CELEX: 32020M9756
Language: en
Date: 2020-06-23 00:00:00
Title: Commission Decision of 23/06/2020 declaring a concentration to be compatible with the common market (Case No COMP/M.9756 - NOURYON / CP KELCO) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                 Brussels, 23.06.2020
                                                                 C(2020) 4294 final
                                                                                  PUBLIC VERSION
                                                                  In the published version of this decision,
                                                                  some information has been omitted
                                                                  pursuant to Article 17(2) of Council
                                                                  Regulation (EC) No 139/2004 concerning
                                                                  non-disclosure of business secrets and other
                                                                  confidential information. The omissions are
                                                                  shown thus […]. Where possible the
                                                                  information omitted has been replaced by
                                                                  ranges of figures or a general description.
                                                                 To the notifying party
Subject:             Case M.9756 – NOURYON / CP KELCO
                     Commission decision pursuant to Article 6(1)(b) of Council Regulation
                     No 139/20041 and Article 57 of the Agreement on the European Economic
                     Area2
Dear Sir or Madam,
       (1)      On 14 May 2020, the Commission received notification of a proposed
                concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004
                and following a referral pursuant to Article 4(5) thereof by which3 Nouryon
                Chemicals International B.V. ("Nouryon", the Netherlands), solely controlled
                by funds managed by affiliates of the Carlyle group (“Carlyle”, USA), acquires
                within the meaning of Article 3(1)(b) of the Merger Regulation control of the
                carboxymethyl cellulose (“CMC”) business of CP Kelco ApS (Denmark),
                consisting of CP Kelco Oy and certain other assets (“CP Kelco CMC”),
                currently under the control of J.M. Huber Corporation (“Huber”, USA), (the
                “Transaction”). Nouryon is referred to as the “Notifying Party” and, together
                with CP Kelco CMC, as the “Parties.”
1     OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation”). With effect from 1 December 2009, the Treaty on the
      Functioning of the European Union (“TFEU”) has introduced certain changes, such as the replacement of
      “Community” by “Union” and “common market” by “internal market”. The terminology of the TFEU will
      be used throughout this decision.
2     OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”).
3     Publication in the Official Journal of the European Union No C 176 of 26.05.2020, p. 5.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- 1.     THE PARTIES
   (2)    Nouryon (formerly known as Akzo Nobel Specialty Chemicals) is a global
          manufacturer and supplier of specialty chemicals, headquartered in Amsterdam,
          the Netherlands. Nouryon produces a wide range of chemicals such as salt,
          chlorine and caustic products, chemical intermediates, surfactants and
          processing chemicals and cellulose derivatives. Nouryon has approximately
          10,000 employees worldwide and operates in over 80 countries.
   (3)    Nouryon has its main CMC plant in the Netherlands (Arnhem) and a smaller one
          in Italy (Novara), this latter plant accounting for around [5-10]% of CMC
          production capacity in the EEA.
   (4)    CP Kelco CMC constitutes the business, currently under the sole control of CP
          Kelco Aps that manufactures and sells CMC. CP Kelco Aps is itself a subsidiary
          of CP Kelco, a nature-based ingredient solutions company, headquartered in
          Atlanta, Georgia, USA. CP Kelco Aps mainly manufactures and sells pectin and
          carrageenan and it also sells products manufactured by other business units
          within CP Kelco. CP Kelco is a producer of specialty hydrocolloids for use in a
          wide variety of consumer and household products and industrial applications.
          CP Kelco is part of the corporate group of Huber, a corporation organized and
          existing under the laws of the state of New Jersey.
   (5)    CP Kelco CMC essentially consists in one single plant, located at in Finland
          (Äänekoski).
2.     THE OPERATION AND THE CONCENTRATION
   (6)    On 29 January 2020 Nouryon, CP Kelco ApS and J.M. Huber Corporation as
          sellers entered into an equity and asset purchase agreement pursuant to which
          Nouryon agreed to acquire all equity interests in CP Kelco Oy as well as certain
          assets held by Huber in connection with the CMC Business.
   (7)    Nouryon will thus acquire sole control of CP Kelco CMC. The Transaction is
          therefore a concentration within the meaning of Article 3(1)(b) of the EU
          Merger Regulation.
3.     EU DIMENSION
   (8)    In accordance with Article 4(5) of the Merger Regulation, the Notifying Party
          requested a referral to the Commission on the grounds that the case would be
          reviewable under the national merger control laws of three Member States,
          namely Austria, Cyprus and Germany. No Member State expressed
          disagreement with this request and the case was referred to the Commission on
          24 April 2020.
                                                 2
 ---pagebreak--- 4.       COMPETITIVE ASSESSMENT
4.1.     Overview of affected markets
     (9)    The Transaction gives rise to a single horizontal overlap. Nouryon and CP Kelco
            CMC both manufacturer CMC, a specialty chemical also known as cellulose
            gum, which would thus be horizontally affected.
     (10)   The Transaction also gives rise to two vertically affected markets, with respect
            to the production and supply of sodium hydroxide (“caustic soda”) and
            monochloroacetic acid (“MCA”). Nouryon manufactures and sells both of these
            products that are important inputs in the CMC manufacturing process. The
            Target neither manufactures nor sells any of these products.
     (11)   The Transaction also gives rise to other minor vertical relationships between
            products manufactured by Nouryon that are used in the production of CMC,
            namely salt, hydrochloric acid and hydrogen peroxide (upstream) and CMC
            (downstream) even though these are minor inputs in the production process.
            Other minor vertical links are created by the fact that CMC is used by some
            portfolio companies controlled by funds managed by affiliates of the Carlyle
            group, either as an input (in sparkling wine and detergents) or in their
            manufacturing process (to produce polishing and abrasive products).
4.2.     Market definitions
 4.2.1. Carboxymehyl cellulose (CMC)
     (12)   CMC is a water-soluble cellulose ether often sold in the form of a powder. It
            functions as a thickener, binder, stabilizer, protective colloid, suspending agent,
            gelling agent, and flow control agent. It is used in a variety of industries (oil &
            gas exploration, manufacturing of detergents, food and beverages, and
            pharmaceuticals), with different purity grades (ranging from 50% to over
            99.5%) depending on the application. Low-purity CMC is called “technical
            CMC”, while higher-purity CMC (typically above 95%) is called “purified
            CMC”. Within purified CMC, a distinction can be made between purified CMC
            with a purity grade comprised between 95% and 99.5% (“intermediate-purity
            CMC”), and purified CMC with a purity grade above 99.5% (“high-purity
            CMC”). CMC is manufactured by converting cellulose into alkali cellulose
            using caustic soda, and further treating alkali cellulose with MCA. The product
            resulting from this two-steps process can then be dried, and, in the case of
            higher purity grade, neutralised with an acid and washed with solvents, before
            being further ground to match the customer’s preferred particle size distribution.
     (13)   CMC is used in a number of different applications. Some applications, such as
            pharma and oral care, as well as food, require a specific grade of CMC (high-
            purity CMC in both cases), while some applications, such as industrial, paper
            and packaging or mining can use different grades of CMC (within each
            application) depending of the precise use that is being made of the product. In
            addition, some applications, such as pharma and oral care, as well as food,
            involve different regulatory requirements.
                                                  3
 ---pagebreak---      (14)    Both parties produce and supply all types of CMC in the EEA, through their
             plants located in the Netherlands and in Italy (Nouryon) and in Finland (CP
             Kelco CMC).
4.2.1.1. Product Market definition
(A)       Commission precedents
     (15)    In the past,4 the Commission examined only once whether the wider market for
             “all cellulose ethers” should be segmented based on the type of a cellulose ether,
             such as methylcellulose and derivatives (“MC&D”) or CMC, but ultimately left
             the product market definition open. It should be noted that on that occasion, the
             Commission did not consider a further sub-segmentation either by purity grade
             or end-use application.
(B)       Position of the Notifying Party
     (16)    The Notifying Party submits that the relevant product market should be defined
             as the overall market for the manufacture and supply of CMC.5 The Notifying
             Party acknowledges that there are certain demand-side substitutability
             limitations that could justify a further segmentation between the technical and
             purified CMC grades.6 However, the Notifying Party takes the view that there is
             a strong degree of supply-side substitutability between different purity grades of
             CMC.7
     (17)    In addition, the Notifying Party discusses a potential segmentation of the CMC
             market by end-use application, proposing a distinction between (i) Pharma &
             Oral care, (ii) Food & Beverage, (iii) Mining, (iv) Paper & Packaging and (v)
             Consumer & Industrial end-use applications.8 In any event, the Notifying Party
             considers that the precise definition of the CMC market can be left open since
             the proposed Transaction does not raise competition concerns, regardless of how
             the markets are defined.9
     (18)    Nonetheless, the Notifying Part itself seems to suggest that a sub-segmentation
             by grade might be appropriate, while on the contrary, a sub-segmentation by
             application might not, since within the same grade CMC does not differ across
             applications. It submits market data for overall CMC, by grade and by
             application.
