CELEX: 32017M8273
Language: en
Date: 2017-03-27 00:00:00
Title: Commission Decision of 27/03/2017 declaring a concentration to be compatible with the common market (Case No COMP/M.8273 - STANDARD / BRAAS MONIER) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                 Brussels, 27.3.2017
                                                                 C(2017) 2135 final
 In the published version of this decision, some
 information has been omitted pursuant to Article                        PUBLIC VERSION
 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 omitted has been replaced by ranges of figures or a             To the notifying party:
 general description.
Subject:             Case M.8273 - Standard / Braas Monier
                     Commission decision pursuant to Article 6(1)(b) of Council
                     Regulation No 139/20041 and Article 57 of the Agreement on the
                     European Economic Area2
Dear Sir or Madam,
(1)         On 20 February 2017, the European Commission received notification of a
            proposed concentration pursuant to Article 4 of the Merger Regulation by which
            Standard Industries Inc. ('Standard', US), controlled by G Holdings Inc., intends
            to acquire sole control over the Braas Monier Building Group S.A. ('Braas
            Monier', Luxembourg) by way of a public bid.3 Standard and Braas Monier are
            collectively referred to as the ‘Parties’.
1.          THE PARTIES AND THE OPERATION
(2)         Standard is a US based privately held company, active in the manufacture and
            distribution of commercial and residential roofing products and certain other
            construction products. Standard has 68 manufacturing sites worldwide. In
            Europe it is mostly active through its subsidiary, Icopal Holding A/S ('Icopal'),
            which is primarily focussed on the manufacture and sale of flat roofing products.
1           OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009, the
            Treaty on the Functioning of the European Union ('TFEU') has introduced certain changes, such
            as the replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The
            terminology of the TFEU will be used throughout this decision.
2           OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').
3           Publication in the Official Journal of the European Union No C 65, 1.3.2017, p. 5.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- (3)    Braas Monier is a Luxembourg based publicly traded company, a manufacturer
       and supplier of pitched roof products, supplying roof tiles and roofing
       components in 29 countries worldwide, mainly in Europe, Asia and South
       Africa. Braas Monier also manufactures chimneys and energy systems.
(4)    On 15 September 2016, Standard publicly expressed its intention to launch a
       public tender offer for shares in Braas Monier. As of 11 January 2017,
       Standard's tender offer has been accepted for approximately 70% of the issued
       share capital and the related controlling voting rights in Braas Monier. Standard
       will thus acquire sole control of Braas Monier.
(5)    Therefore, the operation constitutes a concentration pursuant to Art 3(1)(b) of
       the Merger Regulation.
2.     UNION DIMENSION
(6)    The undertakings concerned have a combined aggregate world-wide turnover of
       more than EUR 2 500 million4 (Standard: EUR […] million, Braas Monier:
       EUR 1 256 million). The aggregate Union-wide turnover of each of the Parties
       is above EUR 100 million (Standard: EUR […] million, Braas Monier:
       EUR […] million). In five Members States ([…]) their combined aggregate
       turnover is more than EUR 100 million. In each of those five Member States,
       the aggregate turnover of each of the Parties is more than EUR 25 million.
       Neither of the Parties achieves more than two-thirds of its aggregate Union-wide
       turnover within one Member State.
(7)    The notified operation therefore has a Union dimension pursuant to Article 1(3)
       of the Merger Regulation.
3.     COMPETITIVE ASSESSMENT
3.1.   General
(8)    The Parties' activities overlap and give rise to affected markets in (i) small-
       format pitched roof coverings, (ii) pitched roof underlays, (iii) chimneys,
       (iv) certain pitched roof accessories and (v) wind barriers.
(9)    The proposed transaction would not give rise to any vertically affected markets.
3.2.   Product market definitions
3.2.1. Small format pitched roof coverings
(10)   The Parties both produce small-format pitched roof coverings. Such coverings
       come in different forms and materials, such as concrete tiles, clay tiles, bitumen
       shingles and metal tiles. Braas Monier only produces concrete and clay tiles
       while Standard (Icopal) is only active in bitumen shingles and metal tiles.
4      Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission
       Consolidated Jurisdictional Notice (OJ C 95, 16.4.2008, p. 1).
                                                     2
 ---pagebreak--- (11) The Notifying Party submits that small-format pitched roof coverings should be
     considered separate from other types of pitched roof coverings, including
     profiled steel construction sheets. According to the Notifying Party, profiled
     steel construction sheets do not generally compete with small-format pitched
     roof coverings that the Parties produce.
(12) The Notifying Party further submits that pitched roof coverings of different
     materials should be considered separate product markets, as their characteristics
     and application conditions are different: for instance clay and concrete tiles are
     heavier and require different roof structures than lighter bitumen shingles and
     metal tiles.
(13) Based on the Notifying Party’s suggested segmentation, that is separate markets
     for small-format pitched roof coverings by type of material, there would be no
     overlap between the Parties in the EEA. In contrast, affected markets arise if the
     different types of small-format pitched roof coverings supplied by the Parties are
     considered to belong to the same relevant product market.
