CELEX: 32014M7366
Language: en
Date: 2014-10-13 00:00:00
Title: Commission Decision of 13/10/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7366 - WHIRLPOOL / INDESIT) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 13.10.2014
C(2014) 7573 final

COMP Operations

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|To the notifying party:                                               |                                                                      |
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|Dear Sir/Madam,                                                       |                                                                      |

Subject:    Case No M.7366 – Whirlpool / Indesit
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

 1. On 8 September 2014, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC)  No
    139/2004 by which the undertaking Whirlpool Corporation ('Whirlpool', United States of America)  acquires  within  the  meaning  of  Article
    3(1)(b) of the Merger Regulation sole control of the undertaking Indesit Company S.p.A. ('Indesit', Italy) by way of purchase of  shares.[2]
    Whirlpool is hereinafter referred to as the 'Notifying Party' while Whirlpool and Indesit together are referred to as the 'Parties'.

       The Parties

 2. Whirlpool is a U.S. incorporated company, listed on the New  York  Stock  Exchange.   Whirlpool’s  principal  products  are  major  domestic
    appliances ('MDA's). In the EEA, Whirlpool markets and distributes MDAs primarily under the  Whirlpool,  Bauknecht,  Ignis,  Maytag,  Laden,
    Polar, and Privileg brands.

 3. Indesit is a joint-stock company listed on the Italian Stock Exchange almost exclusively active in the production and sale of MDAs.  In  the
    EEA, Indesit markets and distributes its products under the Indesit, Hotpoint / Hotpoint-Ariston and Scholtès brands.

       The OperatIon AND THE CONCENTRATION

 4. On 10 July 2014, Whirlpool entered into a set of share purchases agreements  with  the  principal  owners  of  Indesit.  Pursuant  to  those
    agreements, Whirlpool will acquire an overall 60.77% stake in Indesit. In addition, Whirlpool will be required to launch a tender  offer  on
    the remainder of Indesit's share capital. Whirlpool will acquire sole control over Indesit regardless of the outcome of the tender offer.[3]

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

       Union DIMENSION

 6. The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[4] (Whirlpool: EUR 14  137  million;
    Indesit: EUR 2 671 million). Each of them has a Union-wide turnover in excess of EUR 250 million (Whirlpool: EUR […] million;  Indesit:  EUR
    […] million), but they do not achieve more than two-thirds of their aggregate Union-wide turnover within one and the same Member State.

 7. The notified transaction therefore has a Union dimension within the meaning of Article 1(2) of the Merger Regulation.

       COMPETITIVE ASSESsMENT

 A. General remarks

 8. The Parties' activities overlap and result in horizontally affected markets in the production and supply of MDAs to retailers. In  addition,
    the Parties are active in producing MDAs for third parties (private label customers and other OEMs),  such  as  Ikea.  However,  given  that
    Indesit's sales to private label customers and other OEMs are  minimal,  that  level  of  the  market  is  not  discussed  further  in  this
    decision.[5]

 9. In addition, Whirlpool is active in the production of refrigeration compressors that are used as an input in the production of refrigerators
    and freezers.

 B. Relevant product markets

    Major domestic appliances ('MDA's)

10. In previous decisions, the Commission has identified separate relevant product markets for  each  category  of  MDAs.  More  precisely,  the
    Commission has identified the following separate markets: (1) cooking  appliances,  (2)  hoods,  (3)  dishwashers,  (4)  refrigerators,  (5)
    freezers, (6) microwave ovens, (7) washing machines and (8) tumble dryers.[6] The Commission  has  also  previously  considered  a  possible
    subdivision of microwave ovens into freestanding and built-in ones but has ultimately left the question open.[7]

11. The Notifying Party agrees with those market definitions but submits that none of the categories of MDAs should be further sub-divided,  for
    example, into freestanding or built-in appliances. The Notifying Party supports that view by referring to supply-side  substitutability  as,
    according to the Notifying Party, built-in and freestanding models can and are produced on the same  production  lines  and  the  production
    costs are very similar.[8] Moreover, the Notifying Party submits that there is demand-side  substitutability  as  all  possible  sub-segment
    products in a given MDA category are aimed at satisfying the same needs.

12. Nonetheless, the Notifying Party has provided market data separately for those categories of  MDAs  where  both  freestanding  and  built-in
    models are offered. In addition, the Notifying Party has provided market data separately for the possible segments  of  cooking  appliances,
    namely ovens, hobs and cookers (which consist of both a cooker and one or more ovens).

