CELEX: 32018M8795
Language: en
Date: 2018-03-15 00:00:00
Title: Commission Decision of 15/03/2018 declaring a concentration to be compatible with the common market (Case No COMP/M.8795 - Brookfield Asset Management Inc. / Schoeller Industries B.V. / REMA Investments B.V.) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 15.3.2018
                                                                C(2018) 1659 final
  In the published version of this decision, some
  information has been omitted pursuant to                                PUBLIC VERSION
  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  has been replaced by ranges of figures or a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.
                                                                To the notifying parties
Subject:            Case M.8795 — Brookfield/Schoeller Industries/Schoeller Allibert
                    Commission decision pursuant to Article 6(1)(b) of Council
                    Regulation No 139/20041 and Article 57 of the Agreement on the
                    European Economic Area2
Dear Sir or Madam,
(1)         On 08 February 2018, the European Commission received a notification of a
            proposed concentration pursuant to Article 4 of Council Regulation (EC)
            No 139/20043 by which the undertakings Brookfield Asset Management Inc.
            ('Brookfield', Canada) and Schoeller Industries B.V. ('Schoeller Industries', the
            Netherlands) acquire within the meaning of Article 3(1)(b) and 3(4) of the
            Merger Regulation joint control of REMA Investments B.V. ('REMA
            Investments', the Netherlands), the holding company of Schoeller Allibert B.V
            ('Schoeller Allibert', the Netherlands) by way of purchase of shares and other
            means ('the Transaction').4 Brookfield, Schoeller Industries and Schoeller
            Allibert will be hereinafter referred as 'the Parties'. Brookfield and Schoeller
            Industries will be referred as 'the Notifying Parties'.
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       OJ L 24, 29.1.2004, p. 1 (the "Merger Regulation").
4       Publication in the Official Journal of the European Union No C 57, 15.2.2018, p. 5.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- 1.     THE PARTIES
(2)    Brookfield is a Canadian global asset manager whose portfolio is focused on
       property, renewable power, infrastructure and private equity with over
       USD 250 billion of assets under management, either for its own account or for
       investors including pension funds, insurance companies, financial institutions
       and corporations. Brookfield is publicly listed on the New York Stock
       Exchange, the Toronto Stock exchange and on Euronext Amsterdam.
(3)    Schoeller Industries belongs to the Schoeller group, which is active in the areas
       of returnable packaging solutions, supply chain systems and intellectual
       property services.
(4)    Schoeller Allibert5 is a manufacturer of returnable plastic packaging for material
       handling. Schoeller Allibert offers a range of standard and tailor made
       returnable plastic packaging solutions including foldable containers, beverage
       crates and trays, handheld boxes, and pallets. Its customers are active in the
       agriculture, automotive, beverage, food, industrial manufacturing, pooling and
       retail sectors. Schoeller Allibert is currently indirectly controlled by J.P. Morgan
       Chase & Co. ('the Seller'), which holds 75% of the shares in and sole control
       over Schoeller Allibert via REMA Investments. The remaining 25% of the
       shares in Schoeller Allibert are indirectly owned by Schoeller Industries.
       Schoeller Industries does currently not own any rights that give it the possibility
       to exercise decisive influence over Schoeller Allibert.
(5)    On 4 January 2018, the Seller and Brookfield signed a share and purchase
       agreement, pursuant to which Brookfield intends to purchase 75% of the share
       capital of REMA Investments from the Seller. Schoeller Industries intends to
       retain its current shareholding of 25% and enter into a shareholder agreement
       ('SHA') with Brookfield.
(6)    Pursuant to the SHA, Schoeller Industries will have certain rights, which go
       beyond the usual rights protecting the financial interests of a minority
       shareholder. In particular, Schoeller Industries will have the right to [contractual
       relationship between the Parties]. Accordingly, the Transaction would result in
       the acquisition of joint control by Brookfield and Schoeller Industries over
       REMA Investments.
(7)    Schoeller Allibert as a joint-venture has sufficient own staff, financial resources
       and dedicated management for its operation and for the management of its
       business interests. Furthermore it is already operating on the market, is intended
       to continue to operate and does not have sale or purchase relationships with its
       parents. Therefore, the JV is full functional.
