IP/05/1409
Brussels, 10th November 2005
Mergers: Commission approves acquisition of
Kappa Holding B.V. by Jefferson Smurfit, subject to
conditions
The European Commission has cleared under the EU Merger Regulation the
proposed acquisition of the Dutch company Kappa Holding B.V.
(“Kappa”) by the Irish based international packaging group,
Jefferson Smurfit (“JSG”), subject to conditions. The Commission
found that the proposed transaction gave rise to competition concerns in various
countries as regards corrugated boxes and solid board boxes, graphic board and
solid board partitions, all products used in the packaging industry. However,
the parties have offered remedies that remove the concerns identified by the
Commission.
Competition Commissioner Kroes commented "The proposed remedies will remove
the competition concerns and therefore maintain effective competition on all
affected markets.”
JSG is an international packaging group with operations in Western Europe and
Latin America, active in the manufacturing and sale of corrugated case
materials, sheets, and boxes and the recovery of recycled wastepaper. JSG is
jointly owned by Madison Dearborn Partners, a private equity business, and by
its own management.
Kappa is active in the manufacturing and sale of corrugated case materials,
corrugated and solid board sheets, corrugated and solid board, graphic and
specialty board and the recovery of recycled wastepaper. Its operations are
situated mainly in Western and Eastern Europe. It is jointly owned by CVC,
Cinven and by its own management.
The operation as initially notified to the Commission raised serious
competition concerns in the markets of corrugated boxes, solid board boxes,
graphic board and solid board partitions.
The market investigation carried out by the Commission confirmed that the
proposed transaction would:
- remove JSG as the closest competitor of Kappa in the market for corrugated
boxes in Denmark
- reduce the number of players in the market for corrugated boxes in Sweden
and significantly strengthen the parties’ position in this market
- significantly strengthen the parties’ position in the market for solid
board boxes in some regions such as Sweden and France;
- remove JSG, the main competitor to Kappa in the EEA market for graphic
board, and significantly strengthen the parties’ position in this market;
and
- remove the main competitor for the market of solid board partitions in some
areas like the UK and Ireland.
In order to remove these competition
concerns, the parties offered the following commitments:
- as regards corrugated boxes in Denmark, to sell off JSG’s plants in
Denmark i.e. the Neopac network comprising the Randers, Naestved and Horning
plants
- as regards corrugated boxes in Sweden, to sell off JSG’s Swedish
plants in Norrköping and Backefors (Dalwell) and Swedish corrugated
headquarters in Jönköping
- as regards solid board boxes, to sell off the JSG’s Solidpack plant in
the Netherlands
- as regards graphic board, to sell off Kappa’s graphic board plants in
Hoogezand and Sappemeer in the Netherlands
- as regards solid board partitions: to sell off JSG’s Interlok solid
board partitions business in Port Glasgow in Scotland.
These
commitments will considerably reduce the parties’ share and they will
significantly reduce or completely remove the overlap in the markets and
geographic areas concerned. The Commission considers that these commitments are
appropriate to remedy the competition concerns.
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