(14) The Commission has not in previous cases considered all possible small-format
     pitched roof coverings. However, it has previously held that concrete and clay
     roof tiles each constituted a distinct product market: In the early Steetley/Tarmac
     case, the parties argued that the relevant market was for all roofing tiles;
     however, the Commission found the relevant product market to be clay tiles and
     rejected a combined market for clay and concrete tiles.5 In Lafarge/Blue
     Circle (II) and CRH/Semapa/Secil JV, the Commission concluded that concrete
     roof tiles constituted a separate product market.6
(15) The results of the market investigation purport that while some demand-side
     substitutability may exist, there are some limitations in the interchangeability
     between different small-format pitched roof coverings. For instance, customers
     indicated that replacing bitumen shingles or metal tiles with concrete or clay
     tiles is not always possible due to the heavier weight of the latter products. If
     faced with a small but significant price increase of a particular type of small-
     format pitched roof coverings, the majority of customers would also not switch
     or would only switch very small amounts of their sourcing of that type of small-
     format pitched roof covering to other types.7
(16) From the supply side, competitors responding to the market investigation saw no
     substitutability between the production of small format pitched roof coverings of
     different materials, and they also explained that different small-format pitched
     roof coverings each require different production methods and machinery.8
5    M.180 – Steetley/Tarmac, Art 9(3) decision, paragraphs 23–8.
6    M.2317 – Lafarge/Blue Circle (II), paragraph 13; M.3415 – CRH/ Semapa/Secil JV,
     paragraph 10.
7    Replies to questions B.4 – B.8 of Q2 – Questionnaire to customers in Norway. See also
     confirmed non-confidential minutes of a call with a customer on 2 December 2016, and
     confirmed non-confidential minutes of a call with a customer on 16 December 2016.
8    Replies to questions B.2 – B.4 of Q1 – Roofing materials - Questionnaire to competitors in
     Norway.
                                                   3
 ---pagebreak--- (17)   Nonetheless, it is not necessary for the Commission conclude on the exact
       product market definition for small-format pitched roof coverings as the
       proposed transaction does not give rise to serious doubts as to its compatibility
       with the internal market under any alternative market definition.
3.2.2. Pitched roof underlays
(18)   A pitched roof underlay is located between the exterior roof covering (for
       instance roof tiles) and the roof decking of a pitched roof. It acts as a shield to
       protect the roof and building structure from the weather. In particular, it is an
       additional water barrier and prevents external water vapour or precipitation from
       percolating onto the roofing deck and other structures. Underlays are commonly
       used under all types of pitched roof coverings. They are typically made of
       bitumen or plastic.
(19)   The Notifying Party submits that pitched roof underlays constitute a distinct
       market, separate from for instance flat roof membranes. The Notifying Party
       further submits that the market for pitched roof underlays should not be further
       segmented according to the type of material into bitumen or plastic.
(20)   In particular, the Notifying Party submits that bitumen and plastic pitched roof
       underlays are interchangeable from a demand side perspective and should be
       considered to belong to the same relevant product market. According to the
       Notifying Party, underlays can have the same performance regardless of whether
       made from bitumen or plastic. The Notifying Party nonetheless acknowledges
       that there is no supply-side substitutability between bitumen and plastic pitched
       roof underlays.
(21)   The results of the market investigation do not fully support the Notifying Party’s
       submissions. In particular, the results purport that, contrary to the Notifying
       Party’s submissions, (i) demand-side substitutability between plastic and
       bitumen pitched roof underlays could be limited and that (ii) bitumen flat roof
       membranes and bitumen pitched roof underlays may have at least supply-side
       substitutability.
(22)   With regard to the demand-side substitutability between plastic and bitumen
       pitched roof underlays, a number of customers and competitors indicated that
       there is technical interchangeability between the products, though the view was
       not shared by all.9 However, a clear majority of customers indicated that they
       would not switch or would only make a small switch if faced with a small but
       significant relative price increase of one of the products. The reasons cited for
       not switching included, for instance, the requirements of their own customers
       and quality differences between the products.10
9      See, for instance replies to question B.14 of Q2 – Questionnaire to customers in Norway; replies
       to question B.6 of Q4 – Questionnaire to EEA underlay customers; replies to questions B.14 and
       B.15 of Q1 – Questionnaire to competitors in Norway; and replies to questions B.11 and B.12 of
       Q3 – Questionnaire to EEA underlay competitors. See also confirmed non-confidential minutes
       of a call with a customer on 1 December 2016 and confirmed non-confidential minutes of a call
       with a customer on 2 December 2016.
10     Replies to questions B.15 and B.16 of Q2 – Questionnaire to customers in Norway, and replies
       to questions B.8 and B.9 of Q4 – Questionnaire to EEA underlay customers.