(C)       Results of the market investigation and conclusion
     (19)    The results of the market investigation confirmed that the vast majority of
             customers do not consider CMC to be substitutable with any other types of
4   See Case M. 4550 - DOW Chemical Company/Wolff Walsrode, decision of 20 June 2007.
5   Form CO, paragraph 81.
6   Form CO, paragraphs 82 – 84.
7   Form CO, paragraph 85 – 92.
8   Form CO, paragraph 93.
9   Form CO, paragraph 94.
                                                   4
 ---pagebreak---              cellulose ethers, notably croscarmelose (a cellulose ether consisting of cross-
             linked CMC).10
    (20)     The results of the market investigation were somewhat mixed as to the question
             whether the different purity grades of CMC (technical, intermediate-purity and
             high-purity) are substitutable from a demand perspective. While about a third of
             responding customers indicated there is no substitutability at all between the
             three different grades, two other fractions, almost equal in strength as the first
             one indicate either that intermediate-purity CMC can be substituted with high-
             purity CMC, but not with technical CMC, or that all purity grades can be
             substituted. The market investigation therefore shows that customers clearly
             distinguish technical CMC from higher purity grades of CMC. However, the
             results of the market investigation do not allow the Commission to conclude
             regarding the ability of customers to substitute high-purity CMC with
             intermediate-purity CMC.11 At the same time, there are indications that there is
             no supply-side substitutability between the different purity grades of CMC. 12
    (21)     In view of the above, the distinction between technical and purified CMC
             appears relevant. Furthermore, it cannot be excluded that a further distinction
             should be made within purified CMC between intermediate-purity and high-
             purity CMC.
    (22)     With respect to a potential segmentation of CMC by applications, the
             customers’ responses to the market investigation firmly indicated that there is no
             substitutability across applications, therefore rejecting the Parties’ argument in
             this respect.13 This lack of demand-side substitutability is not surprising given
             the different requirements, regulatory or in terms of grade or quality, that exist
             for each application. A majority of competitors nonetheless expressed the
             opinion that they can switch production between CMC for different applications
             very easily and do so routinely.14 The Commission notes in this respect that
             competitors cannot switch production across different purity grades, and
             consequently would not be able to switch production for one or more given
             applications across purity grades. However, should a potential segmentation by
             application be made, this distinction would cease to be relevant within a given
             purity grade, for the above-mentioned supply-side substitutability reasons: if a
             CMC producer attempted to increase prices for a given application within a
             given CMC grade, other producers manufacturing the same grade of CMC (but
             possibly for different applications) would be able to increase their output of this
             very same grade and application of CMC very easily (and they do so routinely).
             As a result, the Commission considers that only the potential segmentation of
             CMC by grade is relevant, and that, for the above-mentioned supply-side
             substitutability reasons, a potential sub-segmentation of CMC by application is
             not relevant.
10 Replies to question 6 of Q1 - Questionnaire to CMC customers.
11 Replies to questions 8 and 8.2 of Q1 - Questionnaire to CMC customers.
12 Replies to question 4 of Q2 - Questionnaire to CMC competitors.
13 Replies to questions 7 and 9 of Q1 - Questionnaire to CMC customers.
14 Replies to question 5 of Q2 - Questionnaire to CMC competitors.
                                                         5
 ---pagebreak---      (23)     Ultimately, for assessing the Transaction, Commission considers that a potential
              segmentation of CMC by application would not be relevant. As regards a
              potential segmentation of CMC by grade, the Commission considers that the
              exact scope of the product market definition can be left open between CMC as a
              single product or segmented between technical and purified CMC or segmented
              between technical, intermediate-purity and high-purity, since the Transaction
              does not give rise to serious doubts as to its compatibility with the internal
              market under any of the various combinations of the above-mentioned
              alternative market definitions.
4.2.1.2. Geographic market definition
(A)       Commission precedents
     (24)     In the past,15 the Commission considered that the market for cellulose ethers was
              more likely to be EEA-wide rather than worldwide, ultimately leaving the
              question open.
(B)       Position of the Notifying Party
     (25)     The Notifying Party submits that the relevant geographic market is global in
              scope. It argues that the costs of shipping CMC overseas are low, the non-
              hazardous nature of CMC makes it suitable for worldwide shipment, and there
              are no regulatory barriers to selling in the EEA.16 Moreover, the Notifying Party
              stresses that more than half of the Parties' combined CMC sales are made
              outside the EEA.17 The Notifying Party also emphasises that there are
              significant volumes of Chinese and Turkish imports of CMC in the EEA market
              (in 2018, 11% of the EEA CMC consumption was imported from Turkey and
              5% was imported from China).18
(C)       Results of the market investigation and conclusion
     (26)     The results of the market investigation confirmed to some extent the view of the
              Notifying Party, pointing towards the existence of a geographic market for CMC
              and its potential sub-segments that would be larger than the EEA.
     (27)     The market investigation revealed that a majority of customers would consider
              procuring CMC outside the EEA in case of a small but significant non-transitory
              increase in CMC prices in the EEA.19 Consistent with this, a majority of
              customers mentioned that they consider CMC supplied by Chinese and Turkish
              suppliers, but not suppliers from North or South America, as a credible
15  See Case Comp/M. 4550 - DOW Chemical Company/Wolff Walsrode, decision of 20 June 2007.
16  Form CO, paragraphs 96 – 100.
17  [60-70]% of the CMC produced by CP Kelco within the EEA is exported and sold outside the EEA, and
    for Nouryon, [40-50]% of the CMC produced within the EEA was sold outside of the EEA. See also
    paragraphs 101 and 102 of the form CO.
18  Form CO, paragraphs 103 – 105.
19  Replies to question 11 of Q1 - Questionnaire to CMC customers.
                                                        6
 ---pagebreak---                alternative to CMC supplied by Nouryon or CP Kelco for the supply of CMC
               for their plants in the EEA.20
     (28)      However, it should be noted that the customers’ responses were inconclusive as
               to whether there exist some factors that they consider as barriers to procuring
               CMC outside the EEA. Logistic and supply chains factors, as well as higher
               transportation costs, are mentioned among these barriers.21
     (29)      As regards competitors, a majority among them considers that there are no
               barriers to supplying CMC from areas outside the EEA to customers located in
               the EEA at competitive terms.22 One competitor suggested that the relevant
               geographic market might encompass Europe, the Middle East and Africa.23
               Competitors responding to the market investigation took the view that there
               were no regulatory requirements for selling CMC in the EEA, and in particular,
               that CMC was exempted from REACH24 registration.25
     (30)      In light of the above, the Commission considers that the relevant geographic
               market for CMC is more likely to be wider than EEA-wide, possibly
               encompassing Europe, Middle East and Africa (EMEA), and including CMC
               producers from China as well, but not North and South America. For the
               avoidance of doubt, throughout all this decision, the term “worldwide” will be
               deemed to encompass the entire world, including North and South America;
               while “EMEA” will be used when referring to the geographic zone comprising
               Europe, Middle East and Africa, plus China. In any event, for the purposes of
               assessing the Transaction, the exact scope of the geographic market definition
               can be left open since under both an EEA-wide or larger geographic market
               definition (EMEA, or world-wide), the Transaction does not give rise to serious
               doubts as to its compatibility with the internal market.
  4.2.2. Caustic soda
     (31)      Caustic soda is a white and odourless compound that absorbs moisture. It is a
               by-product derived from the production of chlorine. It is a commodity product
               that can be supplied in a liquid or solid form.
     (32)      It has a wide range of applications and its use for the production of CMC only
               absorbs a negligible part of total demand. Caustic soda can be used as a raw
               material for the production of sodium hypochlorite, the treatment of bauxite
               (from which alumina is produced), as a pH balancer in a number of chemical
20  Replies to question 12 of Q1 - Questionnaire to CMC customers. See also replies to question 11.2 of Q1 -
    Questionnaire to CMC customers.
21  Replies to question 13 of Q1 - Questionnaire to CMC customers.
22  Replies to question 9 of Q2 - Questionnaire to CMC competitors. See also replies to question 8 of Q2 -
    Questionnaire to CMC competitors.
23  Replies to question 9 of Q2 - Questionnaire to CMC competitors, as well as the non-confidential minutes
    of a call with a CMC competitor on 7 May 2020.
24  Regulation (EC) No 1907/2006 of the European Parliament and of the Council on the Registration,
    Evaluation, Authorisation and Restriction of Chemicals (REACH). The REACH legislation addresses the
    production and use of chemical substances, and their potential impacts on both human health and the
    environment.
25  Replies to question 9 of Q2 - Questionnaire to CMC competitors.
                                                        7
 ---pagebreak---              processes, for the treatment of sewage, for washing and cleansing food storage
             containers amongst others.
4.2.2.1. Product market definition
(A)       Commission precedents
     (33)    The Commission has previously26 considered caustic soda to constitute a
             separate product market. It has ultimately left open whether liquid and solid
             caustic soda constitute two separate product markets, but found that any further
             segmentation within liquid or solid caustic soda would not be appropriate, given
             that most producers can easily produce different concentrations.
(B)       Position of the Notifying Party
     (34)    The Notifying Party submits that the caustic soda segment is a separate market,
             distinct from other chemical products, but that any further division of the caustic
             soda market by its form, that is to say liquid or solid, is not appropriate, due to
             supply-side substitutability.27
(C)       Results of the market investigation and conclusion
     (35)    The market investigation did not provide any indications suggesting that the
             Commission should depart from its past decisional practice.
     (36)    In any event, the Commission considers that, for the purpose of the present case,
             the exact scope of the product market definition for caustic soda can be left
             open, since the Transaction does not raise serious doubts as to its compatibility
             with the internal market, regardless of the product market definition (that is to
             say an overall market for caustic soda or a segmentation by form).
