CELEX: 32015M7529
Language: en
Date: 2015-06-11 00:00:00
Title: Commission Decision of 11/06/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7529 - MOHAWK INDUSTRIES / INTERNATIONAL FLOORING SYSTEMS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 11.6.2015
C(2015) 4114 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|omitted has been replaced by ranges of figures or a general |           |                                                               |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 Sirs,

Subject:    Case M.7529 – Mohawk Industries / International Flooring Systems
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1] and Article 57 of the Agreement  on  the  European  Economic
Area[2]

    0. On 17 April 2015, the European Commission (‘Commission’) received a notification of a proposed concentration  pursuant  to  Article  4  of
       Council Regulation (EC) No 139/2004[3] by which Mohawk Industries Inc. (‘Mohawk’, USA) acquires within the meaning of Article  3(1)(b)  of
       the Merger Regulation control of the whole of the undertaking International Flooring Systems S.A. (‘IFS’, Luxembourg) by way  of  purchase
       of shares. Mohawk is hereinafter designated as the ‘Notifying Party’ whereas Mohawk and IFS together are  hereinafter  designated  as  the
       ‘Parties’.

    0. The case was initially notified on 2 March 2015 but subsequently withdrawn on 24 March 2015.

    0. The Parties were informed at the appropriate stage of the procedure that it could not  be  excluded  that  the  proposed  transaction,  as
       originally notified, might raise serious doubts as to its compatibility with the internal market in the potential small-sized  MDF  panels
       market in the 500-km catchment areas around the Parties' plants located in Belgium and Northern France. The Notifying  Party  subsequently
       submitted commitments on 19 May 2015 designed to eliminate the serious doubts identified by the Commission in accordance with Article 6(2)
       of the Merger Regulation. After further investigation, and for the reasons stated in Section  5.1.1,  the  Commission  considers  that  no
       serious doubts arise on the market for small size MDF panels in the  Benelux.  The  commitments  submitted  by  the  Notifying  Party  are
       therefore not necessary.

THE PARTIES

    0. Mohawk is a US-based publicly-listed company supplying a broad range of flooring products, including carpets,  rugs,  hardwood,  laminate,
       ceramic tiles, stones and vinyl flooring. It is also active in the production and supply of insulation materials  and  wood-based  panels,
       such as MDF. The company is active within the EEA mainly  through  its  wholly-owned  subsidiary  Unilin  BVBA  (‘Unilin’)  that  has  its
       production facilities mainly in or close to Belgium.

    0. IFS is a Luxembourg-based holding company of a group of companies active in the production and supply of vinyl flooring, laminate flooring
       and wood-based panels, in particular  raw and coated MDF. IFS' operational headquarters are located in Belgium.

THE OPERATION AND THE CONCENTRATION

    0. According to the terms of the share purchase agreement of 13 January 2015, Mohawk will acquire all the issued and  outstanding  shares  in
       IFS. Mohawk will therefore acquire sole control of IFS. Consequently, the proposed transaction  constitutes  a  concentration  within  the
       meaning of Article 3(1)(b) of the Merger Regulation.

UNION DIMENSION

    0. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[4] (Mohawk EUR 5 533 million;  IFS
       EUR 492 million. Each of them has a Union-wide turnover in excess of EUR 250 million (Mohawk EUR […] million; IFS EUR  […]  million),  but
       they do not achieve more than two-thirds of their aggregate Union-wide turnover within  one  and  the  same  Member  State.  The  notified
       operation therefore has a Union dimension pursuant to Article 1(2) of the Merger Regulation.

RELEVANT MARKETS

1 General

    0. The Parties’ activities overlap with respect to (i) fibre boards (MDF/HDF and coated MDF), (ii) flooring materials (laminate flooring  and
       vinyl flooring) and (iii) locking technologies employed in flooring materials.

    0. There are vertical links between (i) Mohawk’s UF resins business and the Parties’ fibre board (MDF/HDF) businesses, (ii) the Parties’  raw
       MDF businesses and their coated MDF businesses, (iii) the Parties’ coated MDF  businesses  and  Mohawk’s  components  business,  (iv)  the
       Parties’ HDF businesses and the Parties’ laminate flooring businesses, and (v) the Parties’  locking  technologies  businesses  and  their
       flooring material businesses. The vertical links are illustrated in Figure 1.

                                             Figure 1 - Vertical links (orange = Mohawk, blue = IFS)
                                                                      [pic]

    0. As the proposed transaction does not give rise to horizontally  or  vertically  affected  markets  concerning  components,  they  are  not
       discussed further in this decision.

    0. Moreover, only the vertical links between (i) UF resins and fibre boards (MDF/HDF), (ii) (raw) fibre  boards  and  coated  MDF  and  (iii)
       locking technologies and flooring products give rise to vertically affected markets. Consequently, only those vertical links are discussed
       in this decision.

2 Relevant product markets

1 UF Resins

    0. UF resins (urea-formaldehyde resins) are used as glue in the panel industry in the production of, for  instance  fibre  boards  (MDF/HDF).
       They also have usages outside the panel industry, including, for example, in textiles and paper. In previous decisions, the Commission has
       found that UF resins constitute a separate relevant product market, distinct from PF resins (phenol-formaldehyde resins).[5] The  question
       of whether the market should be further sub-segmented based on the end-usage of the product has been left open.[6]

    0. As the proposed transaction does not give rise to competition concerns related to UF resins under the alternative market  definitions,  it
       is not necessary to conclude on the exact product market definition concerning UF resins.

2 Fibre boards (MDF/HDF)

       MDF and HDF

    0. MDF (Medium Density Fibreboard) and HDF (High Density Fibreboard) are engineered wood products made from compressed wood fibres.  MDF  and
       HDF differ in the density of the product, expressed as the ratio between the mass and volume of the product (kg/m3).

    0. Based on indications of existing supply side substitutability, the Commission has previously considered that MDF and HDF could  belong  to
       the same relevant product market. However, the product market definition has been ultimately left open.[7] The Commission has in  previous
       decision not referred to any specific density threshold to distinguish between MDF and HDF.

    0. The Notifying Party submits that MDF and HDF belong to the same relevant product market as they can be produced  on  the  same  production
       lines and on the basis of the same production process. According to the Notifying Party, the difference between MDF  and  HDF  is  usually
       drawn at the density of 800 kg/m3.

