CELEX: 32015M7464
Language: en
Date: 2015-01-20 00:00:00
Title: Commission Decision of 20/01/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7464 - BLADT INDUSTRIES / EEW SPECIAL PIPE CONSTRUCTIONS / TAG ENERGY SOLUTIONS LIMITED'S ASSETS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 20.1.2015
C(2015) 312 final

|In the published version of this decision, some information|               |Public version                                            |
|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|information omitted has been replaced by ranges of figures |               |                                                          |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.                                  |               |                                                          |
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|                                                           |               |MERGER PROCEDURE                                          |
|                                                           |               |ARTICLE 6(1)(b) DECISION                                  |

                                        |                                                                       |To the Notifying Parties:                                       |

Dear Sir/Madam,

Subject:    Case M.7464 – BLADT INDUSTRIES / EEW SPECIAL PIPE CONSTRUCTIONS / TAG ENERGY SOLUTIONS LIMITED'S ASSETS
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1] and Article 57 of the Agreement  on  the  European  Economic
Area[2]

    1) On 5 December 2014, the European Commission received notification of a  proposed  concentration  pursuant  to  Article  4  of  the  Merger
       Regulation by which the undertakings Bladt Industries A/S ("Bladt", Denmark), controlled  by  the  private  equity  house  Nordic  Capital
       (Jersey), and EEW Special Pipe Constructions GmbH ("EEW", Germany), belonging to the EEW Group, acquire  within  the  meaning  of  Article
       3(1)(b) of the Merger Regulation joint control of assets currently owned by TAG Energy Solutions Limited ("TAG", United Kingdom),  by  way
       of purchase of the assets through a newly created joint venture ("JV").[3] Bladt and EEW are  designated  hereinafter  as  the  'Notifying
       Parties' or 'Parties to the proposed transaction'.

       THE PARTIES

    2) Bladt is a Danish manufacturer of complex steel structures, operating in three key areas of business: the wind and renewable  sector,  the
       oil and gas industry and infrastructural projects. Bladt notably specialises in the manufacturing of offshore foundations for wind turbine
       generators. Bladt is a portfolio company of the private equity company Nordic Capital, which  has  a  controlling  ownership  interest  in
       numerous portfolio companies active in a wide range of sectors.

    3) EEW is a German manufacturer of large steel tubes, especially tubes used in the construction of offshore wind farms. It is part of the EEW
       Group, an international manufacturer of various types of pipes. EEW is a subsidiary of the EEW Group (Erndtebrücker Eisenwerk GmbH  &  Co.
       KG), an international association of submerged pipe mills and trading/representation companies.

    4) TAG's assets, which are subject to the Notified Transaction, are located in the UK and  consist of a complete production facility for  the
       manufacturing of certain types of  offshore  foundations.  TAG  ceased  trading  in  September  2014  and  has  since  been  placed  under
       administration.

       THE OPERATION

    5) On 18 November 2014, the Parties signed a Sale and Purchase  Agreement  to  jointly  acquire  TAG's  assets  through  Offshore  Structures
       (Britain) Limited, an entity jointly controlled by the Parties (“the Notified Transaction”). The Parties will not transfer  any  of  their
       assets into the JV, but will provide it with their expertise and reputation. The JV will use TAG's assets to manufacture transition pieces
       and their primary steel parts. EEW will hold […]% of the shares in the JV, while Bladt will hold […]%.

    6) [Details on composition and voting rights for the JV’s Board of Directors] Moreover, each Party has a veto right over strategic  decisions
       of the JV  (such as[examples]).

    7) The Notified Transaction thus results in Bladt and EEW acquiring joint control of TAG assets and constitutes a  concentration  within  the
       meaning of Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

    8) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[4] (Nordic Capital/Bladt: EUR  […]
       million, EEW Group/EEW: EUR […] million). Each of them has an EU-wide turnover in excess of EUR 250 million (Nordic Capital/Bladt: EUR […]
       million, EEW Group/EEW: EUR […]million), but they do not achieve more than two-thirds of their aggregate EU-wide turnover within  one  and
       the same Member State. The notified operation therefore has an EU dimension within the meaning of Article 1(2) of the Merger Regulation.