4.2.2.2. Geographic market definition
(A)       Commission precedents
     (37)    In the past, the Commission considered that the geographic market for caustic
             soda was at least North-West Europe (Belgium, Luxembourg, Netherlands,
             Denmark, France, Ireland, Sweden, Norway and the United Kingdom) and
             might even be EEA-wide in scope.28
(B)       Position of the Notifying Party
     (38)    The Notifying Party submits that the geographic dimension of the caustic soda
             market is at least EEA-wide in scope, if not worldwide. In support of this, the
             Notifying Party puts forward arguments like intercontinental trade flows of
             caustic soda between the EU, the Americas and the Middle East and the ease
26  See Case COMP/M.6218, Ineos/Tessenderlo, decision of 26 July 2011 and Case COMP/M.4734,
    Ineos/Kerlineg, decision of 30 January 2008.
27  Form CO, paragraphs 111 – 112.
28  See Case COMP/M.6218 Ineos/Tessenderlo, decision of 26 July 2011
                                                     8
 ---pagebreak---              and low costs of transport.29 The Notifying Party ultimately submits that the
             precise geographic market definition for caustic soda can be left open in this
             case, as the Transaction will not lead to any competition concerns under any
             market definition.30
(C)       Results of the market investigation and conclusion
     (39)    The market investigation did not provide any indications suggesting that the
             Commission should depart from its past decisional practice.
     (40)    In any event, the Commission considers that, for the purpose of the present case,
             the exact scope of the geographic market definition for caustic soda and its sub-
             segments can be left open, since the Transaction does not raise serious doubts as
             to its compatibility with the internal market, regardless of the geographic market
             definition (that is to say North West- Europe, EEA or worldwide).
  4.2.3. MCA
     (41)    MCA is an intermediate chemical produced by the reaction of acetic acid and
             chlorine. It is used for the synthesis of other chemical products. It is generally
             sold in liquid solution, flakes, molten or sodium salt. MCA is used in the
             production of CMC, surfactants, thioglycolic acid and various applications, such
             as agrochemicals, pharmaceutical, food and personal care industries and others.
             MCA comes in various purity grades. For CMC applications, customers tend to
             prefer MCA with a higher purity grade.
4.2.3.1. Product market definition
(A)       Commission precedents
     (42)    In the past,31 the Commission has found that MCA may be considered as a
             separate product market in its main applications, where it has no substitutes. The
             Commission has not endorsed a further sub-segmentation of the MCA market.
(B)       Position of the Notifying Party
     (43)    The Notifying Party agrees with the Commission precedents that MCA should
             be considered as a separate product market, without further segmentation.32 The
             Notifying Party also submits that the precise product definition for MCA can be
             left open in this case, as the Transaction will not lead to any competition
             concerns under any market definition.33
(C)       Results of the market investigation and conclusion
     (44)    The market investigation did not provide any indications suggesting that the
             Commission should depart from its past decisional practice.
29  Form CO, paragraph 116.
30  Form CO, paragraph 117.
31  See Case IV/M.390 Akzo / Nobel Industrier, decision of 10 January 1994.
32  Form CO, paragraphs 124 – 125.
33  Form CO, paragraph 126.
                                                        9
 ---pagebreak---      (45)      As a result, the Commission considers that, for the purpose of the present case,
               MCA should be considered as a separate product market, without further
               segmentation .
4.2.3.2. Geographic market definition
(A)        Commission precedents
     (46)      In the past,34 the Commission has examined MCA on a regional basis (Western
               Europe).
(B)        Position of the Notifying Party
     (47)      The Notifying Party argues that at present the geographic market definition
               should be at least EEA-wide since there are ample flows of MCA across the
               EEA, transport costs are low and there are no significant price differentials
               across the EEA.35
     (48)      The Notifying Party also submits that the Commission, in its Decision of 31
               October 2019 in Case SA.38330 (2016/FC) – Poland 36, considered market
               shares for two plausible geographic markets, namely the EEA market, and the
               combined EEA and USA market.37
     (49)       The Notifying Party submits that the precise geographic market definition for
               MCA can be left open in this case, as the Transaction will not lead to any
               competition concerns under any market definition.38
(C)        Results of the market investigation and conclusion
     (50)      The market investigation did not provide any indications suggesting that the
               Commission should depart from its past decisional practice.
     (51)      However ,the Commission considers that recent developments in the MCA
               market, including its Decision on Case SA.38330 (2016/FC) – Poland could
               point to the conclusion that a Western Europe geographic market definition is
               not relevant anymore.
     (52)      In any event, the Commission considers that, for the purpose of the present case,
               the exact scope of the geographic market definition for MCA can be left open,
               since the Transaction does not raise serious doubts as to its compatibility with
               the internal market, regardless of the geographic market definition (that is to say
               regional (Western Europe), EEA-wide or the combined EEA and USA market).
34  See Case IV/M.390 Akzo / Nobel Industrier, decision of 10 January 1994.
35  Form CO, paragraphs 128 - 130
36  Letter to the Member State in working language
    Official Journal: JOCE C/144/2020 of 17.04.2020
    https://ec.europa.eu/competition/state_aid/cases1/202016/282908_2148733_65_2.pdf
37  case SA.38330 (2016/FC) – Poland ; paragraph 146
38  Form CO, paragraph 131
                                                         10
 ---pagebreak--- 4.3.    Competitive assessment
  4.3.1. Horizontal overlap in the manufacture of Carboxymethyl cellulose (CMC): Non-
          coordinated effects
4.3.1.1. Introduction
     (53)    Article 2 of the Merger Regulation requires the Commission to examine whether
             notified concentrations are compatible with the internal market, by assessing
             whether they would significantly impede effective competition in the internal
             market or in a substantial part of it.
     (54)    The Commission Guidelines on the assessment of horizontal mergers under the
             Merger Regulation (the "Horizontal Merger Guidelines") distinguish between
             two main ways in which mergers between actual or potential competitors on the
             same relevant market may significantly impede effective competition, namely
             non-coordinated effects and coordinated effects.39
     (55)    Non-coordinated effects may significantly impede effective competition by
             eliminating the competitive constraint imposed by each merging party on the
             other, as a result of which the merged entity would have increased market power
             without resorting to coordinated behaviour. According to recital (25) of the
             preamble of the Merger Regulation, a significant impediment to effective
             competition can result from the anticompetitive effects of a concentration even
             if the merged entity would not have a dominant position on the market
             concerned. In this regard, the Horizontal Merger Guidelines consider not only
             the direct loss of competition between the merging firms, but also the reduction
             in competitive pressure on non-merging firms in the same market that could be
             brought about by the merger.40
     (56)    The Horizontal Merger Guidelines list a number of factors which may influence
             whether or not significant non-coordinated effects are likely to result from a
             merger, such as the large market shares of the merging firms, the fact that the
             merging firms are close competitors, the limited possibilities for customers to
             switch suppliers, or the fact that the merger would eliminate an important
             competitive force. Not all of these factors need to be present for significant non-
             coordinated effects to be likely. The list of factors, each of which is not
             necessarily decisive in its own right, is also not an exhaustive list.41
4.3.1.2. Market structure
     (57)    Both Parties are active in the supply of all grades of CMC in the EEA and
             worldwide. CP Kelco CMC produces CMC exclusively in one single plant,
             located at Äänekoski (Finland). This plant has the capability to produce all types
             of CMC, with a focus on purified CMC. Nouryon produces technical CMC in its
             Novara plant (Italy) and high purity CMC in its Arnhem plant (the Netherlands).
             Nouryon has the possibility to produce CMC with intermediate purity by mixing
39 OJ C 31, 05.02.2004, p. 5.
40 Horizontal Merger Guidelines, paragraphs 24-38.
41 Horizontal Merger Guidelines, paragraphs 24-38.
                                                    11
 ---pagebreak---                  the outputs of these two plants. [Business secrets – Information redacted
                 regarding commercial strategy].42
Table 1: The Parties’ plants and their respective capacity in the EEA, 2019
                                                 Nouryon                           CP Kelco CMC                      Parties combined
                                                                                                                                       Parties’
                                                        Nouryon                                    CP       Parties’      Parties’    combined
                          Arnhem                                 Nouryon’s    Äänekoski
    Purity grade                          Novara          total                                  Kelco’s  combined       combined      capacity
                        (Netherla                                 capacity    (Finland)
                                        (Italy) (kt)    capacity                                capacity      total       capacity      share –
                         nds) (kt)                                  share          (kt)
                                                           (kt)                                   share     capacity       share      excluding
                                                                                                               (kt)                    Novara
                        [Business        [Business     [Business              [Business        [30–40]%    [Business     [40–50]%     [40–50]%
                          secret –        secret –      secret –                secret –                    secret –
All purities              capacity        capacity      capacity [10–20]%       capacity                    capacity
                        informati        informati     informati              informati                    informati
                             on]             on]           on]                     on]                         on]
                         [Business       [Business     [Business               [Business       [20–30]%    [Business     [30–40]%     [20–30]%
                           secret –        secret –     secret –                 secret –                   secret –
Technical CMC             capacity        capacity      capacity [10–20]%       capacity                    capacity
                        informatio      informatio     informati              informatio                   informati
                              n]              n]           on]                      n]                         on]
All purified CMC         [Business       [Business     [Business  [5–10]%      [Business       [40–50]%    [Business     [50–60]%     [50–60]%
                           secret –        secret –     secret –                 secret –                   secret –
                          capacity        capacity      capacity                capacity                    capacity
                        informatio      informatio     informati              informatio                   informati
                              n]              n]           on]                      n]                         on]
                         [Business       [Business     [Business               [Business                   [Business
  (58)       95% <         secret –        secret –     secret –
                                                                     Not
                                                                                 secret –
                                                                                                   Not
                                                                                                            secret –
                                                                                                                            Not           Not
             Purity       capacity        capacity      capacity                capacity                    capacity
                                                                 provided                       provided                 provided     provided
             < 99.5%    informatio      informatio     informati              informatio                   informati
Purified                      n]              n]           on]                      n]                         on]
CMC                      [Business       [Business     [Business               [Business                   [Business
                           secret –        secret –     secret –                 secret –                   secret –
             Purity                                                  Not                           Not                      Not           Not
                          capacity        capacity      capacity                capacity                    capacity
             > 99.5%                                             provided                       provided                 provided     provided
                        informatio      informatio     informati              informatio                   informati
                              n]              n]           on]                      n]                         on]
    Source: Notifying Party’s estimates
      (59)       At worldwide level, the Notifying Party’s estimates of the Parties and their
                 largest competitors volume-based and value-based sales market shares are
                 shown in Table 2.