    0. The vast majority of the respondents to the market investigation have confirmed that MDF and HDF only differ in terms of their density.  A
       clear majority considers that the density threshold between MDF and HDF lies within the range of 700–800 kg/m3. Some  market  participants
       also referred to certain differences in the surface quality of MDF and HDF.[8]

    0. Demand-side substitutability between MDF and HDF appears quite limited in light  of  the  replies  to  the  market  investigation.  Market
       participants explained that certain applications call for the use of either MDF or HDF due to their weight  and  density  characteristics.
       Market participants explained that typical applications for HDF include for example flooring products which cannot be made with MDF  while
       typical applications for MDF are the production of furniture and wall panels.[9] Moreover, market participants pointed to  the  fact  that
       HDF is only available up to a certain thickness and that the price differential between the products is so high that an increase of  5–10%
       of the price of the cheaper product, which is MDF, would not make them switch to HDF.[10]

    0. In contrast, a degree of supply-side substitutability between MDF and HDF was largely confirmed during the market investigation. The  vast
       majority of the respondents confirmed that MDF and HDF suppliers are usually the same. Even if some  suppliers  concentrate  more  on  the
       production of either of the products, the results of the market investigation confirm that MDF and HDF can usually be produced on the same
       production lines.[11] One competitor though noted that if a production line is only specified to make the  lower-density  MDF,  it  cannot
       make HDF even if the opposite was possible.[12]

       Different sizes of MDF

    0. During the market investigation, the Commission’s attention was drawn to a possible differentiation in the market for MDF according to the
       size of the panels.[13]

    0. Certain Benelux customers appear to require smaller MDF panels than, e.g. their German or French counterparts. Those  sizes,  1220  mm  in
       width, are originally based on foot-measurements (1200 mm equals roughly 4 feet) and are also used in the  UK,  Ireland  and  Scandinavia.
       Other European customers require larger sizes based on the metric measurement system (usually 2070 mm width). In this regard, some  market
       participants from the Benelux have also explained that the market can be roughly divided into (i) large industrial customers  that  demand
       or at least are able to use the larger MDF sizes, and (ii)  smaller customers in the ‘trading  market’  (such  as  carpenters  and  do-it-
       yourself shops) that require the smaller MDF sizes.[14]

    0. The Notifying Party submits that small and large MDF panels belong to the same  product  market,  in  particular  because  of  supply-side
       substitutability. According to the Notifying Party, there are MDF lines that can produce economically both small and  large  formats.  The
       smaller-sized MDF panels can be produced economically on fibre board lines that have at least a press width of 2440 mm as that enables  an
       efficient production set-up. The board coming out from the press with a width of 2440 mm can subsequently be sawed into two to achieve the
       desired product width. According to the Notifying Party, there are more than fourty MDF production lines within the EEA.  Eleven  of  them
       are able to produce small-sized MDF competitively, that is they have a press width of  at least 2440 mm. The Notifying Party  argues  that
       switching between the larger and smaller sizes would be done easily and in a timely manner in those presses . The Notifying Party  further
       submits that the unit price for the small and large-sized MDF panels is equal.

    0. Market participants contacted in the market investigation have explained that from a demand-side perspective, the  end  customers  in  the
       Benelux countries require specifically the small-sized panels not only because they are used to  them  but  because  (i)  the  small-sized
       panels are easier to handle, especially for a person working on his own, and  (ii)  the  customers'  facilities  (such  as  machinery  and
       storage) are tailored for small-sized panels. Customers would need to incur investment costs to be able to use the larger  sizes.  An  MDF
       supplier has explained that over ten years it has tried to promote the larger-sized MDF in the Benelux without success. Therefore, demand-
       side substitutability appears very limited at least to the extent that a subset of customers are not able to switch to  the  larger  sizes
       economically and in a timely manner.[15]

    0. In contrast, the  results  of  the  market  investigation  support  the  Notifying  Party’s  submission  about  a  degree  of  supply-side
       substitutability due to the ease of switching production between the small-sized and large-sized panels on the same production  lines.[16]
       However, as explained by the Notifying Party, such switching appears  to  be  limited  to  presses  with  a  certain  minimum  width.   In
       particular, a customer stated that a production line with a press width of 2070 mm  will  not  be  able  to  offer  1220  mm  wide  panels
       competitively.[17] The results of the market investigation therefore confirm that there appears to be supply-side substitutability  for  a
       subset of MDF producers that operate presses of a certain minimum width but not for all MDF producers in the market.  Notwithstanding  the
       exact market definitions, the Commission will take into account the fact that switching is feasible for  a  subset  of  suppliers  in  its
       competitive assessment.

       Conclusion

    0. As the proposed transaction does not give rise to competition concerns related to fibre boards under  alternative market  definitions,  it
       is not necessary to conclude on the exact product market definition concerning fibre boards. The Commission is, in particular, not able to
       conclude definitively that all small and large-sized MDF panels fall into the same product market and will assess the potential market for
       small-sized MDF panels separately since the overlap between the Parties' activities is most pronounced on that potential sub-market.

3 Coated MDF

    0. Coated MDF is (raw) MDF that has been further refined through coating and is thus a higher value product compared to (raw) MDF. Coated MDF
       is used, for instance in furniture applications.

    0. Various different coating materials and techniques can be used in the production of coated MDF. The  Notifying  Party  submits  that  such
       materials and techniques include (i) melamining; (ii) lacquering; (iii) paper foiling; (iv) laminating with HPL (high  pressure  laminate)
       or CPL (continuous pressure laminate); and (v) veneering. The Notifying Party submits that it is  not  necessary  to  segment  the  market
       according to the coating technique.

    0. The Commission has previously left open the question whether the market for MDF should be sub-segmented by  coating  technique.[18]As  the
       proposed transaction does not give rise to competition concerns related to coated MDF under the alternative market definitions, it is  not
       necessary to conclude on the exact product market definition concerning coated MDF.

4 Laminate flooring

    0. Laminate flooring is a type of flooring that traditionally consists of  a  multiple  layer  product  combining  a  dense  fibreboard  core
       (generally HDF) with a melamine-impregnated paper pattern, a plastic-like wear layer and a melamine under layer. Installed laminate floors
       typically ‘float’ over the sub-floor on top of a foam or film underlayment, which provides inter alia sound-reducing properties.

       Laminate flooring and flooring made from other materials

    0. While the Commission has in an earlier case considered that laminate and wooden flooring could belong to the same relevant market[19],  in
       a later case it has considered that they likely belong to different markets even if the question has been left open.[20]

    0. The Notifying Party argues that laminate flooring constitutes a product market separate from wooden flooring.

    0. The results of the market investigation support the Notifying Party’s argument of laminate flooring being a distinct product market.  Even
       if many respondents explained that laminate flooring is technically substitutable with other materials in all or most  applications,  many
       customers also explained that switching was not commercially possible due to, e.g. end-customers’ preferences and  the  higher  prices  of
       alternative flooring materials.[21] There is also no  or  very  limited  supply-side  substitutability  because  of  different  production
       processes and machinery required for the production of different flooring materials.[22]

    0. The Parties’ internal documents also indicate that […].[23] That supports the finding that at least laminate flooring and  vinyl  flooring
       belong to different product markets in the EU.

       Laminate flooring for residential and for commercial use

    0. The Commission has in an earlier case also suggested that flooring materials for private and  commercial  use  might  constitute  separate
       markets.[24]

    0. The Notifying Party submits that approximately 90% of laminate flooring is sold to residential customers but that differentiation  between
       residential and commercial use is not necessarily instructive because the same products may, at least to certain extent, be used  in  both
       applications and because laminate flooring sold through one channel (residential / commercial) might end up being used in the  other  end-
       use.

    0. The Commission's market investigation in this case indicates that there is a high level of supply-side substitutability  between  laminate
       flooring for commercial and private end-use,[25] which would support the finding of a single market encompassing both of  those  end-uses.
       However, market participants have also indicated in the market investigation that the technical requirements of products for  private  and
       commercial end-use are different and some respondents indicated that  this  is  reflected  in  the  prices.[26]  Some  suppliers  seem  to
       concentrate on either of the product types and some suppliers also commented in the  market  investigation  that,  despite  the  technical
       ability to switch production, they cannot switch immediately between those two types of laminate flooring because the sales  channels  for
       commercial and private customers are different.[27]

       Conclusion

    0. As the proposed transaction does not give rise to  competition  concerns  related  to  laminate  flooring  under  any  alternative  market
       definition, it is not necessary to conclude on the exact product market definition concerning laminate flooring.