13. The results of the market investigation confirm that separate markets exist for each of the MDA categories.[9] As regards potential  further
    sub-segmentation, the results of the market investigation overall did not support the notion  that  such  sub-segments  constitute  separate
    markets taking account of both supply and demand-side considerations.

14. As regards supply-side substitutability, a significant majority of competitors who responded to the  market  investigation  considered  that
    while they in most cases have dedicated one manufacturing plant to the production of a specific category of MDAs, they are able  to  produce
    all types of products within that MDA category on the same production line  regardless  of  the  MDA's  technical  specifications  or  size,
    including both built-in and freestanding models.[10] Competitors also did not in general consider  that  further  segmentation  of  the  MDA
    categories was warranted, although a few competitors mentioned that MDAs could be sub-segmented into built-in  and  freestanding,  and  that
    cooking appliances might be sub-segmented into ovens, hobs and cookers.[11]

15. As to demand-side substitutability, respondents to the market investigation expressed different  views:  while  the  majority  of  customers
    thought no further sub-segmentation was required, a significant minority of customers nevertheless considered that built-in and freestanding
    models could constitute separate markets due to, for instance, different demand patterns.[12]

16. Nevertheless, as the proposed transaction does not give rise to competition concerns  even  under  the  narrowest  possible  product  market
    definitions, it is not necessary to conclude on the exact scope of the product markets.

    Refrigeration compressors

17. Refrigeration compressors are devices used to lower the temperature of an enclosed space by removing heat from that space  and  transferring
    it elsewhere.

18. In the recent Secop / ACC Austria case, the Commission  considered  the  possible  segmentation  of  the  refrigeration  compressors  sector
    according to a number of criteria, namely: (i) technology (on the one hand, stirling, linear, rotary, semi-hermetic reciprocating,  hermetic
    scroll, semi-hermetic screw, screw open, centrifugal, and hermetic  reciprocating,  and,  on  the  other  hand,  fixed  and  variable  speed
    technologies); (ii) end-use (distinction between compressors for air-conditioning and compressors for refrigeration  purposes,  and,  within
    the  latter  category,  distinction  between  compressors  for  household  appliances,  light  commercial  and  mobile  applications);   and
    (iii) efficiency category. The exact market definition was left open although it  was  concluded  that  no  segmentation  on  the  basis  of
    efficiency levels was warranted.[13]

19. In the present case, a vertical link only exists between the Parties' activities in two of the  MDA  categories,  namely  refrigerators  and
    freezers, as well as their  potential  sub-segments,  and  Whirlpool's  activities  in  hermetic  reciprocating  compressors  for  household
    appliances, which is a potential sub-segment of refrigeration compressors.

20. The Notifying Party does not put forward arguments concerning the exact product market definition but has provided market data on the  basis
    of hermetic reciprocating compressors for household appliances, which is the only category creating a vertical link in the present case.

21. As the proposed transaction does not give rise to competition concerns with respect to refrigeration compressors even  under  the  narrowest
    possible product market definitions, it is not necessary to conclude on the exact scope of the product markets.

 C. Relevant geographic markets

    Major domestic appliances (MDAs)

22. In previous decisions, the Commission has left it open whether the markets for the categories of MDAs are EEA-wide or national in scope.[14]

23. The Notifying Party submits that the markets are EEA-wide in scope. The Notifying Party supports that view by referring to, for instance the
    same brands being marketed in numerous countries, production having been centralised to a few locations within  the  EEA  and  many  of  the
    customers being active in more than one country.

24. The results of the market investigation did not support the Notifying Party's submission. On the contrary, they indicated that  the  markets
    have national characteristics with regard to all MDA  categories  with  references  to  different  consumer  consumption  habits  and  brand
    positioning between Member States.[15] Negotiations between MDA suppliers and retailers generally take place on a  national  level  and  the
    price setting for those transactions is largely done on a national level.[16] In addition, prices on the retail level of trade  are  usually
    set on a national level, and those prices differ significantly between various EEA countries.[17] These finding are further corroborated  by
    the geographic scope of the Parties' own activities: the Parties' respective  market  shares  differ  significantly  between  different  EEA
    countries and neither of the Parties has a meaningful presence in all of the EEA.

25. Nevertheless, as the proposed transaction does not give rise to competition concerns even under the  narrowest  possible  geographic  market
    definitions, it is not necessary to conclude on the exact scope of the geographic markets.