      (60)       The Notifying Parties did not provide market shares at the EMEA level, since
                 this possible geographic delineation of the CMC market came up as the result of
                 the market investigation. However, the Parties’ market shares at such a level are
                 lower than their combined EEA ones.43 This means that the EEA market shares
                 discussed below will be an over-estimation of the Parties’ position in the more
                 likely geographic market of the EMEA.
Table 2: Market share estimates for CMC by purity grade worldwide, 2019
                                                        Value                                            Volume
                                                     CP Kelco                                            CP Kelco
                                    Nouryon                          Combined             Nouryon                           Combined
                                                        CMC                                                 CMC
      All purities                  [5–10]%          [10–20]%        [20–30]%              [0–5]%        [10–20]%            [10–20]%
      Technical CMC                 [5–10]%           [5–10]%        [10–20]%             [5–10]%         [5–10]%            [10–20]%
      Purified CMC                  [5–10]%          [10–20]%        [20–30]%              [0–5]%        [10–20]%            [10–20]%
    Source: Notifying Party’s estimate
42   The important differences between the capacity shares provided in Table 1 and the EEA market shares
     provided in Table 3 to Table 6 is due to the fact that part of the CMC produced within the EEA by the
     Parties is exported and sold outside the EEA ([60-70]% for CP Kelco and [40-50]% for Nouryon).
43   See submission by the Notifying Party, by e-mail of 22.06.2020.
                                                                   12
 ---pagebreak--- (61) At the EEA level, the Notifying Party’s estimates of the Parties’ and their
     largest competitors’ volume-based and value-based sales market shares are
     shown in Table 3. The Notifying Party also provided estimates of the Parties’
     volume-based and value-based market shares in the EEA by purity grade (
                                      13
 ---pagebreak--- (63)     Table 4).
    Table 3: Market share estimates for CMC in the EEA, 2019.
                                                   Value                                   Volume
         Supplier                  Sales (million
                                                               Share         Volume (kt)            Share
                                        EUR)
Nouryon                          [Business secret –                       [Business secret –
                                                             [10–20]%                              [5–10]%
                                 sales information]                       sales information]
CP Kelco CMC                     [Business secret –                       [Business secret –
                                                             [20–30]%                             [10–20]%
                                 sales information]                       sales information]
Combined                        [Business secret –                       [Business secret –
                                                             [30–40]%                             [20–30]%
                                sales information]                       sales information]
Ashland                          [Business secret –                       [Business secret –
                                                       [10–20]%-[10–20]%                          [10–20]%
                                 sales information]                       sales information]
Lamberti                         [Business secret –                       [Business secret –
                                                             [10–20]%                              [5–10]%
                                 sales information]                       sales information]
DuPont                           [Business secret –                       [Business secret –
                                                        [5–10]%-[10–20]%                           [5–10]%
                                 sales information]                       sales information]
Mikro-Technik                    [Business secret –                       [Business secret –
                                                         [5–10]%-[5–10]%                           [5–10]%
                                 sales information]                       sales information]
Mare                             [Business secret –                       [Business secret –
                                                         [0–5]% -[5–10]%                           [5–10]%
                                 sales information]                       sales information]
Others                           [Business secret –                       [Business secret –
                                                        [0–5]% -[20–30]%                          [20–30]%
                                sales information]                       sales information]
Total                                    […]                   100%              […]                100%
  Source: Notifying Party’s estimates
                                                           14
 ---pagebreak--- Table 4: Market share estimates for CMC by purity grade in the EEA, 2019
                                                  Value                                                Volume
                             Size of the
                                                                                 Size of the
                              market                   CP Kelco                                             CP Kelco
                                          Nouryon                    Combined      market       Nouryon                  Combined
                              (million                    CMC                                                 CMC
                                                                                    (kt)
                               EUR)
                            [Confident                                           [Confiden
                                 ial                                                 tial
    All purities            informatio
                                         [10–20]%      [20–30]%      [30–40]%
                                                                                 informati
                                                                                                 [5–10]%   [10–20]%      [20–30]%
                                 n]                                                  on]
                            [Confidenti                                          [Confident
                                  al                                                  ial
    Technical CMC           information
                                          [5–10]%      [10–20]%      [20–30]%
                                                                                 informatio
                                                                                                 [5–10]%    [10–20]%     [10–20]%
                                  ]                                                   n]
      (64)      Interme
                                                                                 [Confident
                diate           Not         Not            Not          Not           ial
                purity                                                                            [0–5]%    [30–40]%     [40–50]%
                            provided44    provided       provided    provided    informatio
    Purified    95%-                                                                  n]
    CMC         99.5%
                High                                                             [Confident
                                Not         Not            Not          Not           ial
                purity        provided    provided       provided    provided    informatio
                                                                                                [10–20]%     [5–10]%     [10–20]%
                > 99.5%                                                               n]
                            [Confidenti                                          [Confident
                                  al                                                  ial
    All purified CMC        information
                                         [10–20]%      [10–20]%      [30–40]%
                                                                                 informatio
                                                                                                 [5–10]%    [20–30]%     [30–40]%
                                  ]                                                   n]
   Source: Notifying Party’s estimates
     (65)      For illustrative purposes, the Commission notes that the Parties have also
               provided estimates of their volume-based (only) supply shares in the EEA by
               application (Table 5), as well as by applications within each purity grade (Table
               6).
Table 5: Supply share estimates for CMC (all purities) by applications in the EEA,
2019 (by volume)
                                            Size of the market
                                                                         Nouryon             CP Kelco CMC           Combined
                                                    (kt)
                                               [Confidential
    All applications                           information]
                                                                         [5–10]%               [10–20]%              [20–30]%
                                                [Confidential
    Consumer & Industrial & Others              information]
                                                                         [5–10]%               [20–30]%              [20–30]%
                                                [Confidential
    Paper & Packaging                           information]
                                                                          [0–5]%               [20–30]%              [30–40]%
                                                [Confidential
    Food & Beverage                             information]
                                                                          [0–5]%                [5–10]%              [10–20]%
                                                [Confidential
    Pharma & Oral Care                          information]
                                                                        [20–30]%                 [0–5]%              [20–30]%
                                              [Confidential
    Mining                                                               [0–5]%               [90–100]%            [90–100]%
                                               information]
   Source: Notifying Party’s estimates
44  The Notifying Party explains that it was not possible to provide value shares for the two potential sub-
    segments of Purified CMC because industry reports do not contain such information. Accordingly, the
    Notifying Party only provided volume shares for these two sub-segments, basing their calculation on the
    assumption that the highly purified market corresponds to the regulated industries (i.e. Food, Pharma,
    Personal Care).
                                                                  15
 ---pagebreak--- Table 6: Supply share estimates for CMC (all purities) by applications within each
purity grade in the EEA, 2019 (by volume)
     Purity grade                            Technical CMC       Intermediate-purity CMC         High-Purity CMC
                                                   CP                       CP                          CP
                                       Noury             Combin Noury                Combi  Noury              Combi
                                                 Kelco                    Kelco                        Kelco
                                         on                 ed    on                   ned    on                ned
                                                 CMC                      CMC                          CMC
                                         [5–      [10–     [20–            [30–       [40–   [10–       [5–     [10–
     All applications                  10]%      20]%     30]%
                                                                [0–5]%
                                                                          40]%       50]%    20]%      10]%    20]%
                                        [10–      [20–     [30–   [5–      [20–       [20–             [10–     [10–
     Consumer & Industrial & Others    20]%      30]%     40]%   10]%     30]%       30]%
                                                                                           [0–5]%
                                                                                                       20]%    20]%
                                         [5–       [5–     [10–    -       [30–       [30–
     Paper & Packaging                 10]%      10]%     20]%            40]%       40]%
                                                                                           -             -        -
                                          -         -              -         -          -               [5–     [10–
     Food & Beverage                                         -                             [0–5]%
                                                                                                       10]%    20]%
                                          -         -              -         -          -    [20–               [20–
     Pharma & Oral Care                                      -
                                                                                             30]%
                                                                                                      [0–5]%
                                                                                                               30]%
                                       [10–      [80–      [90–    -       [90–       [90–
     Mining                            20]%      90]%    100]%           100]%      100]%      -         -        -
                                                            45
   Source: Notifying Party’s estimates
     (66)      Within the EEA, in a possible overall CMC market, that is without any further
               distinction by purity grade the Parties have a combined market share of [30–
               40]%(with an increment of [10–20]%, brought by Nouryon) on a value basis and
               of [20–30]%(with an increment of [5–10]% brought by Nouryon) on a volume
               basis. On a volume basis there are five competitors in the EEA with market
               shares higher than the increment brought by Nouryon. On a value basis, there
               are three competitors in the EEA with a market share similar to the increment
               brought by Nouryon.
