.
[97]  See for instance […].

[98]  COMP/M.2382 – Usinor / ARBED / Aceralia, paragraphs 27–30 and Case No IV/M.1595 – British Steel / Hoogovens, paragraph 12.  See  also  Case
No IV/M.1329 – Usinor / Cockerill.

[99]  Replies to questions 23–6 of the Commission's request for information  addressed  to  competitors  –  steel  construction  materials  (Q5);
replies to questions 21 and 22 of the Commission's requests for information addressed to customers – steel construction materials (Q6a–Q6c);  and
replies to question 8 of the Commission's requests for information addressed to customers – steel construction materials (Q6d and Q6e).

[100]       Replies to questions 27 and 28 of the Commission's request for information addressed to competitors –  steel  construction  materials
(Q5), replies to questions 24 and 25 of the Commission's  requests  for  information  addressed  to  customers  –  steel  construction  materials
(Q6a–Q6c); and replies to question 10 of the Commission's requests for information addressed to customers –  steel  construction  materials  (Q6d
and Q6e).

[101]       See, e.g. approved minutes of call with a customer, 24.6.2014.

[102]       COMP/M.4450 – Umicore / Zinifex / Neptune, paragraph 61.

[103]       Replies to questions 27–8 of the Commission's request for information addressed to competitors – steel construction  materials  (Q5);
replies to questions 24 and 25 of the Commission's requests for information addressed to customers – steel construction materials (Q6a–Q6c);  and
replies to question 10 of the Commission's requests for information addressed to customers – steel construction materials (Q6d and Q6e).

[104]       In other words, the combined market shares of the Parties including captive sales to other  downstream  businesses  would  be  higher
than the ones reported in table 3.

[105]       Nordic 4 refers to Denmark, Norway, Sweden and Finland while Nordic 3 refers to Norway, Sweden and Finland.

[106]       See M.6471 Outokumpu / Inoxum, paragraphs 359-360.

[107]       See replies to question 63 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[108]       See Form CO, paragraphs 952-955.

[109]       See replies to question 55 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014, and to  question
53 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[110]       See minutes of conference call with Swedish customer on 16 May 2014.

[111]       See reply to question 26.3 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[112]       See reply to question 63 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[113]       See minutes of conference call with SAMS on 14 May 2014.

[114]       See Annex 17 to the Form CO, […].

[115]       See replies to questions 45.1 and 46 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[116]       A customer stated in this respect that "They are currently first tier competitors at Nordics against each  others  according  to  our
view as both only mills with significant service center network at Nordics with similar volume delivery capabilities".

[117]       See replies to question 45.1 of the Commission's request for information addressed to customers (Q2) on 23  May  2014,  with  several
reference to close competition in "Coated products".

[118]       See replies to questions 54 and 55 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[119]       See minutes of conference call with customer on 2 May 2014.

[120]       See replies to question 45.1 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[121]       See replies to question 39 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[122]       See replies to questions 56 and 57 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[123]       See Annex 17 to the Form CO, […].

[124]       […].

[125]       See Annex 17 to the Form CO, SSAB document n°17, […].

[126]       See SSAB Eurobond Roadshow Presentation of April 2014 (publicly available), slide 11.

[127]       See Annex 17 to the Form CO, […].

[128]       See reply to question 45 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[129]       See reply to question 63 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[130]       […].

[131]       See for instance […].

[132]       See Annex 17 to the Form CO, […].

[133]       In a conference call, a Finnish customer mentioned as regards OC that "switching its process to Korean material would have  a  number
of disadvantages for [customer]: (i) the quality of the material is lower, (ii) the reliability of deliveries is uncertain,  which  would  prompt
[customer] to significantly increase its inventories and would constitute a financial burden, (iii) the colour palette of Korean  suppliers  does
not sufficiently match Finnish customer preferences and (iv) there is a strong preference among end customers for Nordic steel  and  [customer]'s
brand image would suffer from the use of Korean material – in [customer]'s opinion it would also suffer from  the  use  of  continental  European
suppliers such as ArcelorMittal."

[134]       According to the Parties' submissions, non-EEA imports into Norway, Sweden and Finland have remained stable or  marginally  decreased
from 2010 to 2013, for HR ([5-10]% in 2010, [5-10]% in 2013), CR ([10-20]% in both 2010 and 2013) and OC ([10-20]% in 2010, [10-20]% in 2013).

[135]       See replies to question 61 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[136]       See section IV.C.1 above.

[137]       See minutes of conference call with customer on 6 May 2014.

[138]       See replies to question 42.1 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[139]       See answer to questions 26.1 and 26.4 of Q1 and answer to question 2 of the RFI of 5 June  2014,  submitted  on  10  June  2014.  For
instance, Ruukki's median annual delivery of carbon steel flat products to end customers in 2013 was […] tons in Germany, […] tons in Sweden  and
[…] tons in Finland.

[140]       In this respect, […]. See Annex 17 to the Form CO, […].

[141]       See replies to question 63 of the Commission's request for information addressed to customers (Q2) on 23 May 2014, to question 39  of
the Commission's requests for information addressed to customers (Q4a, Q4b and Q4c) on 23 May 2014.

