CELEX: 32015M7785
Language: en
Date: 2015-10-29 00:00:00
Title: Commission Decision of 29/10/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7785 - TRITON / IMTECH NORDIC) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 29.10.2015
C(2015) 7634 final

|In the published version of this decision, some information |                 |Public version                                        |
|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|omitted has been replaced by ranges of figures or a general |                 |                                                      |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.                                                |                 |                                                      |
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|                                                            |                 |MERGER PROCEDURE                                      |

                                        |                                                                       |To the notifying party                                                 |

Dear Madam, Dear Sir,

Subject:    M.7785 – TRITON / IMTECH NORDIC
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1] and Article 57 of the Agreement  on  the  European  Economic
Area[2]

    1) On 25 September 2015, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation  (EC)
       No 139/2004 by which Triton Managers IV Limited and TFF IV Limited  in their capacity as general partners of Triton Fund IV, part  of  the
       Triton Group (‘Triton’, Channel Islands), acquire within the meaning of Article 3(1)(b) of the Merger Regulation control of the  whole  of
       Imtech Nordic Group N.V. ('Imtech Nordic', the Netherlands) by way of purchase of shares.[3]. Triton  and  Imtech  Nordic  are  designated
       hereinafter as the 'Parties'.

       THE PARTIES AND THE OPERATION

    2) Triton is a group of private equity funds and companies dedicated to  investing  in  medium-sized  businesses  headquartered  in  Northern
       Europe, in particular in Austria, Germany, Switzerland and the five Nordic countries: Denmark, Finland, Iceland,  Norway  and  Sweden.  In
       particular, through its portfolio companies Logstor A/S ('Logstor') and Infratek ASA ('Infratek') respectively, Triton has  activities  in
       (i) the manufacturing and supply of pre-insulated pipes for district  heating  and  cooling  applications  and  (ii)  the  management  and
       maintenance of electrical installations.

    3) Imtech Nordic comprises the business of Dutch Royal Imtech  N.V.  in  Finland,  Norway  and  Sweden.  Imtech  Nordic  specialises  in  the
       installation and management and maintenance of electrical, heating, ventilation and plumbing systems.

    4) On 1 September 2015, the Parties signed a Share and Debt Sale Agreement pursuant  to  which  Goldcup  11470  AB,  an  acquisition  vehicle
       controlled by Triton, agreed to purchase all of the issued shares in Imtech Nordic and its direct and indirect subsidiaries. As  a  result
       of the transaction, Triton will thus acquire sole control over Imtech Nordic. Therefore the transaction constitutes a concentration within
       the meaning of Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

    5) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million (Triton EUR  […]  million,  Imtech
       Nordic EUR […] million). Each of them has a Union turnover in excess of EUR 250 million (Triton EUR […] million,  Imtech  Nordic  EUR  […]
       million), and only Imtech Nordic achieves more than two-thirds of its aggregate Union turnover  within  one  and  the  same  Member  State
       (namely […]). The transaction therefore has a Union dimension within the meaning of Article 1(2) of the Merger Regulation.

       COMPETITIVE ASSESSMENT

    6) Imtech Nordic and Triton (through its portfolio company Infratek) are both active in the market for electrical installations  in  Finland,
       Norway and Sweden. However, this horizontal overlap does not give rise to any affected markets. Therefore, the horizontal overlap will not
       be further discussed in this Decision.

    7) On the other hand, the transaction gives rise to vertically affected markets in view of Triton's presence (through its  portfolio  company
       Logstor) in the upstream market for the manufacture and supply of pre-insulated pipes  (and  more  specifically  pre-insulated  pipes  for
       district heating and cooling applications) and Imtech Nordic's activities in the downstream market for water and sanitation installations.

1 Relevant markets

    8) In view of the above, the relevant product markets are: (i) the upstream market(s) for the production and sale of pre-insulated pipes  (in
       particular pre-insulated pipes for district heating and cooling) and (ii) the downstream market(s) for water and sanitation installations.