       OVERVIEW OF PRODUCTS AND THE PARTIES' ACTIVITIES

    9) Offshore wind farms are structures set up offshore to generate electricity, by benefiting  from  better  wind  speeds  compared  to  those
       normally available on land. The wind turbines (wind turbine generators) are installed on  foundations  that  keep  them  anchored  to  the
       seabed. These are called offshore wind foundations.

   10) Offshore wind foundations can be of different types, mainly monopiles, jackets (both mainly  steel  structures)  and  gravity  foundations
       (mainly using heavy concrete ballasts), as depicted in Figure 1 below.

       Figure 1: Different types of offshore wind foundations

       [pic]

       Source: Form CO.

   11) The exact specifications for the type and other parameters of foundations are determined in the tender  documentation,  and  depend  on  a
       number of factors, such as the type of the wind turbine generator and the related wind loads, water depth, wave  loads,  soil  conditions,
       transport distances, and financial considerations.[5]

   12) The tenders for offshore wind foundations are organised either by the developers of wind farms, which are often also end operators of  the
       wind farms (for example energy companies). In other cases,  the  end  user  may  engage  an  engineering,  procurement,  construction  and
       installation (EPCI) contractor to organise the roll-out of a wind farm, including the procurement of foundations. Undertakings setting  up
       wind farms or other undertakings in charge of sub-contracting the manufacturing of foundations usually place orders for the supply of  the
       complete foundation (in case of monopile foundations, both the monopile and the transition piece).

   13) In line with the wind farm project specifications, the developer (or its contractor) will also tender  the  installation  of  foundations,
       procurement of towers for wind turbines, wind turbine generators, installation of cables etc.

       Monopile foundations

   14) Bladt and EEW are both active in the manufacture and supply of monopile foundations. TAG's assets were also dedicated to  the  manufacture
       of monopile foundations.

   15) A monopile foundation is a unique large steel tubular assembly driven into the seabed. It represents the most wide-spread type of offshore
       foundation: approximately 80% of wind-farms rest on monopile foundations.

   16) A monopile foundation consists of two main components: a monopile, a first large raw steel tube driven into the seabed, and  a  transition
       piece, which is fixed on the monopile, reaching the sea level, and on which the wind turbine is installed. While the monopile  is  a  tube
       consisting of primary steel, a transition piece is a primary steel tube to which additional secondary steel parts are added (for  instance
       platforms, ladders, boat landings etc., as illustrated in Figure 2 below) and is subsequently coated, tested and painted.

   17) The production of monopiles and of primary steel for transition pieces is similar in many ways as they both constitute rolling and welding
       large raw steel plates into tubes,  without  further  work  being  carried  out  on  these  tubes.  By  contrast,  the  manufacturing  and
       fixing/assembly of secondary steel for transition pieces is a very different process involving a variety of different  smaller  steel  and
       non-steel parts, requiring different manufacturing capabilities (including coating and  painting)  and  facilities.  Accordingly,  certain
       manufacturers of primary steel tubes (such as […] and […]) are not active in the manufacture of complete transition  pieces  because  they
       specialise in primary steel pieces and do not  manufacture/assemble  the  secondary  steel  parts.  Other  companies  only  specialise  in
       transition pieces.[6]

       Figure 2: Components of monopile offshore wind structures

       [pic]

       Source: Form CO.

   18) Monopiles can be of different diameters. In particular, the so-called XL monopiles are foundations with a diameter exceeding approximately
       7 meters, which makes the foundation suitable for installation in deeper sea zones, and/or for larger wind turbines. Certain manufacturers
       (such as […]) do not have the capacity to manufacture monopiles of such a diameter.