    Refrigeration compressors

26. The Commission has in the recent Secop / ACC Austria decision considered that the relevant  geographic  market  for  hermetic  reciprocating
    compressors (and its possible sub-segments) is at least EEA-wide, although the exact market definition was left open.[18]

27. The Notifying Party submits that the relevant geographic market is at least EEA-wide or possibly worldwide.

28. As the proposed transaction does not give rise to competition concerns even under the narrowest possible geographic market definition, it is
    not necessary to conclude on the exact scope of the geographic markets.

 D. Competitive assessment

 I. Major domestic appliances (MDAs) – horizontal overlaps

    General remarks on the characteristics of the MDA markets

    Closeness of competition

29. The Parties are both active in all of the MDA categories. In the EEA, Whirlpool  sells  its  MDAs  primarily  under  the  brands  Whirlpool,
    Bauknecht, Ignis, Maytag, Laden, Polar and Privileg while Indesit's largest brands are Indesit, Hotpoint / Hotpoint-Ariston and Scholtès.

30. MDAs are differentiated products and Whirlpool and Indesit, like the other major brands, offer a broad range of  products  within  each  MDA
    category. The industry generally tends to consider each MDA category to consist of products offered at entry level, low price level,  medium
    price level and high/premium price level.

31. The Notifying Party submits that the Parties' activities are complementary in that they target different customer groups: Indesit focuses on
    the low-end of the markets (with the exception of the Scholtés brand that targets  the  high-end/premium  segment)  while  Whirlpool's  main
    brands Whirlpool and Bauknecht are positioned in the mid-range. Therefore, the Parties would not be each other's closest competitors  within
    any of the MDA categories.

32. To support this claim, the Notifying Party carried out economic analysis by country and affected MDA category to  see  whether  Indesit  and
    Whirlpool systematically win or lose market share to each other. The Notifying Party  found  no  systematic  correlation  between  the  two.
    Indeed, according to the Notifying Party, both Parties, in general terms and across all the MDA categories, have lost market shares  in  the
    recent past to the advantage of other competitors (both established firms and new entrants, including private labels).[19]

33. The Notifying Party also submitted an analysis of the Parties' market share evolution per Member State and per MDA over the last five years.
    This shows that in particular in some countries such as Italy, both Parties' market shares have been in decline.

34. On the basis of the results of the market investigation and the analysis of pricing data, the Commission considers that  although  Whirlpool
    and Indesit may in general focus on different levels of the market in terms of price points, the ranges of products offered by  the  Parties
    do overlap in all the MDA categories in which they are both present. That applies in particular to Italy, in respect of which the Commission
    carried out an economic analysis of the Parties' price points and calculated combined markets shares per price segment. The results of  this
    exercise suggest that the Parties are not as asymmetric as the Notifying Party suggests and that both are present in all price segments.

35. Nevertheless, the Commission's analysis of the economic evidence provided by the Notifying Party also shows that the product ranges  of  the
    main competitors (for instance BSH and Electrolux) also largely overlap with the product  ranges  offered  by  the  Parties.  Moreover,  the
    Commission finds that there are many other competitors that have product ranges with a narrower scope than the Parties (in  terms  of  price
    points covered) and that target specific segments of the market (for instance the low-end segment or the premium segment). Also, the product
    ranges offered by those competitors overlap with the respective parts of the product ranges offered by the Parties.

36. This suggests that for the different MDAs, and at the different price points, the merger is unlikely  to  reduce  the  competitive  pressure
    faced by the Parties in the current market settings. Following the transaction, customers are likely to  find  several  substitute  products
    offered by the Parties’ competitors, for all of the MDA categories and at the different price points currently targeted by the Parties.[20]

37. As regards the Notifying Party's analysis of whether a correlation exists between Whirlpool's and Indesit's loss and gain of market  shares,
    the Commission extended this analysis in respect of Italy, Romania and Poland, where the combined market shares tended to be the highest. In
    particular, the Commission considers that looking at market share development itself is not enough to establish the  Parties'  closeness  of
    competition as both Parties might have lost market shares to third parties and still be close competitors. The further analysis carried  out
    by the Commission for these three countries suggests that a relative average price increase in the products offered by one of the Parties is
    not associated with a significant increase in the sales made by the other Party. This evidence, together with the analysis of the  evolution
    of market shares, provides further indication that the Parties are not close competitors.[21]

    Customer relationships

38. Many of the Parties' customers are large and sophisticated purchasers, including specialised retail store chains or buying  groups  such  as
    Media-Saturn, Euronics, Expert and GRE, hypermarket chains such as Carrefour or major kitchen manufacturers such as Scavolini.  The  Parties
    compete for their orders with all other MDA suppliers. Consequently, the Notifying Party submits  that  the  customers  have  countervailing
    purchasing power and are able to counteract any attempts by the merged entity to raise prices.