     (67)      Looking at a potential segmentation by purity grade, the Parties’ activities
               appear complementary to some extent. For technical CMC, the Parties’
               combined market share in the EEA is of [10–20]% (with an increment of [5–
               10]% brought by Nouryon) on a volume basis and of [20–30]% (with an
               increment of [5–10]% brought by Nouryon) on a value basis. For the high purity
               grade the market share is [10–20]% (with an increment of [5–10]% brought by
               Nouryon) by volume.
     (68)      The Parties’ combined volume-based market share for the intermediate purity
               grade is [40–50]% (with a [0–5]% increment from Nouryon), but Nouryon is
               present in this segment [Business secrets – Information redacted regarding
               production secrets] in comparison with other players, who can manufacture
               intermediate purity grade CMC in a single site with a dedicated production line.
               [Business secrets – Information redacted regarding production secrets].
     (69)      On an overall purified CMC market, combining the intermediate and high-purity
               grades, the Parties’ combined market share would be [30–40]% (with an
               increment of [5–10]% by Nouryon)on a volume-basis and of [30–40]%(with an
               increment of [10–20]% by Nouryon)
45  Volumes of technical CMC sold for mining applications in the EEA were less than [Business secrets –
    Information redacted regarding sold volumes] in 2019.
                                                          16
 ---pagebreak---      (70)   Looking at applications for illustrative purposes and as an indication of
            closeness of competition between the Parties, the Commission notes that the
            Parties’ portfolios also appear to complement each other, with a strong focus of
            CP Kelco CMC on the mining and paper industries ([40-50]% of CP Kelco’s
            CMC sales, but less than [10-20]% of Nouryon’s CMC sales), while Nouryon
            instead focuses on supplying the pharmaceutical sector (about [50-60]% of its
            CMC sales, but less than [5-10]% of CP Kelco CMC’s sales).
     (71)   Their combined EEA market shares are [20–30]% in the pharma and oral care
            segment (with a [0–5]% increment from CP Kelco CMC), [30–40]% in the
            paper and packaging segment (with a [0–5]% increment from Nouryon), and as
            high as [90–100]%(with a [0–5]% increment from Nouryon) in the mining
            segment. According to the Notifying Party, these market shares would not
            materially change by different purity grades for those applications where
            different purity grades are used.46
4.3.1.3. The Notifying Party’s position
     (72)   The Notifying Party argues that the level of combined market shares should not
            be a cause for concern, since the are many strong remaining rival CMC
            suppliers (such as Ashland, DuPont, Lamberti, Mare, Mikro-Technik, Barzaghi,
            Chongqing Lihong Fine Chemicals and USK Kimya) that will continue to exert
            strong competitive pressure on the merged entity on all possible segments of the
            CMC market in the EEA.47 The Notifying Party also submits that there is
            sufficient spare production of CMC capacity in the EEA and world-wide in
            order to ensure competition post-Transaction.48 In addition, the Notifying Party
            points out that actual and potential future entries act as a further constraint on
            CMC manufacturers, since the barriers to enter the CMC market are low.49
     (73)   The Notifying Party claims that imports of CMC from outside the EEA are an
            additional source of competitive pressure since CMC is easily transportable
            across the EEA and transport costs as well as trade barriers and tariffs are low.50
            In 2018, 11% of the EEA CMC consumption was imported from Turkey and 5%
            was imported from China.
     (74)   The Notifying Party further explains that customers can easily switch among
            CMC suppliers, since long term contracts (with a duration of more than 2 years)
            are infrequent in the CMC industry, multi-sourcing is a common practice among
            customers, and qualification processes that customers need to carry out before
            purchasing from a new supplier are not a barrier to switching.51
     (75)   Finally, the Notifying Party argues that the Parties are not close competitors,
            given their different focus regarding CMC customers and applications, their
            complementary footprint being a key driver of this transaction.52 The Notifying
46  See submission by the Notifying Party, by e-mail of 22.06.2020.
47  Form CO, paragraphs 175 – 208.
48  Form CO, paragraphs 224 – 226.
49  Form CO, paragraphs 219 -223.
50  Form CO, paragraphs 227 – 230.
51  Form CO, paragraphs 209 – 218.
52  Form CO, paragraphs 231 – 241.
                                                         17
 ---pagebreak---               Party further submits that because of their different focuses, the Parties have no
              customers in common.53
4.3.1.4. Results of the market investigation and assessment
     (76)     In light of the results of the market investigation, the Commission considers that
              the Transaction does not lead to a significant impediment to effective
              competition due to horizontal non-coordinated effects for the following reasons:
     (77)     First, on a potential overall market for CMC the market investigation showed
              that customers and competitors consider that there are around five credible CMC
              suppliers in the EEA (including the Parties, Ashland, DuPont and Lamberti).
              When asked about credible CMC suppliers also from outside the geographical
              limits of the EEA, the results of the market investigation point to a more
              important number of credible suppliers (more than five) from the customer’s
              perspective.54 These are mainly suppliers from Turkey and China. Competitors
              consider the number of credible suppliers at this wider level to be around ten, or
              more. Therefore, competitors also identify a number of their peers who are not
              yet active in the EEA, which customers located in the EEA do not consider as
              credible suppliers. Thus, competitors consider that Denkim and USK Kimia
              (two Turkish producers)55 would rank just below the above mentioned top five
              suppliers in the EEA in terms of competitive strength. This number of credible
              suppliers does not change by purity grade or application.56 In light of this, the
              Commission considers that post-Transaction, there will be a sufficient number
              of credible suppliers of CMC to customers based in the EEA.
     (78)     While the Parties are generally considered as strong suppliers for CMC, some of
              their peers would also qualify as strong suppliers. This is in particular the case
              of Ashland, DuPont and Lamberti. For all three purity grades non-EEA
              suppliers are overall not considered as equally strong, but customers do indicate
              in their commentaries that they know of Chinese and Turkish manufacturers
              they would rank in a good position. Other CMC producers consider (in a similar
              way) both CP Kelco and Nouryon as being among the top CMC producers,
              while they also consider Ashland, DuPont and Lamberti to be strong
              competitors.57
     (79)     The finding that post-Transaction a sufficient number of credible suppliers of
              CMC will remain is further supported by the fact that respondents to the market
              investigation clearly indicated that there are no CMC products which would
              only be manufactured by the merged entity or by a small number of CMC
              suppliers beside the merged entity. This fact is widely acknowledged by
              customers of the Parties, 58 as well as by their competitors.59
53  Form CO, paragraphs 242 – 244.
54  See replies to question 15 of Q1 - Questionnaire to CMC customers.
55  See replies to question 13 of Q2 - Questionnaire to CMC competitors.
56  See replies to question 15.1 of Q1 - Questionnaire to CMC customers.
57  See replies to question 13 of Q2 - Questionnaire to CMC competitors.
58  See replies to questions 16 and 17 of Q1 - Questionnaire to CMC customers.
59  See replies to questions 11 and 12 of Q2 - Questionnaire to CMC competitors.
                                                          18
 ---pagebreak---     (80)     Regarding closeness of competition between CP Kelco and Nouryon,
             customers’ responses are inconclusive as to whether CP Kelco and Nouryon are
             competing with each other in a particularly close manner.60 In particular,
             Nouryon and CP Kelco are not considered by their competitors as being each
             other’s closest competitors.61 This would tend to support the Parties’ argument
             that, given their different business focus, Nouryon and CP Kelco are not each
             other’s closest competitors.
    (81)     As regards the Parties’ customers’ buyer power, more than half of the customers
             who expressed a view believe that they have equal or more bargaining power
             against their CMC suppliers when negotiating their purchases of CMC.
    (82)     When asked about potential price increases resulting from the Transaction, only
             a small proportion of customers believe that it will result in significant increases
             in prices at EEA level. Most of the respondents point to either small price
             increases, or no increases at all at EEA level.62 However, at worldwide level, a
             majority of respondents does not foresee any price increase.63 Taking into
             account the fact that, as discussed in paragraph (27) above, a majority of
             customers would consider procuring CMC from suppliers located outside the
             EEA in case of a small but significant non-transitory increase in CMC prices in
             the EEA, it can be concluded that if the merged entity were to attempt to raise
             prices to its customers in the EEA, these would be able to turn to non-EEA
             suppliers (mainly from China and Turkey) and probably defeat this strategy. In
             addition, account has to be taken also of the fact that among the criteria of
             customers for choosing their supplier, price is only in the third place, while
             product quality and supply reliability come in the first two places,64 and that
             customers overwhelmingly responded that post-Transaction there would still be
             sufficient choice of credible CMC suppliers for EEA customers, both from
             inside the EEA and outside the EEA.65
    (83)     Finally, asked about any other negative consequences of the Transaction (for
             example on product quality, choice, innovation), responding CMC customers
             did not identify any, at either EEA66 or wider worldwide level.67
    (84)     If different purity grades of CMC were to constitute separate product
             markets, as can be seen in Table 4 above, the combined market shares of the
             Parties by volume are at most around [30–40]%, with the exception of the
             possible intermediate purity CMC market ([40–50]%). By value, the combined
             shares of the Parties are below [20–30]% for technical CMC, [30–40]% for
             CMC overall and [30–40]% for purified CMC.
