CELEX: 32014M7115
Language: en
Date: 2014-04-29 00:00:00
Title: Commission Decision of 29/04/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7115 - KURARAY / GLSV BUSINESS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                            |EUROPEAN COMMISSION                                                                                              |
|                                 |                                                                                                                 |
|                                 |                                                                                                                 |
|                                 |                                                                                                                 |

Brussels, 29.4.2014
C(2014) 2946 final

 [pic]

|To the notifying party:                                            |                                                                   |
|                                                                   |                                                                   |

Dear Sir/Madam,

Subject:    Case M.7115 – Kuraray/ GLSV Business
Commission decision pursuant to Article 6(1)(b) in conjunction with Article 6(2) of Council Regulation No 139/2004[1]

    1. On 6 March 2014, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council  Regulation  (EC)  No
       139/2004 ("the Merger Regulation") by which Kuraray Co., Ltd. ("Kuraray", Japan) acquires within the meaning of  Article  3(1)(b)  of  the
       Merger Regulation sole control over the Glass Laminating Solutions/Vinyls Business ("GLSV") of E.  I.  du  Pont  de  Nemours  and  Company
       ("DuPont", USA), by way of purchase of assets. Kuraray and GLSV are hereinafter collectively referred to as "the  Parties"  while  Kuraray
       individually is referred to as "Notifying Party".

The parties and the operation

    2. Kuraray is a manufacturer of specialty chemicals, fibres and other materials,  incorporated  in  Japan  and  listed  on  the  Tokyo  Stock
       Exchange. Kuraray's main products are functional resins and film (used to produce adhesives, LCD screens, interlayers for laminated safety
       glass, or food packaging), synthetic isoprene chemical products, synthetic  leather,  vinylon  fibre  (a  substitute  for  asbestos),  and
       polyester fibre.

    3. DuPont is a science and technology company incorporated in Delaware, USA, and listed on the New York Stock Exchange. DuPont is engaged  in
       the R&D, production and sale of a variety of chemical products, plastics, paints, agrochemicals, seeds, nutritional ingredients and  other
       materials.

    4. The target, GLSV, wholly owned and controlled by DuPont, is comprised of assets relating to the manufacture  and  sale  of  Vinyl  Acetate
       Monomer ("VAM"), Polyvinyl Alcohol ("PVA"), Polyvinyl Butyral ("PVB") resin and PVB  film,  all  forming  part  of  the  same  vertically-
       integrated value chain, and DuPont's trademarked  interlayer  product,  Sentryglas.  The  assets  to  be  acquired  include  manufacturing
       equipment, buildings, customer lists, contracts and inventories. All intellectual property required to operate GLSV will  be  assigned  or
       licensed.

    5. According to the Asset Purchase Agreement signed between Kuraray and DuPont on 21 November 2013, Kuraray will acquire sole control over
       GLSV. Therefore, the proposed transaction constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

EU dimension

    6. The operation does not have an EU dimension within the meaning of Article 1 of the Merger Regulation as the aggregate Union-wide  turnover
       achieved by GLSV does not exceed EUR 100 million.

    7. However, on 23 December 2013 the operation acquired Union dimension through a referral under Article 4(5) of the Merger Regulation.

Markets concerned by the Transaction

    8. The markets concerned by this transaction are the markets for (i) VAM, (ii) PVA, (iii) PVB resin and (iv) PVB film. All four  markets  are
       part of the same value chain: VAM is used to produce PVA, which is used to produce PVB resin, which in turn is used to produce  PVB  film.
       PVB film is then sold to glass manufacturers to be used as an adhesive interlayer  in  the  production  of  laminated  safety  glass,  for
       automotive (e.g. windshields) or architecture (e.g. windows) applications.

    9. The markets horizontally affected by the transaction concern the production of (i) PVA and (ii) PVB film. Furthermore, the operation would
       give rise to vertically affected markets between (i) VAM and PVA, and (ii) PVA and PVB resin.

Horizontally Affected Markets

1 PVA

1 Product market definition

   10. PVA is a water-soluble and biodegradable polymer with strong film formation properties and high binding power. PVA is produced in a number
       of grades and is used in a variety of  applications  in  different  industries,  including  the  paper,  the  textile  and  pharmaceutical
       industries. Typically, four PVA grades are distinguished according to their level of hydrolysis: (i) low, (ii) partially, (iii) fully  and
       (iv) super hydrolysed. PVA is the most important raw material for the production of PVB resin, representing  35-50%  of  PVB  resin  input
       costs. PVB resin accounts for 28% of global PVA consumption. The super, fully, and partially hydrolysed PVA  grades  are  referred  to  as
       "standard" PVA, as opposed to "specialty" PVA comprising the more specialized grade such as low hydrolysed PVA as well  as  other  special
       PVA grades (e.g. co-polymer or modified PVA).

   11. In its previous decisions, the Commission indicated that the market for PVA might be subdivided  into  segments  based  on  the  level  of
       hydrolysis, i.e. distinguishing the fully hydrolysed grades and partially hydrolysed grades, but ultimately left the definition open.  The
       Commission however concluded that the product market should not be wider than PVA, as PVA does not have any substitutable products.[2]

   12. The Notifying Party submits that PVA constitutes a single product market and should not be segmented any further: while specific grades of
       PVA are required for specific end use applications, there is a high degree of supply-side substitutability as all PVA producers  are  able
       to produce all grades.

   13. The information obtained by the Commission in the course of its market investigation indicated that concerning the value chain affected by
       the proposed transaction, PVB resin can be produced using all standard PVA, i.e. partially, fully and super hydrolysed  PVA.[3]  From  the
       supply-side perspective all grades of PVA (from  low  to  super  hydrolysed)  are  produced  using  similar  production  process  and  raw
       materials.[4] Partially, fully and super hydrolysed PVA (i.e. standard PVA) can even be produced using the same  production  line.[5]  The
       time required to switch production between these different PVA grades would generally  be  half  a  day  or  one  day.[6]  Therefore,  the
       Commission considers that there is a significant degree of supply-side substitution between all grades of PVA  and  especially  grades  of
       standard PVA.

   14. However, the precise product market definition regarding PVA can ultimately be left open for the purpose of this Decision, as the  outcome
       of the competitive assessment in the present case would not change irrespective of the precise market definition applied to PVA.

2 Geographic market definition

   15. In a previous decision, the Commission considered that the relevant geographic market for PVA is global.[7]

   16. The Notifying Party submits that the relevant geographic market for PVA is worldwide. There are significant trade  flows  of  PVA  between
       world regions and a significant proportion of European demand is met by imports from Japan,  China,  the  United  States  and  Taiwan.  In
       addition, the transport costs to ship PVA between regions are relatively insignificant (accounting for less that 3-5% of the  total  sales
       price).

   17. Respondents to the Commission's market investigation also confirmed that most customers source PVA from various regions of the  world  and
       that there are no significant barriers to trade for most types of PVA from or into the EEA.[8] However, the information  obtained  by  the
       Commission in the course of its market investigation also revealed that there remain significant price differences between world  regions,
       with PVA being 30-40% more expensive in the EEA than in Asia.[9]

   18. However, the Commission considers that the precise geographic market definition regarding PVA can ultimately be left open for the  purpose
       of this Decision, as the outcome of the competitive assessment in the present case would not change irrespective of the geographic  market
       definition applied to PVA.

3 Competitive assessment

   19. The concentration will give rise to a horizontal overlap of the Parties' activities in relation  to  the  market  for  PVA.  The  Parties'
       combined market shares will reach [10-20]% in volume ([20-30]% in value) worldwide. While in  the  EEA  the  combined  market  shares  are
       somewhat higher, reaching [30-40]% in volume ([30-40]% in value), due to GVLS' business  limited  position  in  Europe  the  market  share
       increment brought about by the transaction remains minor, around [0-5]% over the last 3 years.

   20. When considering the Parties' market shares on any more  narrowly-defined  PVA  markets,  namely  potential  markets  for  "standard"  PVA
       (comprising super, fully, and partially hydrolysed PVA grades) and "specialty" PVA (comprising  low hydrolysed and co-polymer or  modified
       PVA grades), the Parties' combined position would not differ from their position on a market for all PVA. In each case,  GLSV  would  have
       very low market shares and Kuraray's market share in the two potential segments – "standard" PVA and "specialty" PVA -  would  be  between
       [10-20]% and [10-20]% worldwide and around [40-50]% in the EEA, while GLSV's market shares would be between [0-5]% and  [5-10]%  worldwide
       and around [0-5]% in the EEA.

   21. Furthermore, during the market investigation PVA customers explained that several strong suppliers will  continue  to  be  active  on  the
       market and produce PVA suitable for the production of PVB resin for film, such as Sekisui,  Eastman,  Shin-Etsu,  Sinopec,  Denka,  Nippon
       Gosei, Chang Chun, Wego Chemical, Wacker Chemie, and Anhui Wanwei.[10]

   22. Consequently, it is concluded for the purpose of this Decision that regarding the supply of PVA the transaction  does  not  raise  serious
       doubts as to its compatibility with the internal market under any plausible market definition.

2 PVB film

1 Product market definition

   23. PVB film, also referred to as PVB sheet, is the most common end product derived from PVB resin. It is primarily used as an  interlayer  in
       the production of laminated safety glass: PVB film is bonded by self-adhesion between two layers of glass to hold them together  and  give
       the appearance of one single pane. PVB film has high tensile strength, impact resistance, transparency and elasticity.  PVB  film  adheres
       tightly to glass so that if either pane breaks, glass fragments remain stuck to the film in between.

   24. The two main applications for PVB film are in the manufacturing of laminated safety glass for the automotive and architectural industries.
       Automobile manufacturers use laminated safety glass in particular to make windshields, while in the construction industry laminated safety
       glass is widely used in windows for commercial buildings and, to a lesser extent, in residential homes.

   25. PVB film is a differentiated product and can vary along different parameters,  specifically:  (i)  thickness;[11]  (ii)  width;[12]  (iii)
       embossed/melt-fracture surface structure;[13] (iv) acoustic/non-acoustic;[14] (v) coloured/clear;[15] and (vi) virgin/recycled.[16]

   26. In a previous case, where PVB film was one of the vertically affected markets, the Commission, without conducting detailed  investigation,
       considered that PVB film may constitute a single relevant product market, without however considering any possibly narrower  category  and
       ultimately leaving the product market definition open.[17]

   27. According to the Notifying Party, the relevant product market should not be defined narrower than PVB film.  Specifically,  the  Notifying
       Party submits that the PVB film market  should  not  be  segmented  by  end  use/application.  First,  the  Notifying  Party  claims  that
       architectural and automotive PVB films are technically the same product and all PVB film suppliers manufacture a complete range  of  films
       using the same resin and there is no barrier to supply-side substitution on the basis of access to raw materials and processing/know  how,
       or access to the market. Architectural PVB film and automotive PVB film are very often  sold  in  the  same  thickness  and  grade.  Thus,
       switching is quick and easy in technical terms and usually requires, at most, changing the additives that  are  combined  with  PVB  resin
       during production. All of the four leading PVB film suppliers currently sell PVB film for both applications, although not all four produce
       the same range of products for each application. Second, prices of PVB film sold for the two applications are closely correlated and  they
       change in corresponding patterns. Third, a large proportion of the Parties' sales are to customers that purchase PVB film to produce  both
       architectural and automotive laminated safety glass, notably the four major global manufacturers of flat glass ([…]).

   28. However, the information obtained by the Commission in the course of its  market  investigation  pointed  to  the  possible  existence  of
       separate markets for PVB film for architectural applications and PVB film for automotive applications.

   29. From the demand side, technical specifications (e.g. adhesiveness, impact resistance) are different, driven by specific  safety  standards
       and regulatory requirements for each segment, with in particular standard EN ISO 12543[18] applying downstream to laminated  safety  glass
       for architecture applications, but EU Directive 92/22/EEC[19]  applying  to  laminated  safety  glass  for  automotive  applications.  The
       information obtained in the course of the Commission's market investigation revealed that customers do not use the same PVB film  for  the
       two applications and would not switch between the two in case of a price increase of one of them.

   30. From the supply side, a large part of architectural applications require specific production equipment that allows producing wide films  –
       the so-called "jumbo" lines. While "non-jumbo"/narrow lines cannot be  used  to  produce  jumbo  PVB  film  (approx.  90%  of  demand  for
       architecture applications in the EEA), jumbo lines can be used  to  produce  narrower  PVB  film  for  both  automotive  and  architecture
       applications (the film is then cut into narrower films) - i.e. there is full one-way supply-side substitutability – but the price will  be
       higher, notably for architectural applications.[20]

   31. In addition, production know-how seems to be specific to the two segments and  developing  a  significant  presence  in  one  segment,  in
       particular for more specialised film (e.g. coloured or acoustic), requires years of expertise. Market participants confirmed that it takes
       significant experience to "find the right formula", through which PVB film consistently achieves the exact  features  required,  and  that
       such "right formula" is specific for each type of PVB film. This is also supported by the fact that except for Eastman,  the  other  three
       producers of PVB film have very different market shares in the two segments. For instance, Sekisui is  the  market  leader  in  automotive
       applications whilst its presence in the architectural segment is minimal. Similarly,  GLSV  and  especially  Kuraray  are  strong  in  the
       architectural application while their presence in the automotive segment is  small,  as  analysed  in  section  "IV.B.3"  of  the  present
       Decision.

   32. Moreover, pricing of the two segments is fairly independent with no arbitrage opportunities between the two segments. Respondents  to  the
       Commission's market investigation have confirmed that, although producers and customers typically enter into contracts  covering  all  PVB
       film products, prices are discussed product by product.

   33. On this basis, it is likely that PVB film for automotive and for architectural applications do not belong to  the  same  relevant  product
       market.

   34. In addition, the information gathered by the Commission in the context of its market investigation pointed to the possible existence of  a
       separate product segment of coloured PVB film stemming from the fact that on average the price of coloured PVB film is twice the price  of
       clear PVB film.[21]

   35. Furthermore, the information gathered by the Commission in the context of its market investigation pointed to the possible existence of  a
       separate segment of recycled PVB film stemming from extrusion lines that are fed almost exclusively with recovered PVB film and much lower
       quantities of PVB resin.[22] In this case, the PVB film manufacturer will  typically  purchase  trimmings  back  from  its  own  PVB  film
       customers, as well as gathering trimmings from other extrusion lines. Both Kuraray and the GLSV Business use this  method  to  manufacture
       "recycled" PVB film, respectively at their Russian and Czech plants.

   36. According to the Notifying Party, virgin PVB film and recycled PVB film are  functionally  almost  identical  and  have  almost  the  same
       applications, except that recycled film is not typically used in high-end applications.

   37. However, the Commission considers that for the purpose of this Decision the precise product market definition can ultimately be left  open
       as to the final application (automotive/architectural), the origin (recycled/virgin) or any other characteristic of PVB  film,  since,  in
       view of the commitments submitted by the Notifying Party, no serious doubts as to the compatibility of the transaction with  the  internal
       market would arise under any plausible market definition.

2 Geographic market definition

   38. In a previous case[23], the Commission investigated the  relevant  geographic  market  for  PVB  film,  but  the  results  of  the  market
       investigation were not conclusive and the definition was ultimately left open.

   39. The Notifying Party submits that the market for PVB film is worldwide in scope, on the basis that shipping costs between world regions are
       small (5% of the sales price) and that extra-EEA imports account for a material share of EEA consumption of PVB film (17% in 2012).

   40. The information obtained by the Commission in its market investigation confirmed that shipping costs amount to approximately 5-10% of  the
       sales price and that there are no technical or regulatory barriers to the global trade of PVB film[24].

   41. However, respondents to the market investigation pointed to the existence of different quality requirements across world regions, with EEA
       customers generally requiring higher quality standards than customers in other regions (e.g. Russia or China), due to stricter  regulatory
       requirements in both the architecture and automotive segments applying downstream to laminated  safety  glass  (LSG),  and  impacting  the
       quality requirements of PVB film[25]. As mentioned in recital 29, all LSG sold in the EEA and used in the architectural sector is governed
       by the standard EN ISO 12543, while LSG used in automotive applications is subject to standards enforced under EU Directive 92/22/EEC.

   42. Respondents also considered lead time and technical/customer services as critical in their choice of a PVB  film  supplier,  resulting  in
       customers' tendency to purchase as close to their manufacturing facility as possible,  as  long  as  product  specifications  and  quality
       requirements are met. The rationale for the notified transaction is precisely for Kuraray  to  acquire  GLSV's  production  facilities  in
       regions where Kuraray currently lack local presence, in order to achieve shorter lead times and build closer customer relationships.

   43. Overall, EEA customers seem to have a preference for sourcing PVB film from EEA production facilities. A majority of respondents indicated
       that they purchase from EEA plants 85% to 100% of their EEA demand[26]. This is confirmed by the Parties' own sales  data.  For  instance,
       the analysis of Kuraray's 2012 sales out of its production plant in Troisdorf, Germany, showed that [80-90]% of volumes  of  standard  PVB
       film were shipped within the EEA. While higher value-added, specialised film tends  to  travel  over  greater  distances,  even  sales  of
       specialised products remained at [70-80]% within the EEA.

   44. The information gathered by the Commission in its market investigation also revealed the existence  of  price  differences  between  world
       regions. This is confirmed by Parties' own pricing data. For instance, GLSV's average sales price of PVB film in 2012 was [50-60]%  higher
       in North America than in Europe, and Kuraray's average sales price [10-20]% higher in Asia than in Europe. Importantly, while global glass
       manufacturers engage with their suppliers in discussions on a global scale, prices for each product are typically negotiated at a regional
       (EEA) level[27].

   45. On this basis, the Commission concludes that for the purposes of this Decision the geographic scope of the PVB film  market,  irrespective
       of any potential further product sub-segmentation, should be considered EEA-wide.

3 Competitive assessment

   46. The PVB market is concentrated, characterised by the presence of four main players active worldwide, namely  Kuraray,  GLSV,  Eastman  and
       Sekisui. In addition, there are a number of small local suppliers in Asia, which however are not present in Europe.

   47. The Parties' activities overlap in an overall market for PVB  film.  Amongst  the  different  segmentations  of  PVB  film,  the  Parties'
       activities overlap with respect to PVB film for architectural applications, PVB film for automotive applications, recycled  PVB  film  and
       coloured PVB film. These five potential markets are analysed in this Decision.[28]

   48. The total market value of an overall market for PVB film is estimated at EUR […] at an EEA-wide level. The total market value of  an  EEA-
       wide market for architectural applications is estimated at EUR […] and for automotive applications at EUR […].[29] The total market  value
       of an EEA-wide market for recycled PVB film is estimated at EUR […].[30] The total market value of an EEA-wide  market  for  coloured  PVB
       film is estimated at EUR […].[31]

   49. The Notifying Party claims that the proposed transaction would not give rise to a significant impediment to effective competition  in  the
       PVB film market. On a worldwide basis, the Parties are currently the third and fourth largest suppliers,  materially  behind  Eastman  and
       Sekisui in terms of both capacity and sales. On an EEA-wide basis, the Parties' higher market shares should be attributed to the fact that
       Sekisui currently has a relatively small presence in the EEA that does not reflect its position in the global market. Although Sekisui has
       focused on exploiting growth in the automotive sector rather than the architectural sector, it is very  well  positioned  to  supply  more
       architectural film and gain a higher share of total available volumes in the EEA. In addition to Eastman and Sekisui, the Notifying  Party
       claims that the Parties face increasing competition from emerging PVB film  manufacturers  located  in  China  and  Taiwan.  Finally,  the
       Notifying Party considers that the Parties also face substantial buyer power by the four leading flat glass manufacturers (NSG Pilkington,
       Saint-Gobain, Guardian and Asahi Glass Company), which account for more than half of total PVB film consumption.

   50. In the following sections, the Commission assesses the Notifying Party's arguments in the light of the results of the market investigation
       and the other available evidence.

1 Coloured PVB film

   51. The Parties activities overlap with regard to coloured PVB film used in both architectural and automotive applications. In that  potential
       market the transaction would lead only to a limited combined market share in the EEA, namely [20-30]%. The market leaders are Eastman  and
       Sekisui holding market shares of [40-50]% and [30-40]%. Moreover, the Parties' market shares have remained at approximately the same level
       during the past three years.

   Table 1: Reconstruction of market shares in coloured PVB film

|COLOURED                       |   |EEA (tonnes)  |%                             |
|PVB FILM                       |   |              |                              |
|Kuraray                        |   |[…]           |[10-20]%                      |
|DuPont                         |   |[…]           |[5-10]%                       |
|COMBINED                       |   |[…]           |[20-30]%                      |
|Eastman                        |   |[…]           |[40-50]%                      |
|Sekisui                        |   |[…]           |[30-40]%                      |
|Total                          |   |[…]           |100%                          |

      Source: Commission reconstruction on the basis of competitors' replies to the data request of Questionnaire Q2

   52. Therefore, with respect to a potential separate market of coloured PVB film, the transaction does not  raise  serious  doubts  as  to  its
       compatibility with the internal market given the limited combined market shares of the Parties post-merger.

2 PVB film for automotive applications

   53. As already explained in section "IV.B.1" of this Decision, PVB film is mainly used for architectural and for automotive applications.

   54. In the potential market for PVB film for automotive applications the transaction would lead only to a limited combined market share in the
       EEA, according to the Notifying Party's estimations in the Form CO. In this potential product market the market leader is and would remain
       Sekisui, holding a market share of [50-60]% in the EEA,  followed  by  Eastman  with  [30-40]%.  The  Commission's  market  reconstruction
       confirmed that in the automotive segment the Parties' combined market share would be in the range of [10-20]% in the  EEA.  Moreover,  the
       Parties' market shares have remained at approximately the same level during the past three years.

   Table 2: Reconstruction of market shares in PVB film for automotive applications

|AUTOMOTIVE                  |  |EEA (tonnes)     |%                 |
|PVB FILM                    |  |                 |                  |
|Kuraray                     |  |[…]              |[5-10]%           |
|DuPont                      |  |[…]              |[5-10]%           |
|COMBINED                    |  |[…]              |[10-20]%          |
|Eastman                     |  |[…]              |[30-40]%          |
|Sekisui                     |  |[…]              |[50-60]%          |
|Others[32]                  |  |                 |                  |
|Total                       |  |[…]              |100%              |

      Source: Commission reconstruction on the basis of competitors' replies to the data request of Questionnaire Q2

   55. Therefore, the Commission considers that with respect to a potential  separate  market  of  PVB  film  for  automotive  applications,  the
       transaction does not raise serious doubts as to its compatibility with the internal market in that regard.

3 PVB film for architectural applications

1 Competitive landscape

   56. In the market for PVB film for architectural applications, there are mainly three significant suppliers, namely Kuraray, GLSV and Eastman,
       since Sekisui has only limited activities in this segment. In the Form CO, the  Notifying  Party  estimated  that  in  2013  the  Parties'
       combined market shares in a PVB film market for architectural applications would be [60-70]% in volume ([50-60]% in value) in the EEA. Due
       to Sekisui’s limited presence, the transaction would lead essentially to a duopoly between the merged entity  and  Eastman,  creating  the
       market leader. According to the Commission's market reconstruction, the merged entity would reach a market share of [50-60]% in  the  EEA.
       Moreover, the Parties' market shares have remained at approximately the same level during the past three years.

   Table 3: Reconstruction of market shares in PVB film for architectural applications

|ARCHITECTURAL PVB FILM        |   |EEA (tonnes)                |%                   |
|Kuraray                       |   |[…]                         |[40-50]%            |
|GLSV                          |   |[…]                         |[10-20]%            |
|COMBINED                      |   |[…]                         |[50-60]%            |
|Eastman                       |   |[…]                         |[40-50]%            |
|Sekisui                       |   |[…]                         |[5-10]%             |
|Others[33]                    |   |                            |                    |
|Total                         |   |[…]                         |100%                |

      Source: Commission reconstruction on the basis of competitors' replies to the data request of Questionnaire Q2

   57. Therefore, with respect to the potential PVB film market for architectural applications, the  transaction  would  essentially  lead  to  a
       "three to two" reduction of the number of suppliers in the EEA.

2 Closeness of competition

   58. Amongst the four main suppliers of PVB film, Eastman, Sekisui and GLSV have a global footprint, while Kuraray is mostly present in  Europe
       with production facilities only in Germany and western Russia. Furthermore, while Eastman, Kuraray and GLSV have a strong position in  the
       supply of PVB film for architectural applications, Sekisui focuses mainly on PVB film for automotive applications, where Kuraray and  GLSV
       have a limited presence. Eastman is the  only  supplier  who  has  an  equally  strong  position  in  both  architectural  and  automotive
       applications.

   59. According to competitors, reliability of supply, level of technical service, price and product quality (especially optical appearance) are
       the most important parameters of competition in the PVB film market.[34] According to customers, the most important competitive parameters
       for suppliers of PVB film are quality, price, consistency, reliability of  supply,  lead  time  and  technical  services.[35]  Eastman  is
       generally seen by customers as able to produce all grades of PVB film for all applications. Sekisui is considered to have limited  ability
       and/or willingness to produce PVB film for architectural applications.[36]

   60. In PVB film for architectural applications, although Kuraray and GLSV are seen as closest competitors to each other  in  terms  of  price,
       Eastman is considered closest to the Parties in terms  all  other  parameters,  such  as  quality,  reliability  and  technical  services.
       Specifically, competitors and customers considered that:[37]

       • in terms of geographic coverage, Kuraray is disadvantaged; and

       • in terms of quality/price ratio, Kuraray, Eastman and GLSV are seen by customers as offering good quality, whereas Sekisui is generally
         absent from the architectural segment.[38] Chinese/Taiwanese suppliers are seen as offering low prices but bad quality/consistency and
         low reliability.

   61. It thus appears that in the potential PVB market for architectural applications, Kuraray, GLSV and Eastman would constitute the three main
       suppliers in close competition with each other.

3 Purchasing patterns

   62. The Notifying Party claims that most customers multi-source and regard two or three sources of supply  as  being  sufficient  to  generate
       effective competition.

   63. During the market investigation, competitors and customers indicated that there is direct negotiation of annual contracts on the basis  of
       last year's prices with a given customer. Customers often approve suppliers by auditing and evaluating them every year, trying samples  in
       their production lines, site visits, as well as vetting of a supplier's financial situation.[39] Therefore, it appears  that  although  de
       jure customers are contractually free to change supplier every year, de facto switching to a new supplier is not immediately possible  due
       to the validation procedure necessary for the trustworthiness of the customers' products.

   64. Most customers multi-source in order to be able to readily switch volumes between their approved  suppliers  in  case  e.g.  one  of  them
       charges too high prices. Almost all customers have at least two PVB film suppliers in a given year, while a significant majority has three
       or four suppliers in a given year.[40] Thus, although the majority of customers do not regularly switch to new suppliers, they  may  shift
       volumes between their existing suppliers mainly for price reasons.[41]

   65. Therefore, it is important for customers to be able to have a pool of existing suppliers from where they source, in order to  be  able  to
       play them against each other in case of attempts of price increases by the suppliers. Hence, a reduction of the  number  of  suppliers  in
       that pool could  contribute to making price increases and reduced customer choice in PVB film for architectural applications more  likely,
       since that pool already pre-merger includes only three credible players.

4 Threat of Chinese/Taiwanese suppliers

   66. The Notifying Party claimed that, apart from Eastman and Sekisui, the merged entity would also face competition  from  emerging  PVB  film
       manufacturers located in China and Taiwan, such as CCPC, Kingboard and Decent, which are steadily gaining ground in Europe.  According  to
       the Notifying Party, each of the largest four glassmakers (NSG Pilkington, Saint-Gobain, Guardian and Asahi Glass Company)  has  at  least
       tested Chinese or Taiwanese PVB film at their EEA or neighbouring facilities, with a view to homologating one or more of these  suppliers.
       Other smaller customers in Italy, Romania, Poland and Greece are also allegedly using, or have recently used, PVB film supplied from China
       or Taiwan.

   67. The information obtained by the Commission in the course of its market investigation did not support the Notifying Party's view. According
       to respondents, at this stage Chinese/Taiwanese suppliers do not have any noticeable presence in the EEA.  Indeed,  almost  all  customers
       stated that they do not purchase PVB film for architectural applications from any supplier other than the  main  four,  that  is  Eastman,
       Sekisui and the Parties. Only a few customers have tested certain Chinese/Taiwanese suppliers (e.g. HJPM, Kingboard, CCPC) without however
       proceeding to making commercial purchases.

   68. The main issue seems to be the lack of quality that would be acceptable for the EEA market. Specifically, amongst the few  customers  that
       claimed to be testing Chinese/Taiwanese suppliers: one customer stated that it tests HJPM, but with the aim of supplying Russia  in  2014;
       another customer has qualifications of CCPC in progress, but with the aim of starting commercial purchases in 2014 in  Asia;  and  another
       customer has tested Kingboard and CCPC, but is unlikely to use them in EEA operations and/or in the short term.[42]  Furthermore,  an  EEA
       customer which according to the Parties purchases from  Chinese/Taiwanese  suppliers  clarified  that  it  does  not  purchase  from  such
       suppliers, since their product has worse clarity and strength.[43]

   69. Moreover, according to customers, Chinese/Taiwanese suppliers have difficulties in handling the logistics of supplying PVB film from China
       to the EEA, they seem unable to provide high volumes, they have limited product range  (e.g.  no  jumbo),  few  of  them  use  virgin  PVB
       resin[44] and they lack reliability and consistency of supply.[45]

   70. [Description of Chinese PVB products and suppliers ].[46]

   71. In view of the above, Chinese/Taiwanese suppliers of PVB film do not appear to be effective competitors pre-merger and thus would  not  be
       in a position to constrain the merged entity post-transaction in the supply of PVB film for architectural applications in the EEA.

5 Buyer power

   72. According to the Notifying Party, demand for PVB film for architectural applications is driven downstream by the four leading  flat  glass
       manufacturers, ([…]), which account for more than half of total PVB film consumption.

   73. Kuraray's 5 largest customers represent [70-80]% and its 10 largest customers represent [80-90]% of its total 2013 sales of PVB  film  for
       architectural applications, while GLSV's figures are even higher, i.e. [90-100]% and [90-100]% respectively.[47] Several  of  those  large
       customers (e.g. [customer], [customer]) purchase PVB film for both architectural and automotive applications.

   74. During the market investigation, competitors stated that  negotiations  are  rather  balanced  and  customers  are  able  to  discuss  the
       contractual terms with suppliers of PVB film.[48] On the other hand, the majority of customers stated that they are  price  takers  rather
       than price makers. Amongst the large customers only two explicitly admitted being price makers. Moreover, customers have  generally  shown
       their readiness to switch supplies between the three/four largest suppliers, but not to sponsor  new  entry  or  to  self-manufacture  PVB
       film.[49]

   75. […]. In a presentation of December 2013, [Pricing structure and strategy with regard to certain customers].[50].[51]

   76. In any event, it appears that negotiations between suppliers and customers are  generally  not  transparent,  which  allows  suppliers  to
       differentiate their pricing amongst their customers according to  the  latter's  negotiating  power.  In  particular,  during  the  market
       investigation competitors and customers indicated that there are direct negotiations of annual contracts  on  the  basis  of  last  year's
       prices with a given customer[52] and there are no sources (e.g. price lists) for customers to benchmark the offer they receive  to  offers
       made to other customers. Given the suppliers' possibility to price discriminate, even if one were to  accept  that  large  customers  have
       buyer power that could counteract the merged entity's attempts to increase prices, such buyer power would not prevent price  increases  to
       the remaining smaller customers. In fact, evidence submitted by the Notifying Party shows that the largest customers do not always get the
       best prices from the Parties – although this could be explained by different product mixes.

   77. In view of the above, although the Commission recognises that there may be a certain degree of buyer power in the hands of large customers
       of PVB film for architectural applications, it is doubtful that such buyer power  can,  on  its  own,  prevent  price  increases  and  the
       deterioration of competitive conditions in the supply of PVB film for architectural applications in the EEA, where customers already  face
       significant consolidation of their suppliers.

6 Entry and expansion

   78. The Notifying Party is of the view that there are no legal or regulatory barriers to entry and that no IP  rights  pose  any  barriers  to
       entry. According to the Form CO, the total cost of establishing a greenfield PVB film manufacturing operation  (including  R&D,  marketing
       and logistics) would be approximately EUR […]. The Notifying Party estimates that an investment at  this  level  would  be  sufficient  to
       develop capacity enabling the new entrant to gain an EEA market share of at least […].

   79. However, the information obtained by the Commission in its market investigation  indicated  the  existence  of  high  barriers  to  entry,
       residing in the know-how (not in the sense of any IP rights, but in the sense of acquired expertise), followed by high capital expenditure
       compared to the value of the market.[53] None of the responding competitors and customers was aware of any new entrant in the EEA  in  the
       past 3 years, nor did they expect any specific entry in the near future.[54]

   80. The Commission also explored the ability and incentives of Sekisui to expand its presence in the supply  of  PVB  film  for  architectural
       applications post-merger. Sekisui has a significant presence in the market for the production of  PVB  film  for  automotive  applications
       which has been its focus historically, as analysed in section "IV.B.3.b)" of the present Decision. However, its position on the market for
       PVB film for architectural applications is limited. Sekisui explained that this is due  to  several  factors,  one  of  them  is  lack  of
       expertise in this sector and the other is related to its strategy to focus on automotive segment. While Sekisui has jumbo capacity in  its
       facility in the Netherlands, so far it has been using it to supply the automotive market by cutting the rolls into narrower pieces.[55]

   81. Sekisui considers that the main barriers to its expansion in the production of PVB film for architectural applications are: (i)  its  lack
       of know-how and expertise in this field, (ii) its current capacity constraints and the associated costs of expanding  that  capacity,  and
       (iii) the lower profit margins in architectural PVB film as compared to automotive PVB film (due to the product mix and higher added value
       of automotive applications). In addition, should the proposed merger take place, the position of the  merged  entity  would  be  an  extra
       hurdle to overcome in order for Sekisui to prove itself in the architectural PVB film market.[56]

   82. Finally, Sekisui is concerned by the recent market developments in the building sector which, in combination with  Sekisui's  already  low
       market share in the supply of PVB film for architectural applications and the drop in EEA demand (approx. 20-25%) on the building  market,
       decrease its appetite for expansion. Sekisui therefore maintains that is unlikely to expand its presence in architectural PVB film as long
       as EEA demand on the building market does not pick up.[57]

   83. In view of the above, the Commission considers that there is no prospect of a timely and sufficient entry/expansion that could  counteract
       attempts by the merged entity to increase prices post-merger in the supply of PVB film for architectural applications in the EEA.

7 Conclusion

   84. As regards a potential PVB film market for architectural applications, the  transaction  would  essentially  lead  to  a  "three  to  two"
       reduction of the number of suppliers in the EEA. Given the Parties' strong positions in the EEA, non-coordinated effects post-merger would
       be particularly likely in that region. Therefore, with respect to a potential separate PVB film market for architectural applications, the
       Commission considers that transaction raises serious doubts as to its compatibility with the internal market.

4 PVB film for all applications

1 Competitive landscape

   85. In the Form CO, the Notifying Party estimated that in 2013 the Parties' combined market shares on an overall PVB film market would be [40-
       50]% in volume ([40-50]% in value) in the EEA. However, the Commission's market reconstruction  revealed  that  the  Notifying  Party  had
       overestimated the Parties' market shares. On this basis, the merged entity would reach a market share of [30-40]% in  the  EEA.  Moreover,
       the Parties' market shares have remained at approximately the same level during the past three years.

       Table 4: Reconstruction of market shares in PVB film overall

|ALL PVB FILM              |   |EEA (tonnes)               |%                   |
|Kuraray                   |   |[…]                        |[20-30]%            |
|GLSV                      |   |[…]                        |[10-20]%            |
|COMBINED                  |   |[…]                        |[30-40]%            |
|Eastman                   |   |[…]                        |[40-50]%            |
|Sekisui                   |   |[…]                        |[20-30]%            |
|Others[58]                |   |                           |                    |
|Total                     |   |[…]                        |100%                |

      Source: Commission reconstruction on the basis of competitors' replies to the data request of Questionnaire Q2

   86. As shown in the above table, with respect to the overall PVB film market, the transaction would lead to a "four to three" reduction of the
       number of suppliers in the EEA, creating the new number two supplier.

2 Closeness of competition

   87. The Parties are particularly close competitors due to their strong focus on the segment of PVB film for architectural applications in  the
       EEA, as analysed in sections "I.A.1.a)i" and "I.A.1.a)ii" of the present Decision.

   88. In particular, in terms of product coverage, Eastman is generally seen by customers as able to produce all grades  of  PVB  film  for  all
       applications. Kuraray and GLSV are considered particularly strong in the supply  of  PVB  firm  for  architectural  applications,  whereas
       Sekisui is considered to have limited ability and/or willingness to produce PVB film for architectural applications.[59]

   89. In view of the analysis in the present section as well as in section "I.A.1.a)ii" of the present Decision, it appears that in a PVB market
       for all applications Kuraray, GLSV and Eastman would constitute the closest competitors to each other due  to  their  strong  presence  in
       architectural applications, as opposed to Sekisui.

3 Purchasing patterns

   90. In the light of the analysis in section "I.A.1.a)iii" of the present Decision, it is important for customers to be able to have a pool  of
       existing suppliers from where they source, in order to be able to face  in  a  flexible  manner  attempts  of  price  increases  by  their
       suppliers. A reduction of the number of possible suppliers in that pool from four to three could contribute to making price increases  and
       reduced customer choice in PVB film more likely.

4 Threat of Chinese/Taiwanese suppliers

   91. In the light of the analysis in section "I.A.1.a)iv" of the present Decision, Chinese/Taiwanese suppliers of PVB film do not appear to  be
       effective competitors pre-merger and thus would not be in a position to constrain the merged entity post-transaction in the supply of  PVB
       film in the EEA.

5 Buyer power

   92. As explained in recital 32, pricing in the two segments of PVB film  (that  is,  automotive  and  architectural  applications)  is  fairly
       independent. Participants in the market investigation have pointed out  that,  although  producers  and  customers  typically  enter  into
       contracts covering all products, prices are discussed product by product. The investigation did not reveal any evidence of customers being
       able to use their strong bargaining position in one segment as leverage to achieve better prices in the other segment.

   93. In the light of the analysis in recital 92 as well as in section "I.A.1.a)v" of the present Decision, although the  Commission  recognises
       that large customers of PVB film have a certain degree of buyer power , it is doubtful that such buyer power  can,  on  its  own,  prevent
       price increases and the deterioration of competitive conditions in the supply of PVB film.

6 Entry and expansion

   94. In the light of the analysis in section "I.A.1.a)vi" of the present Decision, the Commission considers that there  is  no  prospect  of  a
       timely, likely and sufficient entry/expansion that could counteract attempts by the merged entity to increase prices  post-merger  in  the
       supply of PVB film.

7 Conclusion

   95. With respect to a potential PVB film market for all applications, the transaction would essentially lead to a "four to three" reduction of
       the number of suppliers in the EEA. The transaction would bring together two close competitors with strong focus on  the  segment  of  PVB
       film for architectural applications, while Sekisui would exercise at best only a remote  competitive  constraint  to  the  merged  entity.
       Furthermore, the transaction would bring together two competitors with particularly strong positions in the EEA. Thus, the transaction  is
       likely to lead to non-coordinated effects in an overall market for PVB film. Consequently, with regard to a potential PVB film market  for
       all applications in the EEA, the Commission considers that the transaction raises serious doubts as to its compatibility with the internal
       market.

5 Recycled PVB film

   96. For the sake of completeness, the Commission has also considered the effects of the proposed transaction on a  potential  market  for  the
       supply of recycled PVB film.

   97. According to the Notifying Party, virgin PVB film and recycled PVB film are  functionally  almost  identical  and  have  almost  the  same
       applications, except that recycled film is not typically used in high-end applications.

   98. The market investigation showed that recycled PVB film is used to a limited extent by customers, mainly in segments where quality is  less
       important, such as aftermarkets of automotive applications (e.g. replacement windshields). In 2012 the sales  of  recycled  PVB  film  for
       automotive and architectural applications in the EEA were approximately EUR […], i.e. only […]% of the overall EEA PVB market of EUR […].

   99. Although currently only Kuraray and GLSV produce recycled PVB film in the EEA, the barriers to entry appear low,  if  any.  As  a  way  of
       example, a customer stated that it produces its own recycled PVB film for automotive applications based on its PVB  trims  collection.[60]
       Therefore, it appears that in case the merged entity were to attempt to increase prices of recycled PVB film, competitors such as  Sekisui
       and Eastman could enter that potential market. Moreover, customers (especially the large ones that account for the vast  majority  of  the
       Parties' sales) could produce themselves recycled PVB film for the limited applications that they use it, thus rendering unprofitable  any
       attempt to increase prices by the merged entity.

  100. According to the Parties' sales data at table 5 of the Form CO, recycled PVB film is on average only [5-10]% less  expensive  than  virgin
       PVB film. Thus, a price increase by the merged entity is unlikely to be profitable, as it would essentially lead customers  to  switch  to
       virgin PVB film.

  101. In view of the above, with respect to a potential separate market for recycled PVB film, the transaction would not raise serious doubts as
       to its compatibility with the internal market.

4  Conclusion

  102. In view of the above, the Commission concludes that the transaction raises serious doubts as to its compatibility with the internal market
       in the following potential markets: (i) the supply of PVB film for all applications in the EEA; and  (ii)  the  supply  of  PVB  film  for
       architectural applications in the EEA.

Vertically Affected Markets

  103. The proposed transaction also gives rise to vertically affected markets between (i) VAM and PVA, and (ii) PVA and PVB resin.

1 Vertical links between VAM (upstream) and PVA (downstream)

1 VAM

1 Product market definition

  104. VAM is a commodity chemical derived from acetic acid which takes the form of a colourless liquid, most commonly produced by  the  addition
       of acetic acid to ethylene. 70-80% of global VAM production is used in the manufacturing of PVA. In 2012, sales of VAM amounted to EUR […]
       worldwide and EUR […] in the EEA.

  105. The Commission has previously considered that VAM constitutes a single relevant product market.[61]The Notifying Party  agrees  with  the
       Commission's approach.

  106. In any event, the precise product market definition regarding VAM can  ultimately  be  left  open,  as  the  outcome  of  the  competitive
       assessment in the present case would not change under any plausible market definition.

2 Geographic market definition

  107. The Commission has previously considered that VAM constitutes a single relevant product market, global in scope.[62]

  108. The Notifying Party agrees with the Commission view and submits that international trade flows  have  increased  in  the  last  years  and
       imports now represent over one third of EEA VAM consumption.

  109. In any event, the precise geographic market definition regarding VAM can ultimately be left  open,  as  the  outcome  of  the  competitive
       assessment in the present case would not change under any plausible market definition.

2 PVA

1 Product market definition

  110. As analysed in section "IV.A.1", the precise product market definition regarding PVA can ultimately be left open, as the  outcome  of  the
       competitive assessment in the present case would not change under any other plausible market definition.

2 Geographic market definition

  111. As analysed in section "IV.A.2", the precise geographic market definition regarding PVA can ultimately be left open,  as  the  competitive
       assessment in the present case would not change under any plausible market definition.

3 Competitive assessment of vertical links between VAM and PVA

  112. The concentration would give rise to vertical links between the upstream market for VAM and the downstream market for  PVA.  The  Parties'
       combined market shares on the PVA market are [30-40]% in volume ([30-40]% in value) in the EEA and [10-20]% in volume ([20-30]% in  value)
       worldwide.

  113. Any input foreclosure is unlikely in light of the Parties' small market shares on the VAM market worldwide (GSLV [5-10]%, Kuraray  [0-5]%)
       and in the EEA (GSLV [0-5]%, Kuraray [0-5]%). Customer foreclosure would also be very unlikely since Kuraray's production of VAM  is  […],
       while GSLV's share on the PVA market is [0-5]% worldwide and [0-5]% in the EEA. As a result, under any plausible market definition,  input
       or customer foreclosure is unlikely with regard to the VAM and PVA markets.

  114. Consequently, the Commission considers that as regards the vertical links between VAM and PVA  the  transaction  does  not  raise  serious
       doubts as to its compatibility with the internal market

2 Vertical links between PVA (upstream) and PVB resin for technical applications (downstream)

1 PVA

1 Product market definition

  115. As analysed in section "IV.A.1", the precise product market definition regarding PVA can ultimately be left open, as the  outcome  of  the
       competitive assessment would not change under any plausible market definition.

2 Geographic market definition

  116. As analysed in section "IV.A.2", the precise geographic market definition regarding PVA can ultimately be left open, as the outcome of the
       competitive assessment would not change under any plausible market definition.

2 PVB resin for technical applications

1 Product market definition

  117. PVB resin is a polyvinyl acetal. The Notifying Party submits that PVB resin can be divided into film and non-film (technical) grades. Film
       grades are used to manufacture PVB film used as interlayers in laminate safety glass (hereinafter "PVB resin for  film"),  while  non-film
       grades of PVB resin are used for various technical applications (hereinafter "PVB resin for technical applications").

  118. According to data provided by the Parties, there is no merchant market for PVB resin for film in the EEA,[63] as the whole  production  of
       PVB resin for film is consumed captively by vertically integrated producers of PVB film, such as  Kuraray  and  GLSV.  Thus,  the  present
       Decision analyses only the vertical relations between PVA and PVB resin for technical applications.

  119. The market for PVB resin for technical applications is a small, specialised market, with total demand amounting to only EUR  […]  globally
       and EUR […] in the EEA. Technical applications include paints, inks, lacquers, adhesives, removable coatings and ceramics.

  120. The Commission did not define the relevant product market for PVB resin in any of its previous decisions.

  121. However, the precise product market definition regarding PVB resin for technical applications can ultimately be left open, as the  outcome
       of the competitive assessment would not change under any plausible market definition.

2 Geographic market definition

  122. The Commission did not define the relevant geographic market for PVB resin in any of its previous decisions.

  123. The Notifying Party submits that the market for PVB resin for technical applications is at least EEA-wide in scope, if not worldwide,  due
       to the arguably low transport costs stemming from the fact that PVB resin is  a  powder  that  can  be  shipped  and  stored  without  any
       difficulty.

  124. However, the precise geographic market definition regarding PVB resin for technical applications can  ultimately  be  left  open,  as  the
       outcome of the competitive assessment would not change under any plausible market definition.

3 Competitive assessment of vertical links between PVA and PVB resin for technical applications

  125. The transaction would give rise to vertical links between the upstream market for  PVA  and  the  downstream  market  for  PVB  resin  for
       technical applications. On the latter market, Kuraray has significant market shares ([30-40]% worldwide and [70-80]% in the EEA). GLSV  is
       not present in this market as it does not produce this type of PVB resin. The Parties' combined market shares on the PVA market  are  [30-
       40]% in volume ([30-40]% in value) in the EEA and [10-20]% in volume ([20-30]% in value) worldwide.

  126. Kuraray produces PVB resin for technical applications at its plant in Frankfurt, Germany, which has annual  capacity  of  […]  tonnes  for
       technical grades and supplies it to the merchant market, of which […] tonnes are sold in  the  EEA.  Overall  demand  for  PVB  resin  for
       technical applications is also very small at […] tonnes per annum ([...] tonnes in the EEA) –  this  reflects  […]  of  global  PVB  resin
       capacity.

  127. In addition, input foreclosure can be excluded, since Kuraray is vertically integrated upstream in the  production  of  PVA  and,  in  any
       event, GLSV has only [0-5]% of the EEA PVA market. Both Eastman and Sekisui  also  produce  PVA.  Kuraray  is  not  vertically  integrated
       downstream of PVB resin for technical applications, i.e. it does not manufacture any finished or intermediate  products  that  incorporate
       such resin. Neither does GLSV.

  128. As regards input foreclosure, as explained in recital 21, the market investigation confirmed that there is  a  sufficient  number  of  PVA
       producers able to produce the PVA grades required for PVB resin for technical applications. As regards customer foreclosure, any risks can
       be excluded given the very small size of the market for PVB resin for technical applications relative to that of the market for PVA.

  129. Consequently, the Commission considers that the transaction does not raise serious doubts as to its compatibility with the internal market
       regarding the vertically affected markets in relation to PVA and PVB resin.

Proposed Remedies

1 Description of the proposed commitments

  130. In order to render the concentration compatible with the internal market, the Notifying Party has modified the notified  concentration  by
       submitting commitments (the "Commitments")[64], which are annexed to this Decision and form an integral part thereof.

  131. In particular, pursuant to the Commitments, Kuraray committed to divest the GLSV's  PVB film manufacturing facility in  Uentrop,  Germany,
       as well as all associated technical, sales and customer support personnel (the "Divestment Business") to an independent third party.

  132. The Divestment Business consists of three elements, which essentially represent GLSV's production and sales of PVB film for  architectural
       customers in Europe, the Middle East and Africa (the "EMEA" region), namely:

          a) GLSV's PVB film manufacturing facility in Uentrop: this is the primary component of the Divestment Business. It produces PVB film on
             […] and currently has an annual capacity of […] tonnes. [Details of potential investment plans]. The facility has  the  capacity  to
             produce film for both architectural and automotive applications in all standard grades and thicknesses, including  both  jumbo  size
             film (314 cm wide) and smaller (non-jumbo) film. Currently, the facility focuses  on  the  manufacture  of  film  for  architectural
             applications, which consistently accounts for around [70-80]% of its  output.  In  principle,  all  personnel  in  Uentrop  will  be
             transferred to the purchaser of the Divestment Business and all production know-how will remain with the Divestment Business.

          b) Associated EMEA sales, customer service, technical and R&D support functions:  in addition, the Divestment Business will  include  a
             long-term lease agreement for GLSV's facility in Mechelen, Belgium, which houses a customer service group, a supply chain  team  and
             an R&D/technical service lab, together with all personnel that are necessary to ensure  the  continuation  and  development  of  the
             Divestment Business' operations. The Divestment Business will also include a transfer of all other personnel currently  employed  in
             sales, customer service and technical support functions in relation to the Divestment Business

          c) A long-term supply agreement for PVB resin on a cost-plus basis: at present, the Divestment Business  is  supplied  with  PVB  resin
             internally by GLSV from its PVB resin plants in the USA. In order to ensure  the  continuous  and  uninterrupted  operation  of  the
             Divestment Business, the purchaser will be granted the option of entering into a supply agreement with  Kuraray  for  the  same  PVB
             resin post-divestiture. Kuraray undertakes to supply the Divestment Business with PVB resin on cost-plus terms for an initial period
             of 3 years (renewable for up to two further one-year terms) and will guarantee that the specifications of such  resin  will  be  the
             same as that currently used at the Divestment Business.

          d) Licences including the "Butacite" trademark: licences to all intangible assets that are used in  the  operation  of  the  Divestment
             Business and all other IP and know-how that the Divestment Business uses in its production and marketing of PVB film.

          e) A contract for interleaving and warehousing services: an assignment of GLSV's  contract  with  the  third  party  that  operates  an
             interleaving facility and warehousing facility for GLSV in Venlo (the Netherlands).

  133. In addition, the Notifying Party has entered into related commitments, inter alia regarding the separation of the Divestment Business from
       the retained businesses, the preservation of the viability, marketability and competitiveness of the Divestment  Business,  including  the
       appointment of a monitoring trustee and, if necessary, a divestiture trustee.

2 The Commission's assessment of the Commitments

1 Framework for the Commission's assessment of the Commitments

  134. Where a notified concentration raises serious doubts as to its compatibility with the internal market, the parties may modify the notified
       concentration so as to remove the grounds for the serious doubts identified by the Commission with a view to having it declared compatible
       with the internal market pursuant to Article 6(1)(b) in conjunction with Article 6(2) of the Merger Regulation.

  135. As set out in the Commission Notice on Remedies[65], commitments have to eliminate the Commission's serious doubts entirely, they have  to
       be comprehensive and effective from all points of view and they must be capable of being implemented effectively within a short period  of
       time, as the conditions of competition on the market will not be maintained until the commitments have been fulfilled.[66]

  136. In assessing whether or not commitments will restore effective competition, the Commission  considers  their  type,  scale  and  scope  by
       reference to the structure and the particular characteristics of the market in which the Commission has identified serious  doubts  as  to
       the compatibility of the notified concentration with the internal market.[67]

  137. Divestiture commitments are the best way to  eliminate  serious  doubts  resulting  from  horizontal  overlaps  of  the  merging  parties'
       activities.[68] Other commitments (such as licensing) may be suitable to resolve serious doubts if those  commitments  are  equivalent  to
       divestitures in their effects. The divested activities must consist of a viable business that, if operated by a  suitable  purchaser,  can
       compete effectively with the merged entity on a lasting basis and that is divested as a going concern.[69]

  138. The business to be divested must include all the assets which contribute to its current operation or which are  necessary  to  ensure  its
       viability and competitiveness and all personnel which are currently employed or which are necessary to ensure the business' viability  and
       competitiveness. Personnel and assets which are currently shared between the business to be divested and other businesses of the  parties,
       but which contribute to the operation of the business or which are necessary to ensure its viability and  competitiveness,  must  also  be
       included. Otherwise, the viability and competitiveness of the business to be divested would be endangered. Therefore, the business  to  be
       divested must contain the personnel providing essential functions for the business, at least in a sufficient proportion to  meet  the  on-
       going needs of the business to be divested.[70]

  139. Furthermore, the intended effect of the divestiture will only be achieved if and once the business is transferred to a suitable  purchaser
       with proven relevant expertise and ability to maintain and develop the business  to  be  divested  as  a  viable  and  active  competitive
       undertaking.

2 The Commission's market test and assessment of the Commitments

1 The results of the market test

  140. The Commission launched a market test of the Commitments on 4 April 2014. Overall, the market test  was  positive  as  to  the  scope  and
       suitability of the Commitments to remedy the serious doubts identified by the Commission as to the compatibility of the  transaction  with
       the internal market. However, the market test identified specific elements of the Commitments  that  were  subsequently  improved  by  the
       second and final version of the Commitments submitted on 15 April 2014.

  141. Competitors and customers generally considered that the Divestment Business includes all necessary assets and would  be  able  to  compete
       effectively with the merged entity. However, certain respondents called for caution in relation to  the  transitional  agreement  for  the
       supply of PVB resin (the main input for the production of PVB film). Some respondents stated that the 3-year duration of the agreement may
       not be sufficient for the Divestment Business to start producing PVB resin or to establish a credible supply relationship with a  producer
       of PVB resin. Furthermore, given that PVB resin represents a substantial amount of the production cost of PVB film,  the  pricing  of  the
       supply agreement will be key for the competitiveness of the purchaser of the Divestment Business. The "cost plus" price  provided  for  in
       the Commitments was considered difficult to determine in view of the lack of an industry reference and could thus be arbitrary.

  142. The Notifying Party agreed to address the issues expressed during the market test and on 15 April 2014 submitted a revised version of  the
       Commitments (i) extending the duration of the agreement from three years to three years renewable for up to two  further  one-year  terms,
       and (ii) involving an independent expert (whose appointment will be agreed with the Monitoring Trustee) in the determination of a fair and
       competitive "cost plus" price.

2 Suitability of the Commitments to remove the serious doubts

  143. The Commitments, consisting in the divestiture of a production facility and associated assets, constitute a structural measure.  In  fact,
       the sale of the Divestment Business to an independent and  suitable  purchaser  will  dissipate  the  serious  doubts  identified  by  the
       Commission as to the compatibility of   the transaction with the internal market and will  not  require  medium  or  long-term  monitoring
       measures. The new commercial structure resulting from the implementation of the Commitments will be sufficiently workable and  lasting  to
       ensure that a significant impediment to effective competition will not materialise.[71]

  144. The Divestment Business has accounted for [80-90]% of the GLSV's EEA sales of PVB film for architectural applications in each of the  last
       five years. In 2013, [90-100]% of the PVB film for architectural applications that GLSV sold in the EEA was manufactured  in  Uentrop.  As
       such, the Divestment Business accounts for virtually all of the Divestment Business' EEA sales of PVB film for architectural applications.
       [GLSV sales by facility].

1 PVB film for architectural applications

  145. In particular, assuming that the Divestment Business would continue to produce PVB film for architectural and automotive  applications  at
       the same ratio ([…]) as today, the post-remedies market shares for the supply of PVB film for architectural applications in the EEA  would
       change as follows:

       Table 5: Reconstruction of market shares in PVB film for architectural applications post-merger, with and without the remedies

|SALES 2013 - CURRENT MARKET SHARES                                |          |             |            |
|                             |  |                      |          |          |             |            |
|ARCHITECTURAL PVB FILM       |  |   |EEA %             |
|Kuraray                      |  |   |[40-50]%          |
|DuPont                       |  |   |[10-20]%          |
|COMBINED                     |  |   |[50-60]%          |
|Eastman                      |  |   |[40-50]%          |
|Sekisui                      |  |   |[0-5]%            |
|Others[72]                   |  |   |0%                |
|Total                        |  |   |100%              |

|SALES 2013 -  POST-REMEDIES MARKET SHARES                                                 |            |
|                             |  |                     |          |          |            |            |
|ARCHITECTURAL PVB FILM       |  |   |EEA %             |
|Kuraray                      |  |   |[40-50]%          |
|DuPont                       |  |   |<1%               |
|COMBINED                     |  |   |[40-50]%          |
|Eastman                      |  |   |[40-50]%          |
|Sekisui                      |  |   |[0-5]%            |
|Buyer                        |  |   |[10-20]%          |
|Others[73]                   |  |   |0%                |
|Total                        |  |   |100%              |
|                             |  |                     |          |          |            |            |

      Source: Commission reconstruction on the basis of competitors' replies to the data request of Questionnaire Q2

  146. Therefore, the Commitments would remove virtually all the increment that would have been added by the transaction in a potential market of
       PVB film for architectural applications in the EEA. Specifically, the increment would be reduced from  [10-20]%  to  less  than  1%  post-
       remedies. In parallel, the Commitments would lead to the creation of a new significant player with approximately [10-20]% market share  in
       such a market.

2 PVB film for all applications

  147. Furthermore, assuming that the Divestment Business would continue to produce PVB film for architectural and automotive applications at the
       same ratio ([…]) as today, the post-remedies market shares for the supply of all PVB film in the EEA would change as follows:

       Table 6: Reconstruction of market shares in PVB film post-merger, with and without the remedies

|SALES 2013 – CURRENT MARKET SHARES                                    |      |             |            |
|                             |  |                          |          |      |             |            |
|ALL PVB FILM                 |  |   |EEA %          |
|Kuraray                      |  |      |[20-30]%       |
|DuPont                       |  |      |[10-20]%       |
|COMBINED                     |  |      |[30-40]%       |
|Eastman                      |  |      |[30-40]%       |
|Sekisui                      |  |      |[20-30]%       |
|Others[74]                   |  |      |0%             |
|Total                        |  |      |100%           |
|                             |  |                          |          |      |             |            |
|SALES 2013 – POST-REMEDIES MARKET SHARES                                                   |            |
|                            |  |                        |          |        |              |            |
|ALL PVB FILM                |  |   | EEA %          |
|Kuraray                     |  |   |[20-30]%        |
|DuPont                      |  |   |[0-5]%          |
|COMBINED                    |  |   |[20-30]%        |
|Eastman                     |  |   |[30-40]%        |
|Sekisui                     |  |   |[20-30]%        |
|Buyer                       |  |   |[5-10]%         |
|Others[75]                  |  |   |0%              |
|Total                       |  |100%               |   |100%            |
|                            |  |                        |          |        |              |            |

      Source: Commission reconstruction on the basis of competitors' replies to the data request of Questionnaire Q2

  148. Therefore, the Commitments would remove almost the entirety of the increment that would have been added by the transaction in a  potential
       market for all PVB film in the EEA. Specifically, the increment would be reduced from [10-20]% to approximately [0-5]% in such a potential
       market post-remedies. In parallel, the Commitments would lead to the creation of a  new  significant  player  with  approximately  [5-10]%
       market share in such a market.

3 Production capabilities of the Divestment Business

  149. Overall, the Divestment Business is able to produce all standard grades of PVB film in all of the most  widely-purchased  thicknesses  and
       widths. It can also produce coloured PVB film but does not produce acoustic or embossed films. Based  on  the  existing  product  mix  the
       Divestment Business could serve the market in virtually the same way as GLSV does today. In addition,  the  purchaser  of  the  Divestment
       Business could introduce further capabilities, for instance to manufacture shadeband, embossed film and/or acoustic film  at  Uentrop.[76]
       [Details of potential investment plans].

3 Transitional supply agreement for PVB resin

  150. The current specifications for PVB film produced by the Divestment Business require PVB resin manufactured by GLSV at Washington Works  or
       Fayetteville in the USA, and switching to other sources of PVB resin may require a short transition period. Some technical work  would  be
       required in order to transition the Divestment Business to a different type of PVB resin from a different source.  For  example,  the  PVB
       film recipe would need to be reformulated to ensure that the final PVB film product maintains similar physical  properties.  In  addition,
       the quantities of other inputs for PVB resin, e.g. plasticiser and additives, would need to be adjusted to ensure replication of  the  PVB
       film currently produced in Uentrop. The Notifying Party submitted that the technical effort required is relatively limited, such that  the
       purchaser could transition Uentrop to a new source of PVB resin within 1-3 years. This could be achieved in a number of ways including:

         a) in the case of a purchaser that manufactures PVB resin, either by transitioning the  Divestment  Business  to  use  the  purchaser's
            current PVB resin or by developing a new PVB resin using the purchaser's existing capabilities; or

         b) in the case of a purchaser that does not manufacture PVB resin, by sourcing supply of suitable resin from a third party, for example
            from Eastman, Sekisui, Sinopec/Wuhan or any other Asian PVB resin manufacturer.

  151. In any event, Kuraray has committed to enter into a transitional supply agreement with the purchaser of the Divestment  Business  for  the
       same PVB resin that is currently used in Uentrop, in order to  ensure  the  continuous  and  uninterrupted  operation  of  the  Divestment
       Business. Kuraray undertakes to supply the Divestment Business with PVB resin on  cost-plus  terms  for  an  initial  period  of  3  years
       (renewable for up to two further one-year terms) and will guarantee that the specifications of  such  resin  will  be  the  same  as  that
       currently used at the Divestment Business.

4 Viability of the Divestment Business

  152. The Divestment Business is profitable. It generated revenues from sales of PVB film of EUR […] million in 2012  and  EUR  […]  million  in
       2013. [Details of potential investment plans]. This investment will generate an estimated return of USD […] million (net  present  value).
       According to financial projections submitted by the Notifying Party, revenue is forecasted to increase by […]% from 2013 to 2016 and gross
       margins to increase by […]% over the same period. EBITDA is projected to grow by […]% between 2013 and 2016.

5 Purchaser criteria and potential buyers

   The market test revealed several different categories of potential purchasers, including: (i) companies active in the production of PVA
       seeking to vertically integrate downstream; (ii) companies with manufacturing capabilities for PVB resin or PVB film; and (iii) private
       equity investors with some chemical industry experience.

   Generally, both competitors and customers stated that the potential purchaser does not need to be already active in the supply of PVB film,
       but it could be active in one of the upstream markets (e.g. VAM, PVA), in the supply of neighbouring chemical products, or could even be a
       private equity investor. Several respondents, however, stated that it would be preferable that the buyer is integrated upstream, with the
       capacity to produce PVB resin, since, as explained in recital 141, PVB resin is key to the long term competitiveness of the purchaser.

   Specifically, the market test revealed […] interested buyers, namely […] companies active in the PVB film supply chain and […] private equity
       investors.

3 Conclusion on the Commitments

   On the basis of the above, the Commission concludes that the Commitments are suitable and sufficient to remedy the serious doubts raised by
       the transaction in the potential markets for:  (i) the supply of PVB film for all applications in the EEA; and (ii) the supply of PVB film
       for architectural applications in the EEA. Moreover, the Commitments are comprehensive and effective from all points of view, and are
       capable of being implemented effectively within a short period of time.

   The Commitments remove almost entirely the increment that would have been added by the transaction in the potential markets for the supply of
       PVB film for architectural applications in the EEA and for the supply of PVB film for all applications in the EEA.

   Finally, the Commitments will also create an important competitor in the supply of PVB film with a particularly strong position in
       architectural applications in the EEA, [Details of potential investment plans], and react to any market changes.

Conditions and Obligations

  153. Pursuant to the first sentence of the second subparagraph of Article 6(2) of the Merger Regulation,  the  Commission  may  attach  to  its
       decision conditions and obligations intended to ensure that the undertakings concerned comply with the commitments they have entered  into
       vis-à-vis the Commission with a view to rendering the concentration compatible with the internal market.

  154. The achievement of the measure that gives rise to the structural change of the market is a condition, whereas the implementing steps which
       are necessary to achieve this result are generally obligations on the parties. Where  a  condition  is  not  fulfilled,  the  Commission's
       decision declaring the concentration compatible with the internal market and the EEA Agreement no longer stands.  Where  the  undertakings
       concerned commit a breach of an obligation, the Commission may revoke the clearance decision in accordance with  Article  8(6)(b)  of  the
       Merger Regulation. The undertakings concerned may also be subject to fines and periodic penalty payments under Articles 14(2) and 15(1) of
       the Merger Regulation.

  155. In accordance with the basic distinction between conditions and obligations, the decision in this case is conditional on  full  compliance
       with the requirements set out in Section B of the final Commitments, which constitute conditions. The remaining requirements  set  out  in
       the other Sections of the said Commitments are considered to constitute obligations.

  156. The full text of the final Commitments is annexed to this Decision as Annex I and forms an integral part thereof.

Conclusion

  157. For the above reasons, the Commission has decided not to oppose the notified operation as modified by the commitments and  to  declare  it
       compatible with the internal market and with the functioning of the EEA Agreement, subject to  full  compliance  with  the  conditions  in
       Section B of the Commitments annexed to this Decision and with the obligations contained in the other Sections of  the  said  commitments.
       This decision is adopted in application of Article 6(1)(b) in conjunction with Article 6(2) of the Merger Regulation.

For the Commission

signed)
Joaquín ALMUNIA
Vice-President

                                                                                                                                       15/04/2014

                                                       Case M. 7115 – Kuraray/GLSV Business

                                                      COMMITMENTS TO THE EUROPEAN COMMISSION

Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “Merger Regulation”), Kuraray Co., Ltd. (the “Notifying Party”) hereby
enters into the following Commitments (the “Commitments”) vis-à-vis the European Commission (the “Commission”) with a view to rendering its
acquisition of assets that form part of the Glass Laminating Solutions/Vinyls Business (the “GLSV Business”) of E. I. du Pont de Nemours and
Company (“DuPont”) (the “Concentration”) compatible with the internal market and the functioning of the EEA Agreement.

This text shall be interpreted in light of the Commission’s decision pursuant to Article 6(1)(b) of the Merger Regulation, to declare the
Concentration compatible with the internal market and the functioning of the EEA Agreement (the “Decision”), in the general framework of
European Union law, in particular in light of the Merger Regulation, and by reference to the Commission Notice on remedies acceptable under
Council Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004 (the “Remedies Notice”).

Section A.  Definitions

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

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

   Assets: the assets that contribute to the current operation or are necessary to ensure the viability and competitiveness of the Divestment
   Business as indicated in Section B, paragraph 6 (a), (b) and (c) and described more in detail in the Schedule.

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

   Closing Period: the period of 3 months from the approval of the Purchaser and the terms of sale by the Commission.

   Confidential Information: any business secrets, know-how, commercial information, or any other information of a proprietary nature that is not
   in the public domain.

   Conflict of Interest: any conflict of interest that impairs the Trustee's objectivity and independence in discharging its duties under the
   Commitments.

   Divestment Business: the business or businesses as defined in Section B and in the Schedule which the Notifying Party commits to divest,
   consisting of the entire GLSV Business in the EMEA region with the exception of (i) the GLSV Business’ PVB film recycling facility in Holesov
   (Czech Republic) and all personnel, intellectual property, customer contracts or goodwill specific to the manufacture and sale of recycled PVB
   film from such facility, (ii) any personnel, intellectual property, customer contracts or goodwill in relation to the SentryGlas product and
   (iii) any personnel, intellectual property, customer contracts and goodwill in relation to the PVA or VAM products.  For the avoidance of
   doubt, the Divestment Business does not include any tangible or intangible assets or personnel outside of the EMEA region.

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

   Effective Date: the date of adoption of the Decision.

   EMEA: The countries of Europe, the Middle East and Africa.

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

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

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

   Kuraray: Kuraray Co., Ltd., incorporated under the laws of Japan, with its registered office at 1621, Sakazu, Kurashiki City, Okayama
   Prefecture, Japan and registered with the Commercial/Company Register at Okayama Legal Affairs Bureau under number 2600-01-013156.

   Mechelen Facility: the GLSV Business’ R&D/technical service laboratory and customer service/technical support facility located at Antoon
   Spinoystraat 6, Mechelen 2800, Belgium.

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

   Parties: the Notifying Party and the undertaking that is the target of the concentration.

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

   Primary Acquisition Effective Date: […], being the date upon which Kuraray formally obtains legal title to the GLSV Business pursuant to the
   ASPA between Kuraray and DuPont dated […].

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

   Purchaser Criteria: the criteria laid down in paragraph 16 of these Commitments that the Purchaser must fulfil in order to be approved by the
   Commission.

   PVA: Polyvinyl Alcohol.

   PVB: Polyvinyl Butyral.

   Schedule: the schedule to these Commitments describing more in detail the Divestment Business.

   Trustee(s): the Monitoring Trustee and/or the Divestiture Trustee as the case may be.

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

   Uentrop Facility: the GLSV Business’ PVB film manufacturing facility in Uentrop, located at Frielinghauser Straße 5, 59071 Hamm, Germany.

   VAM: Vinyl Acetate Monomer.

Section B.  The commitment to divest and the Divestment Business

      Commitment to divest

2. In order to maintain effective competition, Kuraray commits to divest, or procure the divestiture of the Divestment Business  by  the  end  of
   the Trustee Divestiture Period as a going concern to a purchaser and on terms of sale approved  by  the  Commission  in  accordance  with  the
   procedure described in paragraph 17 of these Commitments. To carry out the divestiture, Kuraray commits to find a purchaser and to enter  into
   a final binding sale and purchase agreement for the sale of the Divestment Business within the First Divestiture Period. If  Kuraray  has  not
   entered into such an agreement at the end of the First Divestiture Period, Kuraray shall grant the Divestiture Trustee an exclusive mandate to
   sell the Divestment Business in accordance with the procedure described in paragraph 29 in the Trustee Divestiture Period.

3. Kuraray shall be deemed to have complied with this commitment if:

      (a)   by the end of the Trustee Divestiture Period, Kuraray or the Divestiture Trustee has entered into a final binding sale and purchase
           agreement and the Commission approves the proposed purchaser and the terms of sale as being consistent with the Commitments in
           accordance with the procedure described in paragraph 17; and

      (b)   the Closing of the sale of the Divestment Business to the Purchaser takes place within the Closing Period.

4. In order to maintain the structural effect of the Commitments, the Notifying Party shall,  for  a  period  of  10  years  after  Closing,  not
   acquire, whether directly or indirectly, the possibility of exercising influence (as defined in paragraph 43 of the Remedies Notice,  footnote
   3) over the whole or part of the Divestment Business, unless, following the submission of a reasoned request from the Notifying Party  showing
   good cause and accompanied by a report from the Monitoring Trustee (as provided in paragraph 43 of these Commitments),  the  Commission  finds
   that the structure of the market has changed to such an extent that the absence of  influence  over  the  Divestment  Business  is  no  longer
   necessary to render the proposed concentration compatible with the internal market.

      Structure and definition of the Divestment Business

5. The Divestment Business consists of the entire GLSV Business in the EMEA region with  the  exception  of  (i)  the  GLSV  Business’  PVB  film
   recycling facility in Holesov (Czech Republic) and all personnel, intellectual property,  customer  contracts  or  goodwill  specific  to  the
   manufacture and sale of recycled PVB film from such facility, (ii) any personnel, intellectual property, customer  contracts  or  goodwill  in
   relation to the SentryGlas product and (iii) any personnel, intellectual property, customer contracts and goodwill in relation to the  PVA  or
   VAM products.  For the avoidance of doubt, the Divestment Business does not include any tangible or intangible assets or personnel outside  of
   the EMEA region. Specifically, the Divestment Business shall include the following:

   (a)      All tangible assets that comprise the Uentrop Facility including its jumbo PVB film extrusion line with current capacity of […] MT
           per annum;

   (b)      All employees at the Uentrop Facility;

   (c)      Licenses to all intangible assets that are used in the operation of the Divestment Business, including the “Butacite” trademark and
           all other IP and know-how that the Divestment Business uses in its production and marketing of PVB film, under terms described in the
           Schedules;

   (d)      At the purchaser’s option, an agreement under which Kuraray will supply PVB resin to the Uentrop Facility of the same specification
           as currently supplied by the GLSV Business for consumption at the Uentrop Facility, in such amounts as the Divestment Business may
           stipulate to support the PVB film capacity at Uentrop Facility, on terms to be negotiated between Kuraray and the purchaser with
           pricing on a cost-plus basis (such price to be determined by an independent expert whose appointment will be agreed with the
           Monitoring Trustee), for an initial period of three years renewable for up to two further one-year terms;

   (e)      At the purchaser’s option, a transfer of all toll manufacturing and outsourcing agreements with third parties that support the
           Uentrop Facility;

   (f)            A long-term lease of the GLSV Business’ R&D/technical service laboratory at the Mechelen Facility and the transfer of all
           machinery, plant and equipment specific to the laboratory;

   (g)      All other tangible and intangible assets used by the employees at the Mechelen Facility (including customer service group and supply
           chain team) that will be transferred to the Divestment Business;

   (h)      All employees at the Mechelen Facility that are necessary to ensure the continuation and development of the Divestment Business’
           operations;

   (i)            All other sales representatives and customer service representatives of the GLSV Business that are necessary to support the
           Divestment Business in the EMEA region;

   (j)            An assignment of the GLSV Business’ contract with a third party that operates an interleaving facility and warehousing facility
           for the GLSV Business in Venlo (the Netherlands);

   (k)      The interleaving machinery, plant and equipment in Venlo that is owned by the GLSV Business and operated by a third party under
           contract (as described in point (j) above).

6. The legal and functional structure of the Divestment Business as operated to date is described  in  the  Schedule.  The  Divestment  Business,
   described in more detail in the Schedule, includes all assets and staff that contribute to the current operation or are  necessary  to  ensure
   the viability and competitiveness of the Divestment Business, in particular:

      (a)   all tangible and intangible assets (including intellectual property rights);

      (b)   all licences, permits and authorisations issued by any governmental organisation for the benefit of the Divestment Business;

      (c)   all contracts, leases, commitments and customer orders of the Divestment Business; all customer, credit and other records of the
           Divestment Business; and

      (d)   the Personnel.

7. In addition, the Divestment Business includes the benefit, for a transitional period of up  to  one  year  after  Closing  and  on  terms  and
   conditions equivalent to those at present afforded to the Divestment Business, of all current arrangements under which the  GLSV  Business  or
   its Affiliated Undertakings supply products or services to the Divestment Business, as detailed in the Schedule, unless otherwise agreed  with
   the Purchaser. Strict firewall procedures will be adopted so as to ensure that any competitively sensitive information related to, or  arising
   from such supply arrangements (for example, product roadmaps) will not be shared with, or passed on to, anyone outside the  business  unit  or
   division responsible for providing the products or services in question.

 Section C.  Related commitments

      Preservation of viability, marketability and competitiveness

8. From the Primary Acquisition Effective Date until Closing, the Notifying Party shall preserve or procure  the  preservation  of  the  economic
   viability, marketability and competitiveness of the Divestment Business, in accordance with good business practice, and shall minimise as  far
   as possible any risk of loss of competitive potential of the Divestment Business. In particular Kuraray undertakes:

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

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

    (c)    to take all reasonable steps, or procure that all reasonable steps are being taken, including appropriate incentive schemes (based on
           industry practice), to encourage all Key Personnel to remain with the Divestment Business, and not to solicit or move any Personnel
           to Kuraray’s remaining business. Where, nevertheless, individual members of the Key Personnel exceptionally leave the Divestment
           Business, Kuraray shall provide a reasoned proposal to replace the person or persons concerned to the Commission and the Monitoring
           Trustee. Kuraray must be able to demonstrate to the Commission that the replacement is well suited to carry out the functions
           exercised by those individual members of the Key Personnel. The replacement shall take place under the supervision of the Monitoring
           Trustee, who shall report to the Commission.

      Hold-separate obligations

9. The Notifying Party commits, from the Primary Acquisition Effective Date until Closing, to keep the  Divestment  Business  separate  from  the
   business(es) it is retaining and to ensure that unless explicitly permitted  under  these  Commitments:  (i)   management  and  staff  of  the
   business(es) retained by Kuraray have no involvement in the Divestment Business; (ii) the  Key  Personnel  and  Personnel  of  the  Divestment
   Business have no involvement in any business retained by Kuraray and do not report to any individual outside the Divestment Business.

10. Until Closing, Kuraray shall assist the Monitoring Trustee in ensuring that the Divestment Business is managed as  a  distinct  and  saleable
   entity separate from the business(es) which Kuraray is retaining. As soon as possible  after  the  adoption  of  the  Decision  and  following
   consultation with the Monitoring Trustee, Kuraray shall nominate a Hold Separate Manager, who will be formally appointed  by  Kuraray  on  the
   Primary Acquisition Effective Date. The Hold Separate Manager, who shall be part of the Key Personnel, shall manage  the  Divestment  Business
   independently and in the best interest of the  business  with  a  view  to  ensuring  its  continued  economic  viability,  marketability  and
   competitiveness and its independence from the businesses retained by Kuraray. The Hold Separate  Manager  shall  closely  cooperate  with  and
   report to the Monitoring Trustee and, if applicable, the Divestiture Trustee. Any replacement of the Hold Separate Manager shall be subject to
   the procedure laid down in paragraph 8(c) of these Commitments. The Commission may, after having heard Kuraray, require Kuraray to replace the
   Hold Separate Manager.

      Ring-fencing

11. Kuraray shall implement, or procure to implement, all necessary measures to ensure that it does not, after the Primary Acquisition  Effective
   Date, obtain any Confidential Information relating to the Divestment Business and that any such Confidential Information obtained  by  Kuraray
   before the Primary Acquisition Effective Date will be eliminated and not be used  by  Kuraray.  This  includes  measures  vis-à-vis  Kuraray’s
   appointees on the supervisory board and/or board of directors of the Divestment Business. In particular, the participation of  the  Divestment
   Business in any central information technology network shall be severed to the extent possible, without  compromising  the  viability  of  the
   Divestment Business. Kuraray may obtain or keep information relating to  the  Divestment  Business  which  is  reasonably  necessary  for  the
   divestiture of the Divestment Business or the disclosure of which to Kuraray is required by law.

      Non-solicitation clause

12. The Parties undertake, subject to customary limitations, not to solicit, and to procure that Affiliated Undertakings do not solicit, the  Key
   Personnel transferred with the Divestment Business for a period of two years after Closing.

      Due diligence

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

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

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

      Reporting

14. Kuraray shall submit written reports in English on potential purchasers of the Divestment Business and developments in the negotiations  with
   such potential purchasers to the Commission and the Monitoring Trustee no later than 10 days after  the  end  of  every  month  following  the
   Effective Date (or otherwise at the Commission’s request). Kuraray shall submit a list of all potential purchasers having  expressed  interest
   in acquiring the Divestment Business to the Commission at each and every stage of the divestiture process, as well as a copy of all the offers
   made by potential purchasers within five days of their receipt.

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

Section D.  The Purchaser

16. In order to be approved by the Commission, the Purchaser must fulfil the following criteria:

    (a)    The Purchaser shall be independent of and unconnected to the Notifying Party and its Affiliated Undertakings (this being assessed
           having regard to the situation following the divestiture).

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

    (c)    The acquisition of the Divestment Business by the Purchaser must neither be likely to create, in light of the information available
           to the Commission, prima facie competition concerns nor give rise to a risk that the implementation of the Commitments will be
           delayed. In particular, the Purchaser must reasonably be expected to obtain all necessary approvals from the relevant regulatory
           authorities for the acquisition of the Divestment Business.

17. The final binding sale and purchase agreement (as well as ancillary agreements) relating to the divestment of the Divestment  Business  shall
   be conditional on the Commission’s approval. When Kuraray has reached an agreement with a purchaser, it shall submit a  fully  documented  and
   reasoned proposal, including a copy of the final agreement(s), within one week to the Commission and the Monitoring Trustee. Kuraray  must  be
   able to demonstrate to the Commission that the purchaser fulfils the Purchaser Criteria and that the Divestment Business is being  sold  in  a
   manner consistent with the Commission's Decision and the Commitments. For the approval, the Commission shall verify that the purchaser fulfils
   the Purchaser Criteria and that the Divestment Business is being sold in a manner consistent with the Commitments including their objective to
   bring about a lasting structural change in the market. The Commission may approve the sale of the Divestment  Business  without  one  or  more
   Assets or parts of the Personnel, or by substituting one or more Assets or parts of the  Personnel  with  one  or  more  different  assets  or
   different personnel, if this does not affect the viability and competitiveness of the Divestment Business after the sale,  taking  account  of
   the proposed purchaser.

Section E.  Trustee

      I.    Appointment procedure

18. No later than two weeks after the Effective Date, Kuraray shall appoint a Monitoring Trustee to carry out the functions  specified  in  these
   Commitments for a Monitoring Trustee. The Notifying Party commits not to close the  Concentration  before  the  appointment  of  a  Monitoring
   Trustee.

19. If Kuraray has not entered into a binding sale and purchase agreement regarding the Divestment Business one  month  before  the  end  of  the
   First Divestiture Period or if the Commission has rejected a purchaser proposed by Kuraray at that time or thereafter, Kuraray shall appoint a
   Divestiture Trustee. The appointment of the Divestiture Trustee shall take effect upon the commencement of the Trustee Divestiture Period.

20. The Trustee shall:
    (i) at the time of appointment, be independent of the Notifying Party and its Affiliated Undertakings;
    (ii) possess the necessary qualifications to carry out its mandate, for example have sufficient relevant experience as an investment banker
    or consultant or auditor; and
    (iii) neither have nor become exposed to a Conflict of Interest.

21. The Trustee shall be remunerated by the Notifying Party in a way that does not  impede  the  independent  and  effective  fulfilment  of  its
   mandate. In particular, where the remuneration package of a Divestiture Trustee includes a success premium linked to the final sale  value  of
   the Divestment Business, such success premium may only be earned if the divestiture takes place within the Trustee Divestiture Period.

            Proposal by Kuraray

22. No later than one week after the Effective Date, Kuraray shall submit the name or names of one or more natural or legal persons whom  Kuraray
   proposes to appoint as the Monitoring Trustee to the Commission for approval. No later than one month before the end of the First  Divestiture
   Period or on request by the Commission, Kuraray shall submit a list of one or more persons whom Kuraray proposes  to  appoint  as  Divestiture
   Trustee to the Commission for approval. The proposal shall contain sufficient information for the Commission to  verify  that  the  person  or
   persons proposed as Trustee fulfil the requirements set out in paragraph 20 and shall include:

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

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

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

            Approval or rejection by the Commission

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

            New proposal by the Kuraray

24. If all the proposed Trustees are rejected, Kuraray shall submit the names of at least two more natural or legal persons within  one  week  of
   being informed of the rejection, in accordance with paragraphs 18 and 23 of these Commitments.

            Trustee nominated by the Commission

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

      II.   Functions of the Trustee

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

            Duties and obligations of the Monitoring Trustee

27. The Monitoring Trustee shall:

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

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

            (a)   monitor the preservation of the economic viability, marketability and competitiveness of the Divestment Business, and the
             keeping separate of the Divestment Business from the business retained by the Parties, in accordance with paragraphs 8 and 9 of
             these Commitments;

            (b)   supervise the management of the Divestment Business as a distinct and saleable entity, in accordance with paragraph 10 of these
             Commitments;

            (c)   with respect to Confidential Information:

               – determine all necessary measures to ensure that Kuraray does not after  the  Primary  Acquisition  Effective  Date  obtain  any
                 Confidential Information relating to the Divestment Business,
               – in particular strive for the severing of the Divestment Business’ participation in a central information technology network  to
                 the extent possible, without compromising the viability of the Divestment Business,
               – make sure that any Confidential Information relating to  the  Divestment  Business  obtained  by  Kuraray  before  the  Primary
                 Acquisition Effective Date is eliminated and will not be used by Kuraray and
               – decide whether such information may be disclosed to or kept by Kuraray as the  disclosure  is  reasonably  necessary  to  allow
                 Kuraray to carry out the divestiture or as the disclosure is required by law;

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

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

    iv) review and assess potential purchasers as well as the progress of the divestiture process and verify that, dependent on the stage of the
        divestiture process:

            (a)   potential purchasers receive sufficient and correct information relating to the Divestment Business and the Personnel in
             particular by reviewing, if available, the data room documentation, the information memorandum and the due diligence process, and

            (b)   potential purchasers are granted reasonable access to the Personnel;

     v) act as a contact point for any requests by third parties, in particular potential purchasers, in relation to the Commitments;

    vi) provide to the Commission, sending Kuraray a non-confidential copy at the same time, a written report within 15 days after  the  end  of
        every month that shall cover the operation and management of the Divestment Business  as  well  as  the  splitting  of  assets  and  the
        allocation of Personnel so that the Commission can assess whether the business is held in a manner consistent with the  Commitments  and
        the progress of the divestiture process as well as potential purchasers;

   vii) promptly report in writing to the Commission, sending Kuraray a non-confidential copy at the same time, if it  concludes  on  reasonable
        grounds that Kuraray is failing to comply with these Commitments;

  viii) within one week after receipt of the documented proposal referred to in paragraph 17 of these Commitments,  submit  to  the  Commission,
        sending Kuraray a non-confidential copy at the same time, a reasoned opinion as to the suitability  and  independence  of  the  proposed
        purchaser and the viability of the Divestment Business after the Sale and as to whether the Divestment Business  is  sold  in  a  manner
        consistent with the conditions and obligations attached to the Decision, in particular, if relevant, whether the Sale of the  Divestment
        Business without one or more Assets or not all of the Personnel affects the viability of the Divestment Business after the sale,  taking
        account of the proposed purchaser;

    ix) assume the other functions assigned to the Monitoring Trustee under the conditions and obligations attached to the Decision.

28. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the  Monitoring  Trustee  and  the  Divestiture  Trustee
   shall cooperate closely with each other during and for the purpose of the preparation of the Trustee Divestiture Period in order to facilitate
   each other's tasks.

            Duties and obligations of the Divestiture Trustee

29. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no  minimum  price  the  Divestment  Business  to  a  purchaser,
   provided that the Commission has approved both the purchaser and the final binding sale and purchase agreement (and ancillary  agreements)  as
   in line with the Commission's Decision and the Commitments in accordance with paragraphs 17 and  17  of  these  Commitments.  The  Divestiture
   Trustee shall include in the sale and purchase agreement (as well as in any ancillary agreements) such terms and conditions  as  it  considers
   appropriate for an expedient sale in the Trustee Divestiture Period. In particular, the Divestiture  Trustee  may  include  in  the  sale  and
   purchase agreement such customary representations and warranties  and  indemnities  as  are  reasonably  required  to  effect  the  sale.  The
   Divestiture Trustee shall protect the legitimate financial interests of Kuraray, subject to the Notifying Party’s unconditional obligation  to
   divest at no minimum price in the Trustee Divestiture Period.

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

      III.  Duties and obligations of the Parties

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

32. Kuraray shall provide the Monitoring Trustee with all managerial and administrative support that it may reasonably request on behalf  of  the
   management of the Divestment Business. This shall include all administrative support functions relating to the Divestment Business  which  are
   currently carried out at headquarters level. Kuraray shall provide and shall cause its advisors to provide the Monitoring Trustee, on request,
   with the information submitted to potential purchasers, in particular give the Monitoring Trustee access to the data  room  documentation  and
   all other information granted to potential purchasers in the due diligence procedure. Kuraray shall inform the Monitoring Trustee on  possible
   purchasers, submit lists of potential purchasers at each stage of the selection process, including the offers made by potential purchasers  at
   those stages, and keep the Monitoring Trustee informed of all developments in the divestiture process.

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

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

35. At the expense of Kuraray, the Trustee may appoint advisors (in particular for corporate finance  or  legal  advice),  subject  to  Kuraray’s
   approval (this approval not to be unreasonably withheld or delayed) if the Trustee considers the appointment of  such  advisors  necessary  or
   appropriate for the performance of its duties and obligations under the Mandate, provided that any fees and other  expenses  incurred  by  the
   Trustee are reasonable. Should Kuraray refuse to approve the advisors proposed by the Trustee the Commission may approve  the  appointment  of
   such advisors instead, after having heard Kuraray. Only the Trustee shall be entitled to issue instructions to the advisors. Paragraph  34  of
   these Commitments shall apply mutatis mutandis. In the Trustee Divestiture Period, the Divestiture Trustee may use advisors who served Kuraray
   during the Divestiture Period if the Divestiture Trustee considers this in the best interest of an expedient sale.

36. Kuraray agrees that the Commission may share Confidential Information proprietary  to  Kuraray  with  the  Trustee.  The  Trustee  shall  not
   disclose such information and the principles contained in Article 17 (1) and (2) of the Merger Regulation apply mutatis mutandis.

37. The Notifying Party agrees that the contact details of the Monitoring Trustee are published on the website of the  Commission's  Directorate-
   General for Competition and they shall inform interested third parties, in particular any potential purchasers, of the identity and the  tasks
   of the Monitoring Trustee.

38. For a period of 10 years from the Effective Date the Commission may request all information from the Parties that is reasonably necessary  to
   monitor the effective implementation of these Commitments.

      IV.   Replacement, discharge and reappointment of the Trustee

39. If the Trustee ceases to perform its functions under the Commitments or for any other good cause, including the exposure of the Trustee to  a
   Conflict of Interest:

    (a)    the Commission may, after hearing the Trustee and Kuraray, require Kuraray to replace the Trustee; or

    (b)    Kuraray may, with the prior approval of the Commission, replace the Trustee.

40. If the Trustee is removed according to paragraph 39 of these Commitments, the Trustee may be required to continue in  its  function  until  a
   new Trustee is in place to whom the Trustee has effected a full hand over of all relevant information. The new Trustee shall be  appointed  in
   accordance with the procedure referred to in paragraphs 18-25 of these Commitments.

41. Unless removed according to paragraph 39 of these Commitments, the Trustee shall cease to act  as  Trustee  only  after  the  Commission  has
   discharged it from its duties after all the Commitments with which the  Trustee  has  been  entrusted  have  been  implemented.  However,  the
   Commission may at any time require the reappointment of the Monitoring Trustee if it subsequently appears that the relevant remedies might not
   have been fully and properly implemented.

Section F.  The review clause

42. The Commission may extend the time periods foreseen in the Commitments in response to a request from Kuraray or,  in  appropriate  cases,  on
   its own initiative. Where Kuraray requests an extension of a time period, it shall submit a reasoned request to the Commission no  later  than
   one month before the expiry of that period, showing good cause. This request shall be accompanied by a report from the Monitoring Trustee, who
   shall, at the same time send a non-confidential copy of the report to the Notifying Party. Only in exceptional circumstances shall Kuraray  be
   entitled to request an extension within the last month of any period.

43. The Commission may further, in response to a reasoned request from the Notifying Party  showing good cause waive, modify  or  substitute,  in
   exceptional circumstances, one or more of the undertakings in these Commitments. This request shall  be  accompanied  by  a  report  from  the
   Monitoring Trustee, who shall, at the same time send a non-confidential copy of the report to the Notifying Party. The request shall not  have
   the effect of suspending the application of the undertaking and, in particular, of suspending the expiry of  any  time  period  in  which  the
   undertaking has to be complied with.

Section G.  Entry into force

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

      (signed)
      ……………………………………
      duly authorised for and on behalf of
      Kuraray Co., Ltd.
                                                                     SCHEDULE

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

           The Divestment Business has operated to date as part of the GLSV Business, which in turn forms part of DuPont’s Performance Materials
           business unit.  An organisational chart illustrating the pre-divestiture legal and functional structure is provided below (the
           Divestment Business currently forms part of the GLSV Business indicated as “PVB” in the chart below): [DuPont internal organisation
           chart]

      2.    In accordance with paragraph [5] of these Commitments, the Divestment Business includes, but is not limited to:

      (a)   the following main tangible assets:

           All tangible assets in relation to the GLSV Business’ PVB film manufacturing plant in Uentrop, Germany (the Uentrop Facility),
           including but not limited to:

               o Leased manufacturing facilities within a shared building (see map attached at Confidential Exhibit  1  –  area  marked  in  red)
                 including a jumbo PVB film extrusion line with current capacity of […] MT per annum and  all  associated  machinery,  plant  and
                 equipment;
               o An open area adjacent to the manufacturing facilities, for handling and  interim  storage,  including  cooling  and  ventilation
                 devices (see map attached at Confidential Exhibit 1 – area marked in green);
               o Four GLSV dedicated storage facilities plus adjacent ground (see map attached at Confidential Exhibit 2 – area marked in  blue);
                 and
               o All other machinery and equipment, devices, instruments and tools which form part of the Uentrop Facility and are necessary  and
                 contribute to their current operations, as listed in Confidential Exhibit 3;

           At the GLSV Business’ R&D/technical service laboratory and customer service/technical support facility in Mechelen, Belgium (the
           Mechelen Facility):

               o A laboratory (to be provided under a long-term lease from DuPont) and the machinery and other  equipment,  devices,  instruments
                 and tools located therein, as listed in Confidential Exhibit 4; and
               o All other tangible and intangible assets used by the employees at the Mechelen Facility (including customer  service  group  and
                 supply chain team) that will be transferred to the Divestment Business;

           At Venlo (the Netherlands):

               o Fixed interleaving machinery, plant and equipment that is operated by a third party under a contract the benefit of  which  will
                 be transferred to the Divestment Business.

       (b)  the following main intangible assets:

               o All know-how which currently resides at the Uentrop Facility;
               o A three year royalty-free, irrevocable, exclusive license to use the “Butacite” trademark for the sale of all virgin (i.e., non-
                 recycled) PVB film in the EMEA region;
               o An unconditional royalty-free, irrevocable, exclusive license granted in perpetuity to use the following patents  necessary  for
                 the production and sale of PVB film at the Uentrop Facility:

[…]

      (c)   the following main licences, permits and authorisations:

           All licenses, permits and authorizations issued by any governmental organization solely for the benefit of the Divestment Business,
           including but not limited to the following in respect of the Uentrop Facility:

                 […]

       (d)  the following main contracts, agreements, leases, commitments and understandings:

               o Heritable Building Right Agreement (Uentrop)

                 […]

               o Right of Use Agreement (Uentrop)

                 […]

               o Site Services Agreement and SLAs (Uentrop)

                 […]

               o Laboratory Lease Agreement (Mechelen)

                 […]

               o Site Services Agreement and SLAs (Mechelen)

                 […]

               o Warehousing and Other Services Agreement (Venlo)

                 […]

      (e)   the following customer, credit and other records:

       All ongoing customer contracts for the sale of all products manufactured at the Uentrop Facility including all PVB film products
           (including but not limited to PVB film products for both architectural and automotive applications); and

       All customer and credit records of the Divestment Business as held by the GLSV Business or DuPont including but not limited to:
               o […]

      (f)   the following Personnel:

       All personnel listed in Confidential Exhibit 5 including but not limited to the following:
               o […]

      (g)   the following Key Personnel:

               o Non-operational Key Personnel
                 (i)   […]
                 (ii)  […]
                 (iii) […]

               o Operational Key Personnel
                 (i)   […]
                 (ii)  […]

      (h)   the arrangements for the supply with the following products or services by Kuraray or Affiliated Undertakings for a transitional
           period (as specified below) after Closing:

       At the purchaser’s option, a supply of PVB resin to the Divestment Business for an initial period of three years renewable for up to two
           further one-year terms, with pricing on a cost-plus basis (such price to be determined by an independent expert whose appointment
           will be agreed with the Monitoring Trustee); and
       Transitional services, including accounting, IT, and HR support services as required by the Divestment Business, for a period of up to one
           year.

      3.    The Divestment Business shall not include:

      (a)   Retained personnel as identified in Confidential Exhibit 6;

      (b)   The GLSV Business’ PVB film facility in Holesov, Czech Republic and all personnel, intellectual property, customer contracts or
           goodwill specific to the manufacture and sale of recycled PVB film from such facility;

      (c)   The GLSV Business’ PVB resin and PVB film facility in Fayetteville, US and all personnel, intellectual property, customer contracts
           or goodwill specific to the manufacture and sale of products from such facility;

      (d)   The GLSV Business’ PVB resin facility in Parkersburg (Washington Works), US and all personnel, intellectual property, customer
           contracts or goodwill specific to the manufacture and sale of products from such facility;

      (e)   The GLSV Business’ PVB film facility in Ulsan, South Korea and all personnel, intellectual property, customer contracts or goodwill
           specific to the manufacture and sale of products from such facility;

      (f)   The GLSV Business’ VAM and PVA facility in LaPorte, US and all personnel, intellectual property, customer contracts or goodwill
           specific to the manufacture and sale of products from such facility;

      (g)   Any other assets or personnel of the GLSV Business outside of the EMEA region;

      (h)   Any personnel, intellectual property, customer contracts or goodwill in relation to the “SentryGlas” product;

      (i)   Any personnel, intellectual property, customer contracts and goodwill in relation to PVA or VAM products as manufactured and sold by
           the GLSV Business; and

      (j)   The “DuPont” name or any rights thereto.

      4.    If there is any asset or personnel which is not be covered by paragraph 2 of this Schedule but which is both used (exclusively or
           not) in the Divestment Business and necessary for the continued viability and competitiveness of the Divestment Business, that asset
           or adequate substitute will be offered to potential purchasers.

-----------------------
[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") 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]   See Commission decision in case COMP/M.3625 Blackstone / Acetex (2005), paragraph 25. In C/0154/09 Sekisui / Celanese (2001),  the  Spanish
   Competition authority ultimately left open whether the market should be further distinguished between “standard” PVA (comprising super,  fully
   and partially-hydrolised PVA) and “specialty” PVA (comprising low-hydrolised PVA and copolymer or “modified” PVA).

[3]   Replies to Questionnaire Q3 – questions 8-9.

[4]   Replies to Questionnaire Q3 – question 10. Only Sekisui indicated the production process may be different for low hydrolysed PVA. However,
Sekisui also agreed that for partially to super hydrolysed PVA the production process and raw materials are very similar.

[5]   Replies to Questionnaire Q3 – question 11.

[6]   Replies to Questionnaire Q3 – questions 12-13.

[7]   See Commission decision in case COMP/M.3625 Blackstone / Acetex (2005), paragraph 82.

[8]   Replies to Questionnaire 3 (question 20) and Questionnaire 4 (questions 10, 11, 12).

[9]   Replies to Questionnaire 3 (question 22) and Questionnaire 4 (question 13).

[10]  Replies to Questionnaire Q4 – questions 8-9.

[11]  PVB film is sold in a range of different thicknesses, with the most "standard" thickness being 0.76 mm.

[12]  PVB film is shipped in rolls of varying widths, generally between 700 mm and 3,000 mm. For certain architectural applications, customers
purchase rolls 3,210 mm wide referred to as jumbo size, which are manufactured on jumbo lines.

[13]  Embossing refers to a production process that results in the final PVB film having a defined surface structure, rather than the random
surface structure produced by using the melt­ fracture process.

[14]  Acoustic film refers to PVB film that has sound-reducing qualities and is used to manufacture sound-proof glass.

[15]  PVB  film  can  be  manufactured  in  different  colours  for  use  in  either  architectural  or automotive glass by adding a dye and
other additives to the PVB resin during production.

[16]  Together with "virgin" PVB film, certain producers may also manufacture to various extents "recycled" PVB film with recovered PVB film and
much lower quantities of PVB resin.

[17]  See Commission decision in case COMP/M. 6542 Eastman / Solutia (2012).

[18]  See Questionnaire 1 (question 10.2).

[19]  Council Directive 92/22/EEC of 31 March 1992 on safety glazing and glazing materials on motor vehicles and their trailers, OJ L 129,
14/05/1992, p. 11–94.

[20]  See Questionnaire 1 (question 13).

[21]  Form CO, tables 71-78.

[22]  During the extrusion process, trimmings are cut from the edge of a PVB film sheet to ensure that the final sheet is of the required width.
In a standard PVB film production line, these edge trimmings are recovered and fed straight back into the mixer where they are incorporated with
PVB resin, plasticizer and additives and extruded into film again. This process, whereby PVB film is made from PVB resin and a small quantity of
recovered edge trimmings, produces what is known as "virgin" PVB film.

[23]  See Case M.6542, Eastman/Solutia (2012).

[24]  See Questionnaire 1 (questions 45 and 46) and Questionnaire 2 (questions 23, 26 and 26)

[25]  Since LSG is subject to regulation but PVB film is not, PVB film manufacturers themselves are not required to perform any testing other
than their own internal tests to establish the performance characteristics of their products. Based on these characteristics, PVB film is
marketed to glass manufacturers who incorporate PVB interlayers into an assembled laminated glass product, which is then tested for compliance
with the LSG regulations as described above. The process of testing and regulation is similar in the US where PVB film is not a regulated
product but LSG incorporating PVB film is.

[26]  See Questionnaire 1 (question 35)

[27]  See Questionnaire 1 (questions 39 and 40) and Questionnaire 2 (questions 18 and 19).

[28]  As regards other possible segmentations of the market for PVB film, the Parties' activities do not overlap with regard to embossed and
acoustic PVB film.

[29]  Form CO, Table 53.

[30]  Form CO, Table 5, extrapolated on the basis of the Commission's market reconstruction.

[31]  Form CO, Tables 71-78, extrapolated on the basis of the Commission's market reconstruction.

[32]  The volumes allocated to "others" in this table are based on the Notifying Party's estimation in the From CO and have not been
reconstructed by the Commission.

[33]  The volumes allocated to "others" in this table are based on the Notifying Party's estimation in the From CO and have not been
reconstructed by the Commission.

[34]  Replies to Questionnaire Q2 – question 29.

[35]  Replies to Questionnaire Q1 – questions 50-51.

[36]  Replies to Questionnaire Q1 – questions 50-51.

[37]  Replies to Questionnaire Q2 – questions 31 and 33; Replies to Questionnaire Q1 – questions 53 and 60-61.

[38]  Customers stated that in negotiations they have often invoked one of the main suppliers, except Sekisui, as a threat to switch to an
alternative supplier.

[39]  Replies to Questionnaire Q2 – questions 44-47; replies to Questionnaire Q1 – questions 70-73.

[40]  Replies to Questionnaire Q1 – question 74.

[41]  Replies to Questionnaire Q1 – questions 75-77.

[42]  Replies to Questionnaire Q1 – question 67.

[43]  Replies to Questionnaire Q1 – questions 67-69.

[44]  As opposed to recycled PVB film.

[45]  Replies to Questionnaire Q1 – questions 67-69.

[46]  See sales reports [Name of presentation]  submitted in response to the Commission's RFI of 13 March 2014.

[47]  Form CO, Table 108.

[48]  Replies to Questionnaire Q2 – questions 49-50.

[49]  Replies to Questionnaire Q1 – questions 78-79.

[50]  See presentation [Name of presentation]   submitted in response to the Commission's RFI of 13 March 2014, slide 8.

[51]  See presentation [Name of presentation]  submitted in response to the Commission's RFI of 13 March 2014, slide 9.

[52]  Replies to Questionnaire Q2 – questions 44-47; replies to Questionnaire Q1 – questions 70-73.

[53]  Replies to Questionnaire Q2 – questions 51-52; replies to Questionnaire Q1 – questions 80-81.

[54]  Replies to Questionnaire Q2 – questions 53-54; replies to Questionnaire Q1 – questions 82-83.

[55]  Agreed non-confidential minutes of 20 March 2014 between the Commission and Sekisui, paras 2-4.

[56]  Agreed non-confidential minutes of 20 March 2014 between the Commission and Sekisui, paras 6 and 16.

[57]  Agreed non-confidential minutes of 20 March 2014 between the Commission and Sekisui, para. 11.

[58]  The volumes allocated to "others" in this table are based on the Notifying Party's estimation in the From CO and have not been
reconstructed by the Commission.

[59]  Replies to Questionnaire Q1 – questions 50-51.

[60]  Replies to Questionnaire Q1 – question 17.

[61]  See Commission decision in case COMP/M.3625 Blackstone / Acetex (2005), paragraph 20.

[62]  See Commission decision in case COMP/M.3625 Blackstone / Acetex (2005), paragraph 20.

[63]  At a worldwide level, [Details of PVB resin sales by region].

[64]  The Notifying Party submitted a first set of commitments on 3 April 2014. In the light of the results of the market test, the Notifying
Party implemented specific improvements in the second and final version of the proposed commitments, which was submitted on 15 April 2014.

[65]  Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004
(2008/C 267/01), (the "Commission Notice on Remedies").

[66]  Commission Notice on Remedies, paragraph 9.

[67]  Commission Notice on Remedies, paragraph 12.

[68]  Commission Notice on Remedies, paragraph 17.

[69]  Commission Notice on Remedies, paragraph 23.

[70]  Commission Notice on Remedies, paragraphs 25 and 26.

[71]  See also Commission Notice on Remedies, paragraphs 10 and 15.

[72]  The volumes allocated to "others" in this table are based on the Notifying Party's estimation in the From CO and have not been
reconstructed by the Commission.

[73]  The volumes allocated to "others" in this table are based on the Notifying Party's estimation in the From CO and have not been
reconstructed by the Commission.

[74]  The volumes allocated to "others" in this table are based on the Notifying Party's estimation in the From CO and have not been
reconstructed by the Commission.

[75]  The volumes allocated to "others" in this table are based on the Notifying Party's estimation in the From CO and have not been
reconstructed by the Commission.

[76]  However, these types of film are exclusively (shadeband, embossed) or primarily (acoustic) aimed at the automotive segment and would not
be necessary to continue competing effectively for architectural business.

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

                                                                  PUBLIC VERSION

                                                                 MERGER PROCEDURE