                                                      4
 ---pagebreak--- (23)   The results of the market investigation support the Notifying Party’s submission
       that there is no supply-side substitutability between plastic and bitumen pitched
       roof underlays.11
(24)   With regard to the distinction between pitched roof underlays and flat roof
       membranes, the results of the market investigation indicate that demand-side
       substitutability is limited. The majority of customers and competitors replied
       that the products are not interchangeable except in some limited occasions.12
       The majority of customers would also not not switch their purchases or would
       only switch small amounts if faced with a small but significant relevant price
       increase of one of the products.13 On the other hand, there might be some supply
       side substitutability in bituminous products. In particular, some competitors
       indicated that bitumen pitched rood underlays and bitumen flat roof membranes
       could be produced on the same production lines.14
(25)   It is not necessary for the Commission to conlude on the exact product market
       definition for pitched roof underlays as the proposed transaction does not give
       rise to serious doubts as to its compatibility with the internal market under any
       alternative market definition.
3.2.3. Chimneys
(26)   The Parties supply chimneys made of steel and concrete/ceramic. The Notifying
       Party submits that those constitute distinct product markets.
(27)   The Notifying Party explains that steel chimneys and concrete/ceramic
       chimneys are not substitutable with each other. According to the Notifying
       Party, they are not only made of different materials but have different
       characteristics: Concrete/ceramic chimneys are heavy, must be built on a
       foundation and must usually be either fabricated on-site or at least installed
       using a crane which increases costs. On the other hand, concrete/ceramic
       chimneys can have more than one stove connected to them and they are more
       durable than steel chimneys. They are typically only used in new builds. In
       contrast, steel chimneys tend to be smaller and lighter, they do not require a
       foundation to hold their weight and can be flexibly installed. They can be used
       in existing buildings that do not previously have a chimney installed. On the
       other hand, they typically can only accommodate one stove.
(28)   The results of the market investigation were largely inconclusive as regards the
       substitutability between steel and concrete/ceramic chimneys.
11     Replies to questions B.17 – B.19 of Q1 – Questionnaire to competitors in Norway and replies to
       questions 13 – 15 of Q3 – Questionnaire to EEA underlay competitors.
12     Replies to questions B.9 and B.10 of Q1 – Questionnaire to competitors in Norway, replies to
       questions 6 and 7 of Q3 – Questionnaire to EEA underlay competitors, replies to question 10 of
       Q2 – Questionnaire to customers in Norway, replies to question B.2 of Q4 – Questionnaire to
       EEA underlay customers.
13     Replies to questions B.11 and B.12 of Q2 – Questionnaire to customers in Norway, and replies
       to questions B.3 and B.4 of Q4 – Questionnaire to EEA underlay customers.
14     Replies to questions B.11 – B.13 of Q1 – Questionnaire to competitors in Norway, and replies to
       questions 8 – 10 of Q3 – Questionnaire to EEA underlay competitors.
                                                    5
 ---pagebreak--- (29)   Nonetheless, it is not necessary for the Commission to conclude on the exact
       product market definition for chimneys as the proposed transaction does not
       give rise to serious doubts as to its compatibility with the internal market under
       any alternative market definition.
3.2.4. Certain pitched roof accessories
(30)   Both of the Parties supply a variety of pitched roof accessories, including
       rainwater systems, snow and safety equipment, valleys as well as ridges and
       hips.
(31)   According to the Notifying Party, affected markets arise with respect to
       (i) valleys and (ii) ridges and hips if those products are to be considered as
       distinct markets and separate from other types of roofing products.
(32)   The results of the market investigation were largely inconclusive as to whether
       those products constitute distinct markets.
(33)   It is not necessary for the Commission to conclude on the exact product market
       definition for valleys or ridges and hips as the proposed transaction does not
       give rise to serious doubts as to its compatibility with the internal market under
       any alternative market definition.
3.2.5. Wind barriers
(34)   The Parties' activities overlap in the manufacture and sale of wind barriers. The
       Parties only sell plastic foil / membrane style wind barriers and are not active in
       other types of wind barriers such as those based on wood particle boards.
(35)   The Notifying Party submits that all types of wind barriers belong to the same
       relevant product market.
(36)   Results of the market investigation support the Notifying Party’s submission in
       that customers considered plastic foil / membrane style wind barriers to have
       substitutability with other types of wind barriers.15 On the other hand, no
       supplier indicated that there would be any supply-side substitutability.16
(37)   Nonetheless, it is not necessary for the Commission to conclude on the exact
       product market definition for wind barriers as the proposed transaction does not
       give rise to serious doubts as to its compatibility with the internal market under
       any alternative market definition.
3.3.   Geographic market definitions
3.3.1. Pitched roof coverings
(38)   The Notifying Party submits that the relevant markets for small-format pitched
       roof coverings are at least national, and potentially EEA-wide. The Notifying
       Party nonetheless acknowledges that it sets the prices for pitched roof coverings
       nationally and not on a pan-European level.
15     Replies to question B.27 of Q2 – Questionnaire to customers in Norway.
16     Replies to question B.30 of Q1 – Questionnaire to competitors in Norway.
                                                    6
 ---pagebreak--- (39)   In previous decisions, the Commission has considered the market for pitched
       roofing tiles to be national in scope, in particular because of transport cost and
       national distribution patterns.17
(40)   The proposed transaction would only give rise to affected markets if the relevant
       markets are considered to be national.