    (85)     While the Parties are generally considered as strong suppliers for CMC for all
             purity grades, it appears that there would also remain other strong suppliers
60 See replies to question 19 of Q1 - Questionnaire to CMC customers.
61 See replies to question 14 of Q2 - Questionnaire to CMC competitors.
62 See replies to question 29.1 of Q1 - Questionnaire to CMC customers.
63 See replies to question 29.1 of Q1 - Questionnaire to CMC customers.
64 See replies to question 21 of Q1 - Questionnaire to CMC customers.
65 See replies to question 28 of Q1 - Questionnaire to CMC customers.
66 See replies to question 29.1 of Q1 - Questionnaire to CMC customers.
67 See replies to question 29.2 of Q1 - Questionnaire to CMC customers.
                                                         19
 ---pagebreak---              post-Transaction for each one of these grades. When asked to rank the CMC
             producers according to their strength, (i) for technical CMC, customers place
             Ashland first, followed by CP Kelco second, Nouryon third, DuPont fourth and
             Lamberti fifth;68 (ii) for purified CMC CP Kelco is ranked first, Ashland second,
             Nouryon third, DuPond fourth and Lamberti fifth;69 finally, for (iii) high purity
             CMC, Ashland is again placed first, CP Kelco second, Nouryon third, DuPond
             fourth and Lamberti fifth.70
    (86)         The combined market share level in intermediate purity also has to be
             assessed against the background of some of the arguments brought forward by
             the Parties. It is worth noting that Nouryon [Business secrets – Information
             redacted regarding manufacturing process].
    (87)     Moreover, and as a consequence of this last element, intermediate-purity CMC
             is a segment in which the increment from the Transaction is relatively low ([0-
             5%] increment from Nouryon). As a result, the HHI increment from the
             Transaction is [Business secrets – Information redacted regarding market share
             increment]. The Notifying Party did not provide market shares for its
             competitors in the intermediate-purity segment that would allow the
             Commission to calculate a post-Transaction HHI level. However, it should be
             noted that the intermediate-purity CMC market represents approximately one
             third of the overall EEA CMC market, which is itself quite fragmented, with a
             post-Transaction HHI of <1400. [Business secrets – Information redacted
             regarding strategic decisions].
    (88)     In addition, the Commission considers that its findings regarding competitive
             pressure exercised by non-EEA suppliers from Turkey and/or China also apply
             to the possible segmentations according to purity grade.71
    (89)     As an illustration of the degree of closeness of competition between the Parties,
             the Commission also notes that as regards CMC supplied for different
             applications, the combined supply shares of the Parties are at most around [30–
             40]%. For the applications of consumer & industrial & others; paper &
             packaging and food & beverage, the increment brought by Nouryon is at most
             [5-10]%. For pharma & oral care, the increment brought by CP Kelco is below
             [0-5]%. This tends to illustrate that the Parties do not compete with each other in
             these segments, but that the Parties’ activities are rather complementary. The
             Commission notes that these supply shares do not materially change if the
             market is further sub-segmented by purity grade (see Table 6 above). The
             Commision also notes that strong competitors of the Parties already mentioned
             above are also present in respect of the different applications for CMC.
             Lamberti, Denkim, USK Kimya, Selkim and Aciselsan are active in consumer &
             industrial & other applications. DuPont, Ashland, Mare, Mikro-Technik and
68 See replies to question 18.1 of Q1 - Questionnaire to CMC customers.
69 See replies to question 18.2 of Q1 - Questionnaire to CMC customers.
70 See replies to question 18.3 of Q1 - Questionnaire to CMC customers.
71 See in particular the replies to question 11.3 of Q1 - Questionnaire to CMC customers. One respondent
   said that “The producers in China produce products that cover all applications and all grades and
   typically have aggressive pricing. The market has accepted many of the manufacturers already.”, while
   another stated that “ Chinese producers of CMC can readily supply technical grades, purified CMC and
   some high purity CMC.”.
                                                         20
 ---pagebreak---               Lamberti are active in paper and packaging, Ashland, DuPont, Wealthy and
              USK Kimya are active in food and beverage. Ashland, DuPont and Wealthy are
              active in pharma and oral care . Finally, Ashland and Lamberti are active in
              mining.
     (90)     The supply of CMC for mining applications stands out, since the combined
              supply share would amount to [90–100]% with a marginal increment of [0–5]%
              brought about by Nouryon, see Table 5 above.
     (91)     The Commission notes that the supply of CMC for mining applications
              represents approximately 0.5% of the overall CMC market in value and in
              volume.72 This is due to the very small size of the overall mining activities in the
              EEA, making demand for CMC for mining applications in EEA very low, which
              so that CMC producers are not actively seeking to be present in this segment.
              On this small segment, Nouryon has a marginal presence with sales of [Business
              secrets – Information redacted regarding the value of sales] in 2019, [Business
              secrets – Information redacted regarding the value of sales] in 2018 and
              [Business secrets – Information redacted regarding the value of sales] in 2017.
              The Commission therefore considers that Nouryon is not an important
              competitor of CP Kelco for mining applications. Moreover, the Commission
              notes that one CMC competitor who produces CMC for mining applications, in
              its EEA plant, but only has sales outside of the EEA, due to lack of demand in
              the EEA, could easily supply to mining customers in the EEA should respective
              demand rise post-Transaction.73 Additionally, other competitors from within as
              well as from outside the EEA (e.g. Turkey and China), could easily produce
              CMC for mining applications should demand for it increase in the EEA.
4.3.1.5. Conclusion
     (92)     In conclusion, for the reasons set out above, the Commission considers that the
              Transaction does not raise serious doubts as to its compatibility with the internal
              market as a result of horizontal non-coordinated effects concerning CMC.
  4.3.2. Horizontal overlap in the manufacture of Carboxymethyl cellulose (CMC) -
           Coordinated effects
     (93)     In addition to significantly impeding effective competition within a given
              market through non-coordinated effects, as described above in paragraphs (53)
              to (56), a merger may also change the nature of competition in such a way that
              firms that previously were not coordinating their behaviour, may be post-merger
              significantly more likely to coordinate and raise prices or otherwise harm
              effective competition, or make coordination easier, more stable or more
              effective for firms which were coordinating prior to the merger (coordinated
              effects).74
     (94)     Regarding potential coordinated effects, the merged entity will have a market
              share in volume terms on the basis of an overall CMC market which is almost
72  0.4 kt out of a total of 99.5 kt and around EUR 1 million out of a total of EUR 191.6 million in 2019.
73  See the non-confidential minutes of a call with a CMC competitor on 7 May 2020, paragraph 13.
74  Horizontal Merger Guidelines, paragraph 22.
                                                          21
 ---pagebreak---              three times higher as that of the next closest competitors. The market does not
             appear to be concentrated, since there are five competitors with market shares in
             the range between 6%-12% in volume (Ashland, DuPont, Lamberti, Mare and
             Mikro-Technik),75 which together represent around half of the volumes put in
             the market, as well as a substantial number of other smaller producers (including
             manufacturers from outside the EEA, which are present in the EEA market
             through imports). As such, it appears that the relatively low concentration of
             CMC production on the supply-side would make reaching terms of coordination
             among CMC producers difficult.76
     (95)    These arguments regarding the lack of concentration in the market are equally
             valid if CMC was further segmented by grade or by application. In light of these
             elements, as well as the evidence available to it, the Commission considers that
             the Transaction does not raise serious doubts as to its compatibility with the
             internal market in relation to potential coordinated effects in the market of
             CMC.
  4.3.3. General conclusion regarding horizontal effects
     (96)    In light of the considerations set out in paragraphs (9) to (93), and taking account of
             the results of the market investigation and of the evidence available to it, the
             Commission concludes that the Transaction does not raise serious doubts as to its
             compatibility with the internal market with respect to non-coordinated and
             coordinated horizontal effects.
  4.3.4. Vertical links
4.3.4.1. Introduction
     (97)    The Commission’s Guidelines on the assessment of non-horizontal mergers
             under the Merger Regulation (the "Non-Horizontal Merger Guidelines")
             distinguish between two main ways in which vertical mergers may significantly
             impede effective competition, namely input foreclosure and customer
             foreclosure.77
     (98)    For a merger to raise input foreclosure competition concerns, the merged entity
             must have a significant degree of market power upstream.78 In assessing the
             likelihood of an anticompetitive input foreclosure strategy, the Commission has
             to examine whether (i) the merged entity would have the ability to substantially
             foreclose access to inputs; (ii) whether it would have the incentive to do so; and
             (iii) whether a foreclosure strategy would have a significant detrimental effect
             on competition downstream.79
75  When considering value shares, there are between three and five competitors with market shares in the
    range between 6%-12% (Lamberti, Mare and Mikro-Technik; as well as possibly Ashland and DuPont),
    which together represent between 40% and 60% of the CMC sales in value terms.