5 Vinyl flooring

    0. Vinyl flooring is made from polyvinyl chloride (‘PVC’), and it can come in different formats, such as sheet vinyl or luxury vinyl tiles.

       Vinyl flooring and flooring made from other materials

    0. While leaving the exact market definition open, the Commission has previously identified vinyl flooring as one main type of flooring.[28]

    0. The Notifying Party submits that vinyl flooring constitutes a distinct relevant product market.

    0. The results of the market investigation support the Notifying Party’s submission that vinyl flooring constitutes a  market  separate  from
       other flooring materials. Even if the majority of respondents explained that  vinyl  flooring  is  technically  substitutable  with  other
       materials in all or most applications, and some customers could consider switching if faced with  price  increases,  many  customers  also
       explained that switching was not commercially possible due to, e.g. end-customers’ demands and properties of  the  product.[29]  There  is
       also no or very limited supply-side substitutability because of different production processes and machinery required for  the  production
       of different flooring materials.[30]

       Sheet vinyl and luxury vinyl tiles ('LVT')

    0. Unlike sheet vinyl, which is sold in sheets, LVT is sold in modular shapes such as squares and rectangles. The  Notifying  Party  explains
       that while LVT has been in the market since the 1990s, it has recently become  more  popular  and  easier  to  install  due  to  technical
       improvements in the product. The Notifying Party estimates that LVT is three times more expensive than sheet vinyl.

    0. According to the Notifying Party, it is not necessary, however, to further segment the market into sheet vinyl and LVT.  Noting  that  the
       Parties' activities only overlap in LVT, it has nonetheless provided market information separately for LVT.

    0. The results of the market investigation do not support the Notifying Party’s submission that sheet  vinyl  and  LVT  belong  to  the  same
       relevant product market. Even if many market participants generally agreed that LVT and sheet vinyl could be used for the  same  purposes,
       many customers were not willing to switch between the two.[31] There is also no  or  only  limited  supply-side  substitutability  because
       different production process and machinery is required to produce the two products.[32]

       Vinyl flooring for residential and for commercial use

    0. As regards a potential division between residential and commercial end use, the results of the market investigation were  largely  similar
       to those for laminate flooring explained in paragraph (36) although some suppliers explained that supply-side  substitutability  might  be
       less easy than with laminate flooring.[33]

       Conclusion

    0. As the proposed transaction does not give rise to competition concerns related to vinyl flooring under the alternative market definitions,
       it is not necessary to conclude on the exact product market definition concerning vinyl flooring.

6 Locking technologies

    0. Flooring panels, such as laminate or LVT panels, must be connected to each other during the  installation  process  to  create  a  uniform
       surface of a desired size and shape. That connecting has historically involved gluing the panels  together.  However,  glueless  solutions
       have evolved over time as they provide for easier and faster installation that can be done both by professionals as well as  by  consumers
       themselves.

    0. There are a number of different glueless solutions and their variations, many of them patented. The technologies can  roughly  be  divided
       into two categories: traditional clicking technologies and fold-down technologies.

    0. Traditional clicking technologies are generally based on a special shape of the edge of a  flooring  panel.  According  to  the  Notifying
       Party, they can further be categorised into angle-angle and angle-snap technologies:

           • Angle-angle: panels are angled on both the short and the long side. That means that the floor cannot be installed panel by panel but
             that it is necessary to lift the previous panel to angle the next panel in.

           • Angle-snap: this is a variation of the angle-angle method and requires the panels to be angled on the long-side but to be  connected
             on the short side by shifting and tapping the panel horizontally into the short side of the other panel.

    0. Fold-down technologies allow the flooring panels to be folded vertically together on the short edges. Combined with an angling  technology
       on the long edges of the panel, the vertical locking allows for easier and faster installation that also makes installation on a panel-by-
       panel basis possible. Fold-down can be achieved with an additional plastic clip  inserted  in  the  short  edge  of  a  panel  during  the
       production process or without such a strip.

    0. According to the Notifying Party, the traditional clicking technologies and the fold-down technologies belong to distinct relevant product
       markets. In the licensing of such technologies to third parties, the Parties’ activities  only  overlap  with  respect  to  the  fold-down
       technologies where Mohawk (Unilin) is present with its […]( technology while IFS is present with its PressXpress (‘PXP’) technology.

    0. The results of the market investigation have confirmed that glueless locking technologies have taken over  the  market  in  some  flooring
       products, such as laminate flooring, and particularly in sales to consumers.[34]

    0. As to the distinction between traditional clicking and fold-down technologies  within  glueless  technologies,  market  participants  have
       indicated that the two are substitutable in most applications but that flooring panels employing a fold-down  technology  are  easier  and
       faster to install.[35] Nonetheless, while traditional clicking can be used on all edges of a flooring panel, fold-down is  typically  only
       used on the short edges of a panel as it would not work optimally in rectangular flooring panels if used on all edges.[36] The  use  of  a
       fold-down technology therefore typically necessitates the use of other types of locking technologies on the same panel as well.

    0. A clear majority of market participants indicated that an extra licence fee is payable by a flooring product manufacturer for the  use  of
       fold-down technologies as compared to a flooring product  solely  employing  the  traditional  clicking  technologies.[37]  Production  of
       flooring panels employing fold-down technologies also typically requires some investment in production  technology,  particularly  if  the
       fold-down technology employed requires the use of a plastic insert in the flooring panel as specific machinery is then needed for  placing
       the inserts into the panels.[38]

    0. A majority of flooring manufacturer respondents confirmed that they not only can but would consider switching between the technologies  if
       warranted by market conditions such as price increases of products employing one of the technologies.[39]

    0. As the proposed transaction does not give rise to competition concerns related  to  locking  technologies  under  any  alternative  market
       definition, it is not, however, necessary to conclude on the exact product market definition concerning locking technologies.

3 Relevant geographic markets

1 UF Resins

    0. In a recent case, which concerned essentially Belgium, the Commission considered that the relevant geographic market  for  UF  resins  was
       cross-border regional, although it left the question ultimately open.[40] In an earlier case, the Commission discussed whether the  market
       was national or wider and, noting that UF resins may be transported 400–700 km, concluded that Finland was a  separate  geographic  market
       even if customers in central Europe could source from across borders.[41]

    0. The Notifying Party submits that the relevant geographic market for UF resins is wider than national.

    0. The results of the market investigation support the Notifying Party’s submission in the present case.[42]

    0. As the proposed transaction does not give rise to competition concerns related to UF resins under the alternative market  definitions,  it
       is not necessary to conclude on the exact geographic market definition concerning UF resins.

2 Fibre boards (MDF/HDF)

    0. The Commission has consistently considered that the relevant geographic market for fibre boards is likely wider than national even if  the
       exact market definition has been left open,[43] including in a recent case concerning essentially Belgium[44]. The Commission has  further
       noted that fibre boards may travel between 500-1000 km.[45]

    0. The Notifying Party submits that the relevant geographic market for fibre boards is a region  between  500–1000  km  around  the  Parties’
       production facilities. The Notifying Party further submits that there are no barriers to imports into the various EEA countries  and  that
       there are significant cross-border trade flows, some EEA countries also being without a  domestic  producer  and  thus  relying  fully  on
       imports.