(41)   The results of the market investigation support the finding of national markets.
       For instance, the majority of customers replying indicated that they agree on the
       prices at a national level. Some customers also indicated that brands and
       customer preferences differ between countries.18
(42)   Nonetheless, it is not necessary for the Commission to conclude on the exact
       geographic market definition as the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market under any
       alternative market definition.
3.3.2. Pitched roof underlays
(43)   The Notifying Party submits that the market for pitched roof underlays is at least
       EEA-wide. The Notifying Party notes that the products are largely
       undifferentiated and that the Parties supply them to numerous EEA countries
       from a limited set of production sites. The Notifying Party nonetheless
       acknowledges that it sets the prices for pitched roof underlays on a national
       basis because product specifications and national market preferences differ.
(44)   The Commission observes that the Parties’ market shares differ significantly
       between different EEA countries, although affected markets are in general found
       in Northern Europe.
(45)   The results of the market investigation support the finding of national markets.
       For instance, the majority of both customers and competitors replying indicated
       that they agree on the prices at a national level.19 A number of both customers
       and competitors also indicated that factors such as national brands, national
       customer preferences and national technical standards are obstacles or at least
       challenges for expanding activities between Member States.20
(46)   Nonetheless, it is not necessary for the Commission to conclude on the exact
       geographic market definition as the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market under any
       alternative market definition.
17     M.180 – Steetley / Tarmac, paragraphs 29–30; M.2317 – Lafarge/Blue Circle (II), paragraph 13;
       M.3415 – CRH/Semapa/Secil JV, paragraph 16.
18     See, for instance replies to questions C.1 and C.3 of Q2 – Questionnaire to customers in
       Norway.
19     See, for instance replies to question C.1 of Q1 – Questionnaire to competitors in Norway;
       replies to question 18 of Q3 – Questionnaire to EEA underlay competitors; replies to
       question C.1 of Q2 – Questionnaire to customers in Norway; and replies to question C.1 of of
       Q4 – Questionnaire to EEA underlay customers.
20     See, for instance replies to questions 20 and 21 of Q3 – Questionnaire to EEA underlay
       competitors; replies to question C.3 of Q2 – Questionnaire to customers in Norway; and replies
       to question C.3 of Q4 – Questionnaire to EEA underlay customers.
                                                    7
 ---pagebreak--- 3.3.3. Chimneys
(47)   The Notifying Party submits that the relevant market for chimneys would be at
       least EEA-wide.
(48)   The proposed transaction would only give rise to affected markets if the markets
       are considered to be national.
(49)   The results of the market investigation support the finding of national markets.
       For instance, the majority of customers replying indicated that they agree on the
       prices at a national level.21 Some market participants also referred to different
       national brands and different customer preferences.22
(50)   Nonetheless, it is not necessary for the Commission to conclude on the exact
       geographic market definition as the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market under any
       alternative market definition.
3.3.4. Certain pitched roof accessories
(51)   The Notifying Party submits that the relevant market is at least EEA-wide.
(52)   The proposed transaction would only give rise to affected markets if the markets
       are considered to be national.
(53)   Nonetheless, it is not necessary for the Commission to conclude on the exact
       geographic market definition as the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market under any
       alternative market definition.
3.3.5. Wind barriers
(54)   The Notifying Party submits that the relevant market is at least EEA-wide.
(55)   The proposed transaction would only give rise to affected markets if the markets
       are considered to be national.
(56)   Nonetheless, it is not necessary for the Commission to conclude on the exact
       geographic market definition as the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market under any
       alternative market definition.
21     Replies to question C.1 of Q2 – Questionnaire to customers in Norway; and replies to question
       C.1 of Q6 – Questionnaire to chimney customers Poland.
22     Replies to question C.2 of Q5 – Questionnaire to chimney competitors Poland; and replies to
       question C.2 of Q6 – Questionnaire to chimney customers Poland.
                                                   8
 ---pagebreak--- 3.4.   Horizontal effects
3.4.1. Affected markets
(57)   None of the products concerned by the proposed transaction give rise to affected
       markets at the EEA-level. On a national level, the following markets are
       affected:
          i.   Small-format pitched roof coverings (all types combined): Bulgaria,
               Germany and Norway;
         ii.   Pitched roof underlays (all types combined): Austria, the Czech
               Republic, Denmark, Finland, France, Italy, Norway, Sweden and the
               United Kingdom;
        iii.   Pitched roof underlays (plastic only): Austria, Denmark, Estonia, France,
               Italy, Norway, Sweden and the United Kingdom;
        iv.    Pitched roof underlays (bitumen only): Norway and Sweden;
         v.    Chimneys: Norway and Poland;
        vi.    Certain pitched roof accessories and wind barriers: Norway
3.4.2. Small-format pitched roof coverings
(58)   Should different small-format pitched roof coverings be considered to constitute
       distinct markets, there would be no overlap between the Parties’ activities.
