EUROPEAN COMMISSION DG Competition CASE M.7567 – BALL / REXAM (Only the English text is authentic) MERGER PROCEDURE REGULATION (EC) 139/2004 Article 8(2) Regulation (EC) 139/2004 Date: 15/01/2016 This text is made available for information purposes only. A summary of this decision is published in all EU languages in the Official Journal of the European Union. Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets. EN EN EUROPEAN COMMISSION Brussels, 15.1.2016 C(2016) 103 final Public Version COMMISSION DECISION of 15.1.2016 declaring a concentration to be compatible with the internal market and the EEA Agreement (Case M.7567 – BALL / REXAM) (Only the English text is authentic) TABLE OF CONTENTS 1. The Parties .................................................................................................................... 1 2. The operation and the concentration ............................................................................ 2 3. Union Dimension ......................................................................................................... 2 4. Procedure...................................................................................................................... 2 5. Introduction to the Parties' activities ............................................................................ 4 5.1. Introduction to the beverage can sector ....................................................................... 4 5.1.1. Description of the beverage can value chain and production process ......................... 4 5.1.2. Demand for beverage cans in the EEA ........................................................................ 6 5.1.3. Beverage can manufacturers in the EEA ..................................................................... 8 5.1.3.1. Location of beverage can plants serving the EEA ..................................................... 10 5.1.3.2. Location of can end plants ......................................................................................... 10 5.1.3.3. Location of research and development activities of the Parties ................................. 10 5.1.4. The pre-Transaction expansion plans of the Parties .................................................. 11 5.1.4.1. Ball in […] ................................................................................................................. 11 5.1.4.2. Rexam in […] ............................................................................................................. 11 5.1.4.3. Rexam in […] ............................................................................................................. 14 5.1.5. Changes in the beverage cans sector in the EEA since 1999 ..................................... 14 5.1.5.1. Changes relating to Rexam ........................................................................................ 14 5.1.5.2. Changes relating to Ball ............................................................................................. 15 5.1.5.3. Changes relating to Can-Pack .................................................................................... 16 5.1.5.4. Changes relating to Crown ......................................................................................... 16 5.1.5.5. Changes relating to other beverage can manufacturers .............................................. 16 5.2. Introduction to the aluminium bottles sector ............................................................. 16 6. Relevant product market ............................................................................................ 17 6.1. Beverage cans............................................................................................................. 17 6.1.1. Beverage cans and other forms of beverage packaging solutions .............................. 17 6.1.1.1. Past decisional practice .............................................................................................. 17 6.1.1.2. The Notifying Party's views ....................................................................................... 17 6.1.1.3. The Commission's assessment ................................................................................... 17 6.1.2. Various sizes and types of cans .................................................................................. 19 6.1.2.1. Past decisional practice .............................................................................................. 19 6.1.2.2. The Notifying Party's views ....................................................................................... 19 6.1.2.3. The Commission's assessment ................................................................................... 19 6.1.3. Can ends and can bodies for beverage cans ............................................................... 21 6.1.3.1. Past decisional practice .............................................................................................. 21 EN 2 EN 6.1.3.2. The Notifying Party's views ....................................................................................... 21 6.1.3.3. The Commission's assessment ................................................................................... 21 6.1.4. Aluminium and steel cans .......................................................................................... 22 6.1.4.1. Past decisional practice .............................................................................................. 22 6.1.4.2. The Notifying Party's views ....................................................................................... 22 6.1.4.3. The Commission's assessment ................................................................................... 22 6.2. Aluminium bottles ...................................................................................................... 24 6.2.1. Past decisional practice .............................................................................................. 24 6.2.2. The Notifying Party's views ....................................................................................... 24 6.2.3. The Commission's assessment ................................................................................... 25 7. Relevant geographic market ....................................................................................... 26 7.1. Beverage cans............................................................................................................. 26 7.1.1. Past decisional practice .............................................................................................. 26 7.1.2. The Notifying Party's views ....................................................................................... 27 7.1.3. The Commission's assessment ................................................................................... 29 7.1.3.1. Lack of national barriers ............................................................................................ 29 7.1.3.2. Pricing occurs on a customer site-by-site basis .......................................................... 30 7.1.3.3. Security of supply, rapid and just-in-time deliveries, good service levels ................. 32 7.1.3.4. Transport costs ........................................................................................................... 33 7.1.3.5. Regional clusters of 700 km catchment areas around individual customer filling locations ..................................................................................................................... 34 7.2. Aluminium bottles ...................................................................................................... 37 7.2.1. Past decisional practice .............................................................................................. 37 7.2.2. The Notifying Party's views ....................................................................................... 37 7.2.3. The Commission's assessment ................................................................................... 37 8. Competitive assessment: Principles ........................................................................... 38 8.1. Non-coordinated effects ............................................................................................. 38 8.2. Coordinated effects .................................................................................................... 41 9. Competitive Assessment Beverage Cans: Non-Coordinated Effects ......................... 43 9.1. Overview of the market dynamics and effects of the Transaction across the regional clusters........................................................................................................................ 43 9.1.1. The position of the Parties across the EEA ................................................................ 44 9.1.1.1. The Parties are the two largest beverage can manufacturers in the EEA ................... 44 9.1.1.2. The merged entity would be the largest player in terms of sales volumes in the EEA .................................................................................................................................... 44 9.1.1.3. The merged entity would be the largest player in terms of total capacity in the EEA .................................................................................................................................... 45 EN 3 EN 9.1.1.4. The