       Other foundations for wind turbine generators

   19) Jackets are three (in the case of tripods, or tripiles) or four-legged steel structures driven into  the  seabed.  They  are  manufactured
       through the assembly of many offshore foundation tubes, and their weight ranges usually from 600 to 900 tons.  Similar  to  XL  monopiles,
       they are suitable for deeper sea. Of the Notifying Parties, only Bladt is active in the production and supply of jackets for offshore wind
       turbine generators.

   20) Other offshore structures include gravity foundations (lying on the seabed  with  the  help  of  heavy  concrete  ballasts)  and  floating
       structures (moored into the seabed). The Notifying Parties do not supply such foundations.

       Other offshore products

   21) Bladt is also active in the manufacturing of offshore substations, i.e. platforms containing equipment to connect the energy generated  by
       the wind farm to the onshore electricity network (or to a converter station). Substations consist of a so-called “topside” which hosts the
       above-mentioned equipment and a foundation structure typically composed of a  jacket  foundation.  Bladt  also  manufactures  jackets  and
       topsides for unmanned platforms in the oil and gas sector.

   22) Both Parties are active in the manufacturing of piles / anchors. EEW manufactures both driven piles  which  are  hammered  in  the  seabed
       (similarly to monopiles), and suction piles with an embodied suction system which sucks the pile into the seabed. Bladt only  manufactures
       suction piles.

   23) Neither offshore substations, offshore gas and oil structures, or piles, fall within the ambit of the JV.

       COMPETITIVE ASSESSMENT

1 Market Definition

1 Relevant Product Markets

   24) The Parties consider that the following markets are relevant for the assessment of the Notified Transaction: (i) offshore foundation tubes
       (an as input for offshore wind foundations based on steel structures);  (ii)  offshore  wind  foundations;  (iii)  offshore  oil  and  gas
       foundations; (iv) piles. As the Notified Transaction does not lead to any affected markets concerning  offshore  gas/oil  foundations  and
       piles (see the previous paragraph), these products are not assessed further for the purpose of this Decision.

2 Relevant product market definition

1 Offshore foundation tubes

       Past decisional practice

   25) Although the Commission has not previously considered steel tubes for offshore fundations, it has, in several previous decisions,  defined
       relevant markets relating to steel tubes in general. In the past, the Commission has distinguished between carbon and alloy steel tubes on
       the one hand and stainless steel tubes on the other hand[7]. The Commission has also segmented tubes into welded  and  seamless  tubes.[8]
       Welded tubes are made from flat steel products, such as hot rolled strips, which are curved into a tube and continuously welded.  Seamless
       tubes are made from tube rounds or ingots/billets which are pierced (i.e. extruded) and rolled.[9]  Finally,  in  the  segment  of  "other
       carbon and alloy steel tubes (non-precision tubes)", the Commission[10] has defined "large-diameter" tubes with  diameters  of  more  than
       20 inches (508 mm) for welded tubes, and 24 inches (610 mm) for seamless tubes, as a separate relevant product market, due to the  natural
       breaks in the production techniques and the differences regarding the field of application.

       The Notifying Parties' arguments

   26) In the present case, tubes manufactured for offshore foundations are mostly large diameter (i.e. with  a  diameter  larger  than  610  mm)
       welded carbon steel tubes. Considering the fact that such tubes are specifically manufactured for the  purpose  of  offshore  foundations,
       thereby requiring certain technical features, the Parties consider that the relevant market should be defined as welded carbon steel tubes
       manufactured for offshore foundations (“offshore foundation tubes”).

   27) The Notifying Parties also differentiate between offshore foundation tubes used as monopiles and primary steel for  transition  pieces  on
       the one hand, and as input for the construction of jackets on the other hand, since both types of tubes differ in some technical aspects.

       Conclusion on the relevant product market

   28) Offshore foundation tubes comprise large diameter carbon steel welded  tubes  for  the  use  in  offshore  wind  farms.  These  tubes  are
       intermediary products for, amongst others, monopile foundations (monopile and primary steel for transition pieces) and jacket  foundations
       for wind turbine generators.