       However, if different small-format pitched roof coverings are considered to
       belong to one and the same market, affected markets arise in Bulgaria, Germany
       and Norway. The Parties’ market shares in the affected markets in those
       countries are included in Table 1.
       Table 1 - Small-format pitched roof coverings (all types combined), affected markets
                             Coverings all, value                   Coverings all, volume
                                     (EUR)                                  (sqm)
                                     Braas                                  Braas
                    Standard                    Combined     Standard                   Combined
                                    Monier                                 Monier
        Bulgaria                                              [0-5]%      [20-30]%      [20-30]%
        Germany       [0-5]%       [10-20]%      [20-30]%
        Norway      [10-20]%       [10-20]%      [30-40]%    [10-20]%     [10-20]%      [20-30]%
       Source: The Notifying Party
(59)   In Bulgaria the proposed transaction only gives rise to an affected market on the
       basis of volume market shares while in Germany an affected market only arises
       on the basis of value market shares. In both Bulgaria and Germany the market
       share increment brought by the proposed transaction remains very limited, less
       than [0-5]%-point. It is thus unlikely that the proposed transaction would
       significantly change the market structure or limit competition in those countries.
(60)   In Norway, the Parties achieve a higher market share based based on value,
       [30-40]%. The market share increment is also not insignificant at
       [10-20]%-points. Nonetheless, the merged entity would continue to be
                                                     9
 ---pagebreak---        challenged by a number of not insignificant competitors including Skarpnes
       ([10-20]%), Benders ([10-20]%), Isola ([5-10]%) and Lindab ([5-10]%).23
(61)   In addition, as set out in paragraph (15), there appear to be limits to the
       interchangeability of different types of small-format pitched roof coverings.
       Therefore, the fact that the Parties are offering different types of small-format
       pitched roof coverings likely means that they are not particularly close
       competitors to each other even if all those different types of products were
       considered to belong to the same (differentiated) relevant product market.
(62)   The market investigation, which was limited to Norway, has not revealed any
       substantiated competition concerns. In particular, customers and competitors
       replying did not consider that the proposed transaction would have significant
       negative effects on competition in small-format pitched roof coverings.24
(63)   Therefore, on balance and in light of the evidence available to it, the
       Commission concludes that the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market with regard to
       small-format pitched roof coverings.
3.4.3. Pitched roof underlays
(64)   The Parties’ market shares in the affected markets are included inTable 2, Table
       3 andTable 4.
       Table 2 - Pitched roof underlays (plastic + bitumen combined), affected markets
                               Underlays all, value                    Underlays all, volume
                                       (EUR)                                   (sqm)
                                       Braas                                   Braas
                      Standard                    Combined      Standard                  Combined
                                     Monier                                  Monier
        Austria       [20-30]%       [5-10]%      [20-30]%      [10-20]%     [5-10]%       [20-30]%
        Czech
                                                                 [0-5]%     [20-30]%       [20-30]%
        Republic
        Denmark       [20-30]%       [5-10]%      [30-40]%      [20-30]%     [5-10]%       [30-40]%
        Finland       [10-20]%       [5-10]%      [20-30]%      [10-20]%    [10-20]%       [20-30]%
        France        [10-20]%      [10-20]%      [20-30]%      [10-20]%    [10-20]%       [20-30]%
        Italy                                                    [0-5]%     [10-20]%       [20-30]%
        Norway        [20-30]%       [5-10]%      [30-40]%      [20-30]%    [10-20]%       [30-40]%
        Sweden        [20-30]%        [0-5]%      [30-40]%      [20-30]%      [0-5]%       [30-40]%
        UK             [5-10]%      [20-30]%      [20-30]%      [10-20]%    [10-20]%       [30-40]%
       Source: The Notifying Party
23     All market shares are the Notifying Party’s best estimates.
24     See, for instance replies to question E.2 of Q1 – Questionnaire to competitors in Norway; and
       replies to question E.2 of Q2 – Questionnaire to customers in Norway.
                                                     10
 ---pagebreak---      Table 3 - Pitched roof underlays (plastic only), affected markets
                             Underlays all, value                   Underlays all, volume
                                    (EUR)                                   (sqm)
                                    Braas                                   Braas
                    Standard                    Combined    Standard                   Combined
                                   Monier                                 Monier
      Austria        [5-10]%      [20-30]%      [20-30]%     [5-10]%     [10-20]%       [20-30]%
      Denmark       [20-30]%      [10-20]%      [30-40]%    [20-30]%     [10-20]%       [30-40]%
      Estonia         [0-5]%      [20-30]%      [20-30]%      [0-5]%     [20-30]%       [20-30]%
      France        [10-20]%      [10-20]%      [20-30]%    [10-20]%     [10-20]%       [20-30]%
      Italy           [0-5]%      [20-30]%      [20-30]%      [0-5]%     [20-30]%       [20-30]%
      Norway        [20-30]%      [10-20]%      [30-40]%    [10-20]%     [10-20]%       [30-40]%
      Sweden        [10-20]%      [10-20]%      [20-30]%
      UK             [5-10]%      [20-30]%      [30-40]%    [10-20]%     [20-30]%       [30-40]%
     Source: The Notifying Party
     Table 4 - Pitched roof underlays (bitumen only), affected markets25
                             Underlays all, value                   Underlays all, volume
                                    (EUR)                                   (sqm)
                                    Braas                                   Braas
                    Standard                    Combined    Standard                   Combined
                                   Monier                                 Monier
      Norway        [20-30]%       [0-5]%       [30-40]%    [20-30]%      [5-10]%       [30-40]%
      Sweden        [30-40]%       [0-5]%       [30-40]%    [30-40]%       [0-5]%       [30-40]%
     Source: The Notifying Party
(65) In all underlays combined, the merged entity’s market shares remain modest and
     in any case below 30% in all countries except in Denmark, Sweden, Norway and
     the United Kingdom. In the Czech Republic, Italy and Sweden, the market share
     increment brought by the proposed transaction also remains low and at most
     [5-10]%-points.
