CELEX: 32021M10263
Language: en
Date: 2021-07-16 00:00:00
Title: Commission Decision of 16/07/2021 declaring a concentration to be compatible with the common market (Case No COMP/M.10263 - ARDIAN / DELI HOME) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                               Brussels, 16.7.2021
                                                               C(2021) 5456 final
                                                                                 PUBLIC VERSION
                                                                 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                                                                 information omitted has been replaced by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.
                                                               Ardian France SA
                                                               20, Place Vendôme
                                                               75001 Paris
                                                               France
Subject:             Case M.10263 – ARDIAN / DELI HOME
                     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 16 June 2021, the European Commission (‘the Commission’) received
          notification of a concentration pursuant to Article 4 of Regulation (EC) No 139/2004
          (‘the Merger Regulation’), which would result from a proposed transaction by which
          Ardian France SA (‘Ardian’ or ‘the Notifying Party’) intends to acquire sole control,
          within the meaning of Article 3(1)(b) of the Merger Regulation, over the whole of
          Deli Home Holding B.V. (‘Deli Home’ or ‘the Target’) by way of a purchase of
          shares (‘the Transaction’). In this Decision, Ardian and Deli Home are referred to as
          ‘the Parties'. The undertaking that would result from the Transaction is referred to as
          ‘the merged entity’.
1     OJ L 24, 29.1.2004, p. 1. With effect from 1 December 2009, the Treaty on the Functioning of the
      European Union (“TFEU”) 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”).
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--- 1.   THE PARTIES
(2)  Ardian, headquartered in Paris, France, is an international private equity asset
     management company that is fully owned by the Ardian Group (formerly known as
     AXA Private Equity Group).
(3)  Deli Home, headquartered in Gorinchem, the Netherlands, supplies timber-based
     home improvement products to retailers, builders’ merchants and online markets.
     Deli Home has production facilities in the Netherlands, Poland and Czechia.
     Deli Home is active in 20 countries with over 1 250 employees.
2.   THE CONCENTRATION
(4)  On 2 April 2021, the Parties entered into a share purchase agreement by which
     Ardian is to acquire sole control over Deli Home, which is, at present, solely
     controlled by NPM Capital, a private equity fund indirectly controlled by SHV. The
     purchase price amounts to an equity value of EUR […] million.
(5)  After the Transaction, Ardian will hold […]% of Deli Home’s shares while
     Deli Home’s management will hold the remaining […]%. The minority shares that
     management will hold after the Transaction will not lead to any control rights, and
     only entitle management to typical minority protection rights. Therefore, after the
     Transaction, Ardian will have sole control over Deli Home.
(6)  It follows that the Transaction would result in a concentration within the meaning of
     Article 3(1)(b) of the Merger Regulation.
3.   UNION DIMENSION
(7)  The Parties have a combined aggregate worldwide turnover of more than EUR 5 000
     million (Ardian: EUR […] billion and Deli Home: EUR […] million). Each of them
     has a Union-wide turnover in excess of EUR 250 million (Ardian EUR […] billion
     and Deli Home EUR […] million). Neither of the Parties achieves more than two-
     thirds of their aggregate Union-wide turnover within one and the same Member
     State.
(8)  The concentration has, therefore, a EU dimension within the meaning of Article 1(2)
     of the Merger Regulation.
4.   M ARKET DEFINITION
4.1. Activities of the Parties
(9)  The Transaction does not give rise to any horizontal overlap, as Ardian and
     Deli Home are not active in the same markets.
(10) Ardian jointly controls – together with Goldentree Asset Management LP – the
     Maxeda Group (‘Maxeda’). Maxeda is active on the downstream markets for the
                                               2
 ---pagebreak---          retail sales of do-it-yourself (‘DIY’) products3 to non-professional customers
         (i.e. consumers) via its DIY stores. Maxeda operates under the brands ‘Brico’ and
         ‘Brico Planit’ in Belgium and Luxemburg, and under the brand ‘Praxis’ in the
         Netherlands. Maxeda has 345 DIY stores in Belgium, Luxembourg and the
         Netherlands.
(11)     Deli Home is active in the supply of wood-based products to retailers (including
         DIY stores in Belgium and in the Netherlands) and to wholesale customers including
         general builders’ merchants and to a limited extent construction and renovation
         companies.4 Deli Home is, therefore, active in a number of upstream markets in
         respect of which Ardian is – through Maxeda – active downstream.
(12)     Accordingly, the Transaction does give rise to vertical relationships in Belgium and
         in the Netherlands between the activities of Deli Home and those of Maxeda.
4.2.     Product market definition
4.2.1. Introduction
(13)     Section 4.2.2 will outline the product market definitions linked to the step of the DIY
         value chain that relates to the production level (namely the upstream markets), where
         manufacturers produce building materials and DIY products, which are sold to
         wholesalers and/or retailers. Deli Home both produces and wholesales certain DIY
         products, namely: (i) floors and flooring materials, (ii) timber construction materials,
         (iii) doors, (iv) storage furniture, and (v) insect screens.
(14)     Section 4.2.3 will outline the product market definition linked to the step in the value
         chain, namely the retail level where DIY retailers sell DIY products to end
         customers (that is downstream markets). Maxeda is active in the downstream market
         for the retail sale of DIY products to non-professional customers.
4.2.2. Wholesale sales to retailers (upstream markets)
(15)     Deli Home is active in the upstream markets for the supply to retailers (including
         DIY retailers such as Maxeda) of (i) floors and flooring materials, (ii) timber
         construction materials, (iii) doors, (iv) storage furniture, and (v) insect screens.