   29) The market investigation has indicated that certain manufacturers of other  steel  products  could  in  principle  also  produce  offshore
       foundation tubes. However, in order for such venture to be profitable, it would need to be capable of large  scale  production  for  large
       orders, while meeting very high quality standards.[11] Thus, a new entrant would need the manufacturing facilities capable of high  volume
       production for offshore foundation tubes. In addition, it would need to acquire know-how and develop procedures  to  comply  with  quality
       assurance and control requirements, certification, standards etc.

   30) In addition, as tenders are normally organised for the supply of complete foundations, a supplier of monopile foundation tubes would  need
       to be either vertically integrated into the production of transition pieces, or team up with a supplier of transition pieces in  order  to
       market the foundation tubes.

   31) For these reasons, it seems unlikely that producers of other steel products would  be  able  to  switch  to  the  production  of  offshore
       foundation tubes in the short term and without entailing significant additional costs or risks.

   32) Concerning so-called 'XL' monopiles, which have a bigger diameter, above approximately 7 meters, are longer, have thicker walls,  and  are
       thus heavier than conventional monopiles commonly installed to date, the Commission concludes, on the basis of the  market  investigation,
       that certain manufacturers may have capacity limitations to switch to large scale production of such monopiles.[12] However, certain other
       manufacturers do have the capacity allowing them to readily switch between the production of conventional and 'XL' monopiles.

   33) Since the Notified Transaction does not raise serious doubts as to its compatibility with the internal market under any conceivable market
       definition[13], the exact relevant product market definition can be left open.

2 Offshore wind foundations

       Past decisional practice

   34) The Commission has in past cases considered, but ultimately left open, markets for the “procurement and installation of the foundations of
       offshore wind turbines”[14], for the “development, construction and operation of wind farms”[15], or the installation/construction of  the
       foundations of wind turbines"[16]. In these cases, emphasis was on the services (or packages thereof) offered to the  EPCI  contractor  or
       the end customer (typically the wind farm operator). The production and supply of offshore wind foundations would thus be placed  upstream
       of these potential markets.

       The Notifying Parties' arguments

   35) The Notifying Parties consider that the relevant market could  be  defined  as  the  market  for  offshore  foundations  for  wind  energy
       infrastructures. Alternatively, in addition to the market for monopiles/offshore foundation tubes as discussed in  section  5.1.2.1,  also
       (i) transition pieces, (ii) jackets used for wind turbine generators and (iii) jackets used for offshore substations could  be  considered
       as separate markets.

   36) According to the Notifying Parties, monopile  foundations  and  jackets  are  technically  different  structures  despite  their  relative
       substitutability in several cases. For larger wind turbine generators or in deeper sea areas (in particular beyond 40 meters), jackets are
       the only foundation solution available. For water depths until approximately 40 meters monopile structures are preferable, since they  are
       significantly cheaper than jackets. Jackets used for wind turbine generators  and  jackets  used  for  substations  could  potentially  be
       considered as separate markets because of their different production requirements and as jackets for substations are significantly  larger
       than jackets for wind turbine generators. In addition, while, generally, jackets for wind turbine generators are built in series on orders
       which cover a large number of jackets, jackets for substations are normally ordered individually.

       Conclusion on the relevant product market

   37) The Commission concludes, on the basis of the market investigation, that monopile offshore wind foundations are the  predominant  type  of
       foundation structures. In particular "XL" monopiles with a larger diameter are, for certain projects in  deeper  water,  substitutable  to
       jacket foundations and higher stress conditions. Conversely, in lower depths, monopiles can also be  substituted  by  gravity  foundations
       (which are however much fewer in number). Other structures (such as floating foundations) are not reported to be used  on  a  commercially
       significant scale yet.[17] Certain customers expect that, in view of the trend to develop wind farms farther from the shore  and  thus  in
       deeper waters, the competition for future projects will be mostly between suppliers of monopile foundations and jacket foundations.[18]