1 Market(s) for the production and sale of pre-insulated pipes

1 Product market

    9) The Commission has previously left the precise scope of the market for the production and sale of pre-insulated  pipes  open,  however  it
       identified the following potential sub-segments of this market:  (i)  pre-insulated  pipes  for  district  heating  and  district  cooling
       applications, (ii) pre-insulated pipes for oil and gas, (iii) pre-insulated pipes for marine and (iv) pre-insulated pipes  for  industrial
       applications.[4]

   10) The Parties submit that the precise product market definition can be left open as the transaction  does  not  raise  competition  concerns
       under any plausible market definition.

   11) It results from the Commission's investigation that the manufacturing process and  technical  know-how  required  for  the  production  in
       particular of pre-insulated pipes for district heating and district cooling applications does not differ from those required for other end
       applications.[5] Also, according to the majority of competitors of Logstor, the costs associated  with  the  production  of  pre-insulated
       pipes for district heating and cooling applications are similar to those for different end applications.[6] Therefore, from a supply  side
       perspective, pre-insulated pipes for district heating and district cooling applications would appear to be substitutable  with  any  other
       type of pre-insulated pipes. Nonetheless, suppliers of pre-insulated pipes appear to specialize and focus on specific sub-segments of  the
       market. In fact, the majority of competitors of Logstor who responded to the Commission's questionnaire focus their offering on one or two
       of these sub-segments.[7] From a demand point of view, there appears to be limited substitutability across pipes  intended  for  different
       customer categories and applications, as demonstrated by the fact that suppliers' offers are highly specialised and differentiated  across
       segments. As a result, it cannot be concluded if the overall market for pre-insulated pipes should indeed be segmented according to  their
       end application. However the precise scope of the relevant product market for the production and sale of pre-insulated pipes can  be  left
       open as the transaction does not lead to competition concerns notwithstanding the product market definition.

2 Geographic market

   12) In past decisions, the Commission left open the issue whether the market for pre-insulated pipes should be defined as  EEA-wide,  regional
       or national.[8] The Parties submit that the geographic scope of the market for the production and sale of pre-insulated pipes is  EEA-wide
       or at least regional (that is Northern Europe, Central Europe, Central Eastern Europe and the Balkans). They  nonetheless  provide  market
       share data for all the plausible geographic markets (i.e. EEA, regional, national markets). The precise geographic market  definition  can
       be left open as the transaction does not raise any competition concerns under any plausible market definition.

2 Market(s) for water and sanitation installations

1 Product market

   13) In previous decisions, the Commission has found confirmation in the market investigation that installation,  service  and  maintenance  of
       water and sanitary installations could constitute a market separate from other technical installations (such as for instance electrical or
       ventilation).[9] However ultimately the market definition was left open.

   14) The Parties submit that the precise product market definition can be left open as the transaction does not raise any competition  concerns
       under any plausible market definition. In addition to market shares for the market for water and  sanitation  installations,  the  Parties
       also provide estimates of their shares in the potential narrower sub segment of installation of district heating and cooling  systems.[10]
       For the purpose of this Decision the precise scope of the market for water and sanitation installations  can  be  left  open  because  the
       transaction does not lead to competition concerns even on the basis of the narrowest plausible market definition.

2 Geographic market

   15) The Commission has in its previous decision considered the market for water and sanitation installations to be either  national  or  local
       (narrower than national) in scope. The precise definition of the geographic market was left open.[11]

   16) For the purpose of this Decision the precise scope of the geographic market for water  and  sanitation  installations  can  be  left  open
       because the transaction does not lead to competition concerns even on the basis of the narrowest plausible geographic market definition.

2 Competitive assessment

1 Structure of the vertically affected markets

   17) Pre-insulated pipes for district heating and district cooling applications amount for […]% of Logstor's  EEA  business.  In  the  upstream
       market for pre-insulated pipes for district heating and cooling applications Logstor's market share in the EEA  amounts  to  [30-40]%.  As
       shown in Table 1 below Logstor has a strong position on the market in Finland (with a share of almost [50-60]%) and  as  well  as  in  the
       Nordic region overall (market share of almost [40-50]%). Logstor's market shares also exceed [40-50]% in Sweden and [30-40]% in Norway.