4.2.2.1. The Commission’s past practice
(16)     In CVC/Dankse Traelast, the Commission considered the segmentation of the
         wholesale distribution of building materials by product category, such as, for
         example, timber, insulation, watering equipment, pipes and fittings, plumbing
         products etc.5 In Sonae Industria/Hornitex, 6 the Commission considered specifically
         markets in the wood-based industry.
3    DIY products include, e.g., products for home and garden, including ironware and tools, decorative
     products, electrical goods and lighting, sanitary equipment, tools, building material, carpentry and
     gardening products.
4    Deli Home has also limited number of online sales to downstream customers. In 2020, these sales
     amounted to approximately [0-10]% of Deli Home’s revenues (see Form CO, paragraph 85).
5    M.3142 – CVC/DANKSE TRAELAST.
6    M.4165 – Sonae Industria/Hornitex, paragraph 6.
                                                       3
 ---pagebreak--- (17)    With respect to floors and flooring materials, in previous decisions the
        Commission considered that flooring and flooring materials constitute a distinct
        market from other building materials.7 The Commission also considered a further
        distinction by the type of floor (e.g. laminate, wood, PVC, etc.) and potential
        sub-segmentations thereof (e.g. laminate used for private or for commercial
        buildings), but it ultimately left open the exact definition of this product market.8
(18)    With respect to timber construction materials, in previous decisions,9 the
        Commission considered that timber materials such as plywood, hardboard, raw
        particleboards and coated particleboards, decorative laminates and wood-based panel
        components for the furniture and construction industry are likely to belong to
        separate product markets. Ultimately, the Commission left open the exact definition
        of this product market.
(19)    In Mohawk Industries/International Flooring Systems, the Commission considered
        in details wood products made from compressed wood fibres (also known as
        fibreboards) and identified a number of possible sub-segmentations, including for
        example the distinction between Medium Density Fibreboard (‘MDF’) and High
        Density Fibreboard (‘HDF’), and between different sizes of MDF. Ultimately, the
        Commission left the exact definition of the product markets open.
(20)    With respect to doors, storage furniture, and insect screens no meaningful
        Commission’s decision is available.
4.2.2.2. The Notifying Party’s view
(21)    The Notifying Party submits that the relevant product markets are to be defined
        according to product categories of (i) floors and flooring materials, (ii) timber
        construction materials, (iii) doors, (iv) storage furniture, and (v) insect screens,
        without any further distinction of narrower segments due to the high degree of
        demand-side and supply-side substitutability. 10
(22)    For floors, timber construction materials and doors, however, the Notifying Party
        distinguishes further hypothetical segmentations as follows:
        (a)      for floors and flooring materials: (i) wooden floors, (ii) laminate floors and
                 (iii) vinyl (PVC) floors;11
        (b)      for timber construction materials: (i) wood-based boards, (ii) wood-based
                 panel components for the furniture and construction industry and (iii) other
                 wood/timber construction materials. With respect to wood-based boards and
                 panels, a further sub-segmentation is considered, according to: particleboard,
                 MDF and HDF, OSB, e. Hardboard; f. Softboard; and g. Sawn soft wood.12
7   See for example: M.2051 – Nordic Capital/HIAG/Nybron/Bauwerk; M.4048 – Sonae
    Indústria/Tarkett/JV; M.7529 – Mohawk Industries/International Flooring Systems .
8   M.1253 – Paribas/JDC Sarl/GERFLOR; M.2051 – Nordic Capital/HIAG/Nybron/Bauwerk; M.7529 –
    Mohawk Industries/International Flooring Systems .
9   M.4165 – Sonae Industria/Hornitex; M.7529 – Mohawk Industries/International Flooring Systems .
10 Form CO, paragraphs 130, 146, 163, 174, 197 and 210.
11 Form CO, paragraph 147.
12 Form CO, paragraphs 168-169.
                                                       4
 ---pagebreak--- 4.2.2.3. The Commission’s assessment
(23)    The Commission agrees with the Notifying Party that, in line with the Commission’s
        past practice, each of the product categories referred to in Section 4.2.2 likely
        constitutes separate product markets.
(24)    Moreover, the results of the market investigation suggest that further segmentations
        might be relevant for the present case. Further distinctions, as indicated by certain
        market participants, may be based on (i) the intended use of the product (for
        example, for doors, the distinction is between external or internal use); (ii) the
        material used; (iii) the sale channel (i.e. if it is intended to be sold through DIY
        stores or through builders’ merchants); and (iv) whether the products are sold
        branded or unbranded.13
(25)    The relevance of the segmentations outlined in paragraph 24 seems to be further
        corroborated by an internal document of Deli Home, produced in its ordinary course
        of business.14 For each of the product category that it sells, Deli Home distinguishes
        between sale channels (that is to say if it is sold to DIY retailers, to builder
        merchants, or directly to professional customers) and if the product is sold as
        branded or as unbranded. While distinctions among intended uses and material used
        are also adopted, these segmentations would typically depend on each product
        category. By way of an example, doors are sub-divided into internal and external,
        but no distinction is made according to the material used to manufacture them.
        Conversely, floors and flooring materials are distinguished by material, but not by
        intended use.