   38) The Commission further derives from the  market investigation that suppliers (or consortia of suppliers) typically offer  entire  offshore
       wind foundations in tender procedures[19]. Suppliers can  thus  be  vertically  integrated  both  in  (upstream)  production  of  offshore
       foundation tubes and the manufacture of final foundations[20] or, in the case of monopile foundations, be active only in the manufacturing
       of tubes (monopiles, primary steel for transition pieces) or final transition pieces (manufacturing and assembling/fixing secondary  steel
       to primary steel tubes). To participate in tenders, such suppliers either subcontract the remaining components from third parties, or form
       a consortium for a specific project.[21]

   39) For the same reasons as described in paragraphs (29) and (30) above, the market investigation suggests that manufacturers of  other  steel
       products are likely not capable to switch to the supply of offshore wind foundations within a short period of time and  without  incurring
       significant additional costs or risks.

   40) Since the Notified Transaction does not raise serious doubts as to its compatibility with the internal market  even  under  the  narrowest
       market definitions (the market for monopile foundations, the market for transition pieces,  and the market for jacket foundations), or any
       other plausible market definition[22], the exact relevant product market definition can remain open.

3 Relevant Geographic Markets

   41) Concerning offshore foundation tubes as well as offshore wind foundations, the Commission finds that the products are vertically  related,
       as the tubes are a key input for the production of final foundations. As both the intermediate and the final product  share  a  number  of
       characteristics concerning the size and weight of the product, and partly depend on the same end demand, the geographic dimension  of  the
       markets is essentially the same for both types of product. Thus no separate assessment will  be  carried  out  for  the  purpose  of  this
       Decision.

       Past decisional practice

   42) The Commission has in past cases considered that the geographic market for the various steel tube segments was at least EEA-wide.[23] This
       was based, amongst others, on relatively limited transportation costs compared to the value of the products, the  absence  of  significant
       price differences, and high levels of mutual market penetration.

       The Notifying Parties' arguments

   43) According to the Parties, cross-border competition exists in Europe. Suppliers of offshore foundation tubes and/or entire foundations (who
       are located in different European countries) all bid for tenders  organised  for  offshore  projects  located  in  countries  where  their
       manufacturing site is not located. Transport costs are  not  significant  relative  to  the  value  of  the  products.  Although  national
       regulations vary from one country to another, this is not an obstacle to cross-border supply, as the suppliers do not stock any  products,
       but tailor make the required products for each project and according to the project specifications.

       Conclusion on the relevant geographic markets

   44) The Commission concludes from the market investigation that the producers of offshore foundation tubes and entire foundations  can  supply
       customers all over the world, but  focus  on  northern/western  Europe  where  the  demand  for  wind  farm  related  components  is  best
       developed.[24]

   45) Respondents to the market investigation also explained that suppliers normally have direct access to seaborne transport, which seems to be
       crucial in view of the dimensions and weight of the products.[25] From a supply side perspective, the geographic dimension of  the  market
       could thus be limited to those areas with access to sea transport.

   46) Certain Member States are said to encourage the inclusion of domestically produced content in the procurement of components  for  offshore
       wind farms.[26] In the UK, for instance, while there appears to be no legally binding  obligation  to  include  domestically  manufactured
       products, local content may be taken into account when allocating Contracts for Difference.[27]

   47) The market investigation however showed that, to date, such measures have not constituted a significant  barrier  to  cross  border  trade
       within the EU. While suppliers of offshore foundation tubes and/or  entire  foundations  generally  consider  that  domestically  produced
       content can be advantagous in winning bids, it does not appear to be the decisive factor, as bids could be competitive on  other  grounds.
       Bidding data on UK projects  for the last five years[28] shows that only one tender out of 18 was  awarded  to  a  company  with  domestic
       production facilities.[29] This one tender accounted for only 1.2% of all offshore foundations for UK wind farms tendered in the period.