    0. The vast majority of the market respondents confirmed that there are no legal barriers to cross-border trade of fibre  boards  within  the
       EEA, nor legal or commercial  barriers to imports to the Benelux countries from other countries of the EEA. This is also supported by  the
       fact that all of the Parties' competitors in the supply of fibre boards (such as Sonae, Norbord, Medite and Finsa) do not have  production
       facilities in the Benelux and have reached a substantial market share in the Benelux through exports from for instance  Germany,  the  UK,
       Ireland and Spain. In addition, many customers responded that they do not even require their supplier to have sales  staff,  let  alone  a
       production facility, in their own country.[46]

    0. The delivery distances are dependent on the means of transport with road transport constituting a more expensive means of transport per km
       than transport by vessel. Nevertheless, according to the respondents to the market investigation, fibre boards would travel a distance  of
       at least 500 km from the production plant. Some market participants even suggested longer sourcing distances.[47]

    0. On the basis of the Commission precedents and the results of the market investigation, the Commission concludes for the purposes  of  this
       decision that the relevant geographic market for fibre boards (MDF/HDF) is larger than national and could be considered  as  the  circular
       catchment areas drawn with a radius of at least 500 km around the Parties’ production  facilities  in  Vielsalm  (Belgium)  and  Bazeilles
       (France). As the proposed transaction does not raise competition concerns in the 500-km catchment area,  where  the  overlap  between  the
       Parties' activities is most pronounced, it is not necessary for the purposes of the present decision to conclude on the  exact  geographic
       market definition concerning MDF/HDF.

3 Coated MDF

    0. The Commission has in a recent case found indications that the geographic market for coated MDF was at least cross-border regional with  a
       range of 500 km around the relevant production plants.[48] In a previous decision, the Commission has considered that the market may  even
       be wider and – in that specific case – cover at least Central Europe.[49]

    0. The Notifying Party submits that the relevant geographic market for coated MDF concerns a radius of at least 1000 km around  the  Parties’
       production plants.

    0. The results of the market investigation have also confirmed that coated MDF can be sourced and sold across borders up to a distance of  at
       least 500 km. Some market participants even suggested longer sourcing distances.[50] While one customer indicated that  they  require  the
       supplier to have a production facility in their own country, the same customer nonetheless replied that they can source coated MDF  across
       borders.[51]

    0. The Commission concludes that the relevant geographic market for coated MDF is cross-border regional with a radius  of  at  least  500  km
       around the relevant production facilities. As the proposed transaction does not raise competition concerns in this area where the  overlap
       between the Parties' activities is most pronounced, it is not necessary for the purposes  of  this  decision  to  conclude  on  the  exact
       geographic market definition concerning coated MDF.

4 Laminate flooring

    0. The Commission has previously considered that the relevant geographic market for laminate flooring is likely EEA-wide  but  has  left  the
       question ultimately open.[52]

    0. The Notifying Party submits that the relevant geographic market for laminate flooring is EEA-wide. The Notifying Party further notes  that
       the Parties only have one EEA production facility each for laminate flooring and that  they  supply  the  whole  of  the  EEA  from  those
       facilities.

    0. The results of the market investigation support the Notifying Party’s submission that the relevant geographic market for laminate flooring
       is EEA-wide. In particular, a clear majority of both customers and competitors considered  that  laminate  flooring  can  be  sourced  and
       purchased across the EEA and no production facility is required in the country of delivery.[53]

    0. Nonetheless, as the proposed transaction does not give rise to competition concerns related to laminate  flooring  under  the  alternative
       market definitions, it is not necessary to conclude on the exact geographic market definition concerning laminate flooring.

5 Vinyl flooring

    0. Leaving the exact market definition ultimately open, the Commission has in a number of  cases  considered  that  the  relevant  geographic
       market for various flooring materials is likely EEA-wide[54], but has in an  early  case  assessed  vinyl  flooring  also  on  a  national
       basis[55].

    0. The Notifying Party submits that the relevant geographic market for vinyl flooring is EEA-wide. The Notifying Party further estimates that
       the majority of LVT sales in the EEA are imported from outside the EEA. While IFS has one production facility in the  EEA,  the  Notifying
       Party itself does not have a production facility in the EEA although it is currently in the process of constructing one.

    0. The results of the market investigation support the Notifying Party’s submission that the relevant geographic market for vinyl flooring is
       EEA-wide. In particular, nearly all customers and competitors considered that vinyl flooring can be sourced and purchased across  the  EEA
       and no production facility is required in the country of delivery.[56] Even if certain competitors referred to some  national  legislation
       concerning the technical specifications of the products, that was not reported to affect cross-border trade, such as for instance  imports
       into the Benelux countries from other parts of the EEA.[57]

    0. A majority, but not all, customers and competitors even considered that they can source and supply vinyl flooring  globally.[58]  However,
       the Notifying Party, which at present does not have a production facility in the EEA for LVT,[59] has notably limited market  share  there
       and has decided to invest in an EEA-production facility. This suggests that the market may  not  be  significantly  wider  than  the  EEA.
       Moreover, the Parties’ internal documents suggest that […].[60]

    0. As the proposed transaction does not give rise to competition concerns related to vinyl flooring under the alternative market definitions,
       it is not necessary to conclude on the exact geographic market definition concerning vinyl flooring.

6 Locking technologies

    0. The Notifying Party submits that the geographic market for locking technologies is worldwide or at least  EEA-wide.  The  Notifying  Party
       supports its view by referring to the wide geographic coverage of the patents and licences, and to licensors and licensees being de  facto
       present around the world. Moreover, transport costs play no role.

    0. The results of the market investigation support the Notifying Party’s submission of at  least  an  EEA-wide  market.  In  particular,  the
       relevant patents are generally  global  and  flooring  producers  also  generally  replied  that  they  use  the  licences  for  worldwide
       production.[61] However, some market participants referred to different patents or pricing mechanisms in different broad geographic  areas
       such as Asia as compared to Europe.[62]

    0. As the proposed transaction does not give rise to competition concerns related to the  licensing  of  locking  technologies  for  flooring
       products under the alternative market definitions, it is not necessary to conclude on the exact geographic  market  definition  concerning
       locking technologies.

Competitive assessment

1 Horizontal effects

1 Fibre boards (MDF/HDF)

    0. The proposed transaction does not give rise to any horizontally affected markets if MDF and HDF are  considered  to  belong  to  the  same
       relevant market.

    0. There are also no horizontally affected markets with respect to a potential separate HDF market and with respect to a potential MDF market
       if all sizes of MDF panels are assessed together.

    0. However, the potential market for the small-size MDF panels[63] would give rise to an affected market  which  will  be  assessed  in  more
       detail in the following sections of this decision.

