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IP/11/208

Brussels, 21 February 2011

Mergers: Commission approves proposed acquisition of the décor and abrasive paper business of Arjowiggins by Swedish paper manufacturer Munksjö

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Arjowiggins' decor paper, thin paper, fine art paper and abrasive paper businesses by Munksjö AB of Sweden. The proposed acquisition will create one of the largest companies worldwide in the market for decor paper. The new entity will continue to face effective competition in the European Economic Area (EEA) including from Technocell of Germany, Malta Decor of Poland and a number of smaller players.

Munksjö is a Sweden-based manufacturer of high value-added paper products in six product areas: decor paper, pulp, electro-technical paper, Spantex, thin paper and Inpak. Under the proposed transaction, Munksjö would acquire Arjowiggins' decor paper, thin paper, fine art paper and abrasive paper businesses including two paper mills located in Arches (France) and Dettingen (Germany).

The Commission's investigation focused on the impact in the décor paper market, where the two companies are both active. Decor paper is a surface material for decorative applications mainly used in the furniture and laminate flooring industries. After the proposed transaction, there will be three large players in the decor paper market the merged entity as the new European and global leader, Germany-based Technocell and Poland-based Malta Decor.

The Commission’s examination of the operation showed, however, that the horizontal overlaps between the decor paper activities of Munksjö and of Arjowiggins are limited and that, for all the decor paper products concerned, the new entity will continue to face several effective competitors, in particular Technocell and Malta Decor but also smaller companies such as Koehler, Hoffsümmer (both of Germany) or Cartiere di Guarcino of Italy. Furthermore, Technocell and Cartiere di Guarcino will substantially increase production capacity shortly, thereby offering credible alternatives for customers.

The Commission's investigation also showed that the proposed operation would not significantly increase the risk of coordination regarding prices or capacity. The Commission's present analysis is that the existence, of numerous smaller companies and the vertically-integrated Malta Decor would likely disrupt any coordination by the large companies. Moreover, the purchase patterns of the customers show that they already tend to multi-source supplies and can shift large orders, which would also destabilise attempts of coordination.

The operation was notified to the Commission on 17 January 2011. More information on the case will be available at:

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_5950


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