   48) In light of past decisional practice, the Notifying Parties' arguments and the responses  to  the  market  investigation,  the  Commission
       considers that the relevant geographic markets for offshore foundation tubes and for entire offshore wind foundations are  at  least  EEA-
       wide in scope.

2 Assessment of the notified operation

1 Offshore foundation tubes (primary steel tubes used as monopiles and primary steel for transition pieces).

   49) The narrowest plausible relevant market is that of primary steel tubes for offshore foundations. These are the welded carbon  steel  tubes
       that can be used as monopiles or primary steel for transition pieces in monopile-type foundations. This is  the  only  plausible  relevant
       market in which the Parties, as well as TAG's assets, were and are active.

   50) When considering the EEA-wide market for the supply of primary steel tubes for offshore foundations, according  to  the  Parties  in  2013
       Bladt had a market share (by volume) of approximately [20-30]%, EEW had a market share of [20-30]% whereas the acquired assets had  a  [0-
       5]% market share.[30]

   51) The Commission observes that the increase in market shares of either party through the acquisition of the TAG assets is marginal and  thus
       unlikely to lead to any anticompetitive effects.[31] This is in line with the findings of the  market  investigation,  where  no  customer
       expects a negative impact from the transaction.[32]

2 Complete transition pieces

   52) Under a different plausible relevant product market definition, the transaction may produce effects on the market for  transition  pieces.
       It is necessary to assess this market because it does not entirely encompass the market for welded carbon steel tubes  used  for  offshore
       foundations. This is because, on top of the primary steel tubes, secondary steel needs to be added to manufacture  a  complete  transition
       piece.

   53) EEW is not active on the market for complete transition pieces, as it only manufactures the primary steel tubes that are used  to  produce
       them. Bladt has a considerable position in this market with a 2013 share of [40-50]% (by number of transition pieces supplied).  Over  the
       same period, TAG accounted for approximately [0-5]%.

   54) Competitors highlighted[33] during the market investigation that, specifically as regards the UK market, the Parties will acquire, through
       the TAG assets, an additional capacity and a logistical advantage in a Member State which is considered strategic as it is expected to see
       a significant number of offshore wind farm projects in the near future.[34] As the JV would be the  only  producer  capable  of  providing
       local content (transition pieces), this may also confer an advantage when bidding for complete projects.

   55) However, some customers expressly welcomed that the capacity of the TAG assets will be kept on the market  through  the  acquisition,  and
       generally no customer anticipates negative impacts from the transaction.[35]

   56) The Commission observes that the transaction will lead to only a marginal increase in Bladt's market share in  the  supply  of  transition
       pieces. Moreover, the acquisition enables the capacity of TAG's assets to be kept on the market. Finally,  in  line  with  the  geographic
       dimension of the market, the logistical advantage acquired through assets located in the UK  does  not  constitute  a  barrier  for  other
       suppliers of transition pieces to continue supplying for projects located in the UK. The transaction thus is also unlikely to lead to  any
       anticompetitive effects on this market.

3 Complete foundations for offshore wind farms.

   57) The JV will not only manufacture transition pieces, but it will also participate in tendering procedures for the entire  foundation  sets,
       though only in the UK.[36] The Commission has therefore assessed the effects of the notified transaction also  as  regards  bids  for  the
       supply of complete foundations.

   58) The Parties submit that the market shares for complete foundations may overstate the Parties' position, as they do not take  into  account
       those portions of the projects that are subcontracted. However, the Commission finds that a reliable indication of the  Parties'  position
       can be obtained by looking at the data on the share of manufacturing of monopiles and primary steel over the last five years (period 2009-
       2014).[37] According to these data, Bladt has a market share of [20-30]%, EEW has a market share of [20-30]%, whereas  TAG  had  a  market
       share of [0-5]%. Also for this market, the transaction would thus constitute only result in a marginal increase for either of the Parties.