       Concentration levels and market structure

    0. Within 500 km from the Parties’ production facilities, the demand for those small-sized panels is concentrated in the  Benelux  countries,
       even if some producers are located outside of those countries. That is illustrated by the Parties' sales figures in the Benelux.  Mohawk's
       small-size MDF sales in the Benelux represent more than [60-70]% of its total sales of small-size MDF boards in  the  EEA.[64]  Similarly,
       IFS' small-size MDF sales in the Benelux represent more than [60-70]% of its total sales of small-size MDF boards in the EEA.[65]

       Figure 2 - Location of the Parties' production plants and their 500km catchment areas
       [pic]Source: the Notifying Party

    0. The Parties have not been able to provide market shares for small MDF in a radius of 500 km around their plants because they lack data  to
       estimate the split between large and small-sized MDF outside Belgium and the Netherlands. Therefore, within  the  500-km  catchment  areas
       around the Parties' plants only the market shares for all MDF sizes taken as a whole are available.

    0. The Notifying Party estimates the Parties’ MDF market shares in their 500 km catchment areas to be as follows. The market shares in  Table
       1 take into account the supplies by all competitors selling into the Benelux.

       Table 1 - Market shares for MDF (all sizes) in 500-km catchment area

|2014             |Total market   |Mohawk                      |IFS                         |Combined                       |
|                 |volume (m3)    |                            |                            |                               |
|                 |               |Sales volume (m3)           |%                           |Sales volume (m3)              |
|              |            |Sales volume (m3)            |%                              |Sales volume (m3)              |
|              |                    |Volume (m2)                |%                          |Volume (m2)                |
|              |                    |Volume (m2)               |%                            |Volume (m2)               |
|               |                                                |Volume (m2)                                     |
|               |EUR million            |%                      |EUR million            |%                      |
|Välinge        |[…]                    |[40-50]%               |[…]                    |[60-70]%               |
|Mohawk         |[…]                    |[40-50]%               |[…]                    |[5-10]%                |
|Classen        |[…]                    |[5-10]%                |[…]                    |[20-30]%               |
|               |[…]                    |100%                   |[…]                    |100%                   |

      Source: Notifying Party

    0. During the market investigation, the Commission received a complaint alleging that the proposed transaction would eliminate  a  competitor
       in the form of IFS from the market for locking technologies. According  to  the  complainant,  the  market  for  locking  technologies  is
       currently controlled by Mohawk and Välinge, a Swedish technology company. According to the complainant, Mohawk and Välinge, which  have  a
       cross-licensing agreement between themselves, have gathered large patent portfolios that  they  aggressively  protect  by  suing  flooring
       manufacturers for patent infringements, effectively forcing all producers to sign a licence with either of the two companies.

    0. The complainant considers that IFS is the only credible alternative and a unique challenger to the Parties. According to the  complainant,
       IFS’ locking technologies are substitutes to Mohawk’s and Välinge’s and IFS has been offering its technologies at a lower price than  that
       of the incumbent companies. The complainant submits that, therefore, the proposed transaction and the resulting elimination of  IFS  as  a
       competitor would not only limit the number of alternative suppliers but increase prices for the relevant licences and hamper innovation.

    0. The Notifying Party submits that the proposed transaction would not give rise to competition concerns  related  to  locking  technologies.
       According to the Notifying Party, many of the underlying patents for the traditional clicking technologies have either already expired  or
       will do so in 2017 when Mohawk’s main patents in the field will expire. The Notifying Party acknowledges, however, that many  patents  for
       fold-down technologies would remain valid even thereafter. Moreover, the Notifying Party argues that  IFS’  PressXpress  has  not  been  a
       competitive constraint on Mohawk prior to the proposed transaction having not even entered into any licensing agreements  for  PressXpress
       before 2015, and a number of alternative suppliers exist in the EEA, in particular for fold-down technologies and also by  companies  that
       are pure technology companies such as Innovations4Flooring.

    0. All of the technologies available in the EEA and their owners are listed in Table 7.

       Table 7 - Overview of fold-down technologies for laminate flooring in the EEA

|Name of the technology         |Patent owner           |Licensor          |Licensees            |Production             |
|5G                             |Välinge                |[…]               |[…]                  |[…]                    |
|Megalock                       |Classen                |[…]               |[…]                  |[…]                    |
|Multifit                       |Mohawk                 |[…]               |[…]                  |[…]                    |
|Automatic Click                |Mohawk                 |[…]               |[…]                  |[…]                    |
|PressXpress                    |IFS                    |[…]               |[…]                  |[…]                    |
|Zip 'n Go                      |Alsapan                |[…]               |[…]                  |[…]                    |
|Masterclic                     |MeisterWerke           |[…]               |[…]                  |[…]                    |
|Proclic                        |Egger                  |[…]               |[…]                  |[…]                    |
|TripleLock/Click4U             |I4F                    |[…]               |[…]                  |[…]                    |
|Hamberger                      |Hamberger              |[…]               |[…]                  |[…]                    |

      Source: Notifying Party

    0. The results of the market investigation purport that there is only limited competition at present in the market for locking  technologies.
       In particular, market participants have indicated that only Välinge or Mohawk are at present credible licensors of such technologies,  and
       that the use of alternative technologies is at present risky and non-attractive to flooring product manufacturers because of the  risk  of
       lengthy patent litigation that may have uncertain outcomes.[95]

    0. However, the fact that competition may not be functioning optimally at present is not merger-specific. The Commission has therefore sought
       to clarify whether the proposed acquisition of IFS by Mohawk would give rise to a merger-specific competition concern.

    0. Taking into account the replies  to  the  market  investigation,  the  Commission  considers  that  the  proposed  transaction  would  not
       significantly change the market structure or competitive conditions and would not give rise to merger-specific  competition  concerns.  In
       particular, the replies of market participants show that IFS has not  been  exerting  any  significant  actual  or  potential  competitive
       constraint on Mohawk prior to the transaction and there are some alternative technologies in the market that are, in the  view  of  market
       participants, at least equally strong options for flooring manufacturers as IFS’ offering.

    0. As to the actual or potential competitive constraint exerted by IFS, market participants have explained that IFS’s technologies, including
       the PressXpress technology, are subject to patent infringement claims.[96] Second, a number of market participants have indicated that  in
       their view, IFS’ technologies also have quality issues which make them unattractive. Market participants  commented,  for  instance,  that
       ‘[PressXpress] we no [sic] not consider to be attractive’, ‘is of minor quality’,  ‘Välinge’s 5G technology - -  is  easier  to  handle.’,
       ‘Balterio’s technology would not work with LVT’ and‘Eigene Test und Versuche haben gezeigt, dass  andere  Fold-down-Systeme  eine  bessere
       Performance haben.’[97]

    0. As to the actual and potential competing suppliers, Innovations4Flooring has confirmed that it has patents related  to  fold-down  locking
       technologies even if those have been legally contested by Mohawk. Innovations4Flooring has  also  already  licensed  the  technologies  to
       flooring manufacturers although those manufacturers may at present be put off from coming to the  market  with  products  employing  those
       technologies because of risks related to the on-going patent litigation.[98]

    0. The Commission notes that even if market participants may at present be somewhat hesitant to operate with a new entrant to the market,[99]
       the fact that Innovations4Flooring does not have its own downstream production of physical flooring materials[100] may make it even a more
       suitable technology supplier to flooring material producers than IFS, which  is  also  active  in  the  physical  products  employing  the
       technologies. Lacking its own downstream  production  capacity,  Innovations4Flooring  is  also  likely  motivated  to  commercialise  its
       technologies through licensing.

