CELEX: 31996M0735
Language: en
Date: 1996-07-03 00:00:00
Title: Commission Decision of 03/07/1996 declaring a concentration to be compatible with the common market (Case No IV/M.735 - BPB / Isover) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31996M0735

Commission Decision of 03/07/1996 declaring a concentration to be compatible with the common market (Case No IV/M.735 - BPB / Isover) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 226 , 03/08/1996 P. 0006

  COMMISSION DECISION of 03/07/1996 declaring a concentration to be compatible with the  common market (Case No IV/M.735 - BPB / Isover) according to Council Regulation (EEC) No  4064/89   (Only the English text is authentic).  The paper version of the decision is available through the sales offices of the Office of Official  Publications of the European Communities.  PUBLIC VERSION  MERGER PROCEDURE  ARTICLE 6(1)(a) DECISION  To the notifying parties  Dear Sirs,  Subject :<ind> Case No IV/M.735 - BPB/Isover  <ind> <ind> Notification of 31.05.1996 pursuant to Article 4 of Council Regulation No 4064/89  1.<ind> On 31 May 1996 BPB Industries plc (BPB) and Isover St. Gobain (ISG), a wholly owned  subsidiary of Compagnie de Saint-Gobain jointly notified a transaction whereby Glasuld A/S,  controlled by the Saint-Gobain Group, will acquire joint control of the company Gyproc Insulation  Limited (GIL), an English subsidiary of BPB, and of Moy Insulation Limited (Moy), an Irish  subsidiary of BPB.  2.<ind> After examination of the notification, the Commission has concluded that the notified  operation does not constitute a concentration, and therefore does not fall within the scope of the  Merger Regulation.  I.<ind> THE PARTIES  3.<ind> BPB is a English holding company of a major Group having worldwide interests notably in  gypsum products, other building materials and paper and board.  4.<ind> ISG is the lead company of the Insulation Division of the Saint-Gobain Group. ISG  manufactures and sells mineral wool products for insulation, agriculture and automobile  applications. The Insulation Division also produces and sells matt tissue materials as well as acoustic  ceilings.  5.<ind> Glasuld A/S is a Danish manufacturer and supplier of mineral wool products for insulation  of buildings and industrial installations and for other applications.  6. <ind> GIL's business is the manufacture and supply of mineral wool products for insulation of  buildings and industrial installations.  7.<ind> Moy's business is the manufacture and supply of mineral wool products for insulation of  buildings and industrial installations and matt tissue products.   II.<tab>THE OPERATION  8.<ind> The foreseen operation will result in the acquisition by ISG, through Glasuld, of a 49.9%  participation in GIL and a 50% participation in Moy.  III.<tab>COMMUNITY DIMENSION  9.<ind> BPB and the St. Gobain group have an aggregate worldwide turnover of more than ECU  5  billion. Each of them has a Community-wide turnover in excess of ECU 250 million, but they do not  achieve more than two-thirds of their aggregate Community-wide turnover within one and the same  Member State. The notified operation therefore has a Community dimension according to Article  1(2) of the Merger Regulation.  IV.<ind> THE CONCENTRATION  <tab>Joint control  10.<ind> According to Article 6.01 of the Shareholders Agreement, the share capital split between  BPB and Glasuld will be such as to confer 50% of the voting rights on both BPB and Glasuld.  In  addition, the parent companies will be equally represented on the board of directors of both GIL and  Moy, and decisions on business plans and annual budgets will be made by simple majority.  Hence  both GIL and Moy will be jointly controlled by BPB and ISG (through Glasuld).  <tab>Risk of coordination  11.<ind> The proposed joint operation affects the product range for insulation (thermal and  acoustic) for residential and commercial buildings (floors, walls, roofs, heating, ventilation and air  conditioning) and industrial applications. The insulation product range comprises mineral wool  products (glass fibre and rock fibre) and a variety of polystyrene, polyurethane, extruded polystyrene,  phenolic foam and other insulation products generically known as foam insulation.  The other  affected product is matt tissue.  12.<ind> Insulation is used in a wide variety of situations and in a wide variety of types of building.  Glass fibre and rock fibre are almost universally interchangeable. The interchangeability of foam  products and mineral fibre products exists for the vast majority of applications, according to a survey  of producers and consumers of fibre and foam insulation products, carried out by the Commission.  13.<ind> The relevant product markets are therefore those for insulation products, both mineral  fibres and foam, and matt tissue products.  ISG is active throughout Europe in these products,  whereas BPB is active only through GIL, Moy and a French subsidiary named Isobox, which  produces foam insulation products.  14.<ind> The Commission has carried out a survey of producers and consumers of insulation  products in order to assess the scope of the relevant geographic markets.  The Commission's survey  concentrated on the extent to which different national building and technical specifications and  transport costs might limit the scope of the relevant geographic market, and the extent to which  customers would switch to a more distant supplier in the event of a small but significant price rise of  insulation products.  The results of the survey indicated that the relevant geographic markets are  probably regional, and that the UK, Ireland and some northern continental European countries  constitute one relevant region.  Insulation products can be profitably transported over distances  which transcend national boundaries, and can be adapted to different national specifications at a cost  which does not exclude profitable imports and exports between Member States (inter-country trade  flows already take place).  Consumers are sensitive to price rises to the extent that they are prepared  to purchase from suppliers located in other Member States.  15.<ind> As already stated, ISG is active throughout Europe in insulation products;  GIL and Moy  are active mainly, but not exclusively, in the UK and Ireland in the same product market, and BPB  retains activities on the same product market through its French subsidiary Isobox.  In view of the  Commission's above-mentioned findings on the geographic scope of insulation product markets, and  of the geographic proximity of the UK, Ireland and France, there is a significant risk of coordination  of the competitive behaviour of ISG and BPB, since both companies retain activities on the same  product market as GIL and Moy to a significant extent (ISG has a significant market share in several  EU Member States [Deleted for publication], and BPB's subsidiary Isobox has a significant share of  insulation product sales in France [Deleted for publication].  The combined market share of the two  parents would translate to a share above a "de minimis" level even on a pan-European basis.   Furthermore, the activities of the joint venture are significant in comparison with the retained  activities of BPB and ISG on insulation product markets.  V.<ind> CONCLUSION  11.<ind> Based on the above, the Commission has concluded that the notified operation does not  constitute a concentration within the meaning of Article 3 of the Merger Regulation.  This decision  is adopted in application of Article 6(1)(a) of Council Regulation No 4064/89.  <tab><tab><tab>For the Commission,