   59) As regards the possibility for the JV to bid instead of the Parties, the Commission observes that consortia between different players  are
       common practice in the industry.[38] The Parties themselves submitted joint bids in the past and they are regarded by some respondents  to
       the market investigation as complementary players, that could also generate efficiencies through the acquisition of assets in the UK. [39]

   60) Finally, as also confirmed by the market investigation,[40] there is a sufficient number of alternative suppliers who will be able to  bid
       for projects (alone or in consortia) and exert competitive pressure on the Parties as well as on the JV.

4 Cooperative effects of the Joint Venture

   61) The Parties will retain to a significant extent activities in the same market as the JV (transition pieces regarding  Bladt,  steel  tubes
       for offshore foundations regarding both Bladt and EEW), and in vertically related markets (production of monopiles by both parents).  This
       may raise the question of possible spill-over effects stemming from the JV. The JV will be a forum where the Parties will regularly  meet,
       discuss and decide on commercial matters in relation to tendered projects (albeit only as regards the UK).  This  concerns,  however,  not
       only decisions to bid in the UK, but also the sub-contracting for the JV's  bids  (as  the  JV  will  have  to  outsource  the  supply  of
       monopiles). This structural link could in theory facilitate coordination not only as concerns market contacts, but also as it may  provide
       a lever for the Parties to also coordinate their bidding activities outside of the UK.

   62) The Parties contend that the economic significance of the JVs activities is limited.  Prior  to  ceasing  business,  the  assets  acquired
       through the JV produced a very low turnover, which would correspond to [0-5]% of Bladt's turnover  and  [0-5]%  of  EEW's  turnover.  Even
       considering the expected turnover of the assets following investments expected from the Parties, the JV is  not  expected  to  generate  a
       turnover which would be higher than approximately [20-30]% of the turnover  of  the  Parties.  Within  the  market  investigation,  market
       participants did not raise concerns of possible cooperative effects of the JV.

   63) The Commission observes that, as also confirmed by the market investigation,[41] it is common practice within the industry that  producers
       bid in consortia and or sub-contract certain parts of the project from other producers.  The  Commission  also  notes  that  none  of  the
       Parties' activities has been contributed to the JV. In view of this, as  well  as  of  the  limited  economic  significance  of  the  JV's
       activities compared to the Parties, and in line with the results of the market investigation, the operation does not raise serious  doubts
       as to possible cooperative effects resulting from the JV.

5  Conclusions on the competitive assessment

   64) In conclusion, based on the information provided by the Parties and on the results of the market investigation, the  Commission  considers
       that the proposed transaction does not give rise to serious doubts as to its  compatibility  with  the  internal  market  even  under  the
       narrowest plausible product and geographic market definitions.

       CONCLUSION

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

For the Commission

(signed)
Margrethe VESTAGER
Member of the Commission

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

[2]   OJ L 1, 3.1.1994, p.3 ("the EEA Agreement").

[3]   Publication in the Official Journal of the European Union No C 449, 16-12-2014, p. 2.

[4]   Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission Consolidated Jurisdictional Notice (OJ  C  95,
16.4.2008, p. 1).

[5]   See replies to questions 5.3 and 5.4 - Questionnaire to competitors (Q1), and question 9 – Questionnaire to customers (Q2).

[6]   See, for example, replies to questions 6.7 and 15 - Questionnaire to competitors (Q1). As stated in  point  5  above,  the  JV  is  such  a
company which is intended to only produce transition pieces (both primary and secondary steel).

[7]   M.315 – Mannesmann/Hoesch/Ilva para. 18.

[8]   M.222 – Mannesmann/Hoesch paras. 21-23.

[9]   M.906 – Mannesmann/Vallourec para. 51.

[10]  M.906 – Mannesmann/Vallourec para. 44.

[11]  See replies to question 18 - Questionnaire to competitors (Q1).

[12]  See replies to question 7 - Questionnaire to competitors (Q1).

[13]  See paragraph (64).

[14]  Case COMP/M.6315 – Hochtief / Geosea / Beluga Hochtief Offshore JV, paragraph 26.