   18) In addition to Logstor, the following players are active  in  the  market  for  pre-insulated  pipes  for  district  heating  and  cooling
       applications: Powerpipe with a strong position in Norway and Sweden (shares exceeding or equal to [40-50]%);  Uponor  Infra  with  a  more
       significant position in Finland and Isoplus.

                         Table 1: Revenue market shares in 2014 for pre-insulated pipes for district heating and cooling
|Pre-insulated pipes for    |Finland                   |Norway                    |Sweden                    |Nordics[12]               |
|district heating and       |                          |                          |                          |                          |
|cooling                    |                          |                          |                          |                          |
|Logstor                    |[50-60]%                  |[30-40]%                  |[40-50]%                  |[40-50]%                  |
|Powerpipe                  |-                         |[40-50]%                  |[40-50]%                  |[20-30]%                  |
|KWH/Uponor Infra           |[20-30]%                  |[5-10]%                   |[5-10]%                   |[10-20]%                  |
|Isoplus                    |-                         |[10-20]%                  |[5-10]%                   |[0-5]%                    |
|Other                      |[10-20]%                  |[5-10]%                   |[5-10]%                   |[10-20]%                  |

Source: Form CO.

   19) In the downstream market Imtech Nordic is active solely in Finland, Norway and Sweden. Its market share in the overall  market  for  water
       and sanitation installations is below [0-5]% both in Finland and in Norway and below [5-10]% in Sweden. The Parties submit  that  also  in
       the potential narrower market for installation of district heating systems (in which the vertical relationship arises) the  market  shares
       of Imtech Nordic would be similar, in particular because installation of district heating systems accounts for less than  […]%  of  Imtech
       Nordic's business in each of Sweden, Finland and Norway. By the same token, according to the Parties, these market shares also reflect the
       position of Imtech Nordic on a local (narrower than national) level, in particular because its main competitors  have  similar  geographic
       coverage to that of Imtech Nordic. According to the Parties in all three Nordic countries 60-80% of the market share is to  be  attributed
       to a significant number of local and regional service providers.

       Legal framework

   20) According to the non-horizontal Guidelines, non-coordinated effects may significantly impede effective competition as a result of  a  non-
       horizontal merger if such merger gives rise to foreclosure. Foreclosure occurs where actual or potential rivals'  access  to  supplies  or
       markets is hampered or eliminated as a result of the merger, thereby reducing these companies' ability and/or incentive to  compete.  Such
       foreclosure may discourage entry or expansion of rivals or encourage their exit.

   21) The non-horizontal Guidelines distinguish between two forms of foreclosure. Input foreclosure occurs where the merger is likely  to  raise
       the costs of downstream rivals by restricting their access to an important input. Customer foreclosure occurs where the merger  is  likely
       to foreclose upstream rivals by restricting their access to a sufficient customer base.

       No input foreclosure effects

   22) According to the Parties, the transaction does not raise any competition concerns due to the marginal presence of  Imtech  Nordic  in  the
       downstream market for water and sanitary installations and the fact that Imtech Nordic's purchases represent less than […]%  of  Logstor's
       pre-insulated pipes. The Parties also argue that in the upstream  market  for  pre-insulated  pipes  alternative  suppliers  would  remain
       available (such as KWH and Isoplus) and switching pre-insulated pipes is easy for the customers given that they usually purchase them on a
       project-by-project basis. Furthermore, the Parties submit that a supply relationship between the Parties already exists,  because  Logstor
       is Imtech Nordic's […] supplier of pre-insulated pipes in Finland and Sweden and supplies […]%  of  Imtech  Nordic's  pre-insulated  pipes
       requirements in Norway.