(8)    Accordingly, the Transaction constitutes a concentration pursuant to
       Articles 3(1)(b) and 3(4) of the Merger Regulation.
5   Schoeller Allibert was created as the result of the merger of Schoeller Arca Systems, and French
    Company Linpac Allibert in 2012. Schoeller Industries […] of Schoeller Arca Systems when the
    merger was implemented. Its share in the new company was diluted to 25% as a result of the merger
    with JP Morgan as a majority owner with 75% of the shares.
                                                      2
 ---pagebreak--- 2.        EU DIMENSION
(9)       The undertakings concerned have a combined aggregate world-wide turnover of
          more than EUR 5 000 million6 (Brookfield: EUR […] million, Schoeller
          Industries: EUR […] million, Schoeller Allibert: EUR [...] million). Each of
          them has an EU-wide turnover in excess of EUR 250 million
          (Brookfield: EUR […] million, Schoeller Industries: EUR […] million,
          Schoeller Allibert: 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.
3.        COMPETITIVE ASSESSMENT
(10)      The Transaction will result in horizontal overlaps between Schoeller Industries
          and Schoeller Allibert because one subsidiary of Schoeller Industries, Schoeller
          Plast, and Schoeller Allibert are active in the same potential segment for
          returnable plastic transport packaging, notably stackable containers and stack
          nest containers.
3.1.      Relevant markets
3.1.1.    Product markets
(11)      Following the Commission’s decisional practice, the segment for transportation
          packaging could be further divided based on (i) the packaging material, and/or
          (ii) the end-use industries.7 In addition, one could potentially further distinguish
          between returnable packaging and one-way packaging.
(12)      Following these principles, the Notifying Parties submit that Schoeller Allibert
          and Schoeller Industries are active in the segment for returnable plastic transport
          packaging for the following end-use industries: (i) agriculture, (ii) automotive,
          (iii) beverage, (iv) food processing, (v) industrial manufacturing, (vi) pooling
          services, and (vii) retail.
(13)      In another previous case, the Commission also considered an additional
          segmentation by type of plastic returnable product, namely in particular
          (i) stackable containers, (ii) stack-nest containers and (iii) bottle trays.8
(14)      Stackable containers are used primarily in the manufacturing industry for in-
          house materials/components handling. Stack-nest containers are mainly used for
          the handling and transport of food. They are available either with or without a
          cover in different sizes. Bottle trays are used for the transport of beverage
          bottles to the retail outlet and for the display of these bottles in the place of sale.
6      Turnover calculated in accordance with Article 5 of the Merger Regulation.
7      See decisions IV/M.603 – Crown Cork & Seal/Carnaud Metal Box, paras 9 and following, and
       COMP/M.2441 – Amcor/Danisco/Ahlstrom, para. 12.
8      See COMP/M.1813 – Industri Kapital (Nordkem)/DYNO, paras. 39 and 82-84.
                                                        3
 ---pagebreak--- (15)      Respondents to the market investigation have in general indicated that they
          source containers needed to fit to the respective conveyor system they are used
          for, the application and the specific features of usage (weight, width,
          height, etc).9 For example, customers selecting stackable containers for storage
          and transportation of industrial components do not use stack-nest containers
          rather designed for food transportation.
(16)      For the purpose of this decision, the Commission assesses the impact of the
          Transaction on the narrowest plausible, distinct, product markets, for stackable
          containers, stack-nest containers and bottle trays. The competitive assessment
          would not change if a wider market definition is adopted.
3.1.2.    Geographic markets
(17)      Schoeller Allibert is active in most European countries, with some limited
          exceptions (such as Denmark) with plants in Germany, the UK, Latvia, Poland
          and the Netherlands. Schoeller Industries through Schoeller Plast is mainly
          active in Denmark and Germany from its plant in Denmark.10 The Notifying
          Parties submit that the relevant geographic market is at least EU-wide. This
          view is based on previous decisions in the packaging sector 11 and the fact that
          they see customers sourcing from different countries in Europe irrespective of
          the location of the plants they source from.
(18)      In M.1813 – Industri Kapital (Nordkem)/DYNO, the Commission considered a
          regional geographic market (Sweden, Norway, Finland) or even a national one,
          due to relevance of transport costs and the importance of proximity of the
          suppliers.