76 Horizontal Merger Guidelines, paragraph 45.
77 OJ L 24, 29.1.2004, p. 1.
78 Non-horizontal Merger Guidelines, paragraph 35.
79 Non-horizontal Merger Guidelines, paragraph 32.
                                                      22
 ---pagebreak---      (99)    For a merger to raise customer foreclosure competition concerns, the merged
             entity must be an important customer with a significant degree of market power
             in the downstream market.80 In assessing the likelihood of an anticompetitive
             customer foreclosure strategy, the Commission has to examine whether (i) the
             merged entity would have the ability to foreclose access to downstream markets
             by reducing its purchases from its upstream rivals; (ii) whether it would have the
             incentive to do so; and (iii) whether a foreclosure strategy would have a
             significant detrimental effect on consumers in the downstream market.81
4.3.4.2. Vertical link between caustic soda (upstream) and CMC (downstream)
     (100) Nouryon manufactures caustic soda, which is an essential input in the
             manufacture of CMC. This gives rise to affected markets because the Parties’
             combined market share levels are above 30% for CMC in certain of its
             segmentations. The Commission will therefore assess potential customer
             foreclosure in this respect. However, Nouryon is not an important supplier of
             caustic soda. Its EEA and North-West Europe market shares for the overall
             caustic soda market and for the liquid caustic soda market are of [10–20]% and
             [10–20]% respectively. For liquid caustic soda they are of [10–20]% and [20–
             30]% respectively. Given the Parties’ (through Nouryon) small market shares in
             the upstream market for caustic soda, and consequently the combined entity’s
             inability to foreclose access to caustic soda to CMC manufacturers with whom it
             competes downstream, post-Transaction, input foreclosure will not be assessed
             in this Decision.82
(A)       The Notifying Party’s view
     (101) The Notifying Party argues that no customer foreclosure risk arises because the
             manufacture of CMC is only one of the multiple uses of caustic soda,83
             representing approximately 14% in North-West Europe84 and 15% of the EEA
             caustic soda demand,85 and Nouryon and CP Kelco are not important purchasers
             of caustic soda at EEA level. Nouryon is already at least partially vertically
             integrated with respect to the supply of these products for the manufacture of
             CMC since Nouryon produces approximately [50-60]% of its requirements of
             caustic soda in-house, while purchasing the remaining [50-60]% from external
             third parties. Nouryon’s external purchases represent approximately [0-5]% of
             the total EEA demand for caustic soda86. Similarly, CP Kelco CMC only
             accounts for a minor share of the total EEA demand for caustic soda in the EEA
             (less than [0-5]%).87
80 Non-horizontal Merger Guidelines, paragraph 61.
81 Non-horizontal Merger Guidelines, paragraph 59.
82  The issue was nonetheless investigated during the market investigation, see replies to question 18 of Q2 -
    Questionnaire to CMC competitors.
83  Form CO, paragraph 277.
84  See submission by the Parties, e-mail of 12 June 2020
85  Form CO, paragraph 276.
86  Form CO, paragraph 275.
87  Form CO, paragraph 276.
                                                         23
 ---pagebreak--- (B)       The Commission’s assessment
     (102) First, as regards ability, the market investigation confirmed the fact that caustic
             soda suppliers consider that CMC manufacturers represent only a minor
             proportion of their sales, and that there is no doubt as to the fact that post-
             Transaction, there will remain a sufficient pool of customers to sell caustic soda
             to in the EEA.88
     (103) Second, as regards incentives, the market investigation has confirmed that with
             respect to the supply of caustic soda, availability, geographic89 as well as
             logistical considerations take precedence over other considerations, and
             therefore caustic soda suppliers who responded to the market investigation
             confirmed that they do not have any material concerns about a potential
             customer foreclosure strategy90 since they do not believe that the Transaction
             will change the Parties’ incentive to source internally for their (and in Particular
             CP Kelco CMC’s) needs for caustic soda rather than purchasing from an
             external supplier.91 In addition, the Commission notes that as of today, Nouryon
             is not preventing other caustic soda competitors to access to itself as a caustic
             soda customer: with a caustic soda output of [Business secrets – Information
             redacted regarding quantities produced and sold ] dry metric tonnes,
             representing [10-20]% of the total EEA consumption, Nouryon would have
             ample capacity to cover its own needs for CMC production (which represent by
             comparison only [0-5]% of the EEA demand for caustic soda), and still Nouryon
             procures around [50-60]% of its needs for caustic soda for the manufacture of
             CMC from third party suppliers.
     (104) Third, as regards potential effects, none of the respondents to the market
             investigation expected that the Transaction would have any effect on their
             business, and as such did not foresee any relevant post-Transaction implications
             for them.
     (105) In light of the above, taking account of the results on the market investigation
             and of all the evidence available to it, the Commission considers that the
             Transaction does not raise serious doubts as to its compatibility with the internal
             market in relation to the vertical link between caustic soda (upstream) and CMC
             (downstream).
4.3.4.3. Vertical link between MCA (upstream) and CMC (downstream)
     (106) Nouryon manufactures MCA, which is used as an input in the manufacture of
             CMC. The Transaction gives rise to vertically affected markets because of the
             merged entity’s downstream market share levels above 30% for CMC in certain
             of its segmentations. Nouryon is not an important supplier of MCA, with an
             EEA market share of [20–30]%92, (below the 30% threshold for a market to be
88  Responses to question 2 of Q3 - Questionnaire to caustic soda competitors
89  As regards geographic considerations, it should be noted that Nouryon has five caustic soda plants in the
    EEA; two of them in the Netherlands and three in Germany; all comparatively far away from Finland.
90  Responses to questions 3 and 4 of Q3 - Questionnaire to caustic soda competitors
91  Responses to question 3 of Q3 - Questionnaire to caustic soda competitors
92  Nouryon’s market share in the combined EEA and USA market would be lower than that. Consequently
    the Commission’s analysis will focus on the EEA level.
                                                        24
 ---pagebreak---             considered vertically affected) and a market share of [30–40]% in Western
            Europe. Therefore, both input and customer foreclosure regarding MCA will be
            assessed in this decision.
(A)       The Notifying Party’s view
     (107) With respect to potential input foreclosure, the Notifying Party argues that
            Nouryon’s moderate market share for MCA in the EEA would not allow it to
            foreclose access to MCA.93 There are in fact three main MCA producers in the
            EEA: CABB, with a market share of [40–50]%, followed by Nouryon, with a
            market share of [20–30]%, and PCC, with a market share of [20–30]% (other
            suppliers representing only [0–5]% of the EEA market).94
     (108) The Notifying Party also provides market shares for the Western Europe
            market,95 recalling that it considers such a geographic delineation highly
            improbable (see paragraph (47) above), especially in the light of the
            Commission’s Decision in Case SA.38330 (2016/FC) – Poland. In Western
            Europe, Nouryon’s market share would be [30–40]%, while CABB would still
            be market leader with a market share of [40–50]% and PCC would have [10–
            20]%.
     (109) The Notifying Party argues that competition in the EEA market is fierce, with
            PCC planning on a capacity increase in its plant in Poland representing 57% of
            the total EEA MCA market size to date.96 Accordingly, the EEA MCA market
            is, and will increasingly be in the future, characterized by overcapacity and will
            have sufficient spare capacity to meet the demand for MCA from customers in
            the EEA.97 Most importantly, the Notifying Party points out that among all
            CMC manufacturers in the EEA, Nouryon only sells MCA to [Business secrets
            – Information redacted regarding customer information], in amounts
            representing approximately [Business secrets – Information redacted regarding
            customer information] of [Business secrets – Information redacted regarding
            customer information] demand for MCA in the EEA. Except for [Business
            secrets – Information redacted regarding customer information], there would
            therefore be no CMC competitor to which the Parties could reduce supply for
            MCA or degrade the terms and conditions for these supplies.98
     (110) The Notifying Party also submits that no customer foreclosure risk arises
            because (i) Nouryon is already at least partially vertically integrated with respect
            to the supply of these products for the manufacture of CMC, (ii) CP Kelco CMC
            only accounts for a minor share of the total EEA demand for MCA in the EEA
            ([10–20]%) and (iii) 67% of all MCA manufactured in the EEA is for uses other
            than the manufacture of CMC.99
93  Form CO, paragraphs 282 – 287.
94  Form CO, paragraph 283.
95  See submission by the Parties, e-mail of 12 June 2020.
96  Form CO, paragraph 286.
97  Form CO, paragraphs 288 – 289.
98  Form CO, paragraph 282.
99  Form CO, paragraphs 291 – 292.
                                                         25
 ---pagebreak--- (B)       The Commission’s assessment
     (111) As regards a potential input foreclosure strategy, the Commission first notes
              that that Nouryon’s market share in MCA is moderate (below the 30% threshold
              for an EEA market definition), and only exceeds the 30% threshold for a
              potential Western-Europe geographic market. Moreover, the market
              investigation confirmed that currently there is a substantial overcapacity in
              MCA production at EEA level, notably due to a recent capacity increase by one
              competing MCA producer.100 The over-capacity situation is also true at
              Western-Europe level, despite the fact that the recent capacity increase in the
              EEA took place in Poland. Also, a clear majority of CMC producers indicated
              that post-Transaction, there would remain sufficient alternative sources of MCA
              if Nouryon decided following the Transaction to stop supplying this input or
              degrade the terms of its supply101.
     (112) Second, regarding Nouryon’s incentives to foreclose MCA input, a majority of
              CMC producers said that they did not expect Nouryon to have any incentive to
              engage in such foreclosure strategy.102 This is also evidenced by the fact that, as
              of today, Nouryon, is already active at both upstream and downstream levels,
              and still supplies third party CMC producers with the MCA it produces.
     (113) Third, customers’ replies indicate that even if the merged entity were to engage
              in input foreclosure post-transaction, it would be detrimental for itself. 103
     (114) Consequently, also in light of the merged entity’s lack of ability and incentive to
              engage in input foreclosure post-Transaction, the Commission concludes that
              there will be no significant detrimental effect on competition downstream
              either.