   23) While the position of Logstor as supplier of input, namely pre-insulated pipes for district  heating  and  cooling  applications,  is  not
       insignificant, there are other alternative providers of this input such as Powerpipe, KWH/Uponor and Isoplus. As noted by the Parties, the
       pipe systems are provided for particular projects and this facilitates  switching  between  suppliers  for  different  projects.  Changing
       suppliers should also not be problematic in view of the spare capacity in the market for pre-insulated pipes, including pipes for district
       heating and cooling applications, which was confirmed by the respondents to the Commission's questionnaire.[13] Furthermore,  among  those
       providers of water and sanitation installations who responded to the  Commission's  questionnaire,  none  considered  that  there  are  an
       insufficient  number  of  alternative  suppliers  of  pre-insulated  pipes  or  pre-insulated  pipes  for  district  heating  and  cooling
       applications.[14] One of the players in the market for sanitation and water installations noted that they source from wholesalers such  as
       Onninen, LVI-Dahl or Ahlsell.[15] Also a majority of respondents confirmed that they could easily and without  incurring  high  additional
       costs switch to a new supplier of pre-insulated pipes.[16]

   24) Finally, the competitors of Imtech Nordic (and thus potential  customers  of  Logstor)  in  the  downstream  market  considered  that  the
       transaction will have no impact, either on their business or on the markets in which they operate.[17]

       No customer foreclosure effects

   25) As regards the potential customer foreclosure, in view of the fact that Logstor already supplies […] of Imtech  Nordic's  needs  for  pre-
       insulated pipes in Finland and Sweden and […]% of their needs in Norway, the transaction  would  de  facto  not  significantly  alter  the
       existing market structure. Furthermore, the fact that Imtech Nordic's market share in the downstream market  is  not  substantial  implies
       that competitors of Logstor have numerous other customers for their pre-insulated  pipes.  This  was  also  confirmed  in  the  course  of
       Commission's investigation since the majority of Logstor's competitors do not view Imtech Nordic as an important customer of pre-insulated
       pipes.[18]

       Conclusion

   26) Finally, no substantiated concerns were raised as to the impact of the transaction on the upstream market for pre-insulated  pipes  and/or
       the downstream market for water and sanitation installations.[19]

   27) In light of the above, the Commission concludes that the transaction does not raise concerns as to possible input foreclosure or  customer
       foreclosure on either of the relevant markets.

       CONCLUSION

   28) 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)
Andrus ANSIP
Vice-President of the Commission

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

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

[3]   Publication in the Official Journal of the European Union No C 327, 3.10.2015, p. 9.

[4]   Case No COMP/M.6922 – Triton/ Logstor, par. 21.

[5]   Responses to question 5 of Questionnaire Q2 – Competitors in pre-insulated pipes.

[6]   Responses to question 6 of Questionnaire Q2 – Competitors in pre-insulated pipes.

[7]   Responses to question 2 of Questionnaire Q2 – Competitors in pre-insulated pipes.

[8]   Case No COMP/M.6922 – Triton/ Logstor, par. 27.

[9]   Case COMP/M.3004-Bravida/Semco/Prenad/Totalinstallatören/Backlunds, paras. 14-15.

[10]  As it will be explained below, […] Logstor's upstream activities in pre-insulated pipes concerns pre-insulated pipes for  district  heating
       and cooling systems.

[11]  Case COMP/M.3004-Bravida/Semco/Prenad/Totalinstallatören/Backlunds, paras. 19-23.

[12]  Finland, Norway and Sweden combined.

[13]  Responses to questions 7 and 8 of Questionnaire Q2 – Competitors in pre-insulated pipes.

[14]  Responses to questions 4, 5 of Questionnaire Q1 – Competitors in installation of water and sanitation installations.

[15]  Response to question 6.1 of Questionnaire Q1 – Competitors in installation of water and sanitation installations.

[16]  Responses to question 7 of Questionnaire Q1 – Competitors in installation of water and sanitation installations.

[17]  Responses to question 8 of Questionnaire Q1 – Competitors in installation of water and sanitation installations.

[18]  Responses to question 9 of Questionnaire Q2 – Competitors in pre-insulated pipes.

[19]  Responses to question 10 of Questionnaire Q2 – Competitors in pre-insulated pipes and question 8  of  Questionnaire  Q1  –  Competitors  in
       installation of water and sanitation installations.