    0. In addition, two flooring manufacturers replied in the market investigation that they are working on independent technology solutions. One
       of those manufacturers indicated that it has already filed for some patents as well.[101]

    0. Finally, a vast majority of flooring producers did not agree with the complainant in that the proposed  transaction  would  give  rise  to
       competition concerns but submitted that the transaction would have no effects concerning the market for locking technologies.[102]

    0. Therefore, the Commission concludes that the proposed transaction does not give rise to competition concerns as  a  result  of  horizontal
       effects related to locking technologies or any of their potential sub-segments.

2 Non-horizontal effects

1 UF resins and fibre boards

    0. UF resins are used as an input in the production of fibre boards as they are used as glue for bonding the wood elements used in the boards
       (and other types of wood-based panels).

    0. The vertical relationship between UF resins and fibre boards only give rise to vertically affected markets if  considering  the  potential
       downstream market for the small-size MDF panels. In that event, the Parties’ combined market share  in  the  downstream  market  would  be
       around [50-60]% in the Benelux which is the most affected region within the 500-km catchment areas around the Parties'  production  plants
       in northern France and Belgium, as explained in section 5.1.1.

    0. It should nonetheless be noted that the UF resins are used similarly in the production of all different sizes of MDF panels  and  are  not
       specific to the small-sized panels (or even to MDF panels as  such).  Therefore,  the  merged  entity’s  market  share  in  the  potential
       downstream market of small-size MDF panels is not indicative of its market position in the sourcing of UF resins.

    0. Only Mohawk is active in the upstream production of UF resins while IFS is not. Mohawk’s acquisition of its present EEA UF resin  capacity
       was considered in the recent case M.6871 – Mohawk Industries / Spano Invest.

    0. […]. According to the Notifying Party, Mohawk’s market share is [5-10]% in a cross-border merchant market of 400–700 km radius around  its
       production plant in Belgium.

    0. In light of the above, foreclosure concerns are unlikely. That finding is supported by the results of the market investigation in which no
       market participant raised such concerns.[103]

    0. Therefore, the Commission concludes that the proposed transaction does not give rise to competition concerns as a result of non-horizontal
       effects related to the vertical link between UF resins and fibre boards.

2 Fibre boards and coated MDF

Raw MDF is used as an input in the production of coated MDF.

    0. The vertical relationship between raw MDF and coated MDF only gives rise to vertically  affected  markets  if  considering  the  potential
       upstream market for the small-size raw MDF panels. In that event, the Parties’ combined market share  in  the  upstream  market  would  be
       around [50-60]% in the Benelux which is the most affected region within the 500-km catchment areas around the Parties'  production  plants
       in northern France and Belgium, as explained in section 5.1.1.

    0. As regards the  downstream  market  for  coated  MDF,  the  Parties’  activities  only  have  a  practical  overlap  in  Belgium  and  the
       Netherlands[104]. Accordingly, the Notifying Party has only provided market share information for Belgium, the  Netherlands  and  the  EEA
       where the Parties' combined market shares are estimated to be limited at [5-10]% in Belgium (Mohawk [5-10]%, IFS [0-5]%), [10-20]% in  the
       Netherlands (Mohawk: [10-20]%; IFS [0-5]%) and [10-20]% in the EEA (Mohawk [10-20]%, IFS [0-5]%).[105]

    0. For the reasons explained under Section 5.1.1 of this decision, the proposed transaction  does  not  give  rise  to  competition  concerns
       related to the supply of raw MDF panels, including the potential subsegment of small-sized panels. Competitors active  in  the  downstream
       markets for coated MDF would continue to have access to alternative suppliers of the upstream raw material,  raw  MDF,  and  some  of  the
       competitors would in all likelihood be able and have incentive to increase their supply of MDF in case of increased demand from customers.
       Consequently, input foreclosure concerns are unlikely to occur.

    0. Given that the Parties do not at present source any significant amounts of raw MDF from other suppliers […], customer foreclosure concerns
       can be excluded.

    0. Therefore, the Commission concludes that the proposed transaction does not give rise to competition concerns as a result of non-horizontal
       effects related to the vertical link between (raw) fibre boards and coated MDF.

3  Locking technologies and flooring products

    0. Glue-less locking technologies are used as an input in certain flooring products, particularly in laminate flooring and LVT.

    0. While the merged entity would have a notable market share of up to [40-50]% in the upstream market for locking technologies, the  proposed
       transaction would not, for the reasons explained under Section 5.1.4 of this  decision,  significantly  affect  the  market  structure  or
       competitive conditions in the upstream market. […].[106] Mohawk has also until now actively licensed  its  IP  rights  to  third  parties,
       including its downstream competitors, and it is not likely that the proposed transaction would significantly affect Mohawk’s incentive  to
       continue doing so also post-transaction.

    0. As to customer foreclosure, the Parties are not significant licensees  of  third-party  locking  technologies  even  before  the  proposed
       transaction. As to IFS, it only licenses technologies from [company] at present while Mohawk needs a license from  [company]  to  use  its
       [brand] fold-down technology. Even if the merged entity, having also the PressXpress now held by IFS, stopped using [brand] and  licensing
       from [company], the modest market presence of the merged entity in the downstream markets indicates that such a change would not result in
       Mohawk having the ability to foreclose its suppliers.

    0. Therefore, the Commission concludes that the proposed transaction does not give rise to competition concerns as a result of non-horizontal
       effects related to the vertical link between locking technologies and flooring products.

CONCLUSION

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

For the Commission
(Signed)
Věrá JOUROVÁ
Member of the Commission

                                                                TABLE OF CONTENTS

1.    THE PARTIES      2

2.    THE OPERATION AND THE CONCENTRATION    2

3.    UNION DIMENSION  2

4.    RELEVANT MARKETS 3

4.1.  General    3
4.2.  Relevant product markets    3
4.2.1.      UF Resins  3
4.2.2.      Fibre boards (MDF/HDF)      4
MDF and HDF 4
Different sizes of MDF 5
Conclusion  6
4.2.3.      Coated MDF 7
4.2.4.      Laminate flooring     7
Laminate flooring and flooring made from other materials 7
Laminate flooring for residential and for commercial use 8
Conclusion  8
4.2.5.      Vinyl flooring   8
Vinyl flooring and flooring made from other materials    9
Sheet vinyl and luxury vinyl tiles ('LVT')   9
Vinyl flooring for residential and for commercial use    9
Conclusion  10
4.2.6.      Locking technologies  10
4.3.  Relevant geographic markets 11
4.3.1.      UF Resins  11
4.3.2.      Fibre boards (MDF/HDF)      12
4.3.3.      Coated MDF 13
4.3.4.      Laminate flooring     14
4.3.5.      Vinyl flooring   14
4.3.6.      Locking technologies  15

5.    Competitive assessment 16

5.1.  Horizontal effects     16
5.1.1.      Fibre boards (MDF/HDF)      16
Concentration levels and market structure    16
               The Notifying Party's views on the effects of the proposed transaction      18
               Competitive landscape – alternative suppliers  20
               Ability and incentive of competitors to increase small-sized MDF production post-transaction      21
               Customers' and competitors' views on the effects of the proposed transaction     22
Conclusion  23
5.1.2.      Laminate flooring     23
5.1.3.      Vinyl flooring   24
5.1.4.      Locking technologies  26
5.2.  Non-horizontal effects 29
5.2.1.      UF resins and fibre boards  29
5.2.2.      Fibre boards and coated MDF 30
5.2.3.      Locking technologies and flooring products   31

6.    CONCLUSION 32

-----------------------
[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]   OJ L 24, 29.1.2004, p. 1 (the ‘Merger Regulation’).