39. It could also be noted that the Parties cooperate with the retailers and offer various incentives, rebate and bonus schemes to them based on
    a variety of factors. However, the Notifying Party submits that such schemes are not unique to the Parties  but  similar  schemes  are  also
    offered by competing suppliers. Moreover, the Notifying Party further submits that the Parties' brands are not 'must-have'  brands  for  the
    retailers but the retailers have numerous alternatives between which they are free to choose.

40. To this effect, the Commission notes that there are a number of MDA suppliers active across all MDA categories in the EEA, offering  a  wide
    product portfolio. In the market investigation, the majority of customers also confirmed the Notifying Party's claims in that  the  Parties'
    brands are not 'must-have' brands,[22] supporting the argument that retailers enjoy the possibility of switching to alternative suppliers.

    Assessment of specific markets

41. While the Parties' activities are largely complementary in geographic terms,  the  proposed  transaction  nonetheless  results  in  affected
    markets with respect to numerous MDA categories, their potential sub-segments and Member States. The markets in each of  the  Member  States
    where at least one of the MDA categories or their potential sub-segments is affected are discussed in the following.[23]

    Austria

42. The proposed transaction results in an affected market in Austria with respect to washing machines (combined [20-30]% in volume and [10-20]%
    in value). In addition, the potential sub-segment of freestanding washing machines would also be affected (combined [20-30]% in  volume  and
    [10-20]% in value).

43. The merged entity's combined market share in Austria is limited.  Moreover,  numerous  competitors  remain  in  Austria,  including  in  the
    potential freestanding washing machine segment such as BSH ([10-20]% in volume [20-30]% in value) Míele ([10-20]% in volume and  [20-30]  in
    value), Gorenje, ([10-20]% in volume and [5-10]% in value), Electrolux ([10-20]% in volume and  [10-20]%  in  value),  Arcelik  ([5-10]%  in
    volume and [5-10]% in value), Samsung [0-5]% in volume and [0-5]% in value), Candy ([0-5]% in volume and [0-5]% in value) and LG ([0-5]% and
    [0-5]% in value). In addition, customers did not raise any concerns during the market investigation with respect to MDA markets in Austria.

44. The Commission thus concludes that the transaction does not raise competition concerns with respect to any MDA markets  or  their  potential
    sub-segments in Austria.

    The Czech Republic

45. The proposed transaction results in affected markets with respect to the following MDA categories, and their potential sub-segments, in  the
    Czech Republic:

    Table 1 - The Czech Republic (2013)

|Category / potential sub-segment     |Market share (%) – value                   |Market share (%) – volume                 |
|                                     |WP                                         |Indesit                                   |
|                                     |WP                                         |Indesit                                   |
|                                     |WP                                         |Indesit                                   |
|                                     |WP                                         |Indesit                                   |
|                                     |WP                                         |Indesit                                   |
|                                     |WP                                         |Indesit                                   |
|                                     |WP                                         |Indesit                                   |
|                                     |WP                                         |Indesit                                   |

