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European Commission

Press release

Brussels, 25 February 2014

Mergers: Commission sends warning to Munksjö and Ahlstrom for providing misleading information in a merger case

The European Commission has sent a Statement of Objections (SO) to Ahlstrom Corporation, Munksjö Oyj, both of Finland, and Munksjö AB of Sweden. In October 2012 Ahlstrom and Munksjö, both producers of speciality papers, had notified the Commission of plans to combine their activities in the production of abrasive paper backings. The Commission takes the preliminary view, that the parties provided misleading information with regard to the market for abrasive paper backings. Such behaviour, if established, would be in breach of the companies' obligation to include their true best estimates of the markets in question in the notification and could result in a fine of up to 1% of turnover. The sending of a Statement of Objections does not prejudge the final outcome of the investigation.

In October 2012, Ahlstrom and Munksjö notified a transaction whereby the label and processing business of Ahlstrom Corporation and Munksjö AB were to be transferred to a new company ("NewCo"), which was later renamed Munksjö Oyj (case M.6576). At the time of the notification, Ahlstrom and Munksjö AB were both producers of heavy weight abrasive paper backings, which are carriers for abrasive products such as sandpaper, sanding discs and sanding belts.

In January 2013, the companies supplied internal documents, which indicate that they estimate the size of the markets for abrasive paper backings and the heavy-weight sub-segment, both with regard to sales in the European Economic Area (EEA) and on a worldwide level, to be significantly lower and, consequently, their own market share significantly higher than what they had stated in the notification.

The notifying companies' obligation to provide information which is to the best of their knowledge correct and complete is one of the cornerstones of merger control. The provision of misleading information could conceal a competition problem and lead to the clearance of transactions, which are harmful for effective competition.

If the Commission finds that the parties provided at least negligently misleading information, it can impose a fine of up to 1% of the annual worldwide turnover of the companies concerned.

The Munksjö/Ahlstrom merger case

In December 2012, the Commission opened an in-depth investigation into the proposed creation of NewCo, combining Munksjö and parts of Ahlstrom (IP/12/1338).

The market investigation confirmed that the transaction would have brought together the only two manufacturers of heavy weight abrasive paper backings in the EEA and the two leading players in the global market with a market share of over 80%. In its final decision of May 2013, the Commission therefore made the approval of the transaction conditional upon the divestment of Ahlstrom's abrasive paper backings business located at Osnabrück, Germany (see IP/13/461).

The ongoing procedure against Munksjö and Ahlstrom for providing misleading information in the notification has no impact on the Commission's May 2013 decision, since the Commission did not base its decision on this incorrect information.

Procedural background

A Statement of Objections is a formal step in an investigation, by which the Commission informs the companies concerned in writing of the objections raised against them. The companies can then examine the documents in the Commission’s file, reply in writing and request an oral hearing to present their comments on the case to representatives of the Commission and the national competition authorities.

Sending a Statement of Objections does not prejudge the final outcome of the investigation.

There is no legal deadline to complete the inquiries. Their duration depends on a number of factors, including the complexity of each case, the extent to which the companies concerned co-operate with the Commission and the exercise of the rights of defence.

The notifying parties' obligation to provide data, which is - to the best of their knowledge and belief- true, correct and complete, is laid down in Article 14 (1) (a) of the EU Merger Regulation and in Article 4(1) of the Implementing Regulation.

Contacts :

Antoine Colombani (+32 2 297 45 13)

Marisa Gonzalez Iglesias (+32 2 295 19 25)

For the public: Europe Direct by phone 00 800 6 7 8 9 10 11 or by e­mail

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