(66) The merged entity would continue to be challenged by a number of not
     insignificant competitors in all countries where affected markets arise. This
     includes the countries where the merged entity would reach its highest market
     shares, namely in Denmark, Sweden, Norway and the United Kingdom:
        a. In Denmark, competitors include Isola ([10-20]% volume, [10-20]%
             value), Komproment ([5-10]% volume, [5-10]% value) and Nordic
             Waterproofing ([0-5]% volume, [5-10]% value).
        b. In Sweden, competitors include Nordic Waterproofing ([20-30]% volume
             and value), T-Emballage ([10-20]% volume and value) and
             Isola ([10-20]% volume and value).
        c. In Norway, competitors include Isola ([30-40]% volume and value),
             Glava ([5-10]% volume and value) and Nordic Waterproofing ([5-10]%
             volume and value).
        d. In the United Kingdom, competitors include Dupont ([5-10]% volume and
             value), Glidevale ([5-10]% volume and value) as well as Wienerberger
             and Eternit (both [5-10]% volume and value).26
25   The Notifying Party has confirmed that the Parties’ market shares would not be materially
     different even if bitumen flat roof membranes were considered to be part of the same relevant
     product market.
                                                   11
 ---pagebreak--- (67) In plastic underlays only, the merged entity’s market shares remain modest and
     in any case below 30% in all countries except in Denmark, Norway and the
     United Kingdom. In Estonia and Italy, the market share increments brought by
     the proposed transaction also remain small and at most [0-5]%-points.
(68) The merged entity would continue to be challenged by a number of not
     insignificant competitors in all countries where affected markets arise. This
     includes the countries where the merged entity would reach its highest market
     shares, namely Denmark, Norway and the United Kingdom:
        a. In Denmark, competitors include Isola ([10-20]% volume and value),
            Komproment           ([5-10]%        volume        and    value)      and       Nordic
            Waterproofing ([5-10]% volume and value).
        b. In Norway, competitors include Isola ([20-30]% volume and value),
            Glava ([5-10]% volume and value) and BMC ([5-10]% volume and
            value).
        c. In the United Kingdom, competitors include Dupont ([5-10]% volume and
            value), Glidevale ([5-10]% volume and value) as well as Wienerberger
            and Eternit (both [5-10]% volume and value).27
(69) In bitumen underlays only, affected markets would only arise in Norway and
     Sweden. Market share increments in Sweden remain small at [0-5]%-points. In
     Norway, the value market share increment would only be [0-5]%-points while
     the value market share would be [5-10]%-points.
(70) The merged entity would continue to be challenged by a number of not
     insignificant competitors in Norway and Sweden. In Norway competitors
     include Isola ([30-40]% volume, [30-40]% value) and Nordic Waterproofing
     ([10-20]% volume, [5-10]% value). In Sweden, the competitors include Nordic
     Waterproofing ([20-30]% volume and value), T-Emballage ([20-30]% volume
     and value) and Isola ([10-20]% volume, [10-20]% value).28
(71) The market investigation has not revealed any significant competition concerns
     related to the horizontal overlaps in pitched roof underlays. While some
     negative comments were expressed in particular with regard to markets in
     Austria, Denmark, France and Italy, negative comments were not in the majority
     in those countries.29 In addition, even in the countries where some negative
     comments were expressed, market participants did not in general consider the
     Parties as particularly close competitors to each other.30 Moreover, in Austria a
26   All marker shares are the Notifying Party’s best estimates.
27   All marker shares are the Notifying Party’s best estimates.
28   All marker shares are the Notifying Party’s best estimates.
29   Replies to question E.2 of Q1 – Questionnaire to competitors in Norway; replies to question E.2
     of Q2 – Questionnaire to customers in Norway; replies to questions 32 and 33 of Q3 –
     Questionnaire to EEA underlay competitors; and replies to questions E.2 and E.3 of Q4 –
     Questionnaire to EEA underlay customers.
30   Replies to questions 28 and 29 of Q3 – Questionnaire to EEA underlay competitors; and replies
     to questions D.4 and D.5 of Q4 – Questionnaire to EEA underlay customers.
                                                   12
 ---pagebreak---        competitor and a customer even considered that the proposed transaction could
       result in price decreases.31
(72)   Therefore, on balance and in light of the evidence available to it, the
       Commission concludes that the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market with regard to
       pitched roof underlays, including its potential sub-segments of plastic and
       bitumen pitched roof underlays.
3.4.4. Chimneys
(73)   The proposed transaction would lead to affected markets for chimneys in
       Norway and Poland. The Parties’ market shares in the affected markets are
       included in Table 5 and Table 6.
       Table 5 - Chimneys, affected markets in Poland
                             Chimneys (steel), value
                                      (EUR)
                                      Braas
                      Standard                   Combined
                                     Monier
         All
                        [0-5]%      [20-30]%      [30-40]%
         chimneys
         Concrete
         /ceramic      [5-10]%      [30-40]%      [40-50]%
         chimneys
       Source: The Notifying Party
       Table 6 - Chimneys, affected markets in Norway
                               Chimneys all, value
                                      (EUR)
                                      Braas
                      Standard                   Combined
                                     Monier
         All
                       [5-10]%      [30-40]%      [40-50]%
         chimneys
         Steel
                       [5-10]%      [30-40]%      [40-50]%
         chimneys
         Concrete
         /ceramic     [10-20]%      [20-30]%      [30-40]%
         chimneys
       Source: The Notifying Party
(74)   In Poland, there is no overlap in steel chimneys as neither of the Parties supply
       them in Poland. In concrete/ceramic chimneys, Braas Monier has a notable
       market position prior to the proposed transaction which is also reflected in the
       market shares for that potential segment of the market. The market share
       increment brought by the proposed transaction would nonetheless be small at
       [5-10]%-points.
(75)   The market for concrete/ceramic chimneys in Poland is relatively fragmented.
       However, the merged entity would continue to be challenged by a number of not
       insignificant competitors whose market shares are also higher than the market
31     Replies to questions 32 and 33 of Q3 – Questionnaire to EEA underlay competitors; and replies
       to questions E.2 and E.3 of Q4 – Questionnaire to EEA underlay customers
                                                     13
 ---pagebreak---        share increment brought by the proposed transaction. These include, for
       instance, Leier ([5-10]%) as well as Tona, Plewa and IBF (each [5-10]%).32
(76)   The market investigation has not revealed any significant competition concerns
       related to chimneys in Poland. In particular, no customer expressed negative
       views about the transaction. One customer even saw the transaction as a positive
       development for themselves. While some competitors drew attention to the size
       of the merged entity, they did not refer to clear negative effects such as
       increased prices.33
(77)   In Norway, potential markets for both steel chimneys and concrete/ceramic
       chimneys would be affected as well as the potential overall market. Braas
       Monier has a notable market position prior to the proposed transaction which is
       also reflected in the market shares. The Parties achieve their highest combined
       market share in steel chimneys but the market share increment brought by the
       proposed transaction would remain modest at [5-10]%-points.
(78)   The merged entity would continue to be challenged in Norway by a number of
       not insignificant competitors. In steel chimneys those include
       Nordpeis ([20-30]%), Peisselskabet [10-20]% and Jotul ([10-20]%) and in
       concrete/ceramic chimneys Weber ([40-50]%) and BMC ([10-20]%). In steel
       and concrete/ceramic chimneys together the most important competitors are
       Weber ([20-30]%), Nordpeis ([10-20]%) and Peisselskabet ([5-10]%).34
(79)   The market investigation has not revealed any significant competition concerns
       related to chimneys in Norway. While one customer referred to potential price
       increases in steel chimneys, that view was not shared by other market
       participants. One customer also explained that there is constant pressure in
       Norway even from suppliers located outside of the country.35
(80)   Therefore, on balance          and in light of the evidence available to it, the
       Commission concludes           that the proposed transaction does not give rise to
       serious doubts as to its       compatibility with the internal market with regard to
       chimneys, including its        potential sub-segments of steel and concrete/ceramic
       chimneys.
3.4.5. Certain pitched roof accessories
(81)   The proposed transaction would give rise to affected markets with regard to
       certain pitched roof accessories in Norway. The Parties’ market shares in the
       affected markets are included in Table 7.
32     All market shares are the Notifying Party’s best estimates.
33     Replies to questions E.1 and E.2 of Q5 – Questionnaire to chimney competitors Poland; and
       replies to questions E.1 and E.2 of Q6 – Questionnaire to chimney customers Poland.
34     All market shares are the Notifying Party’s best estimates.
35     Replies question E.2 of Q3 – Questionnaire to EEA underlay competitors, and replies to
       question E.2 of Q4 – Questionnaire to EEA underlay customers.
                                                     14
 ---pagebreak---        Table 7 - Pitched roof accessories, affected markets
                                 Valleys, value                      Ridges and Hips, value
                                      (EUR)                                   (EUR)
                                      Braas                                   Braas
                     Standard                    Combined    Standard                    Combined
                                    Monier                                  Monier
        Norway       [20-30]%        [0-5]%      [20-30]%     [5-10]%      [20-30]%      [20-30]%
       Source: The Notifying Party
(82)   The Commission observes that the combined market shares in both of the
       affected markets remain modest and the market share increments remain small
       and at most at [5-10]%-points.