     (115) As regards a potential customer foreclosure strategy, it should first be noted
              that Nouryon is already vertically integrated with respect to the supply of MCA,
              while CP Kelco, who procures CMC in the commercial market, accounts for
              only [10–20]% of the total EEA demand ([10–20]%)of Western Europe
              demand) for MCA. As such, it appears therefore unlikely that by foreclosing
              access to CP Kelco CMC, the combined entity would have the ability to
              foreclose access to a key customer in the EEA or Western Europe. Additionally
              there are numerous other potential customers104, either other CMC producers, or
              actors active in other downstream industries representing 67% of the MCA
              market in the EEA (production of herbicides, fungicides and insecticides; of fine
              chemicals; etc. – the proportion in Western Europe was not provided by the
              Notifying Party), who will likely be able to absorb the volumes hitherto
              purchased by CP Kelco (should the combined entity decide to vertically
100 See answers to question 4 of Q4 - Questionnaire to MCA competitors.
101 See answers to question 19.1 of Q2 - Questionnaire to CMC competitors.
102 See answers to question 19.2 of Q2 - Questionnaire to CMC competitors.
103 See answers to questions 19.1.1 and 19.2.1. of Q2 - Questionnaire to CMC competitors. For example one
    respondent said that “Foreclosure would lead to considerable loss of business for Nouryon.”, while
    another stated that “If they decided to exit the market, it could cause a shortage. However, this scenario is
    unlikely. In the event of a shortage, the other suppliers would increase production." and “The
    consolidation of CMC production would not be a rationale for Nouryon to shut down its MCA business”
104 Notably Nouryon’s current customers for MCA.
                                                           26
 ---pagebreak---               integrate with respect to the supply of MCA). Therefore, it would appear that if
              the merged entity decided to vertically integrate with respect to the supply of
              MCA, this would result in a mere realignment of the purchase patterns among
              competing firms.
     (116) Second, as regards incentive and effects, while the results of the market
              investigation were somewhat inconclusive, it is not necessary for the
              Commission to conclude on whether the Parties would have an incentive to
              engage in a potential customer foreclosure strategy with respect to MCA or
              whether such a foreclosure strategy would have significant detrimental effect on
              competition downstream, as the lack of ability would already prevent the Parties
              to engage in such a potential foreclosure strategy in the first place.
     (117) In light of the above, taking account of the results on the market investigation
              and of all the evidence available to it, the Commission considers that the
              Transaction does not raise serious doubts as to its compatibility with the internal
              market in relation to the vertical link between MCA (upstream) and CMC
              (downstream).
4.3.4.4. Other vertical links
(A)       Products used as an input for CMC
     (118) The Transaction also gives rise to other minor vertical relationships between
              upstream products manufactured by Nouryon that are used in the production of
              CMC, namely salt,105 hydrochloric acid and hydrogen peroxide (upstream), and
              CMC (downstream). These products are vertically affected because the market
              share levels are above 30% for CMC in certain of its segmentations; however,
              they are minor inputs in the production process.
     (119) For these three products, input foreclosure is implausible, for lack of ability
              because these products are not important inputs for the manufacture of CMC,
              with CP Kelco purchases representing from [Business secrets – Information
              redacted regarding commercial strategy] to [Business secrets – Information
              redacted regarding commercial strategy] in 2019, and [0-5]% to [0-5]% of the
              total EEA demand, depending on the product.106 This lack of ability also stems
              from the fact that Nouryon has only modest market shares of [20–30]% for salt,
              [10–20]% for hydrochloric acid and [10–20]% for hydrogen peroxide in the
              EEA.107
     (120) Lack of ability is also the main reason why no customer foreclosure risk arises
              because Nouryon is already at least partially vertically integrated with respect to
              the supply of these products for the manufacture of CMC, and CP Kelco CMC
              only accounts for a minor share of the total EEA demand for these products in
105 This refers to industrial salt, which has the same chemical composition (NaCl) as table salt, but is usually
    not suited for human consumption due to the presence of impurities. The majority of industrial salt is
    mined in salt mines, and is therefore also known as rock salt.
106 Form CO, paragraphs 300, 311 and 321.
107 Form CO, paragraphs 297, 308 and 318.
                                                          27
 ---pagebreak---              the EEA (less than [0–5]% for hydrogen peroxide, less than [0–5]% for
             hydrochloric acid and less than [0–5]% for salt).108
     (121) Given the lack of ability to engage in input or customer foreclosure, it is not
             necessary to conclude on whether the Parties would have an incentive to engage
             in input or customer foreclosure strategies.
     (122) As regards as regards potential effects, the market investigation did not reveal
             any concerns from CMC manufacturers with respect to a potential input
             foreclosure strategy for any of these products. As such, it appears therefore that
             such a foreclosure strategy would have no significant detrimental effect on
             competition downstream. Given the evident lack of ability to engage in any
             customer foreclosure strategy with respect to these three products, the
             Commission did not seek explicitly feedback on potential customer foreclosure
             in the course of the market investigation. None of the respondents to the market
             investigation raised any customer foreclosure concern pro-actively.
     (123) In light of the above, taking account of the results on the market investigation
             and of all the evidence available to it, the Commission considers that the
             Transaction does not raise serious doubts as to its compatibility with the internal
             market in relation to the vertical link between salt, hydrochloric acid or
             hydrogen peroxide (upstream) and CMC (downstream).
(B)        Products using CMC as an input
     (124) Finally, certain companies controlled by the Carlyle group (namely
             [Confidential Information – Information redacted regarding the Notifying
             Party’s internal organization]) use CMC as an input in three downstream
             markets: the production and supply of (i) polishing and abrasive products, (ii)
             wine, and (iii) institutional and industrial cleaning and hygiene products. The
             Notifying Party submits that none of those vertical relationships can lead to
             substantive competition concerns as the combined entity (i) will not have
             significant market power in relation to CMC production post-Transaction, and
             (ii) in any event, all these supply relationships do not concern important inputs,
             and are limited in value and volume. As a matter of fact CMC input costs
             represent a negligible part of the overall cost for these industries.
     (125) For all these products, customer foreclosure scenarios appears extremely
             implausible, because these three companies only purchase very limited amounts
             of CMC ([Confidential information – Information redacted regarding the
             purchased volumes]109), together accounting for less than [0-5]% of the EEA
             CMC demand. Consequently, customer foreclosure will not be further assessed
             in this decision.
     (126) As regards potential input foreclosure, this also appears implausible. First, the
             merged entity would most likely lack the ability to foreclose access to CMC to
108 Form CO, paragraphs 302, 313 and 323.
109 Moreover, the Notifying Party submits that these [Confidential information - Information redacted
    regarding commercial strategy] products are produced in the US and not imported in the EEA.
                                                       28
 ---pagebreak---             the Carlyle affiliates’ downstream competitors, because there would still be a
            number of CMC suppliers on the market that could supply those competitors.
     (127) Second, in regard to the ability to foreclose, CMC is also not an important input
            in the manufacture of these downstream products, only representing a negligible
            cost factor in the manufacturing process.110 For polishing and abrasive products,
            the Notifying Party submits that it is impossible to clearly define the relevance
            CMC has for [Confidential information – Information redacted regarding the
            Notifying Party’s internal organisation] products, given that [Confidential
            information – Information redacted regarding the Notifying Party’s internal
            organisation] only purchases [Confidential information – Information redacted
            regarding the Notifying Party’s purchased volumes] of CMC worldwide (these
            purchases having taken place only in [Confidential information – Information
            redacted regarding commercial arrangements of the Notifying Party ] and not in
            the EEA, the purchase share of [Confidential information – Information redacted
            regarding the Notifying Party’s internal organisation] in the EEA would be null)
            and has a minimal presence in the EEA, with a market share below [5–10]% in
            the supply of polishing and abrasive products. For wine, the Notifying Party
            submits that CMC represents less than [0-5]% of the production costs, as it is
            also used in very small quantities. Finally, for institutional and industrial
            cleaning and hygiene products, the Notifying Party explains that CMC
            represents only a small part of the products’ costs (<1%).
     (128) Third, for these three vertical links, it appears unnecessary to conclude on
            whether the Parties would have an incentive to engage in an input foreclosure
            strategy, or whether such a potential input foreclosure strategy would have
            meaningful effects on the market, as the lack of ability would already prevent
            the Parties to engage in such input or foreclosure strategies in the first place.
     (129) In light of the above, taking account of the results on the market investigation
            and of all the evidence available to it, the Commission considers that the
            Transaction does not raise serious doubts as to its compatibility with the internal
            market in relation to the vertical link between CMC (upstream) and (i) polishing
            and abrasive products, (ii) wine, and (iii) institutional and industrial cleaning
            and hygiene products (downstream).
4.3.4.5. General conclusion on vertical effects
     (130) In the light of the considerations in paragraphs (100) to (129) the Commission
            concludes that the Transaction does not raise serious doubts as to its
            compatibility with the internal market due to vertical effects.
110 Non-horizontal Merger Guidelines, paragraph 34.
                                                    29
 ---pagebreak--- 5.    CONCLUSION
   (131) For the above reasons, the European Commission has decided not to oppose the
         notified operation and to declare it compatible with the internal market and with
         the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of
         the Merger Regulation and Article 57 of the EEA Agreement.
                                                  For the Commission
                                                  (Signed)
                                                  Margrethe VESTAGER
                                                  Member of the Commission
                                               30