(19)      The market investigation did not provide a conclusive feedback on the scope of
          the geographic markets. Customers based in Germany indicated in general that
          they source their products from Germany whereas customers based in the
          Nordics may also buy from suppliers located in Germany or the UK, reflecting
          the lower density of local suppliers of returnable packaging in the Nordic
          countries.12
(20)      For the purpose of this decision, the Commission assessed the impact of the
          Transaction at national level and regionally for Sweden, Norway and Finland.
          The competitive assessment would not change under a wider geographic market
          definition.
9      See Replies to Q3 to questionnaire to customers.
10     Schoeller Plast is also active in Czech Republic, France, Hungary, Netherlands, Poland and the UK
       but with very low turnovers (below EUR […] million in Hungary, Poland and the UK and below
       EUR […] in the Czech Republic, France and the Netherlands).
11     See COMP/M.5906 One Equity Partners/Constantia, COMP/M.5599 – Amcor/Alcan, para. 46
       and following.
12     See Replies to Q4-6 to questionnaire to customers.
                                                         4
 ---pagebreak--- 3.2. Competitive assessment
(21) Schoeller Allibert is the market leader in the EU for plastic returnable
     transportation packaging products with a market share around [20-30]%. The
     parties submit that Schoeller Plast achieved an EU-wide turnover of only
     approx. EUR […] million. Considering an EU-wide total demand of EUR […]
     billion for plastic returnable transportation packaging products, this amounts to
     an estimated share of Schoeller Plast in Europe of [0-5]%. A further
     segmentation of the market according to end-use industries would not result in
     significantly higher increments.
(22) As regards a potential sub-segmentation by type of product, Schoeller Allibert’s
     share in the EU is estimated between [20-30]% for both stackable containers and
     stack-nest containers, while Schoeller Plast’s estimated share is less than [0-5]%
     in each of these markets. Important competitors include George UTZ with an
     estimated share of [20-30]% in both markets, as well as Bekuplast and SSI
     Schäfer with an estimated share of [10-20]% each. As regards bottle trays,
     Schoeller Allibert and Schoeller Plast estimate their respective share in the EU
     to be below [5]%.
(23) In a Nordic market (Finland, Norway, Sweden), the combined market share of
     the merged entity would be [30-40]% with an increment of [5-10]% in stackable
     containers and [20-30]% with an increment of [0-5]% in stack-nest containers
     while the bottle trays market would not be affected. Competitive pressure would
     be exerted by different local players, such as N orplasta for example
     (approx. 5-10% in stackable and stack-nest containers respectively), and
     international companies such as George Utz (approx. [10-20]% in stackable and
     stack-nest containers respectively), Bekuplast (approx. 5-10% in stackable and
     stack-nest containers respectively) and SSI Schaefer (approx. 5-10% in
     stackable and stack-nest containers respectively).
(24) At national level, there are no overlaps in national markets in the Nordics where
     Schoeller Allibert is present (Sweden, Norway, Finland) as Schoeller Plast is not
     active in these Member States. Conversely, Schoeller Allibert is not active in
     Denmark, where Schoeller Plast is present.
(25) In Germany, Schoeller Allibert would estimate its shares between [20-30]% in
     both stackable containers and stack-nest containers with George UTZ, Bekuplast
     and SSI Schaefer being its most important competitors (the bottle trays market
     would not be affected).The Notifying Parties have not provided detailed market
     share figures as regards Schoeller Plast in Germany. They estimate however that
     Schoeller Plast’s share would be in any case below 10% for both stackable
     containers and stack-nest containers.
(26) Customers having responded to the market investigation did not express
     concerns as regards the impact of the transaction for stackable containers or
     stack-nest containers in the Nordic countries or in Germany. While they
     consider that Schoeller Allibert has become market leader through an
     acquisition policy, they also stated that Schoeller Plast played in general a minor
                                             5
 ---pagebreak---         role in the competitive process and that they have alternative suppliers to
        source from.13
(27)    In the light of the above, the Transaction does not raise serious doubts as regards
        its impact on competition, either through non-coordinated or coordinated effects.
4.      CONCLUSION
(28)    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
13   See Replies to Q11-12 to questionnaire to customers.
                                                     6