[15]  Case COMP/M.6540 - Dong Energy Borkum Riffgrund I Holdco / Boston Holding / Borkum Riffgrund I Offshore Windpark, paragraph 19 et seq.

[16]  Case COMP/M.6995 – Reggeborgh / Boskalis / VSMC, paragraphs 48 and 60.

[17]  See replies to questions 5, 7.5. and 7.6 - Questionnaire to competitors (Q1) and to questions 4 and 6 – Questionnaire to customers (Q2).

[18]  See, for example, replies to questions 4 and 7 – Questionnaire to customers (Q2).

[19]  See replies to question 13  – Questionnaire to customers (Q2).

[20]  For monopile foundations, this would encompass the manufacturing of both the  monopile  and  the  complete  transition  piece.  For  jacket
foundations, this would encompass both the manufacture of tubes and the manufacture of the complete jacket lattice.

[21]  See replies to question 15  – Questionnaire to competitors (Q1), and Annex R1 5 to to the reply to question  of  the  Commission's  request
for information of 9 December 2014

[22]  See paragraph (64).

[23]  See, for example, M.906 – Mannesmann/Vallourec para. 65.

[24]  See replies to questions 8 and 9 - Questionnaire to competitors (Q1), and questions 14 and 14.1 – Questionnaire to customers (Q2).

[25]  See replies to questions 9 and 9.1 - Questionnaire to competitors (Q1).

[26]  See replies to question 10 - Questionnaire to competitors (Q1), and question 15– Questionnaire to customers (Q2).

[27]  According to the parties, the UK Department for Energy and Climate Change requires, for projects larger than  300  MW,  the  submission  of
supply chain plans indicating the proportion of domestic supply for the whole project. This is taken into account in deciding the  allocation  of
Contracts for Difference, i.e. contracts which guarantee a stable electricity price to generators of renewable energy. The  parties  submit  they
are not aware of any case in which such a contract has been rejected because of lack of  domestic  supply.  See  reply  to  question  12  of  the
Commission's request for information of 9 December 2014.

[28]  See Annex R1 6 to the reply to question 20 of the Commission's request for information of 9 December 2014.

[29]  This company was TAG, and it is the only supplier reported to have had facilities in the UK. See reply to question 13 of  the  Commission's
request for information of 9 December 2014.

[30]  Form CO, section 4.2.1. Other market players in this market are SIF ([40-50]%), and Ambau ([5-10]%).

[31]  The situation is partly different if one considers the capacity of the acquired assets. However,  since  this  capacity  will  be  used  to
manufacture transition pieces, this scenario will be discussed in section below.

[32]  See in particular reply to question 29.3.1, Questionnaire to customers (Q2).

[33]  See replies to questions 17 and 17.3 - Questionnaire to competitors (Q1).

[34]  See replies to question 14 - Questionnaire to competitors (Q1), and replies to question 24 - Questionnaire to customers (Q2).

[35]  See replies to question 29.2 – Questionnaire to customers (Q2).

[36]  See Form CO, paragraph 22, and Draft Shareholders Agreement, Annex 5.1.2 to the form CO, paragraph 4.2.

[37]  'EEA tender data – 2009-2014', provided in pre-notification as annex R1.5 to the reply to the request for information of 9 December 2014.

[38]  See also replies to question 12 - Questionnaire to competitors (Q1), and replies to question 21 - Questionnaire to customers (Q2).

[39]  See replies to question 16 – Questionnaire to  competitors  (Q1)  and  replies  to  questions  26,  26.1,  28,  29.1,  29.2  and  29.3.1  –
Questionnaire to customers (Q2).

[40]  See also replies to questions 20 and 20.2 - Questionnaire to competitors (Q1), and replies to questions  28  and  29   -  Questionnaire  to
customers (Q2).

[41]  See replies to question 12 and 15 - Questionnaire to competitors (Q1), as well as  replies  to  question  21  and  22  -  Questionnaire  to
customers (Q2).