(26)    In any event, based on the results of the market investigation, the Commission
        considers that alternative segmentations of the markets for wholesale sales to
        retailers does not affect the outcome of the competitive assessment of the
        Transaction. Therefore, for the purposes of this Decision, the exact product
        definition of this market may be left open.
4.2.3. Retail sale to non-professional customers through DIY stores (downstream markets)
4.2.3.1. The Commission’s past practice
(27)    In previous decisions,15 the Commission considered that the downstream markets for
        the retail sale of building materials can be distinguished according to the sale
        channel through which products are sold, namely: (i) retail sales to professional
        customers (primarily through builders’ merchants); and (ii) retail sale to
        non-professional customers (primarily through DIY stores).
(28)    First, with respect to (i), the Commission considered in previous decisions a further
        segmentation between specialist and generalist retailers. 16
(29)    Second, with respect to (ii), the Commission considered in previous decisions the
        markets for the distribution of DIY and home improvement products to
13  Replies to Q2 - questionnaire to competitors, questions 6-6.2.
14  Form CO, Annex 16.
15 See for example, M.9406 – Lone Star – Stark Group/Saint-Gobain BDD; M.7703 – PontMeyer/DBS;
    M.3943 Saint Gobain/BPB; M.3407 – Saint Gobain/Dahl; and M.3142 – CVC/Danske Traelast.
16 Case COMP/M.7703 – Pontmeyer/DBS, Commission decision of 20 August 2015, paragraph 9.
                                                          5
 ---pagebreak---          non-professional customers, and identified sub-segmentation by product groups,
         including the specific product group of building materials. 17
(30)     With particular regard to building materials, the Commission previously considered
         that, while most building materials are sold by generalists and DIY stores, each
         product serves a specific purpose and is not substitutable with other building
         materials.18 Therefore, while leaving the exact definition open, the Commission
         considered plausible relevant markets according to the product categories of building
         materials.
(31)     The Commission also previously considered a segmentation according to distinct
         sale channels and types of stores, namely: (i) large DIY stores; (ii) large food stores;
         (iii) retailers specialised in one type of products; and (iv) convenience stores.19
4.2.3.2. The Notifying Party’s view
(32)     The Notifying Party submits that, contrarily to the Commission’s past practice, the
         relevant product market should be limited to the retail sales of building materials and
         DIY products and that no further segmentations of that market would be relevant or
         necessary.20
(33)     More particularly, the Notifying Party argues that, for example, a distinction by
         product type or material is not relevant because from a demand-side perspective
         most customers purchase a variety of DIY products and, from a supply-side
         perspective, most retailers offer a variety of DIY products. The Notifying Party also
         argues that a distinction by sale channels (i.e. sales to non-professional customers via
         DIY stores and sales to professional customers via builders’ merchants) would not
         be appropriate because there is an ongoing convergence of traditional retailers and
         wholesalers to sell to both professional and non-professional customers. Ultimately,
         the Notifying Party considers that if segmentations were to be considered, the
         narrowest relevant market would be the market for retail sales of DIY products to
         non-professional customers via DIY stores.
4.2.3.3. The Commission’s assessment
(34)     The Commission considers that, consistently with its past practice, plausible relevant
         product markets should be defined according to sale channels (namely by
         distinguishing between sales made through DIY stores and those made through
         builders’ merchants). Furthermore, within the market for retail sales to
         non-professional customers through DIY stores, a further distinction according to
         product categories might be relevant.
(35)     First, the results of the market investigation largely supports the distinction between
         retail sales to professional customers (primarily through builders’ merchants) and
         retail sales to non-profession customers (primarily through DIY shops and online
17  M.7283 – Kingfisher/Mr Bricolage, paragraphs 13-14; M.2898 – Leroy Merlin/Brico, paragraph 9.
18  See for example: M.3943 Saint Gobain/BPB, paragraph 17; M.8733 Lone Star/Stark, Section 4.2.5;
19 M.7283 Kingfisher/Mr Bricolage, paragraph 14. Translated from French language. The original text reads:
    (i) grandes surfaces de bricolage (« GSB »), (ii) grandes surfaces alimentaires (« GSA »), (iii) magasins
    spécialisés dans un seul type de produit, et (iv) magasins de proximité ».
20 Form CO, paragraph 131.
                                                            6
 ---pagebreak---          sales).21 The Notifying Party has not provided, in this respect, any evidence that
         current market conditions should differ compared to the market conditions prevailing
         at the time of the Commission’s decisions described in Section 4.2.3.1. Further, the
         Notifying Party has not provided market shares aggregated for both DIY stores and
         builders merchants. This suggests that, in their ordinary course of business, the
         Parties consider the distinction between sale channels to be relevant.
(36)     Second, regarding a possible segmentation by product categories, the market
         investigation confirmed that certain distinctions by categories and, within each
         category, by intended use, material used, etc. might be relevant in the present case.22
         Furthermore, and as a matter of reasoning, the Commission recalls that according to
         the Commission’s Notice on the definition of relevant markets, 23 supply-side
         substitutability implies that “suppliers are able to switch production to the relevant
         products and market them in the short term without incurring significant costs or
         risks in response to small and permanent changes in relative prices”. Therefore,
         contrarily to what the Notifying Party argues, the mere fact that most DIY stores
         offer a wide range of products does not necessarily imply supply-side substitutability
         to the extent that all the products they sell belong to the same product market.
(37)     In any event, based on the results of the market investigation, the Commission
         considers that alternative segmentations of the markets for retail sale to
         non-professional customers through DIY stores does not affect the outcome of the
         competitive assessment of the Transaction. Therefore, for the purposes of this
         Decision, the exact product definition of this market may be left open.
4.3.     Geographic market definition
4.3.1. Wholesale sales to retailers (upstream markets)
4.3.1.1. The Commission’s past practice
(38)     In Pontmeyer/DBS, the Commission considered that the upstream market for
         wholesale sales to retailers are predominantly national.24 In CVC/Fankse Traelast,
         the Commission has also considered the wholesale of building materials (for all
         products) to be at least national but possibly wider, including certain neighbouring
         countries.25
(39)     With respect to the supply of floors and flooring materials to retailers, the
         Commission considered the relevant geographic market for all types of flooring to be
         at least EEA-wide in scope, but left open the exact definition of the market.26
(40)     With respect to the supply of timber construction materials to retailers, the
         Commission considered that the geographic markets for the various timber
21   Replies to Q1 - questionnaire to customers, question 7; Replies to Q2 - questionnaire to competitors,
     question 7.
22   Replies to Q1 - questionnaire to customers, question 6.
23   Commission Notice on the definition of relevant market for the purposes of Community competition law,
     paragraph 20.
24   M.7703 – Pontmeyer/DBS, paragraphs 17 – 22.
25   M.3142 – CVC/Dankse Traelast, paragraphs 14-15.
26   M.4525 – Kronospan/Constantia, paragraphs 36-37; M.6871 – Mohawk Industries/Spano Invest,
     paragraphs 49–50; M.4048 Sonae Industria/Tarkett/JV, paragraphs 17 – 18.
                                                           7
 ---pagebreak---         construction materials were wider than national and at least cross-border regional.
        Regional markets that the Commission previously considered were circular
        catchment areas drawn with a radius of at least 500 km around a production
        facility.27 Other regional markets were considered for a travel range of 500 and
        1,000 km from a facility.28 Ultimately, the Commission left the exact definition of
        the relevant geographic markets open.
(41)    With respect to the supply of doors, storage furniture, and insect screens to
        retailers, no meaningful Commission’s decision is available.
4.3.1.2. The Notifying Party’s view
(42)    The Notifying Party submits that for the supply of various products to retailers the
        geographic scope of the market is wider than national. 29
(43)    With respect to the supply of floors and flooring materials to retailers, the
        Notifying Party submits that the relevant market is at least EEA-wide in scope.30
(44)    With respect to the supply of timber construction materials to retailers, the
        Notifying Party submits that the relevant market is at least EEA-wide in scope.31
(45)    With respect to the supply of doors,32 storage furniture,33 and insect screens 34 to
        retailers, the Parties submit that the relevant markets are at least EEA-wide in scope.
4.3.1.3. The Commission’s assessment
(46)    With respect to the supply of floors and flooring materials to retailers, while
        a number of respondents to the market investigation indicated that the markets are
        national or global in scope, the majority of respondents considers that the markets
        are EEA-wide in scope.35
(47)    With respect to the supply of timber construction materials to retailers, while
        a number of respondents to the market investigation indicated that the markets are
        national or global in scope, the majority of respondents considers that the markets
        are EEA-wide in scope.36
(48)    With respect to the supply of doors to retailers, while a number of respondents to the
        market investigation indicated that the markets are in scope, the majority of
        respondents considers that the markets are national in scope for both interior and
27  M.7529 – Mohawk Industries/International Flooring Systems, paras. 61 – 65.
28  M.4165 – Sonae Industria/Hornitex, paragraphs 6 – 11.
29  Form CO, paragraph 130.
30  Form CO, paragraph 148.
31  Form CO, paragraph 170.
32  Form CO, paragraph 185.
33  Form CO, paragraph 200.
34  Form CO, paragraph 212.
35  Replies to Q1 - questionnaire to customers, questions 8 and 8.1; Replies to Q2 - questionnaire to
    competitors, questions 9 and 9.1.
36  Replies to Q1 - questionnaire to customers, questions 8 and 8.1; Replies to Q2 - questionnaire to
    competitors, questions 9 and 9.1.
                                                        8
 ---pagebreak---          exterior doors.37 This reflects the national character of trade standards for the
         installation of doors, which has consistently emerged over the course of the market
         investigation.38
(49)     With respect to the supply of storage furniture to retailers, while the majority of
         Deli Home’s customers who responded to the market investigation stated that the
         markets are EEA-wide in scope, the majority of competitors indicates that they
         mostly sell their products in the country of manufacture.39
(50)     With respect to the supply of insect screens to retailers, while a number of
         respondents to the market investigation indicated that the markets are national or
         global in scope, the majority of respondents considers that the markets are EEA-wide
         in scope.40
(51)     In any event, based on the results of the market investigation, the Commission
         considers that the exact geographic market definition of the markets for wholesale
         sales to retailers do not affect the outcome of the competitive assessment of the
         Transaction. Therefore, for the purposes of this Decision, the exact geographic
         definition of these markets may be left open.
4.3.2. Retail sale to non-professional customers through DIY stores (downstream markets)
4.3.2.1. The Commission’s past practice
(52)     In Wolseley/Pinault Bois & Materiaux, the Commission considered local markets for
         the retail distribution of DIY products via DIY stores.41
(53)     In particular, in Pontmeyer/DBS, the Commission considered local markets as
         corresponding to the catchment area with a radius of 30 km from a store’s location. 42
4.3.2.2. The Notifying Party’s view
(54)     The Notifying Party submits that the geographic scope of the relevant downstream
         markets for the retail sale to retailers (such as DIY stores) or to wholesalers should
         be national for the following reasons:43 (i) lack of horizontal overlaps between the
         activities of Deli Home and those of Maxeda; (ii) various catchment areas work as
         a chain of substitution from a supply side perspective; (iii) presence of central
         procurement, pricing and offers among DIY retailers like Maxeda; and (iv)
         franchisees are subject to central procurement and pricing.
37  Replies to Q1 - questionnaire to customers, questions 8 and 8.1; Replies to Q2 - questionnaire to
    competitors, questions 9 and 9.1.
38  Non-confidential minutes of a call with a market participant, 10 June 2021; Non -confidential minutes of a
    call with a market participant, 26 May 2021.
39  Replies to Q1 - questionnaire to customers, questions 8 and 8.1; Replies to Q2 - questionnaire to
    competitors, questions 9 and 9.1.
40  Replies to Q1 - questionnaire to customers, questions 8 and 8.1; Replies to Q2 - questionnaire to
    competitors, questions 9 and 9.1.
41  M.3184 – Wolseley/Pinault Bois & Materiaux, paragraph 22.
42  M.7703 – Pontmeyer/DBS, paragraph 21.
43  Form CO, paragraph 133.
                                                         9
 ---pagebreak--- 4.3.2.3. The Commission’s assessment
(55)     With respect to the retail sale to non-professional customers through DIY stores,
         a number of respondents submit that these markets are local in scope (namely, with
         a 30 km radius from the store), whereas others consider them to be national.44
(56)     In any event, based on the results of the market investigation, the Commission
         considers that the exact geographic market definition for the markets for retail sale to
         non-professional customers through DIY stores do not affect the outcome of the
         competitive assessment of the Transaction. Therefore, for the purposes of this
         Decision, the exact geographic definition of these markets may be left open.
4.4.     Conclusions on relevant markets
(57)     In conclusion, the Commission considers that, for the purposes of this Decision, it is
         appropriate to assess the following markets:
         (a)      For the upstream markets: the markets for the wholesale sales to retailers of
                  each of: (i) floors and flooring materials, (ii) timber construction materials,
                  (iii) doors, (iv) storage furniture, and (v) insect screens. Each of these
                  plausible product markets might be further segmented according to: (i) the
                  intended use of the product (for example, for doors, the distinction is between
                  external or internal use); (ii) the material used; (iii) the sale channel (i.e. if it
                  is intended to be sold through DIY stores or through builders’ merchants);
                  and (iv) whether the products are sold branded or unbranded. The plausible
                  geographic scope for each of these product markets is likely national or
                  EEA-wide.
         (b)      For the downstream markets: the market for the retail sale to
                  non-professional customers through DIY stores, which can be further
                  segmented according to the product categories. The plausible geographic
                  scope for each of these product markets is likely national or local with a
                  catchment area’s radius of 30 km from a store’s location.
5.       COMPETITIVE ASSESSMENT
5.1.     Legal framework of the assessment
(58)     Pursuant to Article 2(2) and (3) of the Merger Regulation, the Commission must
         assess whether a proposed concentration would significantly impede effective
         competition in the internal market or in a substantial part of it, in particular through
         the creation or strengthening of a dominant position. In this respect, a merger can
         entail horizontal and/or non-horizontal effects.
(59)     As explained     in paragraphs (10)-(11), the Transaction gives rise to a vertical relation
         between Deli     Home’s supply and Ardian’s sales – through Maxeda – of (i) floors
         and flooring     materials, (ii) timber construction materials, (iii) doors, (iv) storage
         furniture, and    (v) insect screens. For this reason, in the context of the competitive
44   Replies to Q1 - questionnaire to customers, questions 10 and 11; Replies to Q2 - questionnaire to
     competitors, questions 10 and 11.
                                                      10
 ---pagebreak---          assessment of the Transaction, the Commission has to analyse potential non-
         horizontal effects.
(60)     Non-horizontal effects arise when the parties to a concentration operate in different
         levels of the supply chain in certain relevant markets (vertical effects). The
         Commission appraises non-horizontal effects in accordance with the guidance set out
         in the Non-Horizontal Merger Guidelines.45
(61)     The Non-Horizontal Merger Guidelines distinguishes between two main ways in
         which mergers between actual or potential competitors on the same relevant market
         may significantly impede effective competition, namely non-coordinated and
         coordinated effects.
(62)     In non-horizontal mergers, non-coordinated effects may arise when the concentration
         gives rise to foreclosure. In vertical mergers, foreclosure can take the form of input
         foreclosure, where the merger is likely to raise costs of downstream rivals by
         restricting their access to an important input; and/or the form of customer
         foreclosure, where the merger is likely to foreclose upstream rivals by restricting
         their access to a sufficient customer base. 46
(63)     In assessing the likelihood of an anticompetitive foreclosure scenario, the
         Commission examines whether the merged entity would have post-transaction the
         ability to foreclose access to either inputs or customers, whether the merged entity
         would have the incentives to do so and whether such foreclosure strategy would have
         a detrimental effect on competition. 47
(64)     Based thereupon, the Commission will analyse the vertical relationship arising from
         the Transaction in order to assess whether the merged entity would have the ability
         and the incentives to engage in the input foreclosure strategy, and if such
         a foreclosure strategy would impede effective competition in the EEA or parts
         thereof.
5.2.     The Parties’ market shares are low to moderate, with the exception of certain
         market segments
5.2.1. Deli Home’s market shares (upstream)
(65)     The Notifying Party provided estimates of Deli Home’s market shares of the
         plausible relevant markets.48 Table 1 reports Deli Home’s market shares for the
         wider (namely at the level of product category for the EEA, for Belgium and for the
         Netherlands) and for the narrowest plausible relevant markets (where market shares
         are the highest).
45   Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of
     concentrations between undertakings (OJ C 265, 18.10.2008, p. 6).
46 Non-Horizontal Merger Guidelines, para 30.
47 Non-Horizontal Merger Guidelines, para 30.
48 Form CO, Annex 16.
                                                        11
 ---pagebreak--- Table 1 - Deli Home’s 2020 market shares in the wider and in the narrowest plausible
relevant product markets 49
                                                                                                           Deli
                           Deli Home’s market share                                                      Home’s
     Product                                                            Narrowest plausible
    category                                                                    market                   market
                         EEA             BE               NL                                              share
Floors and                                                            Branded stairs sold to
flooring              <[0-5]%            NA            [0-5]%         DIY retailers in the [10-20]%
materials                                                             Netherlands
Timber                                                                Branded mouldings sold
construction          <[0-5]%          [0-5]%          [0-5]%         to DIY retailers in the [60-70]%
materials                                                             Netherlands
                                                                      Branded interior doors
Doors                 <[0-5]%          [0-5]%        [10-20]%         sold to DIY retailers in [90-100]%
                                                                      the Netherlands
                                                                      Branded        self-assembly
Storage                                                               storage furniture sold to [70-80]%
                      <[0-5]%          [0-5]%       [10-20]%50
furniture                                                             DIY retailers in the
                                                                      Netherlands
                                                                      Branded insect screens
Insect screens         [0-5]%        [10-20]%        [20-30]%         sold to DIY retailers in [30-40]%
                                                                      the Netherlands
Source: Form CO, Annex 16 and Form CO, tables 30-31
(66)      Table 1 indicates that for flooring and flooring materials, Deli Home’s market
          shares are well below 30% for any plausible market definition. More specifically,
          under the narrowest market definition, its market share would be [10-20]%.
(67)      With respect to timber construction materials, Deli Home’s market shares are
          below [0-5]% at EEA-level, [0-5]% in Belgium and [0-5]% in the Netherlands. In
          the narrow market definition for which Deli Home’s market share is the highest,
          namely the market for branded mouldings sold to DIY retailers in the Netherlands,
          its market share is [60-70]%.
(68)      With respect to doors, Deli Home’s market shares are below [0-5]% at EEA-level,
          [0-5]% in Belgium and [10-20]% in the Netherlands. In the narrow market definition
          for which Deli Home’s market share is the highest, namely the market for branded
          interior doors sold to DIY retailers in the Netherlands, its market share is [80-90]%.
(69)      With respect to storage furniture, Deli Home’s market shares are below [0-5]% at
          EEA-level, [0-5]% in Belgium and [10-20]% in the Netherlands. In the narrow
          market definition for which Deli Home’s market share is the highest, namely the
49   Market shares relating to the year 2020 can be considered representative of market power in the last 3
     years. The market dynamics have not changed substantially because the number of suppliers remained
     stable, and so did their share of supply with their largest accounts. Refer, for example, to the minutes of a
     call with Maxeda's competitor, 25 May 2021, para. 13.
50 This market share refers to the sale channel to retailers because the Notifying Party did not provide a more
     aggregated figure.
                                                            12
 ---pagebreak---        market for branded self-assembly storage furniture sold to DIY retailers in the
       Netherlands, its market share is [70-80]%.
(70)   With respect to insect screens, Deli Home’s market shares are [0-5]% at EEA-level,
       [10-20]% in Belgium and [20-40]% in the Netherlands. In the narrow market
       definition for which Deli Home’s market share is the highest, namely the market for
       branded insect screens sold to DIY retailers in the Netherlands, its market share is
       [30-40]%.
5.2.2. Maxeda’s market shares (downstream)
(71)   With respect to the market for retail of DIY products through DIY stores (with no
       distinction of individual products), Maxeda’s 2020 market share in the Netherlands
       is [20-30]% and in Belgium [40-50]%.51
(72)   For both Belgium and the Netherlands, the Parties were unable to estimate Maxeda’s
       market shares at the level of catchment areas of 30 km radius but submit that they
       would be above 30% in several local markets. 52 As explained in paragraph (90),
       Maxeda’s market shares are relevant to assess, among other things, Maxeda’s ability
       to foreclose Deli Home’s competitors. As this ability relates to the total volume
       supplied by Deli Home’s competitors to Maxeda (as opposed to the volume supplied
       in individual catchment areas), the exact values of market shares at the level of
       individual catchment areas, are less relevant for the case at hand. Therefore, the
       estimate provided by the Notifying Party appear to be sufficient for assessing
       Maxeda’s market power in the case at hand.
(73)   With regard to a distinction by product category, the Notifying Party provided
       market shares according to the classification used by the market analyst GfK, which
       reflects Maxeda’s classification used in its ordinary course of business (Table 2 and
       Table 3). Maxeda’s market shares in individual categories broadly reflect its market
       shares at DIY retail level.
(74)   Specifically for the Netherlands, Maxeda’s market share remain below [20-30%]%
       (which is the national market share at DIY retail level) for all the various product
       categories, with the exception of two: (i) “decorative wooden panels”, for which
       market share is [30-40]% and (ii) “small household storage”, where market share is
       [30-40]%. However, it is to be noted that, with respect to the last product category,
       the market size of this segment is relatively small, namely EUR 6 million, which is
       less than 0.2% of the market for retail of DIY products through DIY stores in the
       Netherlands.
(75)   With respect to Belgium, market shares at the level of individual product categories
       are similar to those at DIY retail level (which is [40-50]%) with the exception of:
       (i) “Wood & construction panels” for which market share is [10-20]% and (ii) the
       products categorised under “organising”, “Furniture total”, “Brackets”, “Small
       household storage”, which are, respectively: [40-50]%, [60-70]% and [60-70]%. It is
       to be noted, however, that these product categories have relatively small market sizes
       as the total sales of the category “organising” amount to EUR 10.3 million, which
51  Form CO, paragraphs 359 and 361.
52  Form CO, paragraphs 360 and 362.
                                                  13
 ---pagebreak---  ---pagebreak--- 5.3.     No competition concerns with respect to vertical relationships
5.3.1. The Transaction is not likely to lead to input foreclosure
5.3.1.1. Post-Transaction, the Parties would likely not have the ability nor the incentive to
            foreclose Maxeda’s competitors.
(77)     First, the market shares of Deli Home aggregated at the level of product category
         (i.e. doors, storage, timber construction products, floorings and steps, and insect
         screens) are small (i.e., well below 20%) both at EEA and national level.
         Deli Home’s market shares are larger only for narrow market segments at the
         national level, in particular in the Netherlands (i.e., [50-60]% for branded doors, [60-
         70]% for branded doors for external use, [80-90]% for branded doors for internal
         use, [70-80]% for branded self-assembly closets, [60-70]% for branded mouldings,
         [70-80]% for non-branded mouldings, [50-60]% for branded panels and [30-40]%
         for branded insect screens).
(78)     The high market shares in these narrow market segments, however, are not
         indicative of a market power that enables input foreclosure. In certain cases, in
         addition to the suppliers already active in the Netherlands, suppliers active in
         neighbouring countries such as Germany or France would be able to enter the Dutch
         market.53
(79)     Second, after the Transaction, Deli Home’s customers would continue to have
         credible alternative suppliers. A large majority of Deli Home’s customers that
         replied to the market investigation indicated that for the products they source from
         Deli Home can be acquired from other suppliers, 54 and that, in case Deli Home
         increases prices or reduces supplies, they would be able to switch to other
         suppliers.55 Furthermore, a large majority of Deli Home’s customers that replied to
         the market investigation indicated that they would likely switch from Deli Home to
         another supplier in case of price increase or of degradation of commercial
         conditions.56
(80)     Third, Deli Home sells a number of products for which its market shares are
         relatively small, but – taken together – they contribute substantially to Deli Home’s
         overall sales. For example, taking 30% market share as a reference, and considering
         Belgium and the Netherlands (which are the countries where Deli Home is mostly
         active) all the products sold to DIY retailers and for which its market shares are
         below this value generate revenues for approximately EUR […] million annually. 57
         These sales represent approximately […]% of Deli Home’s sales to DIY retailers in
         these two countries.58 . As most of retailers that purchase these products also
         purchase those products where Deli Home’s market shares are high, these sales
         would be at risk in case Deli Home attempted to foreclose its customers in those
         products for which its market shares are high.
53   See for example the minutes with a competitor of Maxeda on 15 June 2021, paragraph 17.
54   Replies to Q1 – Questionnaire to retailers, questions 13 and 14.
55   Replies to Q1 – Questionnaire to retailers, questions 15 and 16.
56   Replies to Q1 – Questionnaire to retailers, question 17.
57   Form CO, Annex 16.
58   Form CO, Annex 16.
                                                           15
 ---pagebreak--- (81)    Therefore, the potential benefit of an input foreclosure in selected products such as
        branded internal doors, branded mouldings sold to DIY retailers in the Netherlands,
        etc. would likely put at risk revenues deriving from other products supplied by
        Deli Home.
(82)    Fourth, a majority of Deli Home’s customers that replied to the market investigation
        consider that after the Transaction, Deli Home would not have the ability or the
        incentive to increase prices or to reduce supply of its products. 59
5.3.1.2. The effects of an input foreclosure strategy would likely be negligible
(83)    First, as explained in Section 5.2.1, in the broader product categories Deli Home’s
        market shares are small or moderate. Therefore, an input foreclosure strategy, if
        implemented by Deli Home, would have limited effects.
(84)    Second, after the Transaction, Deli Home’s customers would continue to have
        credible alternative suppliers.
(85)    Third, the majority of Maxeda’s competitors does not appear to be concerned of
        a potential input foreclosure strategy by Deli Home.60 On the contrary, some of them
        indicated that they are already switching to other suppliers in view of the
        Transaction. As a large majority of Maxeda’s customers considers that switching
        away from Maxeda would not reduce their competitiveness, 61 an attempted input
        foreclosure strategy from Deli Home would have limited or no impact on its
        customers and consequently on the downstream market.
(86)    Furthermore, when explicitly asked about the expected impact of the Transaction on
        price, on quality and on the choices for the end-customers, a majority of
        Deli Home’s customers replied that do not expect significant changes after the
        Transaction.62
5.3.2. The Transaction is not likely to lead to customer foreclosure
5.3.2.1. The Parties would likely not have the ability nor the incentives to foreclose
           Maxeda’s suppliers
(87)    Post-Transaction, the Parties would likely not have the ability and incentives to
        foreclose Maxeda’s suppliers for the reasons outlined below.
(88)    First, as indicated by the market investigation, 63 those manufacturers that supply
        their products to Maxeda typically supply them also to Maxeda’s competitors.
        Therefore, if Maxeda attempts to foreclose Deli Home’s competitors, these would be
59  Replies to Q1 – Questionnaire to retailers, question 12.
60  Replies to Q1 – Questionnaire to retailers, question 18, minutes of a call with a competitor of Maxeda on
    25 May 2021, paragraph 10; minutes of a call with a competitor of Maxeda on 15 June 2021, paragraphs
    23-24.
61 Replies to Q1 – Questionnaire to retailers, question 19.
62 Replies to Q1 – Questionnaire to retailers, questions 20 and 20.1.
63 Replies to Q2 – Questionnaire to competitors, questions 13-14.1.
                                                          16
 ---pagebreak---         able to continue selling to Maxeda’s competitors, as also confirmed in the market
        investigation.64
(89)    This is also corroborated by Maxeda’s market shares. At DIY retail level, Maxeda’s
        market share in Belgium is [40-50]% and in the Netherlands is [20-30]%, which
        means that Deli Home’s competitors would be able to continue supplying [50-60]%
        of the Belgian market and [70-80]% of the Dutch market. In particular, in Belgium
        Hubo has a market share of [10-20]-[20-30]% and independent DIY retailers have a
        market share of [30-40]-[40-50]%. In the Netherlands, Intergamma has a market
        share of [40-50]% and Hornbach a market share of [10-20]%.65
(90)    While, for certain individual product categories, in Belgium Maxeda has high market
        shares (see Table 3), these market shares do not confer Maxeda with the ability and
        incentive to foreclose Deli Home’s competitors. This is the case because
        Deli Home’s competitors typically produce different products and types of products
        and therefore these competitors would continue supplying large customers with other
        products.
(91)    Furthermore, while Maxeda likely has higher shares in certain catchment areas, this
        would not provide Maxeda with the ability and incentive to foreclose Deli Home’s
        competitors because the upstream markets are likely national, if not wider, and
        therefore manufacturers would be able to continue supplying in other catchment
        areas and/or countries.
(92)    Second, Deli Home’s competitors would continue to have access to large number of
        customers active in other sale channels. This is the case because Maxeda is active
        only in the downstream retail sale of DIY products to non-professional customers,
        while Deli Home’s competitors also supply customers active in other sale channels
        (as for example builders’ merchants). .
(93)    Third, Deli Home’s competitors that replied to the market investigation consider that
        Maxeda does not have the ability and the incentive required for foreclosing
        Deli Home’s competitors.66
5.3.2.2. The effects of a hypothetical customer foreclosure would likely be negligible
(94)    First, as explained in Section 5.3.2.1, if Deli Home's competitors were to be
        foreclosed from making sales to Maxeda, they would have sufficient alternative
        customers in Belgium, in the Netherlands and, more broadly, in the EEA.
(95)    Second, a large majority of Deli Home’s competitors that replied to the market
        investigation consider that the Transaction would not have an impact on their
        business,67 and do not consider that their competitiveness would be affected if
        Maxeda stops sourcing certain products from them after the Transaction.68
64  Replies to Q2 – Questionnaire to competitors, question 15-16.1.
65  Form CO, tables 34-35.
66 Replies to Q2 – Questionnaire to competitors, question 12.
67 Replies to Q2 – Questionnaire to competitors, question 18.
68 Replies to Q2 – Questionnaire to competitors, question 19.
                                                         17
 ---pagebreak--- (96)     Third, certain competitors of Maxeda indicated that they are not concerned about the
         Transaction, as it will be possible to find other suppliers for all products currently
         supplied by Deli Home.69 It could, therefore, be argued that, as a result of the
         Transaction, business opportunities may open up for Deli Home’s competitors.
5.3.3. [details of internal documents]
(97)     [Details of internal documents].
(98)     [...] certain market participants, which consider it unlikely that post-Transaction
         Ardian will seek to integrate the activities of Maxeda with those of Deli Home.70
5.3.4. Conclusion on non-horizontal effects
(99)     In conclusion, in light of the above, the Commission considers that the merged entity
         would not have the ability nor the incentive to engage in a foreclosure strategy and
         that, in any event, a foreclosure strategy would not have a significant impact of
         effective competition.
5.4.     Conclusion on competitive assessment
(100) Based on the considerations included in Sections 5.1-5.35.3.4 and in light of the
         results of the market investigation and of all the evidence available to it the
         Commission concluded that the notified concentration does not give rise to serious
         doubts as to its compatibility with the internal market or the functioning of the EEA
         Agreement because of vertical non-coordinated effects in the markets for the
         wholesale sales to retailers of each of: (i) floors and flooring materials, (ii) timber
         construction materials, (iii) doors, (iv) storage furniture, and (v) insect screens under
         any plausible market definition, as well as in the market for the retail sale to
         non-professional customers through DIY stores under any plausible market
         definition.
6.       CONCLUSION
(101) For the above reasons, the Commission has decided not to oppose the notified
         concentration 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
                                                              Executive Vice-President
69   See, for example, minutes with a competitor of Maxeda on 15 June 2021, paragraph 24.
70   See for example Minutes with a competitor of Maxeda on 15 June 2021, paragraph 19.
                                                        18