   |WP |Indesit |Total |WP |Indesit |Total | |Refrigerators |[0-5] |[20-30] |[20-30] |[0-5] |[20-30] |[20-30] | |Freezers |[0-5] |[10-20] |[20-
   30] |[0-5] |[10-20] |[10-20] | |Cooking appliances |[0-5] |[10-20] |[10-20] |[0-5] |[20-30] |[20-30] | |Dishwashers |[0-5] |[10-20] |[10-20]
  |[0-5] |[10-20] |[20-30] | |Washing machines |[0-5] |[20-30] |[30-40] |[0-5] |[30-40] |[30-40] | |Tumble dryers |[0-5] |[30-40] |[30-40] |[0-
   5] |[30-40] |[30-40] | |Built-in refrigerators |[0-5] |[10-20] |[10-20] |[5-10] |10-20] |[20-30] | |Freestanding refrigerators |[0-5] |[20-
   30] |[20-30] |[0-5] |[20-30] |[20-30] | |Built-in cooking appliances |[0-5] |[10-20] |[10-20] |[0-5] |[10-20] |[20-30] | |Built-in hobs |[0-
    5] |[10-20] |[10-20] |[0-5] |[10-20] |[20-30] | |Ovens |[0-5] |[10-20] |[10-20] |[0-5] |[20-30] |[20-30] | |Built-in ovens |[0-5] |[10-20]
    |[10-20] |[0-5] |[10-20] |[20-30] | |Freestanding dishwashers |[0-5] |[10-20] |[20-30] |[0-5] |[20-30] |[20-30] | |Built-in washing machines
    |[0-5] |[20-30] |[30-40] |[0-5] |[30-40] |[30-40] | |Freestanding washing machines |[0-5] |[20-30] |[30-40] |[0-5] |[30-40] |[30-40] |
    |Freestanding tumble dryers |[0-5] |[30-40] |[30-40] |[0-5] |[30-40] |[30-40] | |Source: The Notifying Party

46. The merged entity's combined market share in the United Kingdom is limited in most MDA categories and potential sub-segments, except for the
    market for washing machines and tumble dryers as well as their potential sub-segments. The merged entity would achieve the highest  combined
    market share in the freestanding tumble dryers sub-segment ([30-40]% in value and [30-40]% in volume).

47. However, the increments are minor due to Whirlpool's limited market presence in the United Kingdom. With respect to the potential market for
    freestanding tumble dryers where the merged entity would achieve its highest market share, that is [30-40]%  in  volume,  the  market  share
    increment is less than [0-5]%. Moreover, numerous competitors remain in the United Kingdom, including in free standing tumble dryers such as
    Arcelik ([10-20]% in volume and [10-20]% in value), Candy ([5-10]% in volume and [5-10]% in volume), Electrolux ([5-10]% in volume  and  [5-
    10]% in value), BSH ([5-10]% in volume and [10-20]% in value), and Míele ([0-5]% in volume and [0-5]% in value). In addition, customers  did
    not raise any substantiated concerns during the market investigation with respect to MDA markets or  their  potential  sub-segments  in  the
    United Kingdom.

48. The Commission thus concludes that the transaction does not raise competition concerns with respect to any MDA markets  or  their  potential
    sub-segments in the United Kingdom.

II. Major domestic appliances – conglomerate effects

49. The Parties are both active in all of the categories of MDAs and generally also in their potential sub-segments with  a  number  of  brands.
    However, the Parties' relative strengths vary depending on the MDA category in question. Generally, the merged entity achieves  its  highest
    market shares in washing machines, and potential sub-segments thereof, in a number of EEA countries.

50. Some market participants, particularly those located in France and Italy, raised some concerns in the market investigation that  the  merged
    entity could use its wide product and brand portfolio to gain more shelf space at retailers  and  slowly  squeeze  competitors  out  of  the
    market.

51. The Notifying Party submits that the proposed transaction does not result in any portfolio effects and that the merged entity would  not  be
    in a position to force its rivals out of shelf space at retail stores. The Notifying Party supports  that  position  by  referring  to,  for
    example, the fact that (i) many other suppliers also offer the full range of products; and (ii) many of the Parties' own  brands  are  small
    and thus the Parties' main portfolio only really consists of a small number of brands such as the main  brands  of  Whirlpool  and  Indesit.
    Furthermore, the Notifying Party notes that certain market  participants,  and  in  particular  Samsung,  have  succeeded  in  substantially
    increasing their market shares and have thus not been constrained by any possible present portfolio strengths of the Parties.

52. The results of the market investigation confirmed the arguments put forward by the Notifying Party, notably that other  competitors  and  in
    particular Samsung, are likely to continue growing also after the proposed transaction.[30] Moreover, market participants pointed  out  that
    companies such as LG and Samsung can spread their negotiation across many different product categories and utilise their strong position in,
    for example, mobile phones, to gain space at retailers for their MDAs.

53. The Commission notes that many of the Parties' main competitors, including BSH  and  Electrolux,  indeed  offer  products  in  all  the  MDA
    categories and generally also in their potential sub-segments. Moreover, a number of those competitors also operate under  numerous  brands,
    e.g. BSH operates under the brands Siemens and Bosch[31] while Electrolux operates under the brands Electrolux and AEG[32], to  name  but  a
    few. A number of competitors are thus in a similar position as the merged entity would be.

54. Moreover, the results of the market investigation did not support the view that the proposed transaction  would  make  the  merged  entity's
    position significantly stronger from what each of the Parties' may have in certain Member States. This finding  is  also  supported  by  the
    geographic complementarity between the Parties activities and the fact that the market share  increments  brought  by  the  transaction  are
    modest in many countries.

55. On balance and in light of the above, the Commission considers that the proposed  transaction  does  not  raise  competition  concerns  with
    respect to conglomerate effects.

III. Refrigeration compressors – vertical link

56. The transaction results in a vertical link between (i) the freezers and  refrigerators  produced  by  the  Parties  and  (ii)  the  hermetic
    reciprocating compressors produced by Whirlpool's subsidiary Embraco since the compressors are  used  as  an  input  in  the  production  of
    freezers and refrigerators.

57. The Notifying Party estimates Embraco's market share in hermetic reciprocating compressors for household use to remain  below  30%  both  in
    volume and in value. Alternative suppliers include Secop,  Huayi/Jiaxipera,  LG,  Donper,  Samsung  and  Wanbao.  The  vertical  link  could
    nonetheless potentially result in affected vertical markets due to the merged entity's market shares in refrigerators and freezers  as  well
    as their potential sub-segments.

58. The Notifying Party submits that the merged entity would have neither the ability nor  the  incentive  to  engage  into  input  or  customer
    foreclosure. In particular, the Notifying Party submits that a number of alternative compressor suppliers will remain on the market and that
    Embraco is no longer the market leader […].[33] As to customer foreclosure, the Notifying Party submits that the merged entity does not have
    the scale to be able to foreclose its upstream competitors as the merged entity would only account for [10-20]% of the customer base in  the
    EEA. Moreover, Whirlpool is even at present sourcing around […] of its compressor requirements in the EEA from third-party suppliers as that
    has been the most efficient business model.

59. In the Secop / ACC decision, the Commission concluded that a significant share of the market is captive and that numerous  refrigerator  and
    freezer producers have their own internal compressor production.[34] That limits the merged entity's ability to engage in input foreclosure,
    as those competitors could increase the use of their captive compressor production should the  merged  entity  try  to  foreclose  them.  In
    addition, some of those competitors, such as Secop, are also independent and do not have their own downstream operations in refrigerators or
    freezers and thus have all the incentives to sell their compressors to all interested customers.  It is therefore unlikely that  the  merged
    entity would have the ability to foreclose its downstream competitors.

60. When it comes to customer foreclosure, it should first be noted that the merged entity's share  of  the  compressors  consumed  in  the  EEA
    remains modest. A number of major potential customers, such as Electrolux and BSH would remain on the market. […]. Therefore, if the  merged
    entity were to supply all of its downstream activities with internal compressor production, it would be likely that it would need to  forego
    sales to other customers. On balance, it appears thus unlikely that the merged entity would have the  ability  or  incentive  to  engage  in
    customer foreclosure.

61. Finally, a clear majority of both upstream compressor competitors and downstream refrigerator and freezer competitors confirmed the  absence
    of foreclosure concerns related to the proposed transaction.[35]

62. Therefore, the Commission concludes that the vertical links created by the proposed transaction do not raise competition concerns.

       CONCLUSION

63. For the above reasons, the Commission has decided not to oppose the notified operation and to declare it compatible with the internal market
    and with the EEA Agreement. This Decision is adopted in application of Article 6(1)(b) of the Merger Regulation and Article 57  of  the  EEA
    Agreement.

      For the Commission
(Signed)
Joaquín ALMUNIA
Vice-President

-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
    ('TFEU') has introduced certain changes, such as the replacement of 'Community' by 'Union' and 'common market'  by  'internal  market'.  The
    terminology of the TFEU will be used throughout this Decision.

[2]   Publication in the Official Journal, OJ C 316, 16.9.2014, p. 4.

[3]   Whirlpool is not party to, and does not envisage entering into, any shareholders' agreements limiting  its  possibility  to  exercise  sole
control on the basis of its shareholding. According to the best knowledge of the Notifying Party, its ability to  solely  control  Indesit  after
the transaction is also not limited by other instruments such as company by-laws.

[4]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
C95, 16.04.2008, p1).

[5]   Indesit's total sales to private label and OEM customers amounted to less than EUR […] million in the EEA in  2013.  This  is  compared  to
Whirlpool's EEA-sales of around EUR […] million to private label and OEM customers in 2013.

[6]   M.6717 – Whirlpool / Alno, paragraph 15, M.5859 – Whirlpool / Privileg Rights, paragraphs 11–2, M.2703 – Merloni / GE / GDA JV,  paragraphs
9–12, and IV/M.458 – Electrolux/AEG, paragraph 15.

[7]   M.6717 – Whirlpool / Alno, paragraph 15, and M.5421 – Panasonic / Sanyo, paragraph 151.

[8]   According to the Notifying Party, an initial investment of around EUR […] needs to be made for the appropriate tooling to produce  built-in
MDAs on a line used to building freestanding MDAs. However, once that initial investment is made, switching costs are minimal.

[9]   Replies to questions 6–9 – Questionnaire to MDA competitors; and replies to questions 6 and 7 – Questionnaire to MDA customers.

[10]  Replies to questions 7–9 – Questionnaire to MDA competitors.

[11]  Replies to question 6 – Questionnaire to MDA competitors.

[12]  Replies to questions 6 and 7 – Questionnaire to MDA customers.

[13]  M.6996 – Secop / ACC Austria, paragraphs 15–24.

[14]  M.6717 – Whirlpool / Alno, paragraphs 16–9, M.5859 – Whirlpool / Privileg Rights, paragraphs  13–6,  M.2703  –  Merloni  /  GE  /  GDA  JV,
paragraph 19. In the early case IV/M.458 – Electrolux/AEG, paragraph 15, the market was considered to be Western European in scope.

[15]  Replies to question 14 – Questionnaire to MDA competitors; and replies to questions 10 and 11 – Questionnaire to MDA customers.

[16]  Replies to question 12 – Questionnaire to MDA competitors; and replies to question 8 – Questionnaire to MDA customers.

[17]  Replies to question 11 – Questionnaire to MDA competitors; and replies to question 9 – Questionnaire to MDA customers.

[18]  M.6996 – Secop / ACC Austria, paragraph 28.
[19]  The Notifying Party also claims that Indesit and Whirlpool do not compete aggressively for the same shelf space at the same retailers.

[20]  For instance in Italy, the analysis submitted by the Notifying Party shows that for any MDAs at the different relevant price  points  there
    are 7-10 other competitors active.

[21]  The Commission's analysis focused on the countries with the highest overlap between the Parties and found that Whirlpool  and  Indesit  are
    not close competitors. This indicates that also in the countries in which the overlap is lower, the  Parties  are  not  likely  to  be  each
    other's closest competitors.

[22]  Replies to questions 12 and 13 – Questionnaire to MDAs customers.

[23]  All markets shares provided by the Notifying Party are based on the GFK Retail and Technology Panel.

[24]  Replies to question 23 – Questionnaire to MDA competitors; and replies to question 18 – Questionnaire to MDA customers.

[25]  Replies to question 24 – Questionnaire to MDA competitors; replies to question 19 – Questionnaire to MDA customers.

[26]  Replies to questions 23 and 24 – Questionnaire to MDA competitors; and replies to questions 18 and 19 – Questionnaire to MDA customers.

[27]  See, e.g. minutes of a call with a customer on 27 August 2014 and minutes of a call with a customer on 28 August 2014.

[28]  Replies to questions 18 and 19 – Questionnaire to MDAs customers.

[29]  Replies to questions 23 and 24 – Questionnaire to MDAs competitors; and replies to questions 18 and 19 – Questionnaire to MDAs customers.

[30]  See, e.g. the confirmed minutes of a conference call with a customer on 27 August 2014 and the confirmed minutes of a call with a  customer
on 28 August 2014.

[31]  See, e.g. www.bsh-group.com/index.php?102573, last retrieved on 1 October 2014.

[32]  See, e.g. http://group.electrolux.com/en/category/about/brands/, last retrieved on 1 October 2014.

[33]  It should be noted that in the case Secop / ACC Austria, Embraco's market share for 2012 was established to be 30–40% in volume and  40–50%
in value. The outcome of the Commission's assessment of the competition effects of the proposed transaction would  nonetheless  not  be  affected
regardless of which of the figures were used.

[34]  M.6996 – Secop / ACC Austria, paragraph 36.
[35]  Replies to questions 29 and 30 – Questionnaire to MDAs competitors; and replies to questions  10  and  11  –  Questionnaire  to  compressor
competitors.

-----------------------
 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