(83)   The market investigation has not revealed any significant competition concerns
       related to pitched roof accessories in Norway. None of the market participants
       responding referred to any effects related to valleys or ridges and hips.36
(84)   Therefore, on balance and in light of the evidence available to it, the
       Commission concludes that the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market with regard to
       valleys or ridges and hips.
3.4.6. Wind barriers
(85)   The proposed transaction would give rise to an affected market with regard to
       wind barriers in Norway. The Parties’ market shares in the affected market are
       included in Table 8.
       Table 8 - Wind barriers, affected markets
                              Wind Barriers, value                   Wind Barriers, volume
                                      (EUR)                                   (sqm)
                                      Braas                                   Braas
                     Standard                    Combined    Standard                    Combined
                                    Monier                                  Monier
        Norway       [20-30]%        [0-5]%      [20-30]%    [20-30]%        [0-5]%      [20-30]%
       Source: The Notifying Party
(86)   The Commission observes that the market share increment brought by the
       proposed transaction would be small, less than [0-5]%. It is thus unlikely that
       the proposed transaction would significantly change the market structure or the
       Parties’ market positions.
(87)   The Notifying Party has explained that the market shares only include plastic
       foil / membrane –style wind barriers. Should other types of wind barriers be
       considered to belong to the same relevant market, that would decrease the
       Parties’ market shares as they do not supply those types of wind barriers.
(88)   The results of the market investigation support the absence of competition
       concerns related to wind barriers. None of the market participants responding
       referred to any effects related to wind barriers.37
36     Replies to question E.2 of Q1 – Questionnaire to competitors in Norway; and replies to question
       E.2 of Q2 – Questionnaire to customers in Norway.
                                                    15
 ---pagebreak--- (89)   Therefore, on balance and in light of the evidence available to it, the
       Commission concludes that the proposed transaction does not give rise to
       serious doubts as to its compatibility with the internal market with regard to
       wind barriers.
3.4.7. Non-Horizontal effects
(90)   The Commission has further investigated whether the proposed transaction
       could give rise to portfolio effects, in particular due to the combination of
       Standard’s flat roof offering and Braas Monier’s pitched roof offering.
(91)   The Commission recalls that conglomerate mergers do not in the majority of the
       cases lead to any competition problems even if they in certain specific cases
       may be harmful to competition.38
(92)   The most common competition problem related to conglomerate mergers is that
       of foreclosure. The combination of products in related markets may confer on
       the merged entity the ability and incentive to leverage a strong market position
       form one market to another by means of tying or bundling or other exclusionary
       practices.39
(93)   The Notifying Party has submitted that the proposed transaction would not give
       rise to portfolio effects. According to the Notifying Party, there are also other
       suppliers that have product portfolios spanning both pitched roof and flat roof
       products in countries where the proposed transaction gives rise to affected
       markets.
(94)   A limited number of competitors have noted that the merged entity would have a
       significant product portfolio.40
(95)   Nonetheless, the market investigation has not revealed that either of the Parties
       would have a definite ‘must have’ product or otherwise such a market position
       in any roofing products that would confer it a clear ability to engage in
       significant exclusionary bundling or tying. In all of the roofing markets
       considered in this decision, the Parties will continue to be challenged by a
       number of competitors.
(96)   Further, and with regard to pitched roof underlays and flat roof membranes, the
       results of the market investigation suggest that it is not uncommon for the same
       suppliers to supply them both even if some suppliers specialise.41
37     Replies to question E.2 of Q1 – Questionnaire to competitors in Norway; and replies to question
       E.2 of Q2 – Questionnaire to customers in Norway. See also replies to question A.4 of Q1 –
       Questionnaire to competitors in Norway.
38     See, for instance the Commission Guidelines on the assessment of non-horizontal mergers under
       the Council Regulation on the control of concentration between undertakings, OJ C 265,
       18.10.2008, p. 6 (‘Non-Horizontal Guidelines’), paragraph 91.
39     See, for instance Non-Horizontal Guidelines, paragraphs 93 and 94.
40     See, for instance replies to question 35 of Q3 – Questionnaire to EEA underlay competitors.
41     Replies to question B.9 of Q2 – Questionnaire to customers in Norway, and replies to
       question B.1 of Q4 – Questionnaire to EEA underlay customers.
                                                      16
 ---pagebreak--- (97) Therefore, on balance and in light of the evidence available to it, the
     Commission concludes that the proposed transaction does not give rise to
     serious doubts as to its compatibility with the internal market with regard to
     non-horizontal effects.
4.   CONCLUSION
(98) For the above reasons, the European Commission has decided not to oppose the
     notified operation and to declare it compatible with the internal market and with
     the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of
     the Merger Regulation and Article 57 of the EEA Agreement.
                                                  For the Commission
                                                  (signed)
                                                  Margrethe VESTAGER
                                                  Member of the Commission
                                            17