[4]   Turnover calculated in accordance with Article 5 of the Merger Regulation.

[5]   M.6871 – Mohawk Industries / Spano Invest, paragraphs 30–31, M.2396 – Industri Kapital /  Perstorp  (II)  –  paragraph  26,  and  M.1813  –
       Industri Kapital / Nordkem / Dyno, paragraph 30.

[6]   M.6871 – Mohawk Industries / Spano Invest, paragraphs 30–31, and M.1813 – Industri Kapital / Nordkem / Dyno, paragraph 30.

[7]   See, e.g. M.6871 – Mohawk Industries / Spano Invest, paragraph 17, M.4165 – Sonae Indústria / Hornitex, paragraph 11, and  M.4048  –  Sonae
       Indústria / Tarkett / JV, paragraph 16.

[8]   Replies to question 6 of Q1 – Questionnaire to MDF/HDF customers and replies to question 8 of Q3 – Questionnaire to competitors.

[9]   See, e.g. replies to question 8of Q3 – Questionnaire to competitors.

[10]  See, e.g. replies to question 6 of Q1 – Questionnaire to MDF/HDF customers and replies to question 8 of Q3 – Questionnaire to competitors.

[11]  See, e.g. replies to question 6 of Q1 – Questionnaire to MDF/HDF customers and replies to question 8 of Q3 – Questionnaire to competitors.

[12]  Replies to question 8 of Q3 – Questionnaire to competitors.

[13]  Regarding HDF, the sizes are usually customer specified and not off-the-shelf; confirmed minutes of a call  with  a  customer  on  8  April
       2015. Therefore the potential distinction between groups of large and small sized panels  is  not  relevant  for  the  assessment  of  the
       potential HDF market.

[14]  See, e.g. responses to the Commission’s requests for information sent to small-sized MDF  customers  of  the  Parties  on  23  April  2014,
       confirmed minutes of a call with a customer on 8 April 2015, confirmed minutes of a call with a  customer  on  26  April  2015;  confirmed
       minutes of a call with a competitor on 20 April 2015 and confirmed minutes of a call with a competitor on 29 April 2015.

[15]  See, e.g. responses to the Commission’s requests for information sent to small-sized MDF  customers  of  the  Parties  on  23  April  2014,
       confirmed minutes of a call with a customer on 8 April 2015, confirmed minutes of a call with a  customer  on  26  April  2015;  confirmed
       minutes of a call with a competitor on 20 April 2015 and confirmed minutes of a call with a competitor on 29 April 2015.

[16]  See, e.g. confirmed minutes of a conference call with a competitor on 13 May 2015 and  confirmed  minutes  of  a  conference  call  with  a
       competitor on 19 May 2015.

[17]  See, e.g. confirmed minutes of a conference call with a customer on 8 April 2015.

[18]  M.6871 – Mohawk Industries / Spano Invest, paragraphs 20–21.

[19]  M.2051 – Nordic Capital / HIAG / Nybron / Bauwerk, paragraph 10.

[20]  M.4048 – Sonae Indústria / Tarkett / JV, paragraphs 13–14.

[21]  Replies to questions 5 and 6 of Q2 – Questionnaire to flooring customers and replies to question 9 of Q3 – Questionnaire to competitors.

[22]  Replies to question 9 of Q3 – Questionnaire to competitors.

[23]  See, e.g. document titled ‘IVC management case’, annex 8 to the Form CO.

[24]  M.1253 – Paribas / JDC / Gerflor, paragraph 7.

[25]  Replies to question 12 of Q3 – Questionnaire to competitors.

[26]  Replies to question 9 of Q2 – Questionnaire to flooring customers and replies to question 12 of Q3 – Questionnaire to competitors.

[27]  Replies to question 12 of Q3 – Questionnaire to competitors.

[28]  M.1253 – Paribas / JDC / Gerflor, paragraph 7. See also M.4048 – Sonae Indústria / Tarkett / JV, paragraph 13.

[29]  Replies to questions 5 and 7 of Q2 – Questionnaire to flooring customers and question 10 of Q3 – Questionnaire to competitors.

[30]  Replies to question 10 of Q3 – Questionnaire to competitors.

[31]  Replies to question 8 of Q2 – Questionnaire to flooring customers and question 11 of Q3 – Questionnaire to competitors.

[32]  Replies to question 11 of Q3 – Questionnaire to competitors.

[33]  Replies to question 10 of Q2 – Questionnaire to flooring customers and replies to question 13 of Q3 – Questionnaire to competitors.

(     Should read: Multifit.

[34]  Replies to question 7 of Q4 – Questionnaire to flooring technology owners and licensees.

[35]  Replies to questions 13 and 14 of Q4 – Questionnaire to flooring technology owners and licensees.

[36]  Replies to questions 11 and 12 of Q4 – Questionnaire to flooring technology owners and licensees.

[37]  Replies to questions 13 and 20 of Q4 – Questionnaire to flooring technology owners and licensees.

[38]  See, e.g. replies to question 16 of Q4 – Questionnaire to flooring technology owners and licensees.

[39]  Replies to questions 16 to 19 of Q4 – Questionnaire to flooring technology owners and licensees.

[40]  M.6871 – Mohawk Industries / Spano Invest, paragraph 54.

[41]        M.1813 – Industri Kapital / Nordkem / Dyno, paragraphs 56, 65 and 68.

[42]  Replies to question 14 of Q3 – Questionnaire to competitors.

[43]  M.6871 – Mohawk Industries / Spano Invest, paragraph 44, M.4165 – Sonae  Indústria  /  Hornitex,  paragraphs  13–14,  and  M.4048  –  Sonae
       Industria / Tarkett / JV, paragraphs 20–21.

[44]  M.6871 – Mohawk Industries / Spano Invest, paragraph 44.

[45]  M.4165 – Sonae Indústria / Hornitex, paragraphs 13–14.

[46]  Replies to question 7 of Q1 – Questionnaire to MDF/HDF customers.

[47]  Replies to questions 7–10 and 13–14 of Q1 – Questionnaire to MDF/HDF customers and questions 15–18 of Q3 – Questionnaire to competitors.

[48]  M.6871 – Mohawk Industries / Spano Invest, paragraph 46.

[49]  M.4525 – Kronospan / Constantia,  paragraphs 34–35.

[50]  Replies to questions 7–9 of Q1 – Questionnaire to MDF/HDF customers and questions 15–17  of  Q4  –  Questionnaire  to  flooring  technology
       owners and licensees.

[51]  Replies to questions 7 and 8 of Q1 – Questionnaire to MDF/HDF customers.

[52]  M.4048 – Sonae Indústria / Tarkett / JV, paragraphs 17–18 and  21, and M.2051 – Nordic Capital /HIAG / Nybron / Bauwerk, paragraphs 12–13.

[53]  Replies to questions 12–14 of Q2 – Questionnaire to flooring customers and question 15–18 of Q3 – Questionnaire to competitors.

[54]  M.6871 – Mohawk Industries / Spano Invest, paragraphs 49–50, M.4048 – Sonae Indústria / Tarkett / JV, paragraphs 17–18  and  21,  M.2051  –
       M.2051 – Nordic Capital /HIAG / Nybron / Bauwerk, paragraphs 12–13.

[55]  M.1253 – Paribas / JDC / Gerflor, paragraph 9.

[56]  Replies to questions 12–14 and 16 of Q2 – Questionnaire to flooring customers and question 15–18 of Q3 – Questionnaire to competitors.

[57]  Replies to questions 18 of Q3 – Questionnaire to competitors.

[58]  Replies to question 12 of Q2 – Questionnaire to flooring customers and question 16 of Q3 – Questionnaire to competitors.

[59]  The Notifying Party does though cut vinyl slabs imported from China into LVT in Belgium.

[60]  See, e.g. documents ‘IVC management case’ and ‘MHK management case’, annex 8 to the Form CO.

[61]  Replies to questions 23–26 of Q4 – Questionnaire to flooring technology owners and licensees.

[62]  See, e.g. confirmed minutes of a call with a flooring manufacturer on 27 March 2015.

[63]  For the assessment of large-sized panels, the same arguments as for the small-sized MDF panels would be valid – there would be a number  of
       alternative suppliers with the likely ability and incentive to increase production and supply of MDF. Moreover, there are more alternative
       suppliers in the market for large-sized MDF panels than for small-sized MDF panels as illustrated in the map in Figure 3 of this decision:
       all the suppliers marked by a grey unnumbered dot are able to supply large-sized panels and a number of them are located within  or  close
       to the 500-km catchment areas around the Parties' production plants in northern France and Belgium.

[64]  See Parties' replies to RFI of 20 May 2015.

[65]  See Parties' replies to RFI of 20 May 2015.

[66]  See, e.g. the Notifying Party’s submission of 30 April 2015.

[67]  See, e.g. the expert report submitted by the Notifying Party on 11 May 2015.

[68]  See the expert report submitted by the Notifying Party on 11 May 2015, page 6.

[69]  See the expert report submitted by the Notifying Party on 11 May 2015, page 7.

[70]  Confirmed minutes of a call with Sonae on 20 April 2015.

[71]  Confirmed minutes of a call with Kronospan on 29 April 2015.

[72]  Confirmed minutes of a call with Panneaux de Correze on 21 May 2015 and email of 3 June 2015

[73]  Confirmed minutes of a call with Norbord on 19 May 2015.

[74]  Confirmed minutes of a call with Finsa on 12 May 2015.

[75]  Confirmed minutes of a call with Medite on 20 May 2015.

[76]  Confirmed minutes of a call with Swiss Krono on 21 May 2015 and of a call with Pfleiderer on 19 May 2015.

[77]  Confirmed minutes of a call with Kronospan, 29 April 2015.

[78]  Mohawk's internal document ‘Dico panels: sales & mkt’, 24 March 2015.

[79]  Confirmed minutes of a call with a customer on 26 May 2015.

[80]  Confirmed minutes of a call with a competitor on 20 April 2015.

[81]  Confirmed minutes of a call with Panneaux de Correze on 21 May 2015 and email of 3 June 2015.

[82]  M.6871 – Mohawk Industries/Spano Invest.

[83]  See Mohawk's reply to RFI of 20 May 2015.

[84]  See, e.g. replies to questions 24 and 25 of Q1 – Questionnaire to MDF/HDF customers, replies to questions 36 and 37 of Q3  –  Questionnaire
       to competitors, and responses to the Commission’s requests for information sent to MDF customers  purchasing  small-sized  MDF  panels  on
       23 April 2014.

[85]  See, e.g. confirmed minutes of a call with a customer on 26 May 2015; responses to the Commission’s requests for information  sent  to  MDF
       customers purchasing small-sized MDF panels on 23 April 2014.

[86]  Of the Parties, only Mohawk has limited activities in wooden flooring and the inclusion of wooden flooring in the market  definition  would
       only dilute the Parties’ market shares.

[87]  The market shares are the Notifying Party’s estimates for 2013.

[88]  Replies to questions 25 and 26 of Q2 – Questionnaire to flooring customers, and replies to questions 36 and 37 of  Q3  –  Questionnaire  to
       competitors.

[89]  Market shares are the Notifying Party’s estimates for 2013.

[90]  Paragraph 29 of the Commission Notice on the definition of relevant market for the purposes of  Community  competition  law  (97/C  372/03)
       highlights the fact that companies might enjoy high market shares in their domestic markets just because of the weight of the past. Hence,
       high market shares as such do not necessarily mean the markets would be national.

[91]  Mohawk does though cut vinyl slabs imported from China in Belgium.

[92]  See, e.g. replies to question 34 of Q3 – Questionnaire to competitors.

[93]  Replies to questions 25–28 of Q2 – Questionnaire  to  flooring  customers  and  replies  to  questions  36-38  of  Q3  –  Questionnaire  to
       competitors.

[94]  Parties’ submission of 22 April 2015.

[95]  See, e.g. replies to question 40 of Q4 – Questionnaire to technology owners and licensees and confirmed minutes of phone calls with  market
       participants on 18 March 2015, 20 March 2015, 27 March 2015 and on 30 March 2015.

[96]  See, e.g. replies to questions 35 and 36 of Q4 – Questionnaire to technology owners and licensees, and confirmed  minutes  of  phone  calls
       with market participants on  27 March 2015 and 30 March 2015.

[97]  Replies to questions 35–37 of Q4 – Questionnaire to technology owners and licensees, and confirmed  minutes  of  phone  calls  with  market
       participants on 27 March 2015; the German quote's translation into English reads ‘Own test and trials  have  shown  that  other  fold-down
       systems have a better performance’.

[98]  See, e.g. confirmed minutes of a phone call with Innovations4Flooring on  30  March  2015.  See  also  replies  to  question  47  of  Q4  –
       Questionnaire to technology owners and licensees.

[99]  See, e.g. confirmed minutes of a phone call with a flooring material producer on 27 March 2015.

[100]       Confirmed minutes of a phone call with Innovations4Flooring on 30 March 2015.

[101]       Replies to question 46 of Q4 – Questionnaire to technology owners and licensees.

[102]       Replies to questions 48–50 of Q4 – Questionnaire to technology owners and licensees.

[103]       Replies to question 36 of Q3 – Questionnaire to competitors. While one  competitor  indicated  competition  concerns  related  to  UF
       resins, they did not substantiate their reply at all.

[104]       In addition, there is a negligible overlap of a maximum of […] m3 in Italy and Spain. To put it in context, the size  of  the  coated
       MDF market in Begium is […] m3 and in the Netherlands […] m3.

[105]       The market shares are the Notifying Party’s estimates for 2013. Should the market be defined  according  to  the  individual  coating
       techniques, the Parties’ activities would only overlap with regard to lacquered MDF. Mohawk is also active in the production and  sale  of
       melamined MDF but IFS is not active in that coating technique. The Notifying Party submits that the merged entity’s  market  share,  which
       will in any case be limited, would be lower if the individual coating techniques were considered  and  would  be  higher  if  all  coating
       techniques were considered together as the clear majority of coated MDF sold by Mohawk (or the merged entity) is melamined.

[106]       See Table 56 of the Form CO, replies to question 29 of Q3 – Questionnaire  to  competitors  and  replies  to  question  28  of  Q4  –
       Questionnaire to technology owners and licensees.