[142]       See reply to question 43 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[143]       See reply to question 63 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[144]       See reply to question 69 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014.

[145]       See reply to question 43 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[146]       See non-confidential minutes of conference call with Swedish customer on 8 May 2014.

[147]       See replies to question 35 of the Commission's requests for information addressed to competitors (Q1) and customers (Q2)  on  23  May
2014. BE Group Sverige AB stated in this respect that "With more and more producers offering the lower high strength grades these grades will  be
as any commodity steel grades soon".

[148]       See replies to question 53 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014 and  question  52
of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[149]       See minutes of conference call with [a European competitor].

[150]       See replies to question 66 of the Commission's request for information addressed to competitors (Q1) on 23 May 2014, and to  question
60 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[151]       See replies to questions 42.2 and 42.3 of the Commission's request for information addressed to customers (Q2) on 23 May 2014.

[152]       See replies to questions 65.1, 65.2, 66.1 and 66.2 of the Commission's request for information addressed to customers (Q2) on 23  May
2014. The Commission notes that the few concerns expressed regarding HS QP and WR QP mostly stem from distributors of  the  Parties'  HS  and  WR
products, and not from end customers.

[153]       See paragraph 62 of the Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004  on  the  control  of
concentrations between undertakings, OJ 2008/C 95/01.

[154]       See non-confidential minutes of call with Vik Ørsta.

[155]       Saferoad AS' response to question 37 of Q4a – DISTRIBUTION (Norway) – QUESTIONNAIRE TO CUSTOMERS.

[156]       […].

[157]       […].

[158]       See Annex 17 to Form CO, […].

[159]       See non-confidential minutes of call with with Swedish Association for Material Sourcing (SAMS).

[160]       […].

[161]       […].

[162]       Ibid.

[163]       […].

[164]       […].

[165]       Eino Talsi Oy's response to question 37 of Q4c – DISTRIBUTION (Finland) – QUESTIONNAIRE TO CUSTOMERS.

[166]       Pumppulohja AB Oy's response to question 37 of Q4c – DISTRIBUTION (Finland) – QUESTIONNAIRE TO CUSTOMERS.

[167]       Replies to question 25 of the Commission's request for information addressed to customers – steel construction materials  (Q6a).  See
also, e.g. approved minutes of a call with a customer, 24.6.2014.

[168]       See, e.g. approved minutes of a call with a customer, 24.6.2014.

[169]       Replies to questions 31 of the Commission's request for information addressed to competitors – steel construction materials (Q5)  and
replies to questions 40 of the Commission's request for information addressed to customers – steel construction materials (Q6a).

[170]       Replies to questions 46–7 of the Commission's request for information addressed to customers – steel construction materials (Q6a).

[171]       Replies to questions 46–7 of the Commission's request for information addressed to customers – steel  construction  materials  (Q6a).
Approved minutes of a pre-notification call with a customer, 16.5.2014.

[172]       The original in  Finnish  reads:  'Pelkään  että  hinnat  saattavat  muuttua  oleellisesti  kun  kaksi  markkinajohtajaa  eivät  enää
kilpailekaan keskenään'.

[173]       Replies to question 37 of the Commission's request for information addressed to customers – steel construction materials (Q6a).

[174]       See, e.g. replies to questions 48–9 of the Commission's request  for  information  addressed  to  competitors  –  steel  construction
materials (Q5).

[175]       Replies to questions 46–7 of the Commission's request for information addressed to customers – steel construction materials (Q6b).

[176]       See, e.g. replies to questions 37 of the Commission's request for information addressed to customers – steel  construction  materials
(Q6b).

[177]       Replies to questions 46–7 of the Commission's request for information addressed to customers – steel construction materials (Q6c).

[178]       See, e.g. replies to questions 37 of the Commission's request for information addressed to customers – steel  construction  materials
(Q6c).

[179]       Replies to questions 46–7 of the Commission's request for information addressed to customers – steel construction materials (Q6b).

[180]       See, e.g. Guidelines on the assessment of non-horizontal mergers under the  Council  regulation  on  the  control  of  concentrations
between undertakings, OJ 2008/C 265/07, 'Non-horizontal Guidelines'.

[181]       See, e.g. Non-horizontal Guidelines, paragraphs 31–2.

[182]       Replies to questions 49–50 of the Commission's request for information addressed to competitors – steel construction materials  (Q5).
See also replies to question 46 of the Commission's request for information addressed to customers – steel construction materials (Q6a–Q6b).

[183]       See, e.g. Non-horizontal Guidelines, paragraphs 40–6.

[184]       See, e.g. agreed minutes of a pre-notification call with a competitor, 16.5.2014.

[185]       See, e.g. Non-horizontal Guidelines, paragraphs 58–9.

[186]       Form CO, Annex 24.

[187]       Economies of scale can be achieved by transporting carbon steel products to the Nordic countries  by  vessel  instead  of  by  truck.
[…](see Form CO, paragraphs 275 and 276).

-----------------------
 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.

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE