CELEX: 32010M5927
Language: en
Date: 2010-11-30 00:00:00
Title: Commission Decision of 30/11/2010 declaring a concentration to be compatible with the common market (Case No COMP/M.5927 - BASF / COGNIS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

[pic] |EUROPEAN COMMISSION

 | |Brussels, 30/11/2010

                                        SG-Greffe(2010) D/19027
                                        C(2010)8746

                 To the notifying party

Dear Sir/Madam,

Subject:    Case No COMP/M.5927 – BASF/ Cognis
         Notification of 8 October 2010 pursuant to Article 4 of Council Regulation No 139/2004[1]

 1. On 8 October 2010, the Commission received a notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which
    BASF SE ("BASF", Germany) acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole  control  of  Cognis  GmbH  ("Cognis",
    Germany), by way of purchase of shares.

    I.      THE PARTIES
 2. BASF SE ("BASF") is the world's largest chemical company headquartered in Ludwigshafen, Germany. Its activities range from chemicals to crude
    oil and natural gas, including specialty chemicals, plastics, performance products, functional solutions and  agricultural  solutions,  among
    others. BASF has production sites in 41 countries.

 3. Cognis GmbH ("Cognis") is a private company which is active worldwide as supplier of specialty chemicals and nutritional ingredients.  Cognis
    is also active in care chemicals and functional products, inter alia, and it operates production sites and service centres in 30 countries.

    II.           THE OPERATION AND THE CONCENTRATION
 4. BASF, through a subsidiary, intends to acquire 100% of the share capital of Cognis. Following the transaction, BASF will  have  sole  control
    over Cognis.

 5. The operation constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

    III.    EU DIMENSION
 6. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million (BASF: EUR 50  693  million,  Cognis:
    EUR 2 584 million in 2009)[2]. Each of them has an EU-wide turnover in excess of EUR 250 million (BASF:  EUR  […]  million,  Cognis  EUR  […]
    million in 2009), but they do not achieve more than two-thirds of their aggregate EU-wide turnover within one and the same Member State.  The
    notified operation therefore has an EU dimension.

      IV.   COMPETITIVE ASSESSMENT

        A. Horizontal overlaps

 7. BASF and Cognis have overlapping activities in a large number of areas. However, several horizontal overlaps do no lead  to  combined  market
    shares exceeding 15% under any plausible market definition. In view of the small combined market shares, the  Commission  considers  that  in
    those areas the transaction will not lead to competition concerns resulting from horizontal overlaps[3]. This concerns the following  markets
    including potential submarkets: alcohols, cationic surfactants, esters (except for  synthetic  lubricants),  solvents,  lubricant  additives,
    mining chemicals, fire protection chemicals, lutein, polyunsaturated fatty acids and pharmaceutical excipients[4].

           1. Surfactants

 8. Both parties are active in the production and distribution of various types of surfactants. The activities overlap in relation  to  so-called
    anionic, non-ionic and cationic surfactants. For cationic surfactants the combined market shares do not exceed 15%. In relation to amphoteric
    surfactants only Cognis is active. Amphoteric surfactants are dealt with in Section B.

           1.1. Relevant product market

 9. Surfactants (surface active agents) are substances that exert their physical influence at the boundary between a liquid and a  gaseous  phase
    or at the interface of solid substances and surrounding liquids.  They  are  employed  in  the  consumer  goods  sector  as  ingredients  for
    detergents, cleaners and personal care products and in the industrial sector as processing aids.

10. In line with previous Commission decisions[5], BASF considers that there are four  distinct  product  markets  for  surfactants:  1)  anionic
    surfactants, 2) non-ionic surfactants, 3) cationic surfactants and  4)  amphoteric  surfactants.  The  distinction  is  based  on  the  ionic
    (electrical charge) properties in water of the different surfactant segments, which is a function of their composition  and,  indirectly,  of
    the production process used.

11. The market investigation has broadly confirmed the existence of the above mentioned delineations. In addition, further  sub-segmentations  of
    these four categories have to be considered.

                       Anionic Surfactants

12. Anionic surfactants have a negative charge. The great majority of anionic surfactants is used in household detergent  markets  (i.e.  laundry
    detergents, dishwashing products, household and  industrial  cleaners,  personal  cleansing  products,  inter  alia).  The  bulk  of  anionic
    surfactants (ca. 90%) are produced through sulfonation and sulfation of the relevant raw  materials.  Other  anionic  surfactants,  so-called
    specialty anionics, are produced in a variety of other methods.

13. Sulfonation and sulfation are chemical methods to introduce a “SO3” group into organic molecules. A sulfation production unit consists  of  a
    reactor and a neutralisation unit. For sulfonates, a reactor similar to that for sulfation is needed but no neutralisation unit is  required.
    As a result, producers of sulfates can easily switch to the production of sulfonates, whereas producers of sulfonates have  to  invest  in  a
    neutralisation unit to produce sulfates.

14. BASF claims that this investment is very minor. In addition, BASF states that once a manufacturer has the required  know-how  and  technology
    to handle the sulfonation and sulfation processes, it can manufacture all anionic surfactants produced by these processes.

15. On the demand-side, BASF considers that there is substitutability between sulfonates and sulfates  at  least  for  certain  applications.  In
    particular, for laundry detergents or manual dishwashing applications sulfonates and sulfates are considered  as  substitutable  due  to  the
    following factors: (i) their prices are similar, and (ii) both products perform the same functions and only require insignificant changes  in
    the formulations.

16. The remaining 10% (‘specialty anionics’) are produced through a variety of other methods,  such  as  carboxylation  and  phosphatation.  BASF
    considers that these surfactants should be regarded as belonging to separate markets which are distinct from sulfonates and sulfates.

17. In a previous decision the Commission[6] considered anionic surfactants used for emulsion polymerization as a separate market, as  they  have
    special chemical characteristics, which influence the stability of the emulsion and its activity in polymerization, and cannot  therefore  be
    automatically replaced by other anionic surfactants. Also the market investigation in the present case indicated that the different types  of
    anionic surfactants are not interchangeable from a customers' perspective. The vast  majority  of  the  respondents  considered  the  various
    anionic surfactants not as substitutes or at least not close substitutes since they do not have the same technical and  chemical  properties,
    their performance differs and prices are different. Only a few competitors stated that sulfates and sulfonates have comparable performances.

18. Concerning supply side substitutability, the overwhelming majority of competitors pointed out that it is difficult to switch production  from
    one anionic surfactant to another, and in particular from the production of commodity anionic surfactants (i.e. sulfates and  sulfonates)  to
    specialty anionic surfactants, since chemical processes and equipment required are different and  substantial  capital  investment  would  be
    necessary in order to switch production.

19. In conclusion, there are indications that the various categories of anionic surfactants constitute separate  product  markets.  However,  the
    precise delineation of the product market definition for anionic surfactants can be left open as no  competition  concerns  arise  under  any
    alternative market definition.

       Non-ionic surfactants

20. Non-ionic surfactants are surfactants that have no charge. They are generally less sensitive to hard water than anionics  and  generate  less
    foam. In many detergent formulations, they are added to complement the properties of anionics and cationics.

21. BASF submits that the bulk of non-ionic surfactants (ca. 90%) are produced through alkoxylation (including ethoxylation) of the relevant  raw
    materials. Alkoxylation refers to the reaction between lower molecular weight alkylene oxides (such as ethylene oxide (EO) or propylene oxide
    (PO)) and any compound containing one or more active hydrogen atoms in the presence  of  a  catalyst.  Based  on  the  categorisation  of  an
    independent organisation, a number of potential sub-categories of alkoxylates  exist[7].  The  activities  of  the  parties  overlap  in  the
    following CESIO's categories of alkoxylates:  (i)  alkylphenol  ethoxylates,  (ii)  natural  fatty  alcohol  ethoxylates,  (iii)  fatty  acid
    ethoxylates, (iii) fatty acid esters, ethoxylated, (iv) fatty amine ethoxylates, (v) alkyl mixed alkoxylates, and (vi) EO/PO copolymers.

22. Concerning demand side substitutability, BASF claims that there is a degree of substitutability between alkoxylates for applications such  as
    in household laundry detergents, automatic dishwashing powders and tablets, and in the area of industrial formulators, such  as  textile  and
    leather processing, industrial cleaners and for defoamers used in industrial applications.

23. Concerning supply-side substitutability, BASF considers that once a  manufacturer  has  the  required  knowledge  and  technology  to  handle
    ethylene oxide (EO), it is capable of manufacturing any type of non-ionic surfactants produced through alkoxylation.

24. With regard to the non-ionic surfactants that are produced through other processes than alkoxylation (i.e. without  EO  or  PO  as  an  input
    material) BASF considers that these represent separate product markets as these products would not be interchangeable from both  demand-  and
    supply side. This includes in particular APG. APGs are sugar-based non-ionic surfactants that are  produced  by  reacting  dextrose  with  an
    excess of fatty alcohol. BASF submits that its and Cognis' APGs are not substitutable from either demand or supply-side.

25. In the market investigation the vast majority of customers indicated that none of various categories of non-ionic surfactants  in  which  the
    parties are active constitute substitutes. All of them have different chemical  and  physical  characteristics,  different  performances  and
    different prices. However, the majority of the competitors stated that the underlying technology requirements are similar for  all  types  of
    alkoxylates and that thus any producer could, in principle, manufacture any type of non-ionic surfactants produced through alkoxylation.

26. Concerning APG it appears that BASF and Cognis' products belong to different product markets, BASF's APGs are produced through a […]  process
    that no other APG supplier uses. This specific proprietary process results in a product with very distinct chemistry (i.e. different chemical
    composition, etc.) and physical properties (different colour, viscosity, etc.). BASF’s APG are used […] applications, whilst the bulk of APGs
    are used in personal care and home care applications. Also, BASF’s APGs are at least [20-30]% more expensive  than  APGs  produced  by  other
    suppliers on the market.

27. In the present case there is no need to precisely define the relevant product market/s for non-ionic surfactants as no  competition  concerns
    arise under any alternative market definition.

        Amphoteric surfactants

28. Only Cognis is active in the production of amphoteric surfactants. These will be dealt with in Section B (Vertical relationships).

           1.2 Relevant geographic market

29. BASF considers that the geographic market(s) for surfactants should be considered as worldwide. Trade flows between the  different  worldwide
    regions are considered as well-established[8], there are no regulatory barriers, import duties are minor (ca. 4% of the total  price  of  the
    product) and cost of transport would be low (ca. [0-10] % of the total price of the product).

30. In a previous decision the Commission[9] considered that the markets for surfactants were EEA-wide due to the  following  facts:  (i)  nearly
    every product was available from several sources regionally, (ii) there was no significant  international  trade,  and  (iii)  transportation
    costs were significant. In more recent decisions[10] the scope of the geographic market was left open.

31. In the market investigation in the present case most EEA customers replied that they are supplied from EEA producers. They also  stated  that
    have a preference for suppliers with local or national presence, with the exception of non-ionic surfactants, where the preference is not  so
    pronounced. Transport costs appear to be significant in almost all categories of surfactants, ranging from 10 to 20% of  the  total  cost  on
    average. Although, the transport costs are lower for non-ionic  surfactants.  Imports  from  outside  the  EEA  are  still  moderate  in  all
    categories. In any event, neither customers nor competitors considered the market smaller than the EEA.

32. For the purposes of the present case it can be left open whether the market is EEA wide or larger, since  under  any  market  definition,  no
    competition concerns arise.

       1.3 Assessment

           Non-ionic Surfactants

33. On a worldwide basis the overall market for non-ionics would not be an affected market, since the parties' combined market  shares  would  be
    [10-20] %. In addition, the parties face strong competition from other market participants, including: Sasol ([5-10] % worldwide,  [10-20]  %
    EEA-wide), Shell ([5-10] % worldwide, [10-20] % EEA-wide), Ineos ([0-5] % worldwide, [5-10] % EEA wide), KLK ([0-5] % worldwide, [5-10] % EEA-
    wide) and Huntsman ([5-10] % worldwide, [5-10] % EEA-wide). If the market were to be sub-segmented  by  type  of  non-ionic  surfactant,  the
    parties' combined market share would exceed 15% concerning APG ([60-70] % worldwide).

34. The below table shows the parties' estimated market shares in the EEA for non-ionic surfactants and its further sub-segments in 2009.

|MARKET DATA EEA (2009)                                                                                                             |
|Product                   |Total market (kt)                                    |Total market (Mio €)                                 |
|                          |BASF                      |Cognis                    |BASF                      |Cognis                    |
|Overall Anionics          |[0-5] %                   |[10-20]%                  |[0-5] %                   |[10-20] %                 |
|Sulfonates                |[0-5] %                   |[0-5] %                   |[0-5] %                   |[0-5] %                   |
|Sulfates                  |[0-5] %                   |[30-40] %                 |[0-5] %                   |[20-30] %                 |
|Anionics for emulsion     |[0-5] %                   |[30-40] %                 |[0-5] %                   |[20-30]%                  |
|polymerization            |                          |                          |                          |                          |
|Phosphates                |[0-5] %                   |[10-20] %                 |[0-5] %                   |[0-5] %                   |
|Carboxylates              |-                         |                          |-                         |                          |

35. In an overall market for anionic surfactants, the parties' combined market shares are below [10-20] % on both an EEA level and global  level.
    In the potential submarkets the market shares reach ca. [30-40] % for sulfates and ca. [30-40] % for anionics  for  emulsion  polymerisation.
    However, the increment in these segments is very small. Also, the parties will face competition  from  other  market  players,  like  Stepan,
    Huntsman, Rhodia, Sasol and Cytec.

36. In the market investigation none of the respondents voiced concerns about the transaction in relation to any anionic surfactant.

37. In view of the moderate market shares under all potential market definitions, the small increment and the fact that several  competitors  are
    active in all segments, the Commission considers that the proposed transaction does not raise serious doubts as to its compatibility with the
    internal market as regards the market for anionic surfactants or any of its further sub-segmentations.

      2. Polyalkylene Glycols ("PAG")

38. PAGs are alkoxylates that are produced by reacting ethylene oxide (EO) with short chain  non-surfactant  alcohols.  PAGs  are  used  as  high
    temperature, thermally stable heat transfer fluids exhibiting strong resistance  to  oxidation,  as  ingredient  in  industrial  formulations
    including lubricants, as raw materials for chemical processing as well as ingredient for household products formulated in a solid form.  Both
    BASF and Cognis produce and sell PAG.

           2.1 Relevant product market

39. BASF submits that PAGs should be regarded as a separate product market since they are not substitutable  with  any  other  product  for  most
    applications in which they are used.

40. The Commission has previously considered that PAGs are not substitutable with other lubricant  base  stocks.[12]  In  another  decision,  the
    Commission examined the question as to whether the transaction in question would raise competition  concerns  in  relation  to  the  vertical
    relationship between EO and PAGs, without having previously defined a separate market for PAGs.[13]

41. It is not necessary to further delineate the relevant product market for the purpose of this decision no  competition  concerns  arise  as  a
    result of the transaction under any market definition.

           2.2. Relevant geographic market

42. BASF submits that the relevant geographic market for PAGs should be considered as at least EEA-wide, but can also  be  considered  worldwide.
    Customers tend to source their requirements for PAGs from throughout the EEA or even from outside the EEA. On the supply-side,  the  key  PAG
    producers all supply the whole of the EEA and outside the EEA from a single plant (or very few plants) and apply at least EEA-wide prices  as
    the starting point for negotiations with customers.

43. In previous decisions concerning PAG, the Commission did not define the scope of the geographic market[14]. Also  for  the  purposes  of  the
    present decision it is not necessary to define the precise scope of the geographic market since under all alternative market definitions,  no
    competition concerns would arise as a result of the transaction.

      2.3. Assessment

44. On a global basis the parties would have a combined market shares of [5-10] % (BASF [5-10] % and Cognis [0-5] %) by value and [5-10] %  (BASF
    [5-10] % and Cognis [0-5] %) by volume

45. BASF estimates the EEA market shares as follows:

|MARKET DATA EEA (2009)                                                                                                             |
|Product                                                                                                                            |
|Product                                                                                                                            |
|Product                                                                                                                               |
|Product         |Total market (kt)                 |Total market (Mio €)                   |BASF sales (kt)                        |
|World           |[10-20]%                          |[5-10]%                                |[20-30]%                               |
|EEA             |[50-60]%                          |[40-50]%                               |[50-60]%                               |

46. Relatively few competitors are active in this area and the two segments. For the overall market these are  Evonik  ([20-30]  %  EEA),  Nippon
    Shokubai ([10-20] % EEA) and Dow ([0-5] % EEA). The market investigation has revealed that a substantial number of  customers  are  concerned
    about the reduction of the number of EEA producers and they fear that prices will rise as a consequence of the transaction. They point to the
    fact that post transaction only one other EEA producer of hydroxyl monomers will remain. However the market investigation identified two  EEA
    producers, Evonik and Dow/Rohm.  Competitors from outside the EEA included, Nippon Shokubai and Mitsubishi (Japan) Osaka Organic, and Jiangsu
    Yinyan Speciality Chemicals among other Chinese producers.

47. Given the strong position of the merged entity in the market for hydroxy monomers, the relatively high concentration level of the market,  as
    well as the substantiated customer concerns, the Commission considers that the transaction raises serious doubts as to its compatibility with
    the internal market in relation to hydroxy monomers in the EEA.

                 6.4 Commitments submitted by BASF

          48. In order to render the concentration compatible with the internal market, BASF has modified the notified concentration by  entering
              into the following commitments, which are annexed to this decision and form an integral part of it.

          49. On 9 November 2010, BASF submitted commitments to remove the serious doubts identified by the Commission in the market for  hydroxy
              monomers. BASF proposed to divest Cognis's plant in Hythe, UK, which includes Cognis’ entire hydroxy monomers production business.

          50. Under the proposed remedy BASF also commits to divest the multifunctional methacrylates and adducts  businesses  operating  on  the
              Hythe site. It will also grant the new owner a licence to produce and sell polyalkylene  glycols  (PAG)  and  PAG-based  lubricants
              using Cognis' intellectual property rights and know how. These additional businesses account for substantial parts of  the  overall
              activities of the site.

          51. Pursuant to BASF's proposal, the sale of the Hythe  site  is  conditional  upon  the  Purchaser  entering  into  a  cost-plus  toll
              production agreement for a minimum duration of […] years for the PAGs and PAG-based  lubricants  that  are  presently  produced  at
              Hythe. Under the proposed arrangement, BASF would buy in the […] months all of the production and reduce its off-take  subsequently
              to […] % over the […] months. After the […] months the purchaser would be able to sell PAG and PAG-lubricants on its own account.

          52. BASF considers that the proposed divestment eliminates the parties' overlap in hydroxy monomers (with  the  Hythe  site  being  the
              only facility where Cognis produces hydroxy  methacrylates)  and  thus  is  suitable  to  remove  any  serious  doubts  as  to  the
              compatibility of the operation with the common market.

          53. In addition BASF has entered into related commitments, inter alia  regarding the separation of the divested businesses  from  their
              retained businesses, the preservation of the viability, marketability and competitiveness of  the  divested  businesses,  including
              the appointment of a monitoring trustee and, if necessary, a divestiture trustee.

           Assessment of the proposed remedies

          54. The Commission market tested the proposed commitment with competitors and customers in order to evaluate  its  ability  to  restore
              effective competition in the market for hydroxy monomers.  The  overwhelming  majority  of  the  respondents  considered  that  the
              proposed divestiture would eliminate the serious doubts and that it would constitute a viable business.  A  number  of  respondents
              indicated that would be interested in acquiring the divestment business.

          55. In addition to removing the entire overlap in the area of hydroxy monomers, BASF  has  offered  additional  elements  in  order  to
              further increase the viability and attractiveness of the divestment business to potential purchasers. The fact that the whole  site
              will be operated by one operator reduces the complexity of the transfer of the divestment business. Furthermore,  BASF  will  enter
              into a toll-manufacturing agreement for PAGs and PAG-based lubricants in order to assist the purchaser of  the  business  with  the
              dilution of fixed costs and will offer the purchaser an irrevocable licence to all relevant IP rights, technology and know-how.

          56. Hythe is the largest European producer of hydroxy methacrylates (HEMA and HPMA) with a  capacity  of  approximately  […]  tons  per
              year. In 2009, Hythe's hydroxy methacrylates business amounted to  EUR  […]  million  worldwide.  It  is  Europe's  second  largest
              European producer of multifunctional methacrylates, with annual capacity  of  some  […]  tons.  In  2009,  Hythe's  multifunctional
              methacrylates business worldwide turnover amounted to EUR […]million, the adducts business – to EUR […]million, the PAG business  –
              EUR […] million, PAG-based lubricants – EUR […]million. The projected sales in the Divestment Business (not including PAG and  PAG-
              based lubricants) for 2010 are EUR […]million (EUR […]million in 2009).

          57. Based on the information provided by BASF and the results of the remedies market test, the proposed divestment business appears  to
              be viable and attractive to prospective purchasers.

          58. For the reasons outlined above, the commitments entered into by the undertakings concerned are sufficient to eliminate the  serious
              doubts as to the compatibility of the transaction with the internal market.

      8. Fuel additives

          59. Fuel additives are chemical substances that are added in small amounts to diesel or gasoline in order to  enhance  the  quality  or
              performance of the fuel.

          60. Both parties produce and sell fuel additives but Cognis  is  only  active  in  the  production  of  […]  individual  fuel  additive
              components. Even if each of the components was considered a separate market no competition concerns arise since for each  of  these
              products Cognis' product is produced based  on  the  customer’s  know-how  under  tolling  arrangements.  Cognis  manufactures  the
              respective additives based on the specifications of these customers, […] on request of the respective ordering party.  Cognis  does
              not sell fuel additives on the merchant market.

          61. The Commission therefore considers that the parties’ activities do not overlap in this respect. Even  if  Cognis’  toll  production
              for third parties was attributed to Cognis, the transaction  would  lead  under  all  reasonable  market  definitions  to  moderate
              combined market shares of less than 30% and/or moderate increments. In view of this, the Commission considers that  no  competition
              concerns arise in the field of fuel additives.

      9. Cosmetic ingredients/Chlorphenesin

          62. BASF and Cognis both produce and sell a broad range of cosmetic ingredients. The parties’ activities overlap only  with  regard  to
              surfactants and active ingredients for skin care, which include, among other  elements,  conditioning  polymers  and  biocides,  in
              particular chlorphenesin.

          63. Conditioning polymers are water-soluble polymers used in conditioners, shampoo, hair mousse, hair spray, hair dye, body wash,  hair
              styling and skin care. Biocidal ingredients are used in order to control the growth of microorganisms, which might  otherwise  have
              a negative effect on processes, products and end users. Chlorphenesin is used in both cosmetic applications as a  preservative  and
              in pharmaceutical applications as a skeletal muscle relaxant.

           9.1. Relevant product market

          64. BASF submits that, irrespective of whether all cosmetic ingredients are considered as a single product market or, whether  separate
              markets are defined for individual segments,  such  as  active  ingredients  for  cosmetics,  conditioning  polymers,  biocides  or
              chlorphenesin, the definition of the relevant product market(s) can be left open.

          65. In a previous decision, the Commission considered that all cosmetic ingredients belong to a single product market[29].

          66. In the present case, the market investigation was inconclusive as  to  whether  there  is  a  separate  market  for  chlorphenesin.
              However, it is not necessary to precisely define the relevant product market for the purpose of  this  decision,  since  under  all
              alternative market definitions, no competition concerns arise as a result of the transaction.

           9.2. Relevant geographic market

          67. The parties consider the geographic market of cosmetic ingredients (including chlorphenesin) to be worldwide.

          68. The Commission has previously considered the  geographic  market  for  cosmetic  ingredients  to  be  at  least  EEA-wide,  if  not
              worldwide.[30] The results of the market test in the present case were inconclusive in this respect. However, it is  not  necessary
              to delineate the relevant geographic market for the purpose of  this  decision  since  under  either  market  definition  (EEA  and
              worldwide), no competition concerns arise as a result of the transaction.

           9.3. Assessment

          69. The parties estimate their market shares (value) as follows:

|Product                |worldwide                                                 |EEA                                                     |
|                       |BASF              |Cognis            |combined           |BASF              |Cognis            |combined         |
|active ingredients     |[0-5] %           |[0-5] %           |[5-10] %           |[0-5] %           |[5-10] %          |[5-10] %         |
|biocides               |[0-5] %           |[0-5] %           |[0-5] %            |[5-10]%           |[0-5] %           |[5-10]%          |
|of which chlorphenesin |[40-50]%          |[30-40]%          |[70-80] %          |[5-10]%           |[10-20]%          |[10-20]%         |
|conditioning polymers  |[0-5] %           |[0-5] %           |[0-5] %            |[0-5] %           |[0-5] %           |[0-5] %          |

          70. The market shares and increments of all conceivable market definitions are moderate except for chlorphenesin  should  the  relevant
              geographic market be defined as worldwide. Within the EEA market shares are moderate.

          71. For chlorphenesin, BASF estimates the size of the worldwide market at ca [0-5] kt/EUR [5-10]  million  and  the  size  of  the  EEA
              market at [0-5] kt/EUR [0-5] million. Based on the information  provided  by  BASF,  there  do  not  seem  to  be  other  important
              competitors but several smaller companies with market shares of about [0-5] % worldwide or [5-10]% in the EEA (such as Jan  Dekker,
              Orient Stars LLC, Arch, Grant Industries and Kraeber).

          72. Further investigation has revealed that the chlorphenesin used in pharmaceutical applications has the same chemistry and  the  same
              quality as the chlorphenesin used in cosmetic applications. Also the price of chlorphenesin for both  applications  appears  to  be
              the same. While approval procedures are required for chlorphenesin that is sold for pharmaceutical applications, no  such  approval
              is required for chlorphenesin for cosmetic applications. It thus appears that any chlorphenesin that is  available  on  the  market
              for pharmaceutical applications can be sold for cosmetic applications. There are numerous players  that  supply  chlorphenesin  for
              pharmaceutical applications.

          73. The Commission therefore considers that the chlorphenesin available for pharmaceutical application exerts considerable  competitive
              pressure on chlorphenesin for cosmetic ingredients.

74. The Commission therefore considers that the transaction does not lead to competitive concerns in this field.

      10. Vitamine E

75. Vitamin E refers to a category of fat-soluble compounds called tocopherols and tocotrienols. Vitamin  E  functions  as  an  antioxidant  that
    helps to resist damages to cells and tissues by stabilizing cell membrane. It is used in a variety of applications: in nutrition  (human  and
    animal) as well as in cosmetics and in the pharmaceutical industry. Vitamin E can either be extracted from natural resources or be chemically
    synthesized.

76. Both BASF and Cognis produce vitamin E. However, while Cognis is active in the production and sale of natural vitamin E, BASF  is  active  in
    the production and sale of synthetic vitamin E.

           10.1 Relevant product market

77. BASF considers that there are separate product markets for natural vitamin E on the one hand  and  for  synthetic  vitamin  E  on  the  other
    because of different uses (food applications and cosmetics  as  opposed  to  animal  feed  applications),  price  differences  and  different
    production processes. Prices for natural vitamin E exceed prices for synthetic vitamin E significantly. As a result, synthetic vitamin  E  is
    purchased predominantly by the feed industry, where natural vitamin E is not used (apart from very  small  specialty  and  premium  pet  food
    applications), the remainder being consumed by the food industry, and to a limited although increasing  extent  ([0-5]  %  according  to  the
    parties’ estimate) by the cosmetics industry.

78. Natural vitamin E is primarily used in food applications (dietary supplements), and to a  lesser  extent  in  “natural”  cosmetics.  Even  in
    applications where natural and  synthetic  vitamin  E  are,  in  principle,  substitutable  from  the  demand-side,  in  fact  they  are  not
    interchangeable due to the price differences. In applications such as dietary supplements in human  nutrition  (e.g.  softgel  capsules)  and
    cosmetics, for which both types of vitamin E are generally suitable, the purchaser’s choice is either  driven  by  price  considerations,  in
    which case he will opt for synthetic vitamin E, or by health/branding considerations (“natural” brand), in which case he will opt for natural
    vitamin E regardless of the higher price. As for multi-vitamin blends, the use of natural vitamin E would not be taken into consideration  by
    a reasonable producer if the vitamin E were to be blended with other vitamins that are not derived from natural sources. The price difference
    could in this case not be compensated by a credible health claim that would permit to pass on the higher price on the downstream  market  for
    multivitamins.

79. In CVC/PAI Europe/Provimi, where the Commission examined several vitamins, including vitamin E, used for animal  feed  purposes,  the  market
    investigation generally indicated that each vitamin constitutes a separate product market. However the Commission  left  the  precise  market
    definition open.[31]

80. The market investigation tends to confirm BASF’ arguments and their view that natural vitamin E and synthetic vitamin E are not in  the  same
    product market. However, for the purposes of the present decision there is no need to decide on the product market definition as in any event
    the transaction will not lead to a significant impediment to effective competition.

           10.2 Relevant geographic market

81. In CVC/PAI Europe/Provimi, the Commission considered that the geographic markets for vitamins are worldwide, but left the precise  definition
    open[32].

82. According to the notifying party the relevant geographic markets for synthetic vitamin E and for natural vitamin E are  worldwide  in  scope.
    BASF produces synthetic vitamin E in[…]. Cognis produces natural vitamin E in[…]. The  notifying  party  submits  that  there  are  no  trade
    barriers with regard to either natural vitamin E or synthetic vitamin E.

83. For BASF, price differences, if any, are caused by regional supply or demand imbalances.  For  Cognis,  vitamin  E  is  priced  globally  and
    pricing may vary between [0-10] % between the different world regions. The results of the market  investigation  were  inconclusive  in  this
    respect. Several companies pointed out a price difference between the EEA and the rest of the world.

84. The results of the market investigation confirm that there are no significant limitations to a worldwide scope. Companies  source  Vitamin  E
    at worldwide level as there is a reduced number of sourcing sites. Vitamin  E  is  easily  packaged  and  transported  to  customers  located
    worldwide. Synthetic vitamin E is exported to all countries.

85. In view of the above  results, it is not necessary to delineate the relevant geographic market for the purpose of this decision  since  under
    either market definition (EEA and worldwide), no competition concerns arise as a result of the transaction.

           10.3. Assessment

86. The parties estimate their market shares (by volume) as follows:

|Product               |Worldwide                                                |EEA                                                    |
|                      |BASF              |Cognis            |combined           |BASF              |Cognis            |combined         |
|synthetic             |[20-30] %         |0                 |[20-30] %          |[20-30] %         |0                 |[20-30] %        |
|natural               |0                 |[30-40]%          |[30-40]%           |0                 |[10-20]%          |[10-20]%         |

87. If there are separate relevant product markets for natural and synthetic vitamin E BASF and Cognis are not active in the same markets.

88. BASF and Cognis only have very few customers for vitamin E in common accounting for less than [10-20] % of  their  sales.  BASF  shares  less
    than [10-20] % of its vitamin E customers with Cognis. This is likely due to the fact that the different types  of  vitamin  E  are  used  in
    different applications and that customers do not consider the products interchangeable. In any event, the market shares in a combined  market
    as well as in the different segments remain moderate with several significant  competitors  like  Zhejiang,  ADM,  Bluestar  /  Adisseo,  DSM
    Nutritional Products, Eisai and Vitaecaps being active in all segments. The Commission therefore considers that no competition concerns arise
    from the transaction in this field.

            11. Beta carotene

89. Beta-carotene is a provitamin A that is converted into vitamin A when ingested by the living organism. Beta-carotene is, in large part,  used
    in food applications (dietary supplement and food coloring), in particular beverages. Animal nutrition accounts for a  smaller  part  of  the
    uses for betacarotene. There are two types of beta-carotene: naturaland synthetic. Synthetic beta-carotene accounts for approximately 90%  of
    the overall beta-carotene production.

90. Both BASF and Cognis produce beta-carotene. However, while Cognis is active in the production and sale  of  natural  beta-carotene,  BASF  is
    active in the production and sale of synthetic beta-carotene.

           11.1 Relevant product market

91. BASF submits that natural and synthetic Beta-carotene form separate markets due to price  differences  and  different  production  processes.
    From a demand-side perspective, there is little substitutability between synthetic and  natural  beta-carotene.  On  average,  natural  beta-
    carotene is priced approximately [0-5] times the price of synthetic beta-carotene. The majority of natural beta-carotene is purchased for use
    as dietary supplement (up market health food) as a natural source of vitamin A, and to a lesser extent for  food  colouring  (i.e.  technical
    additive).

92. Synthetic beta-carotene is predominantly sold to the food food/beverage industry as a colorant and as ingredient in dietary  supplements,  as
    a source of vitamin A and as an ingredient in the animal feed and pet food market. Thus, even though both synthetic and natural beta-carotene
    are sold as dietary supplements and colorants, there is only very  limited  substitutability  given  the  significant  price  difference.  As
    customers’ choices are often driven by either price, marketing strategies ("natural” brand) or  health  considerations,  they  will  opt  for
    synthetic or for natural beta-carotene depending on the specific end use, without considering the use of the other type of beta-carotene.  In
    addition, in some applications such as food colouring natural and synthetic beta-carotene cannot be substituted  directly  due  to  different
    properties (e.g. different colouring).

93. The majority of respondents to the market investigation confirm BASF's view and arguments concerning the product market definition.  However,
    for the purposes of the present decision there is no need to decide on the product market definition as in any event the transaction will not
    lead to a significant impediment to effective competition.

           11.2. Relevant geographic market

94. The Commission considered in a previous decision that the market for beta-carotene is at least EEA-wide admitting, however, that  there  were
    several indications pointing to a worldwide market[33].

95. According to the notifying party the markets for both synthetic and natural beta-carotene are worldwide  in  scope  as  there  are  no  trade
    barriers for beta-carotene. Beta-carotene is easily packaged and transported over long distances.

96. Cognis produces in and exports natural beta-carotene from[…]. BASF produces synthetic  beta-carotene  in  […],  from  where  it  also  serves
    customers located in all world regions.

97. The results of the market investigation were inconclusive in this respect. In fact, several companies pointed to  price  differences  between
    the EEA and the rest of the world.

98. The market investigation has revealed that most companies (both  customers  and  competitors)  source  the  majority  of  their  betacarotene
    requirements at a worldwide level. Moreover, distribution of betacarotene is organised on a worldwide basis for most of  both  customers  and
    competitors, as main suppliers are spread worldwide.

99. However, it is not necessary to delineate the relevant geographic market  for  the  purpose  of  this  decision  since  under  either  market
    definition (EEA and worldwide), no competition concerns arise as a result of the transaction.

           11.3 Assessment

100. BASF estimates the parties' market shares (by volume) as follows:

|Product               |worldwide                                                |EEA                                                    |
|                      |BASF              |Cognis            |combined           |BASF              |Cognis            |combined         |
|synthetic             |[20-30] %         |0                 |[20-30] %          |[20-30] %         |0                 |[20-30] %        |
|natural               |0%                |[40-50] %         |[40-50] %          |0                 |[40-50] %         |[40-50] %        |

101. BASF and Cognis are not active on the same markets, if separate markets are defined for synthetic and natural beta-carotene.

102. Cognis and BASF only share very few customers (less than [5-10] % of all beta carotene customers accounting  for  less  than  [10-20]  %  of
    sales). BASF considers that even those customers to which they both sell would use the product for different applications, some  applications
    always using natural and some always using synthetic beta-carotene. Three out of four customers replying to  the  Commission's  investigation
    said that natural and synthetic beta-carotene are separate product markets because the prices and production processes are different.

103. The Commission considers that on a combined market for all beta carotene the proposed concentration will not lead  to  competition  concerns
    due to the moderate market shares and the small increment resulting from the transaction. Also, several competitors such as DSM, Vitatene and
    Christian Hansen will remain active on the market. In the potential segments the parties' activities do not overlap so that  the  transaction
    would not cause an impediment to effective competition. In any event,  in  both  segments  several  strong  competitors  remain  active  post
    transaction. The Commission therefore considers that no competition concerns arise from the transaction in this field.

    B. Vertical relationships

104. The transaction involves a large number of vertically related markets. The Commission has assessed these relationships and arrived  at  the
     conclusion that for most of the vertical relationships foreclosure issues are excluded since the total purchases or sales of many of  these
     products by one of the parties are minor and therefore the concentration will not impact on the future behaviour of the combined entity. In
     addition, there are several vertical relationships where the factual situation renders it unlikely that  the  concentration  will  have  an
     impact on the competitive structure of the market (e.g. the total demand of one party significantly lower than the production of the  other
     party or where the purchases of one party significantly exceeded the total production of the other party or where the Commission identified
     several other suppliers of the same product).

105. Concerning the remaining markets, in many instances the market shares do not reach 25% on the up- or downstream level under  any  plausible
     market definition. For those markets the Commission considers that no competition concern  will  arise.  These  relationships  concern:  1)
     detergent range alcohols (upstream), non-ionic surfactants (downstream), 2) PEO (upstream) – PAG (downstream), 3) TMP  and  Isonnonaniconic
     acid (upstream) – Esters for synthetic lubricants (downstream), 4) 2-Pyrrikudibe (upstream) – cosmetic ingredients  (downstream),  5)  PUFA
     oil (upstream) - PUFA powders (downstream), 6) Sodium hydroide and Sodium carbonate (upstream) with various applications.

106.  The remaining relationships are described in more detail in the following paragraphs.

    1. Fixed bed catalysts (upstream) – natural alcohols (downstream)

107. Both parties produce fixed bed catalysts which are used in the production of natural fatty alcohols.

      1.1. Fixed bed catalysts

            1.1.1. Relevant Product market

108. A catalyst is a reagent that promotes a chemical reaction even if it is not consumed by the reaction itself. There exist multiple types  of
     catalysts with different chemical compositions and applications (e.g.  catalysts  used  for  refining,  polymerization,  petrochemicals  or
     oleochemicals). Catalysts are typically used in either fixed-bed or slurry processes. The fixed-bed process uses a static catalyst bed  (in
     the form of a tablet or extrudate) with a continuous flow  of  feedstock  over  the  catalyst.  Products  and  part  of  the  catalyst  are
     continuously withdrawn from the reactor and the catalyst is removed via filtration. Natural fatty alcohols are produced using  both  fixed-
     bed and slurry processes. Fixed bed catalysts are not suitable for use in slurry processes and vice versa.

109. BASF considers that fixed-bed catalysts used in the production of natural fatty alcohols constitute a separate  product  market.  From  the
     demand-side, catalysts for this application cannot be substituted by catalysts for slurry phase due to the  technical  differences  between
     the processes described above. Also, from the supply-side fixed bed catalysts are sufficiently different  from  slurry  catalysts  so  that
     suppliers could not produce both catalyst types using the same assets. Slurry catalysts are supplied as powder, whereas fixed-bed catalysts
     are supplied as extrudates or tablets having different characteristics.

110. The Commission has previously considered whether catalysts should be grouped according to their application[34].  In another  decision[35],
     the Commission’s market investigation confirmed BASF's view that there exist separate markets for catalysts on the basis of the application
     of the catalyst. Similarly, in another case[36], it resulted from the replies to the market investigation that  “the  catalyst  has  to  be
     designed to produce the specified product in a given production facility”. In all these cases the Commission  ultimately  left  the  market
     definition open.

111. However, the precise product market definition can be left open in this case as  under  any  delineation  there  would  be  no  competition
     concerns.

                 1.1.2. Relevant geographic market

112. BASF considers that a potential market for fixed-bed catalysts for natural fatty alcohols should also be regarded as  worldwide  in  scope.
     BASF argues that it produces fixed-bed catalysts in the USA and supplies to the customers on a worldwide basis.

113. In previous decisions[37], the Commission’s market investigation indicated that the markets for  the  catalysts  at  issue  are  worldwide.
     However, the precise market definition was ultimately left open.

114. In any event, the definition of the relevant geographic market can be left open as there would be no competition concerns  irrespective  of
     the precise geographic scope of the catalyst market.

      1.2. Alcohols

115. BASF and Cognis are active in the production of alcohols but focus on different parts of  this  product  segment.  In  general,  BASF  only
     produces and sells synthetic alcohols, while Cognis is only active in the production and sale of natural alcohols.

           1.2.1. Relevant product market

116. BASF considers that alcohols should be grouped depending on their chain length since alcohols with  different  chain-lengths  are  used  in
     different applications and can therefore not be regarded as substitutable by customers. The groups proposed by BASF are as follows:

    • Alcohols with a chain length below C6. This group includes primarily monohydric alcohols such as C1 (methanol) and C2 (ethanol), which  are
      used as intermediates for the production of methyl- and ethyl esters and as solvents, C3  (n-propanol,  iso-propanol),  used  as  solvents,
      diluents or disinfectants, and C4 (n-butanol, iso-butanol) and C5 (pentanols), used as solvents and process additives.

    • Alcohols with a chain length between C6 and C11 may be synthetic or natural alcohols with one hydroxyl group. Alcohols with a chain  length
      between C6 and C11 can be produced from natural (vegetable oils) or from synthetic sources. For alcohols with a chain length between C6 and
      C11, natural and synthetic alcohols cannot be regarded as substitutable due to their different chemical structure and application.  Natural
      alcohols are linear alcohols (also referred to as unbranched), which are used mainly in personal  care,  due  to  their  thick  jelly  like
      consistency and the fact that these alcohols are produced from natural oils (mainly coconut or palm oil). Synthetic alcohols  are  branched
      alcohols, used mainly as intermediates in the production of plasticizers, lubricants,  solvents  and  other  technical  products  and  have
      different characteristics from the natural alcohols (except for one process (Ziegler process) able to produce synthetic linear C6,  C8  and
      C10 alcohols with the same characteristics as natural alcohols).

    • Alcohols with a chain length between C12 and C18 and one hydroxyl group are so-called detergent-range  alcohols  and  are  used  in  making
      surfactants, which are further used in detergents and cosmetics, but also for technical applications.

    • Alcohols with a chain length above C18 are primarily used in paper defoaming.

117. BASF considers that in some cases it may be appropriate to further distinguish alcohols based on their origin,  i.e.  natural  (palm,  palm
     kernel or coconut oil based) or synthetic.

118. The Commission has not previously assessed an overall market for alcohols but rather looked at specific alcohols. In  a  previous  case[38]
     the Commission has assessed detergent-range alcohols and left open whether oxo-alcohols (type of a  synthetic  alcohol)  and  linear  fatty
     alcohols and their derivatives (linear fatty alcohols in the C12-C18 range) belong in the same market open.

119. For the purposes of this case, it is not necessary to decide on the precise product scope of the  alcohols  market,  since  no  competition
     concerns arise under any alternative market definition.

           1.2.2. Relevant geographic market

120. BASF submits that the markets for all types of alcohols are global in scope. There are significant imports into  the  EEA,  accounting  for
     approximately 15% of the EEA demand. Also, alcohols could be easily transported across the world and transport  costs  are  relatively  low
     (approximately [0-10] %). There are no regulatory or customs barriers to trade. All alcohols sold worldwide comply with the same standards.
     BASF considers that there are also no major price differences between regions.

121. In a prior decision[39] the Commission indicated that the market for oxo-alcohols (a type of synthetic alcohol) was at least EEA-wide,  but
     ultimately left the definition of the relevant geographic market open.

122. The Commission considers that the precise market definition can be left open in the present case as no competition concerns arise under any
     plausible market definition

1.3 Assessment

123. BASF submits the following market shares for fixed bed calatysts and for natural alcohols:

|Market Shares, Worldwide                                                                                                                   |
|Product                                                                                                                                    |
|Product                                                                                                                                    |
|Product                                                                                                                                    |
|Natural alcohol blends (C12-C18)                                                                                                           |
|Natural fatty alcohol |[20-30] %                                     |[20-30] %                                                        |
|ethoxylates           |                                              |                                                                 |
|                      |Volume (kt)      |Value (million EUR)          |Volume (kt)     |Value (million |Market share by |Market share  |
|                      |                 |                             |                |EUR)           |volume in %     |by value in % |
|EEA total             |[600-700]        |[600-700]                    |[…]             |[…]            |[0-5] %         |[0-5] %       |
|UK and Ireland        |[100-150]        |[100-150]                    |0               |0              |0%              |0%            |
|Nordic Countries      |[5-10]           |[5-10]                       |0               |0              |0%              |0%            |
|Mainland North-West   |[250-300]        |[250-300]                    |[…]             |[…]            |[0-5] %         |[0-5] %       |
|Europe                |                 |                             |                |               |                |              |
|Mediterranean Bassin  |[200-250]        |[200-250]                    |0               |0              |0%              |0%            |
|Central and Eastern   |[100-150]        |[100-150]                    |0               |0              |0%              |0%            |
|Europe                |                 |                             |                |               |                |              |

124. The following table shows parties' market shares in the downstream market for non-ionic surfactants.

 |MARKET SHARES, EEA (2009)                                                                                                             |
|Product             |BASF + Cognis             |BASF + Cognis        |BASF           |BASF            |Cognis          |Cognis        |
|                    |volume (% )               |value (%)            |volume (%)     |value(%)        |volume (%)      |value(% )     |

    Input foreclosure

125. EO is an important input for non-ionic surfactants and accounts for more than [40-50] % of the costs. However, with a market share of  less
     than [0-5] % under any possible product and geographic market delineation  in  PEO,  the  combined  entity  lacks  market  power  upstream.
     Therefore, Cognis' rivals in non-ionic surfactants have alternative sources of supply for PEO, i.e.  Clariant, Ineos, Sasol, Dow and Shell.
     In view of this, the Commission considers that the proposed transaction will not lead to input foreclosure/price increases for PEO.

    Customer foreclosure

126. Non-ionic surfactants are an important application of PEO. More than [50-60] %  of  the  PEO  are  used  in  the  production  of  non-ionic
     surfactants. However, with combined market shares below [20-30] % in the EEA the merged entity will not have  sufficient  market  power  to
     successfully foreclose access to customers. Also, it appears likely that the combined entity will  continue  to  purchase  PEO  from  other
     suppliers. Cognis' demand for PEO will be reduced following the divestiture of the hydroxy  monomers  business  at  Hythe.  BASF's  current
     merchant sales would not be sufficient to supply all of Cognis' requirements for PEO […] kt in the EEA as BASF's global merchant sales were
     only […] kt in 2009.

127. As a result, both input and customer foreclosure seem unlikely as a result of the vertical relationship between PEO upstream and  non-ionic
     surfactants downstream. For these reasons the Commission considers that the proposed transaction does not raise serious doubts  as  to  its
     compatibility with the internal market resulting from this vertical relationship.

    4. EO-(upstream) –Hydroxy methacrylates (downstream)

128. BASF produces EO which is used for the production of hydroxy methacrylates. Cognis is active in the production  of  hydroxy  methacrylates,
     which are a segment of hydroxy monomers.

129. Ethylene Oxide-EO is described above in paragraphs 190-194.

130. Hydroxy methacrylates are described, as being a part of hydroxy monomers, in paragraph 91.

131. The following table shows Cognis' market shares in the downstream market segment for hydroxy methacrylates.

|MARKET SHARES, EEA (2009)                                                                                                                 |
|Product             |BASF + Cognis              |BASF + Cognis        |BASF              |BASF           |Cognis         |Cognis         |
|                    |volume (% )                |value (%)            |volume (%)        |value(%)       |volume (%)     |value(% )      |

      Input foreclosure

132. With a market share of less than [0-5] % for EO under all plausible product and geographic market definitions, the  combined  entity  would
     lack market power on the upstream market. There are alternative suppliers for PEO, e.g. Clariant, Ineos, Sasol, Dow and Shell.  Also,  only
     about [0-5] % of the PEO is used in the production of hydroxy methacrylates and there are  no  indications  that  BASF  could  discriminate
     different users of PEO. In view of this, input foreclosure, including price rise due to the proposed transaction, is unlikely.

      Customer foreclosure

133. Based on its production capacities, BASF is capable of supplying all of Cognis’ PEO requirements; however, this represents only  [10-20]  %
     of EEA merchant demand and this would require BASF to operate at 100% of capacity and resolve the transport problems. BASF  currently  only
     delivers by rail whereas Cognis is supplied by road tanker. In any case, the parties have submitted a proposal to divest Cognis'  plant  in
     Hythe (the UK) which manufactures all of Cognis' hydroxy methacrylates. This remedy will remove the vertical relationship at issue.

134. As a result, both input and customer foreclosure can be excluded and the vertical relationship will no longer exist. For these reasons  the
     Commission considers that the proposed transaction does not raise  serious  doubts  as  to  its  compatibility  with  the  internal  market
     concerning PEO and hydroxy methacrylates.

        5. AEEA (upstream) – Amphoteric surfactants (downstream)

135. BASF produces Aminoethylethanolamine (AEEA) which is used as an input for amphoteric surfactants, a segment in which Cognis is active.

    5.1 AEEA

      5.1.1. Relevant product market

136. The upstream product of Aminoethylethanolamine (AEEA) is a commodity chemical intermediate product, which is  derived  from  ethylene.  Its
     primary and secondary amine groups together with the hydroxy group combine the features of an ethyleneamine and an  ethanolamine.  AEEA  is
     used for various applications, including epoxy hardeners, fuel additives, chelating agents, surfactants and fabric softeners among others.

137. BASF submits that AEEA forms a single product market that is separate from the markets for other ethyleneamines basing its reasoning on the
     homogeneous nature of the chemical product, different uses compared to other ethyleneamines, difficulty in reformulation  and  testing  and
     the limits of supply-side substitutability among the producers of different ethyleneamines.

138. The Commission has previously examined ethyleneamines[45]  and  concluded  that  both  from  a  demand  and  from  the  supply  side,  each
     ethyleneamine including AEEA constitutes a separate product market. This  position  has  been  confirmed  by  the  results  of  the  market
     investigation in the present case. However, the precise product market definition can be left open in the present case in  the  absence  of
     competition concerns on the narrowest market, that for AEEA.

      5.1.2. Relevant geographic market

139. In line with the previous Commission decisions[46], BASF submits that the geographic market for AEEA is worldwide. The  four  producers  of
     AEEA ([…]) are supplying the entire world from their respective single production plant without any other  production  sites.  Two  of  the
     plants are located in the US, one in Sweden and one in Belgium.

140. In addition, BASF submits that substantial amounts of products are imported and exported from and to the EEA. Also, transportation costs do
     not play a significant role and there are no significant safety or other restrictions to transportation other than the standard regulations
     for the transportation of chemicals.

141. The Commission’s market investigation confirmed that there is no preference on the customer side for a  supplier  with  a  local  presence.
     Moreover, results of the market investigation indicate that there are no material differences with regard to customers' requirements or the
     regulatory regimes between different world regions[47].

142. However, the precise geographic market definition can be left open in the present case in the absence of competition concerns regardless of
     whether the market is worldwide or EEA in scope.

    5.2. Amphoteric surfactants

143. Only Cognis is active in the production of amphoteric surfactants.

      5.2.1.Relevant product market

144. Amphoteric surfactants have a charge that is either positive or negative, depending on the pH of the solution. Amphoteric  surfactants  are
     generally characterized by their relative mildness. They also tend to be stable and effective over a broader pH  range  than  most  anionic
     surfactants. They are used in laundry detergents, dishwashing products, household  and  industrial  cleaners  (oil  field),  personal  care
     products and industrial applications such as textile and leather treatment and as metal ion scavengers and antistatic agents.

145. BASF considers that all types of amphoteric surfactants belong to a single product market. This is based on supply side  considerations  as
     all types of amphoteric surfactants (betaines which represents ca. 90% of all  amphoterics  as  well  as  other  types  such  as  acetates,
     glycinates, imidazolines etc) and are produced using basically the same process.

146. The majority of the competitors replying to the Commission's market investigation confirm that producers could switch from  the  production
     of betaines to the production of other amphoteric surfactants. However, switching costs would  be  involved,  as  well  as  time  would  be
     required (from 6 months to 1 year to switch from one product group  to  another,  on  average).  The  customers  considered  that  not  all
     amphoteric surfactants are interchangeable, or at least not interchangeable  for  all  applications.  In  fact,  as  the  majority  stated,
     amphoteric surfactants are different from a chemical, physical, safety, price and performance point of view.

147. In any event, the question whether all amphoteric surfactants belong to the same  product  market,  or  whether  each  type  of  amphoteric
     surfactants has to be regarded as a different market can be left open, given that no competition concerns arise under any plausible  market
     definition.

      5.2.2. Relevant geographic market

148. As for all types of surfactants (see paras 29-32 above) BASF considers that the geographic  scope  of  the  market  is  worldwide,  due  to
     substantial trade flows, lack of regulatory barriers and low cost of transport.

149. However, the precise geographic market definition can be left open in the present case in the absence of competition concerns  whether  the
     market is worldwide or EEA in scope.

    5.3. Assessment

150. BASF submits the following market share estimates for AEEA and amphoteric surfactants:

|MARKET DATA, Worldwide (2009)                                                                                                      |
|Product                                                                                                                            |
|Product                                                                                                                            |
|Product                                                                                                                            |
|Product                                 |Total market (kt)                         |Total market (Mio €)                   |
|BASF                                    |[40-50] %                                 |[40-50] %-                             |
|Huntsman                                |[30-40] %                                 |[10-20] %                              |
|Taminco                                 |[10-20] %                                 |[10-20] %                              |
|Feixang                                 |[0-5] %                                   |[10-20] %                              |
|Air Products                            |-                                         |[0-5] %                                |
|Others                                  |-                                         |[0-5] %                                |

      Source: BASF estimates

151. BASF claims that no input foreclosure concerns arise given the relatively small presence of  Cognis  on  the  downstream  market,  and  the
     presence of important players on the upstream and downstream markets. BASF also claims that for some applications, such as certain type  of
     personal care products, the downstream manufacturers can substitute betaines by other amphoteric surfactants that are not  based  on  DMAPA
     (notably, amphoacetates and cocobetaine) or by certain  non-ionic  surfactants,  leading  to  end-products  with  only  slightly  different
     characteristics. BASF considers that these substitutes constitute a competitive constraint on the DMAPA market.

152. In the market investigation a number  of  DMAPA  customers/amphoteric  surfactants  producers  expressed  concerns  about  potential  input
     foreclosure and price increases post merger. A majority of customers emphasized the bargaining power of DMAPA producers.

153. The Commission considers that the high market shares in the upstream market could give BASF the ability  to  engage  in  input  foreclosure
     practices including price increases. However, it has to be noted that a number of significant competitors will remain active on the  market
     and that those competitors seem capable of frustrating any attempt of BASF to increase prices for DMAPA in  order  to  increase  their  own
     market shares. In any event, the Commission has come to the conclusion that BASF does not have incentives to raise prices at  the  risk  of
     losing market share for DMAPA.

154. BASF’s margins for DMAPA (as a percentage of net sales[51]) are higher than those of Cognis’ for betaines. Based on the figures provided by
     the parties the DMAPA contribution margin excluding fixed costs varied [by 10-50] % in the period  2007-2009.  While  Cognis’  margins  for
     betaines[52], on the same basis, during the last three years were in the range of [0-30] %, and thus, significantly  lower  than  those  of
     DMAPA. As a consequence, it would not be economically reasonable to reduce sales in the upstream market, since  the  profitability  in  the
     downstream product is lower and BASF would lose money by following this strategy.

155. It should be taken into account, however, that Cognis already purchases [50-60] % of its worldwide DMAPA needs from BASF and operates at  a
     high capacity utilisation rate ([80-90] %).Even if all of Cognis’ needs of DMAPA for the production  of  betaines  were  shifted  to  BASF,
     Cognis’ purchases of DMAPA would account for only [10-20] % of BASF’s total capacity.

156. Hence, over [80-90] % of BASF's DMAPA production would have to be sold into the merchant market. Alternatively, the combined  entity  could
     increase its betaines production to use the remaining [80-90] % of BASF DMAPA capacity. If this were the case, the merged entity would need
     to use [significantly] more DMAPA than it is currently using. For that purpose, it would need to increase its production of amphoterics and
     build new betaine plants to use the available DMAPA.

157. Cognis estimates that a new greenfield production plant for [5000-10000] tonnes of betaines  a  year  of  betaines  in  Europe  would  cost
     approximately EUR […] million. To absorb the DMAPA currently consumed by Cognis's competitors the combined entity would have to invest [10-
     20] of such plants.

158. Thus, the investment required in order to use all of the available DMAPA to produce betaines would be extremely  high.  The  lower  margins
     achieved by betaines would not justify a decision to build (a) new production plant(s) for betaines, given the investments required.

159. Also, given the significant free DMAPA capacity (capacity utilisation in the EEA and globally is less than [70-80] %)  in  the  market  and
     considering the strength of Cognis’ betaine competitors, it is unlikely that the  combined  entity  could  realistically  gain  significant
     market share in the downstream market for betaines.

160. In light of the above, the Commission considers that it is unlikely that the transaction leads to input  foreclosure  since  there  are  no
     incentives to increase prices for DMAPA at the risk of loosing market shares to competitors. Also, the  relatively  low  market  shares  of
     Cognis in the downstream market, the existence of strong players on both levels and the significant  investments  required  by  the  merged
     entity for the expansion of betaines' production downstream indicate that input foreclosure is unlikely.

      Customer foreclosure

161. Cognis’ market shares in the downstream market of amphoteric surfactants and the potential submarkets are below 20% both  in  the  EEA  and
     globally. There are significant large competitors: Evonik (5-10% worldwide, [20-30] % EEA-wide), Rhodia/Feixiang (5-10%  worldwide,  10-20%
     EEA-wide), Zschimmer & Schwarz ([5-10] % worldwide, 10-20% EEA-wide),  Stepan  ([5-10]  %  worldwide  and  EEA-wide),  Huntsman  ([5-10]  %
     worldwide and EEA-wide) and Kao ([5-10] % worldwide and EEA-wide). BASF's sales are very concentrated and focused  on  [0-5]  main  clients
     which account for about [60-70] % of its EEA sales (one of which represent [40-50] % of BASF's total sales).

162. In addition, Cognis is to a large extent supplied by BASF.  In 2009 Cognis purchased [50-60] % of its worldwide DMAPA and [30-40] % of  its
     European DMAPA needs from BASF

163. Cognis’ needs for DMAPA account for only [10-20] % of the European DMAPA demand and much lower shares on a worldwide basis. Subtracting the
     DMAPA quantities already supplied by BASF to Cognis, the share of demand that might shift  from  other  DMAPA  competitors  to  BASF  as  a
     consequence of the transaction is only approximately [10-20] % of total European DMAPA demand. This indicates that the transaction will not
     deprive BASF’s DMAPA competitors of a customer that is crucial for the competitors’ presence and ability and incentive to  compete  on  the
     DMAPA market. Moreover, with an EEA market share of [20-30] % under the narrowest possible market definition,  Cognis  lacks  market  power
     downstream. Therefore, the transaction will not cause customer foreclosure concerns.

164. In light of the above, the Commission considers that the proposed transaction does not raise serious doubts as to  its  compatibility  with
     the internal market as regards the vertical link of DMAPA (upstream) and amphoteric surfactants (downstream), or in any of its further sub-
     segmentations.

    7. Surfactants for emulsion polymerisation (upstream) – Latices (downstream)

165. Both parties are active in the production of surfactants for emulsion polymerisation which are inputs for the latices BASF produces. Cognis
     does not produce latices.

     7.1. Anionic and Non-ionic Surfactants for emulsion polymerisation (upstream)

166. Both anionic and non-ionic surfactants can be used for emulsion polymerisation. Anionic surfactants for emulsion polymerization are defined
     in paragraph 17 above. Non-ionic surfactants for emulsion polymerisation are defined in paragraph 24.

      7.2. Latices

      7.2.1. Relevant product market

167. Latex dispersions (or latices) are used as a binder in various applications including paper and carpet manufacturing and the production  of
     non-woven textiles. Depending on the basic monomers used, there are different types of latices. The main latices produced  by  the  parties
     from surfactants are carboxylated styrene butadiene (XSB), styrene acrylate (SA) and all-acrylics (AA) latices. There are also other  types
     including vinyl-based, hollow sphere or polystyrene based latices.

168. The Commission has previously defined product markets according to the type of latex dispersion (i.e. chemical composition) and also by its
     application.[53]

169. In line with the previous Commission decisions BASF considers that the product markets relevant for the notified merger  are:  XSB  latices
     and SA latices, both used for paper applications, and AA latices used for non-woven applications.

170. The market investigation has indicated that the segmentation according to the type of dispersion,  as  well  as  by  application,  is  most
     commonly used within the latex industry and among its customers. It has also been confirmed that there are  essential  differences  between
     the three types of latices in terms of water resistance, durability, cost/performance ratio, etc. However,  the  market  investigation  has
     also demonstrated that XSB and SA latices for paper applications are, to a certain extent, substitutable from a  demand  side  perspective.
     Concerning the supply side, producers indicated that they are able to switch from producing a given type  of  latex  to  another,  and,  in
     particular, between SA and AA latices[54].

171. In the light of the above the Commission has based its assessment on XSB latices and SA latices, both used for paper applications,  and  AA
     latices used for non-woven applications as potential separate product markets.

     7.2.2. Relevant geographic market

172. In line with the Commission precedents[55], the notifying party submits that the market for latices should be defined as EEA-wide.

173. The market investigation indicates that latices' producers are supplying on an EEA wide basis. Also prices and market conditions appear  to
     be similar throughout the EEA.

174. In view of the above and for the purposes of the present case the Commission has based its assessment on a EEA wide market  since  for  the
     assessment of the vertical relationship the sourcing of the latices producers is relevant rather than the  supply  of  latices  to  latices
     customers.

    7.3. Assessment

175. BASF submits the following market shares for surfactants for emulsion polymerisation and for the different types of latices.

|Market Shares, EEA (2009)                                                                                                                  |
|Product                                                                                                                                    |
|XSB latices for paper                   |[30-40]%                                  |[30-40]%                               |
|Stepan                                  |10-25%                                    |-                                      |
|Huntsman                                |10-25%                                    |10-25%                                 |
|Sasol                                   |10-25%                                    |10-25%                                 |
|Cytec                                   |5-10%                                     |-                                      |
|AKZO                                    |-                                         |10-25%                                 |
|Clariant                                |-                                         |25-40%                                 |

    Source: Parties' best estimates. According to the parties it is difficult to determine their  sales  of  anionic  surfactants  for  emulsion
    polymerisation, as they often do not know for what purposes their customers use the anionic surfactant. The  volume  figures  in  the  table
    indicate the volume of active substance sold. The amount of active substance differs from product to  product  and  therefore  can  only  be
    estimated.

Input foreclosure

176. In the upstream surfactants' markets the parties' market shares slightly  exceed  [30-40]  %  in  the  EEA  and  a  number  of  significant
     competitors are active (see table above).

177. The market investigation at the downstream level confirmed that there are no anionic or non-ionic surfactants for  emulsion  polymerisation
     produced by Cognis for which there are no viable alternative suppliers. Therefore, even if Cognis were to restrict downstream  competitors'
     access to anionic and non-ionic surfactants for emulsion  polymerisation  post-transaction,  such  a  foreclosure  strategy  would  not  be
     effective given the presence of alternative suppliers. This is further supported by the fact that pursuant to the  results  of  the  market
     investigation, a vast majority of competitors of the parties in the downstream markets for SA and XSB latices for paper  applications  seek
     dual or multi-sources for their requirements of anionic and non-ionic surfactants for emulsion polymerisation.

178. In view of the moderate market shares and the presence of the competitors the Commission considers input foreclosure unlikely.

      Customer foreclosure

 179. The market shares for latices are high in the field of SA latices for paper and [are 30-40] % for XSB latices for paper. In the field of AA
      latices for non-woven the market shares do not reach 15% in the EEA. In all segments several important competitors are active such  as  for
      SA latices for paper: Dow ([20-30] %) and CH Polymers ([10-20] %); for XSB latices for paper: Dow ([40-50] %) and Polymer Latex ([10-20] %)
      are the most important competitors. Surfactants for emulsion polymerisation account for less than [0-5] % of the merchant sales of both non-
      ionic and anionic surfactants. The percentage of surfactants used for latices would not exceed [0-5] % even  if  all  the  surfactants  for
      emulsion polymerisation were used for latices. Therefore, producers of the relevant surfactant would still find alternative  customers  for
      their product.

180.
   1. In addition, BASF already buys a significant proportion of its needs of anionic surfactants for emulsion  polymerisation  for  the  latices
      production from Cognis so that in this respect, the transaction will not cause any structural change in the market. It does not buy any non-
      ionic surfactants for emulsion polymerisation from Cognis. However, in any event BASF accounts for less  than  [5-10]  %  of  the  European
      demand for anionic surfactants for emulsion polymerisation (EUR […] million out of EUR [80-90] million) and less than [0-5] %  of  European
      demand for non-ionic surfactants for emulsion polymerisation (EUR […] out of EUR [80-90] million. Subtracting  the  quantities  of  anionic
      surfactants for emulsion polymerisation already supplied by Cognis to BASF, the share of demand that might shift from  other  suppliers  of
      anionic surfactants for emulsion polymerisation to Cognis as a consequence of the merger  is  negligible  (less  than  [0-5]  %)  of  total
      European demand.

181. Based on this, the Commission considers that customer foreclosure is unlikely in this vertical relationship.

182. In the light of the above, the Commission considers that the proposed transaction does not raise serious doubts  as  to  its  compatibility
     with the internal market in the vertically affected hypothetical markets of anionic and non-ionic surfactants for  emulsion  polymerisation
     and XSB and SA latices for paper applications.

 7. Esters for synthetic lubricants (upstream) – Finished synthetic lubricants (downstream)

183. BASF produces esters which can be used for Cognis finished synthetic lubricants.

     7.1. Esters for synthetic lubricants

      7.1.1. Relevant product market

184. Esters are chemical compounds composed of an acid part and an alcohol part. Most commonly they are manufactured directly by condensation of
     acid and alcohol. Esters can be found virtually everywhere. Many naturally occurring fats and oils are the fatty acid esters  of  glycerol.
     Esters with low molecular weight are commonly used as fragrances and found in essential oils and pheromones. Esters can also be used for  a
     very wide variety of applications. The main demand for esters in volume terms is for use as a PVC plasticizer, as reactive  acrylic  esters
     and for biodiesel. Another use for esters is as base stocks for high performance  lubricants  (mainly  automotive  and  aviation  but  also
     industrial, e.g. for refrigeration and textile finishing). There are many different types of esters, named generally with reference to  the
     parent alcohol and the carboxylic acid.

185. In a previous case, the Commission indicated that an esterification plants (a type of batch autoclave)  can  be  configured  to  produce  a
     variety of types of esters in differing proportions[56]. From the demand-side, the Commission noted that esters have many and varied  uses,
     which tend to be specific to the type of ester. It ended up examining a narrower sub-segment of the  esters  market,  that  of  short-chain
     polyol esters (SCPEs)[57].

186. In other cases, the Commission looked at very specific types of esters defined by acid and alcohol used although  very  often  it  was  not
     necessary to take a definitive decision on the relevant product market. Thus, in COMP/M.5355 - BASF/CIBA[58], the Commission confirmed  its
     prior decision[59] and indicated that various types of acrylate esters constitute separate relevant markets. In the mentioned decision, the
     Commission had already stated that butyl acrylate and 2-ethylhexyl acrylate esters belong  to  separate  product  markets.  Similarly,  the
     Commission defined separate product markets for each type  of  acrylic  ester[60].  Whether  diacetyl  tartaric  esters  of  monoglycerides
     constitute a separate market was left open by the Commission.[61]

187. Generally, the Parties agree with the Commission’s past approach to look at each type of ester in isolation because in many  instances  the
     use of a particular alcohol and acid will influence the  characteristics  of  the  resulting  ester  in  a  way  that  renders  demand-side
     substitution difficult. There are also applications where customers may and regularly do substitute different  types  of  esters,  or  even
     products other than esters, for one another. This applies, for example to some extent with respect  to  esters  used  in  cosmetics  or  in
     synthetic lubricants, both of which are made by Cognis. BASF submits that supply-side substitution is possible for certain types of esters,
     as is the case with respect to Cognis’ esters, but in connection with BASF’s esters, it is excluded or at least economically  uninteresting
     for many other types.

188. However, in the present case, the exact product market definition can be left open in the absence of competition concerns.

     7.1.2. Relevant Geographic market

189. Concerning the scope of the geographic market BASF considers that the market for esters including those  for  synthetic  lubricants  is  at
     least EEA wide. This is in line with previous Commission decisions where the Commission considered the various markets for esters  analysed
     to be at least EEA-wide[62]. However, for the purposes of the present case it is not necessary to  decide  on  the  precise  scope  of  the
     geographic market as no competition concerns will arise under any plausible geographic market definition.

           7.2. Finished synthetic lubricants

190. Finished synthetic lubricants have been described in paras 54-62 above.

           7.3. Assessment

191. The following tables show the parties' estimated market shares in  the  upstream  market  for  esters  for  synthetic  lubricants  and  the
     downstream market for finished synthetic lubricants, both EEA and worldwide.

|MARKET DATA, Worldwide (2009)                                                                                                          |
|Product                                                                                                                        |
|Product                |Total                                                    |Total                                                    |
|                       |market (kt)                                              |market (Mio €)                                           |
|                       |BASF              |Cognis            |combined           |BASF              |Cognis            |combined           |
|hydroxy monomers       |[0-5] %           |[10-20] %         |[10-20] %          |[10-20] %         |[40-50] %         |[50-60] %          |
|(downstream)           |                  |                  |                   |                  |                  |                   |
|Hydroxy methacrylates  |0                 |[20-30] %         |[20-30] %          |0                 |[50-60] %         |[50-60] %          |

192. On the upstream level BASF's market shares for MAA [are 20-30] % with several competitors being active on that market, such as  MRC,  Evonik
    and Dow who are capable of supplying MAA. In addition, BASF submits that all  other  major  producers  of  hydroxy  methacrylates  ([…])  are
    vertically integrated and produce their own MAA. This has been confirmed by the market investigation.

193. In view of the fact that market shares below 30% are unlikely to lead to vertical issues[65], the presence of  other  strong  suppliers  and
    the fact that major methacrylic acid producers are vertically integrated, the Commission considers that input foreclosure  is  unlikely  post
    transaction.

194. Concerning potential customer foreclosure, the Commission notes that Cognis only accounts for a relatively small portion of the  MAA  demand
    within the EEA and worldwide. When subtracting the amounts of MAA currently supplied by BASF to Cognis, the amount will be approximately [10-
    20] % of the total EEA demand for MAA The transaction could therefore not deprive MAA producers of  a  crucial  customer.  In  addition,  the
    Commission's market investigation has not revealed any concerns in the market with regard to MAA. In any  event,  BASF  committed  to  divest
    Cognis’ hydroxy monomers business (see paragraph 101-110). As a result, the Commission considers that the  transaction  will  not  cause  any
    issues of customer foreclosure.

195. The Commission therefore considers that the vertical  relationship  of  methacrylic  acid  and  hydroxy  monomers  does  not  give  rise  to
    competitive concerns under either a worldwide or an EEA market for MAA.

8.4 Methacrylic acid upstream – Esters for synthetic lubricants downstream

196. The parties estimate their market shares (by volume) as follows:

|Product               |worldwide                                                |EEA                                                      |
|                      |BASF              |Cognis            |combined           |BASF              |Cognis            |combined           |
|Esters for synthetic  |[0-5] %           |[5-10] %          |[5-10] %           |[0-5] %           |[5-10] %          |[5-10] %           |
|lubricants            |                  |                  |                   |                  |                  |                   |
|(downstream)          |                  |                  |                   |                  |                  |                   |

197. Market shares below 30% are unlikely to lead to vertical issues[66].

198. The main competitors in the market for MAA, and their respective market shares in the EEA, by value,  are  MRC/Lucite  ([40-50]  %),  Evonik
    ([20-30] %) and Dow/Rohm&Haas ([0-5] %).

199. In addition, the application in esters for synthetic lubricants accounts for only [5-10] %  of  all  sales  of  MAA  by  volume.  Therefore,
    competitors in the downstream market for esters for synthetic lubricants would not find it any difficulty in sourcing MAA.

200. Subtracting the quantities of MAA already supplied to Cognis by BASF, the share of demand that might shift from other MAA suppliers to  BASF
    as a consequence of the Transaction is only approximately [10-20] % of the total European demand. Thus the  proposed  transaction  would  not
    deprive BASF’s competitors of a customer that is critical for the competitors’ presence and ability and incentive to compete  on  the  market
    for MAA.

201. The Commission therefore considers that the vertical relationship of methacrylic acid and esters for  synthetic  lubricants  does  not  give
    rise to competitive concerns under either a worldwide or an EEA market for methacrylic acid.

   9. HAS (upstream) – solvent extraction reagents (downstream)

202. BASF produces hydroxyl ammonioum sulphate (HAS) which is an input for the production of solvent extraction reagents, produced by Cognis.

      9.1. HAS

203. HAS is a versatile process chemical used in a number of industries: surface  coatings,  pharmaceuticals,  rubber,  textile,  plastics,  crop
    protection, metallurgy, detergents and the photographic industry. Crystallised HAS produced from HAS solution.

204. BASF submit that for the purposes of assessing the vertical relationship, HAS should be considered to constitute a separate  product  market
    since HAS is the only hydroxylamine purchased by Cognis in more significant quantities for the production of solvent extraction reagents used
    in the mining industry (mainly for extraction of copper and nickel).

205. The market investigation has not revealed reasons why the market should be defined more narrowly than comprising  HAS.  The  Commission  has
    therefore based its assessment on HAS as relevant for the assessment of the present vertical relationship. This definition  of  HAS  excludes
    HAS solution which is less pure and contains between 60% and 75% water and is principally used internally for the production of caprolactans.

206. Concerning the geographic scope in which HAS is sold, BASF submits that the market should be considered as worldwide. It  is  not  necessary
    to decide on the geographic scope of the market as in any event no competition concerns will arise. The geographic scope for HAS solution  is
    unlikely to exceed the EEA as it is uneconomical to transport large volumes of water.

      9.2. Solvent extraction reagents

207. Solvent extraction reagents are chemicals used in the mining industry. BASF considers that  solvent  extraction  reagents  form  a  separate
    product market separate that is distinct from other mining chemicals with regard to the different physical and chemical processes that  exist
    in this area (SLS, liquid ion exchange solvent extraction, flotation, agglomeration, dispersants).  Concerning  the  geographic  scope,  BASF
    considers that the market is worldwide.

208. It is not necessary, however, to come to a final conclusion on the relevant product or geographic market for the purpose  of  assessing  the
    vertical relationship since, under all alternative market definitions, no competition concerns would arise as a result of the transaction.

      9.3. Assessment

209. BASF estimates the parties' market shares (value) as follows:

|Product                |worldwide                                             |EEA                                                  |
|                       |BASF             |Cognis           |combined          |BASF             |Cognis           |combined         |
|all mining chemicals   |[5-10] %         |[5-10] %         |[10-20] %         |[0-5] %          |[0-5] %          |[0-5] %          |
|of which solvent       |0                |[50-60] %        |[50-60] %         |0                |N/A[67]          |N/A              |
|extraction reagents    |                 |                 |                  |                 |                 |                 |
|(downstream)           |                 |                 |                  |                 |                 |                 |

210. The size of the worldwide market size for HAS is estimated at [20-25] kt/EUR [30-40] million. The EEA size is  estimated  at  [5-10]  kt/EUR
    [10-20] million. Most important competitors are UBE ([20-30] % worldwide), Grodno ([10-20] % worldwide) and Juhua ([5-10]  %  worldwide).  In
    addition to those, there are several other producers of HAS and HAS solution who currently sell only minor part of their  production  to  the
    merchant market but who use the HAS internally, in particular for the production of caprolactam. These producers are[…].

211. For solvent extraction reagents, BASF estimates the market size at [10-20] kt/ EUR [80-90]  million  worldwide.  Concerning  the  EEA,  BASF
    point out that there is very little mining activity in the EEA. Most important competitor for solvent extraction reagents is Cytec ([30-40] %
    worldwide). Apart from Cytec, Longlight, Zijin Mining Group and Shanghai Institute of Organic Chemistry are active, all with estimated market
    shares below [0-5] %.

    Input foreclosure

212. BASF's market share for HAS are high both on a worldwide level and in the EEA. However, there are a number of competitors and, in  addition,
    the market shares for HAS do not appear to be fully indicative of market power as there are a number of producers who only sell  minor  parts
    of their production to the merchant market but use it internally for the production of caprolactam. These producers include[…].  Also,  there
    are several producers of HAS solution, the raw material of crystallised HAS, which is a commodity produced  by  many  producers.  The  market
    investigation confirmed that crystallised HAS and HAS solution appear to be used interchangeably in most applications.

213. Also HAS is not an important input for solvent extraction reagent in terms  of  cost  (estimated  at  [5-10]  %  of  the  production  cost).
    Therefore, in order to achieve competitive advantages in the sale of solvent extraction reagents, BASF would have to increase prices for  HAS
    very significantly. However, in view of the other HAS producers including those who currently only sell a minor part of their  production  to
    the merchant market it is likely that such price rise would be counteracted by BASF's HAS competitors.

214. Also, the majority of BASF's HAS production is currently sold to the merchant market and Cognis' HAS needs are less than [40-50%] of  BASF's
    production. Therefore, BASF has strong incentives to continue supplying HAS to the merchant market in order to fill its capacity.

215. The Commission considers it is unlikely that BASF would be able to successfully raise prices for crystalised HAS because there  are  several
    other suppliers of (crystallised) HAS; HAS solution can easily be converted into crystallized HAS; HAS only represents a minor  part  of  the
    production costs of solvent extraction reagents and that Cognis' HAS needs only account for a relatively small part of BASF's HAS production.
    Therefore, input foreclosure seems unlikely in the present case.

    Customer foreclosure

216. Cognis has negligible sales of solvent extraction reagents (to a single customer) and  indeed  there  is  very  little  demand  for  solvent
    extraction reagents in the EEA as there is very little mining activity in Europe. Cognis' purchases of HAS account for less than [20-30]%  of
    HAS demand in the EEA. Subtracting the quantities of HAS already supplied by BASF to Cognis, the share of demand that might  shift  from  HAS
    competitors to BASF as a consequence of the transaction is about [10-20] % of total European HAS demand and much less on a global basis. This
    indicates that the transaction will not deprive BASF’s HAS competitors of a customer that is crucial for a competitor’s presence, ability and
    incentive to compete on the HAS market.

217. In view of this, the Commission considers customer foreclosure unlikely in the present case.

218. The Commission considers that the transaction does not give rise to competition concerns in this vertical relationship.

10. Non-ionic surfactants (upstream) – Pesticides (downstream)

219. Both parties produce non-ionic surfactants that can be used in the production of pesticides, an area where BASF is active.

    10.1. Non-ionic surfactants

220. Non-ionic surfactants are described in paragraph 20.

    10.2. Pesticides

221. Agrochemicals comprise a large variety of pesticides that are designed to protect crops against all forms of  damage.  Following  Commission
    practice in previous decisions[68], different agrochemical products form a number of  relevant  product  markets:  herbicides,  insecticides,
    fungicides and seed treatment products which are the main four categories of pesticides where BASF is active.

222. Fungicides are agents that control fungi and moulds, herbicides are used for the protection against weeds and insecticides are  designed  to
    combat insects. The parties submit that, although pesticides can be further sub-segmented by application (agriculture or  home  use)  and  by
    type of crop, for the present case it would not be appropriate to further sub-segment this market. They claim that input  materials  (anionic
    and non-ionic surfactants and solvents) are used to produce all pesticides, without any concentrated effect on a single application or  crop.
    In addition, the cost of surfactants and solvents is estimated to represent below 10% in the value of the pesticides.

223. There is no need to further sub-segment the fungicides, herbicides, insecticides and  seeds  treatment  markets  since  the  input  material
    (anionic and non-ionic surfactants) is used in almost all pesticides, regardless of the crop.

224. Therefore the exact definition of the product market can be left open since there  will  be  no  competition  concern  with  regard  to  the
    vertical relationship between non-ionic surfactants and pesticides.

225. Concerning the geographic scope of the market it  has  to  be  noted  that  non-ionic  surfactants  are  used  as  input  material  for  the
    manufacturing of pesticides. Therefore, for assessing the vertical relationship, the area  in  which  the  input  is  sourced  by  pesticides
    producers is relevant rather than the area in which pesticides producers sell the downstream product. Thus,  there  is  no  need  to  analyse
    potential national pesticides markets or to make distinctions based on the end use of each type of pesticides.

226. BASF submits that the cost of the input material does not vary based on the country for which the product is  destined.  In  addition,  BASF
    and its main competitors, to the extent they purchase non-ionic surfactants from the merchant market, source these input materials  centrally
    for their respective production plants. BASF produces pesticides primarily in Ludwigshafen and sells them across the  EEA.  From  all  BASF’s
    pesticide portfolio, the top [100-150] products are sold by average in [5-10] EEA countries. Moreover, competitors in pesticides  sell  these
    products in various Member States.

227. However, the precise geographic scope of the pesticides market can be left open in this case in the absence of competition concerns  at  EEA
    or global level.

      10.3. Assessment

228. The following table shows the parties market shares in the upstream market of  non-ionic  surfactants  and  in  the  downstream  markets  in
    pesticides in 2009.

|MARKET SHARES, EEA (2009)                                                                                                            |
|Product               |BASF + Cognis volume|BASF + Cognis value|BASF volume (%) |BASF value(%)   |Cognis volume   |Cognis value(% ) |
|                      |(% )                |(%)                |                |                |(%)             |                 |
|Fungicides            |N/A                 |[20-30] %          |N/A             |[20-30] %       |-               |-                |
|Herbicides            |N/A                 |[10-20] %          |N/A             |[10-20] %       |-               |-                |
|Insecticides          |N/A                 |[5-10] %           |N/A             |[5-10] %        |-               |-                |
|Seed treatment        |N/A                 |[5-10] %           |N/A             |[5-10] %        |-               |-                |
|products              |                    |                   |                |                |                |                 |

        Input foreclosure

229. Input foreclosure can arise when the vertically integrated firm resulting from the merger has a significant market power  upstream.  As  the
    above table shows, this is not the case in relation to non-ionic surfactants. According to the Guidelines on the assessment of non-horizontal
    mergers under the Council Regulation on the control of concentrations between undertakings[69], it is unlikely to find  competition  concerns
    in non-horizontal mergers where the market shares are below 30%. Also BASF's rivals in pesticides would have alternative  sources  of  supply
    for non-ionic surfactants, i.e. Sasol ([10-20] %), Shell ([10-20] %), Huntsman ([5-10] %), Ineos  ([5-10]  %),  KLK  ([5-10]  %),  AkzoNobel,
    Clariant, Croda, Dow, Galaxy Surfactants.

230. In addition, the cost of the non-ionic surfactants provided by Cognis represents less than [5-10] % of the total price  of  pesticides.  The
    situation does not change if individual sub-segments of the market for non-ionic surfactants are considered.

231. A respondent to the Commission's market investigation raised concerns about the ability and incentive of  the  merged  entity  to  foreclose
    downstream rivals. More precisely, the object of the said concerns was certain specific surfactants used in the production of pesticides. The
    respondent claimed that those surfactants were only manufactured by Cognis and internalising their production or sponsoring or certifying  an
    alternative supplier would be expensive and time consuming.

232. A closer examination revealed that for certain products Cognis was supplying on the basis of formulations provided  by  its  clients.  These
    products, therefore, could be manufactured by other upstream competitors, given that the  complainant  has  the  formula.  The  parties  also
    confirmed that there are alternative suppliers that could produce these products according to the said formula.

233. There were other two products which raised concerns, polyethyleneglycol cetyl/ stearyl ether and castor oil  ethoxylated.  At  this  regard,
    the parties identified a number of alternatives suppliers that were capable of manufacturing  these  non-ionic  surfactants.  In  particular:
    Clariant, KLK, Sasol and Croda for polyethyleneglycol cetyl/ stearyl ether, and Croda, Sasol, KLK, Rhodia, Clariant and AZKO for  castor  oil
    ethoxylated. Also, the market investigation showed that there is more than one supplier for these inputs. Hence, even in the  unlikely  event
    that Cognis were to stop supplying them, alternative suppliers are available.

234. For some products BASF has no competing product therefore no incentive to foreclose its rivals downstream.

   Customer foreclosure

235. BASF accounts for less than [0-5] % of the European demand for non-ionic surfactants, thus, even if it were to source them all from  Cognis,
    there would be no change in the market structure. If, after the proposed transaction, BASF were to purchase  all  its  non-ionic  surfactants
    from Cognis, the share of demand that might shift from other suppliers of non-ionic  surfactants  to  Cognis  is  very  small[70].  Therefore
    competitors will not be deprived of a customer that is crucial for the competitors’ presence as well as the ability and incentive to  compete
    on the market for non-ionic surfactants. Moreover, with an EEA market share of below 30% in any type of pesticides, BASF lacks  market  power
    downstream.

236. In addition, surfactants are used in many applications. Actually, less than [5-10] % of all non-ionic surfactants used by BASF are  used  as
    input material in pesticides.

237. On the basis of this, the Commission considers that both input and customer foreclosure are unlikely in the present case.

11. Anionic surfactants (upstream) – Fungicides (downstream)

238. Anionic surfactants are described in paragraphs 12-19 and 29-32.

239. Fungicides are described in paragraphs 332-337.

240. The following table shows the parties' market shares in  the  upstream  market  for  anionic  surfactants  and  the  downstream  market  for
    fungicides.

|MARKET DATA, EEA (2009)                                                                                                                 |
|Product              |Total mar ket (kt)                                    |Total mar ket (Mio €)                                 |
|                     |BASF                       |Cognis                     |BASF                       |Cognis                     |
|Sulfonates           |[0-5] %                    |[0-5] %                    |[0-5] %                    |[0-5] %                    |
|Sulfates             |[0-5] %                    |[30-40] %                  |[0-5] %                    |[20-30] %                  |
|Phosphates           |[0-5] %                    |[10-20] %                  |[0-5] %                    |[0-5] %                    |
|Carboxylates         |-                          |                           |-                          |                           |

241. BASF submits that all four types of anionic surfactants are used in the manufacture of fungicides. BASF estimates that less than [0-5] %  of
    the sulfates that it purchases are used in the production of pesticides.

    Input foreclosure

242. As the above table shows, with markets shares [of 10-20] % the merged entity will not enjoy significant market  power  upstream.  Even  when
    considering the potential market of sulfates, the merged entity will not enjoy significant market power upstream. BASF's rivals in pesticides
    have many alternative sources of supply for anionic surfactants, i.e.  Sasol, Cytec, Huntsman, Rhodia  or  Stepan.  The  situation  does  not
    change if individual sub-segments of the market for anionic surfactants are considered.

243. As in the case of non-ionic surfactants used in the production of pesticides,  one  respondent  to  the  Commission's  market  investigation
    expressed concerns about the ability and incentive of the merged entity to foreclose upstream  market.  The  respondent  claimed  that  those
    surfactants were only manufactured by Cognis and there were no alternative suppliers in the market.

244. After a close examination the Commission discovered that for a product Cognis was supplying on the basis of  formulations  provided  by  its
    clients. The parties confirmed that there are alternative suppliers that could manufacture these products according to the formula.

245. As well, in the case of dodecylbenzenesulfonic acid, calcium salt, texapon F and disopropylnaphtalenesulfonic acid, sodium  salt,  according
    to the parties, a number of alternative suppliers will remain in the market post-merger. Specifically, Rhodia is an alternative  supplier  at
    least for dodecylbenzenesulfonic acid and calcium salt; Huntsman, Clariant and Rhodia are alternative suppliers for texapon F  and  Hunstman,
    Sasol and Stepan for dodecylbenzenesulfonic acid and calcium salt.  Also, the market  investigation  showed  that  there  is  more  than  one
    supplier for these inputs. Hence, even in the unlikely event that Cognis were to stop supplying them alternative suppliers are available.

246. Finally, for some products BASF has no competing product, therefore no incentive to foreclose its rival's dowstream.

    Customer foreclosure

247. Surfactants are used in many applications. Less than [5-10] % of all anionic surfactants  used  by  BASF  are  used  as  input  material  in
    pesticides. BASF accounts for less than [0-5] % of the European demand for anionic surfactants, thus, even if it were to source them all from
    Cognis, there would be no change in the market structure. If after the proposed transaction BASF were to purchase all its anionic surfactants
    from Cognis, the share of demand that might shift from other suppliers of non-ionic  surfactants  to  Cognis  is  very  small[71].  Therefore
    competitors will not be deprived of a customer that is crucial for the competitors’ presence as well as the ability and incentive to  compete
    on the market for non-ionic surfactants. Moreover, with an EEA market share of below  [20-30]  %  in  fungicides,  BASF  lacks  market  power
    downstream.

    12. Solvents (upstream) – Fungicides (downstream)

      12. 1. Solvents

248. Solvents are liquids which have the ability to dissolve, suspend or extract other materials. They make it possible to process, apply,  clean
    or separate materials. They can be used as input in the production of pesticides.

249. BASF submits that chemically, organic solvents can be grouped in four major  groups:  (i)  oxygenated  solvents;  (ii)  hydrocarbons;  (iii)
    halogenates and (iv) others (including so-called green solvents based on natural based fatty alcohols or  fatty  acids).  Within  each  group
    there may be sub-groups constituting separate product markets.

250. Oxygenated solvents are organic solvents, molecules of which contain oxygen. They comprise mainly alcohols,  glycols,  esters  and  ketones.
    Oxygenated solvents are widely used in  the  paints,  inks,  pharmaceuticals,  fragrance  sectors,  adhesives,  cosmetics,  detergents,  food
    industries and, to a lesser degree, agriculture.

251. Green solvents are solvents based on  natural  (predominantly  plant-based)  raw  materials,  which  are  derived  from  the  processing  of
    agricultural crops. They have a unique composition which minimizes the use and generation of hazardous chemicals.

252. The Commission has in the past  analysed  individual  solvents  based  on  chemical  structure[72].  In  COMP/M.4972-Permira/Arysta[73]  the
    Commission analysed the upstream markets to crop protection products on the basis of (i)  active  substances  (the  substance  that  actively
    controls and regulates the pest) and (ii) inerts, including solvents, fillers and adjuvants[74]. The parties therefore suggested that it  may
    be appropriate to analyse solvents used in agricultural applications.

253. However, there is no need to precisely define this product market in the absence of competition concerns  in  connection  to  this  vertical
    relationship.

254. BASF submits that the relevant geographic market for oxygenated solvents, green solvents and solvents used in the agricultural sector is  at
    least EEA-wide because: (i) solvents are easily transported (by sea and land within the EEA and between world regions)  and  transport  costs
    are not high; (ii) price levels for comparable quantities are very similar throughout and often beyond  the  EEA;  and  (iii)  there  are  no
    regulatory or customs barriers to trade.

255. In COMP/M.2314 - BASF/Eurodiol/Pantochim[75] the Commission concluded that the EEA was the  relevant  geographic  market  for  the  solvents
    gamma-butyrolacton (GBL), N-methylpyrrolidon (NMP) and tetrahydrofuran (THF).

256. For the purposes of the present case and in the absence of competition concerns under any market definition there is no need to  define  the
    scope of the market.

      12.2. Fungicides

257. Fungicides are described in paragraph 332-337.

      12.3 Assessment

258. The following table shows the parties' market shares in the upstream market for solvents and the downstream market for fungicides.

    |MARKET DATA, EEA (2009)                                                                                                                   |
|Product               |Total market (kt)                                        |Total market (Mio €)                                     |
|                      |BASF              |Cognis            |combined           |BASF              |Cognis            |combined           |
|of which DMA          |<10%              |0                 |<10%               |[20-30] %         |0                 |[20-30] %          |
|solvents for use in   |[0-5] %           |[0-5] %           |[0-5] %            |[0-5] %           |[0-5] %           |[5-10] %           |
|agricultural products |                  |                  |                   |                  |                  |                   |
|of which green        |0                 |[10-20] %         |[10-20] %          |0                 |[10-20] %         |[10-20] %          |
|solvents              |                  |                  |                   |                  |                  |                   |

259. The market shares of BASF and Cognis are moderate or low on  the  up-  and  downstream  levels.  In  a  potential  overall  market  for  all
    methylamines it would slightly exceed 30%, on a market for DMA only, the market shares would be even lower.

260. As market shares below 30% are unlikely to lead to vertical issues[76] and as the investigation has not  revealed  any  element  that  would
    point to competition problems, the Commission considers that vertical relationship of DMA and solvents for use in agricultural products  does
    not give rise to competitive concerns under either conceivable market definition.

    14. Anionic surfactants (upstream) – Tunnel boring chemicals (downstream)

261. Cognis is active upstream in the production and supply of certain anionic surfactants which are used as input materials for  certain  tunnel
    boring chemicals. At present, only very small quantities are used in the production of soil conditioners  that  are  used  by  tunnel  boring
    machines. BASF is active in the production and sale of soil conditioners for tunnel-boring machines (‘TBM soil-conditioners’).

    14.1. Anionic surfactants

262. Anionic surfactants are described in paras 12-19 and 29-32.

         14.2. Soil conditioners for tunnel boring machines

263. Tunnel-boring chemicals are used to improve the performance of tunnel-boring machines in large underground construction  projects,  by,  for
    example, softening the ground removed by tunnel-boring machines (TBM), suppressing the dust created by  boring  or  penetrating  hard  rocks.
    Tunnel-boring chemicals include, among others, soil conditioners, anti-abrasion and dust suppressant products, sealing greases  and  grouting
    products, whether it is by soft ground, or open hard rock methods.

264. The Commission has not considered the tunnel-boring chemicals market before.

265. BASF submits that tunnel-boring chemicals should be considered as a separate product market because the products are not used for any  other
    application outside tunnel-boring construction. Soil conditioners are one category of tunnel-boring chemicals.  They  are  primarily  polymer
    foams based on anionic surfactants, anti-clay additives and long chain polymers, which help to reduce soil permeability and the stickiness of
    soil and minimise clogging risk, torque and wear reduction at the cutter head of the machines. Since TBM excavation has to manage  a  variety
    of geological conditions and soil behaviour, soil conditioners are introduced in front of the cutter head of a machine to change the  natural
    rheological characteristics in order to maintain optimal advance rates and/or stability of the machine and  to  minimize  or  prevent  ground
    movement on the surface.

266. BASF considers that different soil conditioners are interchangeable from a demand-side and supply-side perspective. Customers consider anti-
    clay agents, polymer foams and other soil conditioners as substitutable  products.  Chemical  TBM  additives  from  different  suppliers  are
    interchangeable and customers can easily switch from one supplier to another without the need of changing the tunnel boring machine. All soil
    conditioners are manufactured using similar equipment and manufacturers can easily switch to the production of different soil conditioners.

267. However, for the purpose of the proposed transaction the precise product market definition can be left open in the  absence  of  competition
    concerns.

268. BASF considers that the market for tunnel boring chemicals, or a narrower segment of soil conditioners, is at least EEA-wide. Only  a  small
    proportion (less than 1%) of TBM chemicals is sold between  continents,  although  BASF  and  other  producers  of  TBM  chemicals  primarily
    distribute their products to construction sites located in a particular region (Europe, Asia and North America). TBM chemicals can be  easily
    transported over long distances (by trucks, tankers, ship containers), transportation costs representing between 5 to 10% of the total  price
    of these products, depending on volume and distance. There are no major price differences between the  EEA  Member  States  and  other  world
    regions. Prices typically vary due to additional local taxes or transport costs.

269. However, the exact geographic scope of the market can be left open in the absence of competition concerns at either EEA or global level.

    14.3. Assessment

270. The following table shows the parties' market shares in the upstream market for anionic surfactants and the  downstream  market  for  tunnel
    boring chemicals (including the possible sub-segment of TBM soil conditioners).

    |MARKET DATA, EEA (2009)                                                                                                                   |
|Product                    |Total market (kt)                                     |Total market (Mio €)                                  |
|                           |BASF                       |Cognis                     |BASF                       |Cognis                     |
|Sulfonates                 |[0-5] %                    |[0-5] %                    |[0-5] %                    |[0-5] %                    |
|Sulfates                   |[0-5] %                    |[30-40] %                  |[0-5] %                    |[20-30] %                  |
|Phosphates                 |[0-5] %                    |[10-20] %                  |[0-5] %                    |[0-5] %                    |
|Carboxylates               |-                          |                           |-                          |                           |

    All four types of anionic surfactants are used in the manufacture of all types of TBM chemicals. In addition, BASF considers that  all  four
    types of anionic surfactants are fully exchangeable as regards the production of TBM chemicals.

    Input foreclosure

271. The market shares of the parties in anionic surfactants are moderate and [are 10-20]  %  in  the  EEA  in  an  overall  market  for  anionic
    surfactants. When looking at potential submarkets the market shares exceed 30%  only  for  sulfates.  According  to  the  Guidelines  on  the
    assessment of non-horizontal mergers under the Council Regulation on the control of concentrations between undertakings[77], it  is  unlikely
    to find competition concerns in non-horizontal mergers where the market shares are below 30%. In spite of the market shares [of 30-40]  %  in
    the segment of sulfates, there are still several competitors who are able to supply soil conditioner producers and to counteract any  attempt
    of BASF to raise prices. These competitors include Sasol, Cytec, Huntsman, Rhodia or Stepan.

272. Therefore, the Commission considers that the transaction will not cause any input foreclosure concerns in this field.

    Customer foreclosure

273. As described in the table above, the market shares on the downstream level are moderate.  In  any  event,  only  very  small  quantities  of
    anionic surfactants are used for the production of tunnel boring chemicals. Therefore customer foreclosure can be excluded.

274. Therefore, both input and customer foreclosure seem unlikely as a result of the vertical relationship between anionic  surfactants  upstream
    and the potential market of TBM soil conditioners downstream.

275. For these reasons the Commission considers that the proposed transaction does not raise serious doubts as  to  its  compatibility  with  the
    internal market regarding the said vertical link.

    15. PAG (upstream) – Tunnel boring chemicals (downstream)

276. Apart from anionic surfactants, also PAG is used for the production of tunnel boring chemicals.

277. PAGs are described in paragraph 44-49.

278. Tunnel boring chemicals are described in paragraph 387-393.

279. The following table shows the parties' market shares in the upstream market for PAG and the downstream market for tunnel boring chemicals.

    |MARKET DATA, EEA (2009)                                                                                                                   |

Product  |Total market (kt)  |Total market (Mio €)  |BASF sales (kt)  |BASF sales (Mio€)  |BASF volume share  |BASF value shares   |Cognis sales
                                                                     (kt)  |
                                                                   Cognis sales
  (Mio €)  |Cognis volume shares  |Cognis value shares | |PAG  |[200-250] |[300-350] |[…] |[…] |[10-20] |[10-20] %  |[…] |[…] |[0-5] %  |[0-5] %
| |TBM chemicals
  |[10-20] |[20-30] |[…] |[…] |[20-30] %  |[20-30] %  |- |- |- |- | |TBM soil
conditioners
 |[5-10] |[10-20] |[…] |[…] |[30-40] %  |[30-40] %  |- |- |- |- | |
280. According to the Guidelines on the assessment of non-horizontal mergers under the  Council  Regulation  on  the  control  of  concentrations
    between undertakings[78], it is unlikely to find competition concerns in non-horizontal mergers where the market shares are below 30%.

281. The parties’ market shares are moderate on both upstream and downstream level. In addition, BASF started using PAG in TBM soil  conditioners
    in 2010 only. Currently, less than [0-5]% of the PAG purchased by BASF are used for the production of TBM  chemicals[79].  Therefore,  BASF's
    rivals in TBM soil conditioners would have alternative sources of supply for PAG like Clariant ([20-30] %), Ineos ([10-20] %), Sasol ([10-20]
    %), Dow ([10-20] %).

282. Also, only relatively small amounts of PAG are used as input in TBM soil conditioners (less than [10-20] %). In view of the moderate  market
    shares on both up- and downstream level, the presence of significant competitors and the fact that tunnel boring chemicals are only  a  small
    application for PAG, input and customer foreclosure seem unlikely as a result of the vertical  relationship  between  PAG  upstream  and  the
    potential market for TBM soil conditioners downstream.

283. For these reasons the Commission considers that the proposed transaction does not raise serious doubts as  to  its  compatibility  with  the
    internal market regarding the said vertical link.

    V.      CONCLUSION

284. For the above reasons, the Commission has decided not to oppose the notified operation as modified by the  commitments  and  to  declare  it
    compatible with the internal market and with the functioning of the EEA Agreement, subject to full compliance with the conditions in  Section
    B and the corresponding Schedule of the commitments annexed to the present decision and with the obligations contained in the other  sections
    of the said commitments. This decision is adopted in application of Article 6(1)(b) in conjunction with Article 6(2)  of  Council  Regulation
    (EC) No 139/2004.

                                        For the Commission,
                                        (signed)
                                        Joaquín ALMUNIA
                                        Vice-President

By email and by fax: 00 32 2 296 4301
European Commission
Directorate-General for Competition
Merger Registry
70 Rue Joseph II / Jozef-II straat 70
B-1000 Brussels

                                                             Case M. 5927 BASF/Cognis

                                                      COMMITMENTS TO THE EUROPEAN COMMISSION

Pursuant to Article 6(2) of Council Regulation (EC) No. 139/2004 as amended (the “Merger Regulation”), BASF SE (“BASF”) hereby provides the
following Commitments (the “Commitments”) in order to enable the European Commission (the “Commission”) to declare the acquisition of Cognis
GmbH (“Cognis”) compatible with the common market and the EEA Agreement by its decision pursuant to Article 6(1)(b) of the Merger Regulation
(the “Decision”).

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

This text shall be interpreted in the light of the Decision to the extent that the Commitments are attached as conditions and obligations, in
the general framework of Community law, in particular in the light of the Merger Regulation, and by reference to the Commission Notice on
remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004.

Section A.  Definitions

For the purpose of the Commitments, the following terms shall have the following meaning:

Adducts: range of specialty monomers produced at the Hythe Site by the alkoxylation (with ethylene and propylene oxides) of hydroxy
methacrylates using proprietary catalyst and reaction technology, used in industrial coatings, rapid prototyping systems, photo-resists for
printed circuit manufacture and UV curable resins.

Affiliated Undertakings: undertakings controlled by BASF or Cognis, whereby the notion of control shall be interpreted pursuant to Article 3
Merger Regulation and in the light of the Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004.

BASF: BASF SE, whose business address is at Carl-Bosch Strasse 38, Ludwigshafen 67056, Germany.

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

Cognis: Cognis GmbH, whose business address is at Rheinpromenade 1, Monheim 40789, Germany.

Contact Lens Materials: range of high purity materials and blends produced at the Hythe Site and sold mainly under the [...] trademark for use
in conventional high water hydroxy methacrylates and silicone hydrogel soft contact lenses.

Divestment Business: the businesses as defined in Section B and the Schedule that BASF commits to divest.

Divestiture Trustee: one or more natural or legal person(s), independent from BASF or Cognis, who is approved by the Commission and appointed by
BASF and who has received from BASF the exclusive Trustee Mandate to sell the Divestment Business to a  Purchaser at no minimum price.

Effective Date: the date of adoption of the Decision.

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

Hold Separate Manager: the person appointed by BASF to manage the day-to-day business of the Divestment Business under the supervision of the
Monitoring Trustee.

Hydroxy Methacrylates: range of hydroxy methacrylates (HEMA and HPMA) produced at the Hythe Site via a catalysed reaction of methacrylic acid
with ethylene oxide (“EO”) and propylene (“PO”) oxide, used as cross-linkers in the production of a wide variety of automotive OEM topcoat and
refinish paints, industrial coatings, sealants and adhesives.

Hythe Site: tangible assets located at Charleston Rd Industrial Estate, Hardley, Hythe, Southampton, SO45 3ZG, United Kingdom, involved in the
production, business administration, R&D and application development for Hydroxy Methacrylates, Multifunctional Methacrylates, Adducts, PAGs,
PAG-based Lubricants, Contact Lens Materials and Other Products.

Key Personnel: all personnel necessary to maintain the viability and competitiveness of the Divestment Business, as listed in the Schedule.

Monitoring Trustee: one or more natural or legal person(s), independent from BASF or Cognis, who is approved by the Commission and appointed by
BASF, and who has the duty to monitor BASF’s compliance with the conditions and obligations attached to the Decision.

Multifunctional Methacrylates: range of specialty methacrylate monomers produced presently at the Hythe Site by transesterification of an
alcohol with methyl methacrylate, used to modify the properties of high performance resins systems in a wide variety of applications, including
anaerobic adhesives, fixings and sealants, industrial coatings and resin composites for automotive and aeronautical applications.

Other Products: the following minor products produced using the alkoxylation technology: [...]

PAGs: polyalkylene glycols, including specialty EO/PO co-polymers produced by alkoxylation by the reaction of various alcohols with either EO or
PO or a random or block combination of both EO and PO and including polyalkylene glycols with the terminal hydroxyl group being capped methyl,
sold mainly under the [...] trademark and used in a wide range of niche applications including: lubricant base fluids (gearbox, compressor, fire-
resistant hydraulic fluid, metalworking fluids, textile, etc.), reactive intermediates for silicone polyether manufacture, process aids,
adhesives and foam control components in various aqueous applications.

PAG-based Lubricants: range of blends using the PAGs and proprietary additive formulation know-how at the Hythe Site, sold mainly under the
[...] trademark and mainly used in industrial gearboxes, compressors, refrigeration systems and in automotive air-conditioning compressors.

Personnel: all personnel currently employed by the Divestment Business including Key Personnel, staff seconded to the Divestment Business,
shared personnel and the additional personnel listed in the Schedule.

Purchaser: the entity approved by the Commission as acquirer of the Divestment Business in accordance with the criteria set out in Section D.

Trustee(s): the Monitoring Trustee and the Divestiture Trustee.

Trustee Divestiture Period: the period of [...] months from the end of the First Divestiture Period.

Section B.  The Divestment Business

      Commitment to divest

    In order to restore effective competition, BASF commits to divest, or procure the divestiture of the Divestment Business by the  end  of  the
        Trustee Divestiture Period as a going concern to a Purchaser and on terms of sale approved by the  Commission  in  accordance  with  the
        procedure described in paragraph 14.  To carry out the divestiture, BASF commits to find a Purchaser and to enter into a  final  binding
        sale and purchase agreement for the sale of the Divestment Business within the First Divestiture Period.  If BASF has not  entered  into
        such an agreement at the end of the First Divestiture Period, BASF shall grant the Divestiture Trustee an exclusive mandate to sell  the
        Divestment Business in accordance with the procedure described in paragraph 23 in the Trustee Divestiture Period.

    BASF shall be deemed to have complied with this commitment if, by  the  end  of  the  Trustee  Divestiture  Period,  BASF  or  an  Affiliated
        Undertaking has entered into a final binding sale and purchase agreement for the Divestment Business, if  the  Commission  approves  the
        Purchaser and the terms in accordance with the procedure described in paragraph 14 and if the closing of  the  sale  of  the  Divestment
        Business takes place within a period not exceeding three months after the approval of the  Purchaser  and  the  terms  of  sale  by  the
        Commission.

    In order to maintain the structural effect of the Commitments, BASF shall, for a period of 10 years after the  Effective  Date,  not  acquire
        direct or indirect influence over the whole or part of the Divestment Business, unless the Commission  has  previously  found  that  the
        structure of the market has changed to such an extent that the absence of influence over the Divestment Business is no longer  necessary
        to render the proposed concentration compatible with the common market.

      Structure and definition of the Divestment Business

    The Divestment Business, as described more fully in the Schedule, consist of:

        1. The Hydroxy Methacrylates business, being all tangible and intangible assets  including  all  patents,  the  [...]  trademark,  other
           intellectual property rights, technology and know-how required in the production and sale of Hydroxy Methacrylates, as well as supply
           contracts, customer lists and all pertinent Personnel required to run the Hydroxy Methacrylates business.  In relation to the  supply
           contracts, BASF commits, at the option of the Purchaser, to supply [...] methacrylic acid [...].

        2. The Multifunctional Methacrylates, Adducts and Other Products businesses, being  all  tangible  and  intangible  assets  (except  for
           intellectual property rights, technology and know-how) required in the production and sale of Multifunctional Methacrylates,  Adducts
           and Other Products as well as supply contracts, customer lists and all pertinent Personnel required to run  these  businesses.   BASF
           retains the intellectual property rights, technology, quality control specifications and know-how relating to the production and sale
           of Multifunctional Methacrylates, Adducts and Other Products, except for the [...] trademark, but commits to grant to the Purchaser a
           non-exclusive, paid-up irrevocable license to all technology and know-how required to produce at the Hythe Site or  another  location
           in the EEA and sell Multifunctional Methacrylates, Adducts and Other Products produced presently at the existing manufacturing  units
           at the Hythe Site.  [...].

        3. The Hythe Site, including the tangible assets involved in the production, business administration, R&D  and  application  development
           for Hydroxy Methacrylates, Multifunctional Methacrylates, Adducts and Other Products, as well as for the  following  products:  PAGs,
           PAG-based Lubricants and Contact Lens Materials.  BASF will relocate the Contact Lens Materials assets and business  from  the  Hythe
           Site [...].

        4. The sale of the Hythe Site is conditional upon the Purchaser entering into a  cost-plus  toll  production  agreement  for  a  minimum
           duration of [...] years after Closing for the following stipulated volumes of  PAGs  and  PAG-based  Lubricants  that  are  presently
           produced at the Hythe Site. [...] BASF commits to grant to the Purchaser with effect as of the Closing Date a non-exclusive,  paid-up
           irrevocable license to all intellectual property rights, technology and know-how required to produce at  Hythe  or  another  location
           within the EEA and sell PAGs and PAG-based Lubricants produced presently at the existing  manufacturing  units  at  the  Hythe  Site,
           except for the relevant trademarks.  [...]

Section C.  Related commitments

      Preservation of Viability, Marketability and Competitiveness

    From the Effective Date until Closing, BASF shall preserve the economic  viability,  marketability  and  competitiveness  of  the  Divestment
        Business, in accordance with good business practice, and shall minimise as far as possible any risk of loss of competitive potential  of
        the Divestment Business.  In particular BASF undertakes:

      (a)   not to carry out any act upon its own  authority  that  might  have  a  significant  adverse  impact  on  the  value,  management  or
           competitiveness of the Divestment Business or that might alter the nature and scope of activity,  or  the  industrial  or  commercial
           strategy or the investment policy of the Divestment Business;

      (b)   to make available sufficient resources for the development of the Divestment Business, on the basis and continuation of the  existing
           business plans;

      (c)   to take all reasonable steps, including appropriate incentive schemes (based on industry practice), to encourage all Key Personnel to
           remain with the Divestment Business.

      Hold-separate obligations of BASF and Cognis

    BASF commits and shall cause Cognis to commit, from the Effective Date until Closing, to keep  the  Divestment  Business  separate  from  the
        businesses it is retaining and to ensure that Key Personnel of the Divestment Business - including the Hold Separate Manager -  have  no
        involvement in any business retained and vice versa.  BASF shall also ensure that the  Personnel  does  not  report  to  any  individual
        outside the Divestment Business.

    Until Closing, BASF shall assist the Monitoring Trustee in ensuring that the Divestment Business is managed as distinct and  saleable  entity
        separate from the businesses retained by BASF.  BASF shall appoint a Hold Separate Manager who shall be responsible for  the  management
        of the Divestment Business, under the supervision of the Monitoring Trustee.  The Hold Separate  Manager  shall  manage  the  Divestment
        Business independently and in the best interest of the business with a view to ensuring its continued economic viability,  marketability
        and competitiveness and its independence from the businesses retained by BASF.

      Ring-fencing

    BASF shall implement all necessary measures to ensure that it does not after the  Effective  Date  obtain  any  business  secrets,  know-how,
        commercial information, or any other information of a confidential or proprietary  nature  relating  to  the  Divestment  Business.   In
        particular, the participation of the Divestment Business in a central information technology network shall  be  severed  to  the  extent
        possible, without compromising the viability of the Divestment Business.   BASF  may  obtain  information  relating  to  the  Divestment
        Business which is reasonably necessary for the divestiture of the Divestment Business or whose disclosure to BASF is required by law.

      Non-solicitation clause

    BASF undertakes, subject to customary limitations, not to solicit, and to procure that  Affiliated  Undertakings  do  not  solicit,  the  Key
        Personnel transferred with the Divestment Business for a period of [...] years after Closing.

      Due Diligence

    In order to enable potential purchasers to carry out a reasonable due diligence of the Divestment Business, BASF shall, subject to  customary
        confidentiality assurances and dependent on the stage of the divestiture process:

      (a)   provide to potential purchasers sufficient information as regards the Divestment Business;

      (b)   provide to potential purchasers sufficient information relating to the Personnel and allow them reasonable access to the Personnel.

      Reporting

    BASF shall submit written reports in English on potential purchasers of the Divestment Business and developments  in  the  negotiations  with
        such potential purchasers to the Commission and the Monitoring Trustee no later than 10 days after the end of every month following  the
        Effective Date (or otherwise at the Commission’s request).

    BASF shall inform the Commission and the Monitoring Trustee on the preparation of the data room documentation and the due diligence procedure
        and shall submit a copy of an information memorandum to the Commission and the Monitoring Trustee before sending the memorandum  out  to
        potential purchasers.

Section D.  The Purchaser

    In order to ensure the immediate restoration of effective competition, the Purchaser, in order to be approved by the Commission, must:

      (a)   be independent of and unconnected to the Parties;

      (b)   have the financial resources, proven expertise and incentive to maintain and develop the Divestment Business as a viable  and  active
           competitive force in competition with BASF and other competitors;

      (c)   neither be likely to create, in the light of the information available to the Commission, prima facie competition concerns  nor  give
           rise to a risk that the implementation of the Commitments will be delayed, and must, in particular, reasonably be expected to  obtain
           all necessary approvals from the relevant regulatory authorities for the acquisition of the Divestment Business (the before-mentioned
           criteria for the purchaser hereafter the “Purchaser Requirements”).

    The final binding sale and purchase agreement shall be conditional on the Commission’s approval.  When BASF has reached an agreement  with  a
        purchaser, it shall submit a fully documented and reasoned proposal, including a copy of the final agreement(s), to the  Commission  and
        the Monitoring Trustee.  BASF must be able to demonstrate to the Commission that the purchaser meets the Purchaser Requirements and that
        the Divestment Business is being sold in a manner consistent with the Commitments.  For the approval, the Commission shall  verify  that
        the purchaser fulfils the Purchaser Requirements and that the Divestment Business  is  being  sold  in  a  manner  consistent  with  the
        Commitments.  The Commission may approve the sale of the Divestment Business without one or more Assets or parts of  the  Personnel,  if
        this does not affect the viability and competitiveness of the Divestment Business  after  the  sale,  taking  account  of  the  proposed
        purchaser.

Section E.  Trustee

I.    Appointment Procedure

    BASF shall appoint a Monitoring Trustee to carry out the functions specified in the Commitments for a Monitoring Trustee.  If  BASF  has  not
        entered into a binding sales and purchase agreement one month before the end of the First Divestiture Period or if  the  Commission  has
        rejected a purchaser proposed by BASF at that time or thereafter, BASF shall appoint a Divestiture Trustee to carry  out  the  functions
        specified in the Commitments for a Divestiture Trustee.  The  appointment  of  the  Divestiture  Trustee  shall  take  effect  upon  the
        commencement of the Trustee Divestiture Period.

    The Trustee shall be independent of BASF or Cognis, possess the necessary qualifications  to  carry  out  its  mandate,  for  example  as  an
        investment bank or consultant or auditor, and shall neither have nor become exposed to a conflict of interest.   The  Trustee  shall  be
        remunerated by BASF in a way that does not impede the independent and effective fulfilment of its mandate.   In  particular,  where  the
        remuneration package of a Divestiture Trustee includes a success premium linked to the final sale value of the Divestment Business,  the
        fee shall also be linked to a divestiture within the Trustee Divestiture Period.

      Proposal by BASF

    No later than one week after the Effective Date, BASF shall submit a list of one or more  persons  whom  BASF  proposes  to  appoint  as  the
        Monitoring Trustee to the Commission for approval.  No later than one month before the end of the First Divestiture Period,  BASF  shall
        submit a list of one or more persons whom BASF proposes to appoint as Divestiture Trustee to the Commission for approval.  The  proposal
        shall contain sufficient information for the Commission to verify that  the  proposed  Trustee  fulfils  the  requirements  set  out  in
        paragraph 16 and shall include:

      (a)   the full terms of the proposed mandate, which shall include all provisions necessary to enable the  Trustee  to  fulfill  its  duties
           under these Commitments;

      (b)   the outline of a work plan which describes how the Trustee intends to carry out its assigned tasks;

      (c)   an indication whether the proposed Trustee is to act as both Monitoring Trustee and Divestiture Trustee or whether different trustees
           are proposed for the two functions.

      Approval or rejection by the Commission

    The Commission shall have the discretion to approve or reject the proposed Trustee(s) and to approve the  proposed  mandate  subject  to  any
        modifications it deems necessary for the Trustee to fulfill its obligations.  If only one name is approved, BASF shall appoint or  cause
        to be appointed, the individual or institution concerned as Trustee, in accordance with the mandate approved by the Commission.  If more
        than one name is approved, BASF shall be free to choose the Trustee to be appointed from among the names approved.  The Trustee shall be
        appointed within one week of the Commission’s approval, in accordance with the mandate approved by the Commission.

      New proposal by BASF

    If all the proposed Trustees are rejected, BASF shall submit the names of at least two more individuals or institutions within  one  week  of
        being informed of the rejection, in accordance with the requirements and the procedure set out in paragraphs 15 and 18.

      Trustee nominated by the Commission

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

II.   Functions of the Trustee

    The Trustee shall assume its specified duties in order to ensure compliance with the Commitments.  The Commission may, on its own  initiative
        or at the request of the Trustee or BASF, give any orders or instructions to  the  Trustee  in  order  to  ensure  compliance  with  the
        conditions and obligations attached to the Decision.

      Duties and obligations of the Monitoring Trustee

    The Monitoring Trustee shall:

        i) propose in its first report to the Commission a detailed work  plan  describing  how  it  intends  to  monitor  compliance  with  the
           obligations and conditions attached to the Decision.

       ii) oversee the on-going management of the Divestment Business with a view to ensuring its continued  economic  viability,  marketability
           and competitiveness and monitor compliance by BASF with the conditions and obligations attached to the Decision.   To  that  end  the
           Monitoring Trustee shall:

             a) monitor the preservation of the economic viability, marketability and competitiveness of the Divestment Business, and the keeping
                separate of the Divestment Business from the business retained by the Parties, in accordance with  paragraphs  5  and  6  of  the
                Commitments;

             b) supervise the management of the Divestment Business as distinct and saleable entities, in accordance  with  paragraph  7  of  the
                Commitments;

             c)  (i) in consultation with BASF, determine all necessary measures to ensure that BASF does not after the Effective Date obtain any
                business secrets, know-how, commercial information, or any other information of a confidential or proprietary nature relating  to
                the Divestment Business, in particular strive for the severing of the Divestment Business’ participation in a central information
                technology network to the extent possible, without compromising the viability of the Divestment Business, and (ii) decide whether
                such information may be disclosed to BASF as the disclosure is reasonably necessary to allow BASF to carry out the divestiture or
                as the disclosure is required by law;

             d) monitor the splitting of assets and the  allocation  of  Personnel  between  the  Divestment  Business  and  BASF  or  Affiliated
                Undertakings;

      iii) assume the other functions assigned to the Monitoring Trustee under the conditions and obligations attached to the Decision;

       iv) propose to BASF such measures as the Monitoring Trustee considers necessary to  ensure  BASF’  compliance  with  the  conditions  and
           obligations attached to the Decision, in particular the maintenance of the full economic viability, marketability or  competitiveness
           of the Divestment Business, the holding separate of the  Divestment  Business  and  the  non-disclosure  of  competitively  sensitive
           information;

        v) review and assess potential purchasers as well as the progress of the divestiture process and verify that, dependant on the stage  of
           the divestiture process, (a) potential purchasers receive  sufficient  information  relating  to  the  Divestment  Business  and  the
           Personnel in particular by reviewing, if available, the data room documentation, the information memorandum  and  the  due  diligence
           process, and (b) potential purchasers are granted reasonable access to the Personnel;

       vi) provide to the Commission, sending BASF a non-confidential copy at the same time, a written report within 15 days after  the  end  of
           every month. The report shall cover the operation and management of the Divestment Business so that the Commission can assess whether
           the business is held in a manner consistent with the Commitments and the progress of the divestiture process  as  well  as  potential
           purchasers. In addition to these reports, the Monitoring Trustee shall promptly report in writing to the Commission, sending  BASF  a
           non-confidential copy at the same time, if it concludes on reasonable grounds that BASF is failing to comply with these Commitments;

      vii) within one week after receipt of the documented proposal referred to in paragraph 14, submit to the Commission a reasoned opinion  as
           to the suitability and independence of the proposed purchaser and the viability of the Divestment Business after the Sale and  as  to
           whether the Divestment Business is sold in a manner consistent with the conditions and  obligations  attached  to  the  Decision,  in
           particular, if relevant, whether the Sale of the Divestment Business without one or more Assets or not all of the  Personnel  affects
           the viability of the Divestment Business after the sale, taking account of the proposed purchaser.

      Duties and obligations of the Divestiture Trustee

    Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no  minimum  price  the  Divestment  Business  to  a  purchaser,
        provided that the Commission has approved both the purchaser and the final binding sale and purchase agreement in  accordance  with  the
        procedure laid down in paragraph 14.  The Divestiture Trustee shall include in the sale and purchase agreement such terms and conditions
        as it considers appropriate for an expedient sale in the Trustee Divestiture Period.  In particular, the Divestiture Trustee may include
        in the sale and purchase agreement such customary representations and warranties and indemnities as are reasonably  required  to  effect
        the sale.  The Divestiture Trustee shall protect the legitimate financial interests of BASF, subject to BASF’  unconditional  obligation
        to divest at no minimum price in the Trustee Divestiture Period.

    In the Trustee Divestiture Period (or otherwise at the Commission’s request), the Divestiture Trustee shall provide  the  Commission  with  a
        comprehensive monthly report written in English on the progress of the divestiture process.  Such reports shall be submitted  within  15
        days after the end of every month with a simultaneous copy to the Monitoring Trustee and a non-confidential copy to the Parties.

III.  Duties and obligations of the Parties

    BASF shall provide and shall cause its advisors to provide the Trustee with all such co-operation, assistance and information as the  Trustee
        may reasonably require to perform its tasks.  The Trustee shall have full and  complete  access  to  any  of  BASF’  or  the  Divestment
        Business’ books, records, documents, management or other personnel, facilities, sites and technical information necessary for fulfilling
        its duties under the Commitments and BASF and the Divestment Business shall make available to the Trustee one or more offices  on  their
        premises and shall be available for meetings in order to provide the Trustee with all information necessary for the performance  of  its
        tasks.

    BASF shall provide the Monitoring Trustee with all managerial and administrative support that it may reasonably  request  on  behalf  of  the
        management of the Divestment Business.  This shall include all administrative support functions  relating  to  the  Divestment  Business
        which are currently carried out at headquarters level (if any).  BASF shall  provide  and  shall  cause  its  advisors  to  provide  the
        Monitoring Trustee, on request, with the information submitted to potential purchasers, in particular give the Monitoring Trustee access
        to the data room documentation and all other information granted to potential purchasers in the due  diligence  procedure.   BASF  shall
        inform the Monitoring Trustee on possible purchasers, submit a list of potential purchasers, and keep the Monitoring Trustee informed of
        all developments in the divestiture process.

    BASF shall grant or procure Affiliated Undertakings to grant comprehensive powers of attorney, duly executed, to the Divestiture  Trustee  to
        effect the sale, the Closing and all actions and declarations which the  Divestiture  Trustee  considers  necessary  or  appropriate  to
        achieve the sale and the Closing, including the appointment of  advisors  to  assist  with  the  sale  process.   Upon  request  of  the
        Divestiture Trustee, BASF shall cause the documents required for effecting the sale and the Closing to be duly executed.

    BASF shall indemnify the Trustee and its employees and agents (each an “Indemnified Party”) and hold each Indemnified Party harmless against,
        and hereby agrees that an Indemnified Party shall have no liability to BASF for any liabilities arising out of the  performance  of  the
        Trustee’s duties under the Commitments, except to the extent that such liabilities result from the wilful default,  recklessness,  gross
        negligence or bad faith of the Trustee, its employees, agents or advisors.

    At the expense of BASF, the Trustee may appoint advisors (in particular for corporate finance or legal advice),  subject  to  BASF’  approval
        (this approval not to be unreasonably withheld or delayed) if the Trustee considers  the  appointment  of  such  advisors  necessary  or
        appropriate for the performance of its duties and obligations under the Mandate, provided that any fees and other expenses  incurred  by
        the Trustee are reasonable.  Should BASF refuse to approve the  advisors  proposed  by  the  Trustee  the  Commission  may  approve  the
        appointment of such advisors instead, after having heard BASF.  Only the  Trustee  shall  be  entitled  to  issue  instructions  to  the
        advisors.  Paragraph 28 shall apply mutatis mutandis.  In the Trustee Divestiture Period, the Divestiture Trustee may use  advisors  who
        served BASF during the Divestiture Period if the Divestiture Trustee considers this is in the best interest of an expedient sale.

IV.   Replacement, discharge and reappointment of Trustee

    If the Trustee ceases to perform its functions under the Commitments for any other good cause, including the exposure of  the  Trustee  to  a
        conflict of interest:

      (a)   the Commission may, after hearing the Trustee, require BASF to replace the Trustee; or
      (b)   BASF, with the prior approval of the Commission, may replace the Trustee.

    If the Trustee is removed according to paragraph 30, the Trustee may be required to continue in its function until a new Trustee is in  place
        to whom the Trustee has effected a full hand over of all relevant information.  The new Trustee shall be appointed  in  accordance  with
        the procedure referred to in paragraphs 15-20.

    Beside the removal according to paragraph 30, the Trustee shall cease to act as Trustee only after the Commission has discharged it from  its
        duties after all the Commitments with which the Trustee has been entrusted have been implemented.  However, the Commission  may  at  any
        time require the reappointment of the Monitoring Trustee if it subsequently appears that the relevant remedies might not have been fully
        and properly implemented.

Section F.  The Review Clause

    The Commission may, where appropriate, in response to a request from BASF, showing good cause and accompanied by a report from the Monitoring
        Trustee:

      (i)   Grant an extension of the time periods foreseen in the Commitments; or
      (ii)  Waive, modify or substitute, in exceptional circumstances, one or more of the undertakings in these Commitments.
      Where BASF seeks an extension of a time period, it shall submit a request to the Commission no later than one month before the expiry of
      that period, showing good cause.  Only in exceptional circumstances shall BASF be entitled to request an extension within the last month of
      any period.

      SIGNED ON:        November 9, 2010

      SIGNED BY:

      …………………………………….........      ............................................................
      [...]

           duly authorised by and on behalf of BASF SE

                                                                     SCHEDULE

                                                             The Divestment Business

   1. The Divestment Business as operated to date has the following legal and functional structure:

         – Cognis’ production site located at Hythe (the Hythe Site), located at Industrial Estate, Hardley, Hythe, SO45 3ZG,  Southampton,  the
           United Kingdom.  [...]

         – The Hythe Site is a production, business administration, R&D and application development site for the following products:

                    a. Hydroxy Methacrylates (HEMA and HPMA);

                    b. Multifunctional Methacrylates;

                    c. Adducts;

                    d. PAGs;

                    e. PAG-based Lubricants;

                    f. Contact Lens Materials;   and

                    g. Other Products.

         – BASF commits to divest the following business:

            • The Hydroxy Methacrylates business, being all tangible and intangible assets including all patents,  the  [...]  trademark,  other
              intellectual property rights, technology and know-how required in the production and sale of Hydroxy  Methacrylates,  as  well  as
              supply contracts, customer lists and all pertinent Personnel required to run the Hydroxy Methacrylates business.

            • The Multifunctional Methacrylates, Adducts and Other Products businesses, being all tangible and  intangible  assets  (except  for
              intellectual property rights, technology and know-how) required in the  production  and  sale  of  Multifunctional  Methacrylates,
              Adducts and Other Products as well as supply contracts,  customer  lists  and  all  pertinent  Personnel  required  to  run  these
              businesses.  BASF retains the intellectual property rights, technology, quality control specifications and  know-how  relating  to
              the production and sale of Multifunctional Methacrylates, Adducts and Other Products, except for [...] trademark, but  commits  to
              grant to the Purchaser a non-exclusive, paid-up irrevocable license to all technology and know-how  required  to  produce  at  the
              Hythe Site or another location in the EEA and sell Multifunctional Methacrylates, Adducts and Other Products produced presently at
              existing manufacturing units at the Hythe Site.  [...]

            • The Hythe Site, including the tangible assets relating to the Hythe Site will be transferred in its entirety with the exception of
              the assets relating to the Contact Lens Materials business, which BASF will remove from the Hythe Site [...]

            • The sale of the Hythe Site is conditional upon the Purchaser entering into a cost-plus toll production  agreement  for  a  minimum
              duration of [...] years after Closing for the following stipulated volumes of PAGs and PAG-based  Lubricants  that  are  presently
              produced at the Hythe Site.  [...]
              BASF commits to grant to the Purchaser with effect as of the Closing Date a non-exclusive,  paid-up  irrevocable  license  to  all
              intellectual property rights, technology and know-how required to produce at the Hythe Site or another location  in  the  EEA  and
              sell PAGs and PAG-based Lubricants produced presently at the existing manufacturing units  at  the  Hythe  Site,  except  for  the
              relevant trademarks.  [...]

   2. Following paragraph 4 of these Commitments, the Divestment Business includes, but is not limited to:

        a) The Hythe Site, including but not limited to all manufacturing facilities, production lines, equipment, storage tanks,  pumps,  waste
           water treatment, owned by Cognis and used in the production of the following products:

                  o Hydroxy Methacrylates (HEMA and HPMA);
                  o Multifunctional Methacrylates, Adducts and Other Products; and
                  o PAG and PAG-based Lubricants.

           Details on the assets of the Hythe Site to be divested are fully described in Annex 1.

        b) The following main intangible assets:

            – Any patents that are required for the production of Hydroxy Methacrylates;

            – All trademarks, including [...] trademark, owned by, assigned to or licensed to Cognis at the Effective Date that are specific  to
              Hydroxy Methacrylates;

            – Rights to all other intellectual property rights available to Cognis at the Effective Date and  necessary  for  the  Purchaser  in
              order to manufacture and sell Hydroxy Methacrylates.  These intellectual property rights may consist of formulations,  technology,
              manufacturing know-how and any other secret know-how, trade secret, invention, application to register of  any  of  the  mentioned
              rights.

           Details on the intangible assets included in the Divestment Business are contained in Annex 2.

        c) All licenses, permits and authorizations specific to the Hythe Site, including all  relevant  dossiers  relating  to  such  licenses,
           permits and authorizations available to Cognis.  A list of the main licenses required for the operation of the Hythe Site is provided
           in Annex 3.

        d) All relevant data, books, records, and other documents available to Cognis and exclusively related to or necessary for the  operation
           of the Hythe Site and the commercialization of the Hydroxy Methacrylates, Multifunctional Methacrylates, Adducts and Other  Products,
           including existing customer records for  the  Hydroxy  Methacrylates,  Multifunctional  Methacrylates,  Adducts  and  Other  Products
           (including by way of example relevant details concerning orders, deliveries, invoicing and billing collection for these products  for
           each such customer sufficient to provide the Purchaser with a working knowledge of customers’ requirements and preferences), provided
           that BASF may redact from  such  copies  any  information  that  does  not  relate  to  the  Hydroxy  Methacrylates,  Multifunctional
           Methacrylates, Adducts or Other Products businesses. A  list  of  the  main  customers  for  Hydroxy  Methacrylates,  Multifunctional
           Methacrylates, Adducts and Other Products is attached as Annex 4.

        e) The Parties’ best efforts to assign or novate all contracts, agreements, leases, commitments and  understandings,  in  particular  to
           assign contracts with Cognis’ current customers and suppliers insofar as they relate to the  Hydroxy  Methacrylates,  Multifunctional
           Methacrylates, Adducts and Other Products businesses and insofar they do not expire, terminate or give notice of  termination  before
           Closing.  In relation to the supply contracts, BASF commits, at the option of the Purchaser, to supply [...] methacrylic  acid  [...]
           to the Hythe Site [...].  A list of the suppliers of raw materials in attached as Annex 5.   A  list  of  the  main  contractors  for
           services is attached as Annex 6.

        f) In line with applicable employment laws and other relevant legislation, the Key Personnel and all other employees currently  employed
           at the Hythe Site as at the date of Closing (approximately [...] employees), [...]

        g) In line with applicable employment laws and other relevant legislation, unless the Purchaser does not require them,  [...]  employees
           required for marketing, sales and distribution of  the  Hydroxy  Methacrylates,  Multifunctional  Methacrylates,  Adducts  and  Other
           Products, even if not located at the Hythe Site, will be transferred to the Purchaser.  The Key Personnel functions and more  details
           regarding the Divestment Business Personnel and the employees to be transferred to BASF are described in Annex 7.

   3. The Divestment Business does not include:

        a) The Contact Lens Materials business.  BASF undertakes to relocate the  assets  and  other  elements  relating  to  the  Contact  Lens
           Materials from the Hythe Site [...].

        b) The PAG and PAG-based Lubricants businesses, except for the tangible assets located at Hythe for these businesses.  For the avoidance
           of doubt, the Divestment Business does not include any intangible assets, intellectual property, [...] trademarks, or  other  rights,
           titles or interests exclusively associated with the Contact Lens Materials, PAG or PAG-based Lubricants businesses,  except  for  the
           appropriate license, which will include all necessary technology and know-how.

        c) Intellectual property rights relating to the Multifunctional Methacrylates,  Adducts and Other Products businesses, except for  [...]
           trademark and the appropriate licenses, which will include all necessary technology and know-how.

        d) Intellectual property rights included in (a), (b) and (c) above means all  patents,  trademarks,  tradenames,  technical  information
           including, but not limited to the operation manual,  standard  operating  procedures,  process  flow  charts,  detailed  process  and
           instrumentation diagrams, process control system (“PCS”) data (e.g. PCS programs, screenshots and  data  points  of  temperature  and
           pressure where recorded), quality control specifications, customer specific quality requirements and  specifications,  testing  data,
           customer approvals, customer specific product claims, process & instrumentation diagrams required for the production and sale of  the
           Contact Lens Materials, PAGs and PAG-based Lubricants, Multifunctional Methacrylates, Adducts or Other Products. [...].

        e) For the avoidance of doubt, the Divestment Business also does not include the employees listed under (i), (ii) and (iii)  of  Section
           2(f) above ([...]).

        f) The Cognis name, tradename, logo or any brand of BASF or Cognis.

                                                                     Annex 1

                                                                  The Hythe Site

   1. The Hythe Site was built in early 1960s. The current equipment is modern and has been  regularly  upgraded  and  no  production  lines  are
      considered obsolete.

   2. The area covered by the Hythe Site is [...].  An aerial photograph and site plan are provided in Appendix 1.1.

   3. The Hythe Site consists of the following manufacturing units:
         • [...]

   4. The Hythe Site has the following non-manufacturing facilities and building:
         • [...]

   5. The Hythe Site has all the required licenses, permits and authorizations for its full operation.  [...]

   6. The Hythe Site has significant spare capacity and significant capacity for expansion.

   7. The Hythe Site holds a skilled employee base of approximately [...].

   8. BASF will commit to work with the Purchaser to transfer the assets and other elements relating to the Contact Lens Materials  business  out
      of the Hythe Site [...].

                                                                  Appendix 1.1.
                                                     Aerial photo and plan of the Hythe Site

                                                                      [...]
                                                                  Appendix 1.2.
           Production flow and equipment charts for Hydroxy Methacrylates, Multifunctional Methacrylates, PAG and PAG-based Lubricants

                                                                      [...]

                                                                     Annex 2

                                                Intangible Assets included the Divestment Business

 A.   Patents specific to Hydroxy Methacrylates

 [...]

 B.   Trademarks specific to Hydroxy Methacrylates

 [...]

C.    [...] trademark used in other products manufactured at the Hythe Plant

[...]

D.    Other intellectual property rights

[...]

The know-how related to Hydroxy Methacrylates will be tranferred to the Purchaser as part of the Divestment Business.

                                                                     Annex 3

                                   Main permits and authorizations required for the operation of the Hythe Site

                                                                      [...]

                                                                     Annex 4

                       Main customers for Hydroxy Methacrylates, Multifunctional Methacrylates, Adducts and Other Products

      BASF will transfer to the Purchaser customer lists for the Hydroxy Methacrylates, Multifunctional Methacrylates, Adducts and Other Products
      businesses.  The top five customers for each of these product groups are listed below:

                                                                      [...]
                                                                     Annex 5

                                                   Suppliers of raw materials at the Hythe Site

                                                                      [...]

                                                                     Annex 6

                                                 Main contractors for services at the Hythe Site

 A.   Logistics

      [...]

B.    Other services

      [...]

                                                                     Annex 7

                                                       Personnel of the Divestment Business

A.    Personnel and Key Personnel at the Hythe Site

   1. In line with applicable employment laws and other relevant legislation, the Key Personnel and all other employees currently employed at the
      Hythe Site as at the date of Closing, [...]

   2. At the date of signature of the Commitments, approximately [...] employees work at the Hythe Site.  [...]

   3. Personnel that are key to the operation of the site are listed in the Table below.  The Personnel holding these key functions  are  stable,
      know the business and were, for most of them, already there at the time the Hythe Site was  held  separate  following  the  acquisition  by
      Degussa of Laporte (2001).

      [...]

B.    Employees outside the Hythe Site

   4. [...]

   5. [...] Cognis can estimate the resources that are likely to be needed after Closing of the Divestment Business to cover  for  the  functions
      currently being carried outside of the Hythe Site (primarily in marketing, sales and distribution) and that would be, unless the  Purchaser
      does not require them, made available to the Purchaser as part of the Divestment Business:

                                                                      [...]

                                                                  Appendix 7.1.

                                         Organizational charts of the employees located at the Hythe Site

                                                                      [...]

-----------------------
[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]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation.
[3]   Both parties produce conjugated linoleic acid. However this product is produced under licence. One of the parties is  licensed  to  produce
 for human consumption and the other for animal feed. The proposed transaction will not therefore have any structural effects on the market  for
 conjugated linoleic acid.
[4]   Where vertically affected markets arise, these are dealt with in Section B below.
[5]   Case COMP/M.2231 Huntsman International/Albright&Wilson Surfactants Europe paras  10-16;  M.1517  Rhodia/Donau  Chemie/Albright  &  Wilson,
 paras 33-40.
[6]   Case COMP/M.5358 Arizona Chemical/Abieta Chemie.
[7]   Categorisation by CESIO (Comité Européen des Agents de Surface et de leurs Intermédiaires Organiques).
[8]   For example, in 2009, imports of non-ionic surfactants into the EEA were estimated by the 2010 SRI study at [80-90] kt, i.e.  approximately
 [10-20] % of all EEA sales of non-ionic surfactants and originated to a large extent from the United States.
[9]   IV/M.1517 - Rhodia/Donau Chemie/Albright& Wilson.
[10]  Case COMP/5243 - CVC/RAG/Evonik, Case COMP/M. 4972 - Permira/Arysta and Case COMP/M.4179 - Huntsman/Ciba TE Busines.
[11]  Based on the parties' based estimates (in terms of sales).
[12]  Case No IV/M.933 - ICI/Unilever, Commission decision of23 June 1997, para. 7.
[13]  Case No COMP/M.4094 - Ineos/BPDormagen, Commission decision of10 August 2006, para. 180.
[14]  Case No COMP/M.4094 - Ineos/BPDormagen, Commission decision of10 August 2006, para. 180.
[15]  In some instances base oils can be sold as lubricants without having been blended with additives.

[16]  In COMP/M.5689 - Bominflot/SBI Holding, para. 25 and IV/M.1891 - BP Amoco/Castrol, para. 10, the  Commission  has  distinguished  different
      product markets for automotive, industrial, marine and aviation lubricants.
[17]  In the area of automotive lubricants, standards  are  set  up  by  bodies  such  as  ACEA,  which  represents  the  interests  of  European
      manufacturers of cars and trucks. In the area of industrial and marine lubricants the end product is  approved  either  as  the  result  of
      commercial trials or because it meets a standard product specification whereby the product has the required properties (e.g. ISO  or  DIN).
      Marine lubricants, which are used to lubricate marine diesel engines of deep draft  vessels  running  on  heavy  fuel  (with  high  sulphur
      content), are specially formulated to cope with the extreme conditions encountered in the engines of ocean going vessels. These  lubricants
      also require approvals from Original Equipment Manufacturers (OEMs).
[18]  IV/M.1891 - BP Amoco/Castrol, para. 18.
[19]  IV/M.1891 - BP Amoco/Castrol, para. 19.
[20]  M.4835 Hexion/Huntsman, paras 18 and 84; M.3125 Huntsman/Matlinpatterson/Vantico, para 17, fn 5.
[21]   Case  No   COMP/M.4835   -   Hexion/Huntsman,   Commission   decision   of   30   June   2008,   para.   85;   Case   No   COMP/M.3125   -
      Huntsman/Matlinpatterson/Vantico, Commission decision of 19 June 2003, para. 15.
[22]  M.5243 CVC/RAG/Evonik, paras 23-25.
[23]  M.5424 Dow/Rohm and Haas, para 218-220.
[24]  Case No COMP/M.5243 - CVC/RAG/Evonik, Commission decision of 8 September 2008.,  para.  58;  Case  No  COMP/M.5424  -  Dow/Rohm  and  Haas,
      Commission decision of 8 January 2009, paras 221-222.
[25]  Case No COMP/M.2277 - Degussa/Laporte, Commission decision of 12 March 2001, paras 15-21.
[26]  According to the results of the market investigation, there are just a few  small niche markets,  where  only  hydroxy  acrylates  or  only
      hydroxy methacrylates can be used, e.g. fiber optics,
[27]  Case No COMP/M.2277 - Degussa/Laporte, Commission decision of 12 March 2001, paras 32-35.
[28]        Market investigation revealed that difference in prices for hydroxy monomers worldwide varies from 5-30%.
[29]  M.2926 EQT/H&R/Dragoco, paras 29-30.
[30]  Case No COMP/M.2926 - EQT/H&R/Dragoco, Commission decision of 16 September 2002, paras 33-38.
[31]  Case No COMP/M.2956 - CVC/PAIEurope/Provimi, Commission decision of 28 October 2002.
[32]  Case No COMP/M.2956 - CVC/PAIEurope/Provimi, Commission decision of 28 October 2002, para. 21.
[33]  Case No COMP/E-1/37.512 - V, Commission decision of 21 November 2001, para. 69.
[34]  COMP/M. 4102 - BASF/Engelhard, para. 8.
[35]  COMP/M.3125 - Huntsman/Matlinpatterson/Vantico, para. 14.
[36]  [pic][37]&COMP/M.4927 - Carlyle/Ineos/JV, para. 33.
[38]  COMP/M.4927 - Carlyle/Ineos/JV, paras 40-41; COMP/M.3125 - Huntsman/Matlinpatterson/Vantico, para. 15.

[39]  Case No. IV/M.612 – RWE-DEA/Augusta.
[40]        COMP Case No. IV/M.612 – RWE-DEA/Augusta.
[41]  This is an unlikely outcome, since the results of market investigation indicate that the most  plausible  market  definition  is  that  all
      alkoxylates belong to the same product market.
[42]  COMP/M.4005 - Ineos/Innovene, paragraph 15.
[43]  COMP/M.4094 - Ineos/BP Dormagen,  paragraph 46.
[44]  According to the Cefic guidelines, RTCs are the preferred mode of transport and only in the case of missing railway  connections  will  the
      shortest possible distance then be transported by road tank (multimodal transport rail-truck).
[45]  COMP/M.4094 - Ineos/BP Dormagen,  paragraph 47-51.
[46]  COMP/M.1671 - Dow Chemical/Union Carbide, Commission decision of 3 May 2000, paras 149-159;  COMP/M.  4179  –  Huntsman/Ciba  TE  Business,
      Commission decision of 30 June 2006, paras 12-15.
[47]  Case COMP/M.1671 - Dow Chemical/Union Carbide, Commission decision of 3 May 2000, paras 160-163; Case No COMP/M. 4179  –  Huntsman/Ciba  TE
      Business, Commission decision of 30 June 2006, paras 42.
[48]  The respondents of the market investigation unanimously submitted that the requirements of AEEA customers throughout the world  regions  do
      not vary.
[49]    Case   No   COMP/M.2231   -   Huntsman   International   /Albright   &   Wilson   Surfactants   Europe,    Case    No    COMP/M.3125    -
      Huntsman/Matlinpatterson/Vantico.
[50]  Case No COMP/M.5243 CVC/RAG/Evonik.
[51]  Case No COMP/M.5243 - CVC/RAG/Evonik, Case No COMP/M.3125 - Huntsman/Matlinpatterson/Vantico.
[52]        After deduction of variable costs and allocated fixed costs from net sales to third parties.
[53]        Calculated as ‘Net Total Sales - Mark up - Commissions - Transport - Material Costs - Processing  Costs’,  but  not  deducting  fixed
      costs
[54]  See COMP/M.1993 – Rhodia/Raisio/JV, Commission decision of 20 July 2000, para. 20; COMP/M.5355  -  BASF/CIBA,  Commission  Decision  of  12
      March 2009, para 165.
[55]  This finding is also in line with the findings in previous Commission decisions. See COMP/M.5355 - BASF/CIBA,  Commission  Decision  of  12
      March 2009, para 176.
[56]  Case No, COMP/M.5355 - BASF/CIBA, Commission Decision of  12  March  2009,  para  172;  COMP/M.1467  -  Rohm&Haas/Morton,  COMP/M.  1097  -
      Wacker/Air Products, COMP/M.751 - Bayer/Huls.
[57]  IV/M.933 - ICI/Unilever, para. 7.
[58]  IV/M.933 - ICI/Unilever, paras 7-11.
[59]  para. 299.
[60]  COMP/M.3056 - Celanese/Degussa/JV, paras 178 and 181.
[61]  COMP/M.5424 - Dow/Rohm and Haas, para. 33.
[62]  COMP/M.5109 - Danisco/Abitec, para. 26.
[63]  IV/M.933 - ICI/Unilever, para. 15 and COMP/M.4972 - Permira/Arysta, para. 23.
[64]  Case No IV/M.942 - Veba/Degussa, Commission decision of 3 December 1997, para. 15.
[65]  Case No IV/M.942 - Veba/Degussa, Commission decision of 3 December 1997, para. 36.
[66]  See Commission Guidelines on the assessment of non-horizontal mergers, OJ 2008 C 265, p. 6, ("Vertical Guidelines") para.25.
[67]  See Commission Guidelines on the assessment of non-horizontal mergers, OJ 2008 C 265, p. 6, ("Non Horizontal Guidelines") para.25.
[68]  The parties submit that Cognis only sells [0-5] % of its solvent extraction reagents in the EEA and does not  have  reliable  estimates  on
    the size of the EEA market.
[69]  COMP/M.1932-BASF/American Cyanamid (AHP), COMP/M.3465-Syngenta CP / Advanta.
[70]  Paragraph 25.
[71]  Assuming that after the implementation of the proposed transaction, BASF will purchase its total non-ionic  surfactants  requirements  from
      Cognis, these purchases would (at 2009 levels) account for only approximately [0-5] % of Cognis’ sales of non-ionic surfactants in the EEA.

[72]  Assuming that after the implementation of the proposed transaction, BASF will purchase its  total  anionic  surfactants  requirements  from
      Cognis, these purchases would (at 2009 levels) account for only approximately [0-5] % of total European demand.

[73]  In COMP M.3506 - Celanese/Degussa JV¸ the Commission considered butyl acetate but did not finally decide  on  the  precise  extent  of  the
      relevant market. In COMP/M.2314 - BASF/Eurodiol/Pantochim the Commission analysed butanediol-related solvents, which were  further  divided
      into gamma-butyrolacton, N-methylpyrrolidon and tetrahydrofuran.
[74]  Decision of 25 February 2008.
[75]  COMP/M.4972-Permira/Arysta, paragraph 12.
[76]  Paragraph 58.
[77]  See Commission Guidelines on the assessment of non-horizontal mergers, OJ 2008 C 265, p. 6, ("Non-Horizontal Guidelines") para.25.
[78]  Paragraph 25.
[79]  Paragraph 25.
[80]  In the long term BASF estimates that approximately [10-40] % of the current content of anionic surfactants in  the  TBM  soil  conditioners
      would be replaced by PAG.

-----------------------
                                                                 MERGER PROCEDURE
                                                             ARTICLE 6(1)(b) DECISION
                                                         IN CONJUNCTION WITH ARTICLE 6(2)

 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

                                                                  PUBLIC VERSION