Commission, July 19, 2017, No M.8452

Dear Sir/Madam,

Subject:Case M.8452 – SUEZ / GE WATER AND PROCESS TECHNOLOGIES

Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/20041

(1)     On 14 June 2017, the Commission received notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/20042  by which SUEZ S.A. ("Suez", France) intends to acquire within the meaning of Article 3(1)(b) of the Merger Regulation sole control over GE Power's Water and Process Technologies business ("GE Water", USA) by way of purchase of shares and assets ('the proposed Transaction').3 Hereinafter Suez is referred to as the "Notifying Party", Suez and GE Water are referred to as the "Parties" and  the combination of Suez and GE Water as "the Merged Entity".

1.THE PARTIES

(2)     Suez is a company active in the provision of water management, recycling and wastewater recovery and urban development services.

(3)     GE Water is active in the provision of chemicals and equipment for water treatment solutions to industrial customers as well as municipalities.

2.THE TRANSACTION

(4)     On 8 March 2017, the Parties entered into a Share and Asset Purchase Agreement ("SAPA") pursuant to which Suez will acquire sole control of GE Water). As a result of the proposed Transaction, Suez will hold 70% of GE Water. Caisse de Dépôt et Placement du Québec (“CDPQ”) will hold the remaining non-controlling 30% share in GE Water.

(5)     The notified operation therefore constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

3.EU DIMENSION

(6)     The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million. Each of them has an EU-wide turnover in excess of EUR 250 million, but they do not achieve more than two-thirds of their aggregate EU-wide turnover within one and the same Member State.

(7)     The notified operation therefore has a Union dimension within the meaning of Article 1(2) of the Merger Regulation.

4.MARKET DEFINITION AND COMPETITIVE ASSESSMENT

4.1 INTRODUCTION

(8)     The proposed Transaction gives rise to horizontally affected markets in two areas: (i) the supply of mobile water treatment solutions, and (ii) the supply of downstream water treatment chemicals.

(9)     The proposed Transaction will also give rise to vertically affected markets between the upstream market for the supply of membranes where GE Water is active, and the downstream market(s) for (i) the construction (EPC) and operation/maintenance (O&M) of water and wastewater treatment facilities (which can be fitted with membranes) where Suez is active, and (ii) mobile water services in which both Parties operate.

4.2 MOBILE WATER TREATMENT (HORIZONTAL OVERLAP)

(10)    Mobile water treatment refers to the provision of emergency and short/medium- term purified water through the supply of trailer-mounted and skid-mounted systems (“mobile water services or mobile water solutions”). Mobile water services are typically used in instances of equipment failure at an existing water or wastewater treatment facility, during planned outages for equipment repair and maintenance, when a new water treatment facility is not yet operational or when there is a requirement for temporary additional capacity.4

(11)    Mobile water services can be used in a variety of applications, namely (i) industrial water treatment; (ii) municipal/potable water production, (iii) sea water treatment and, (iv) wastewater and sludge treatment. The Parties' activities only overlap in the provision of industrial water treatment.

(12)    Mobile water units can employ two different technologies in order to carry out the water treatment: membrane based technology or resin based technology (or a combination of both). Each of the Parties have both resin based and membrane based units; however Suez has a limited fleet of resin based units and did not generate any revenue with resin based units in the last year.

4.2.1 Market definition

4.2.1.1 Product market definition

(13)    The Commission has not previously analysed the market for mobile water services.

(14)    The Notifying Party considers that the relevant market is that for the supply of mobile water solutions (with no further segmentation). This is because:5 (a) The main suppliers of mobile water solutions generally have both resin based and membrane based units in their fleets; (b) Customers generally switch between different technologies, as long as both technologies can meet the technical specification required for the specific application; (c) Mobile water units are not the only solutions available to the customers and are not common in a number of jurisdictions, where customers use alternative methods rather than outsource to a third party.

(15)    In the market investigation, the Commission tested whether it is appropriate to segment the product market according to the technology of the units. The results of the market investigation were inconclusive.

(16)    First, both competitors and customers indicated that the two technologies are largely interchangeable, as for most applications both resin based units and membrane based units can be employed.6

(17)    Respondents to the market investigation, however, also indicated that for some applications the above statement is not true. Particularly resin based units can produce higher quality water, notably with a lower level of conductivity, required by some specific industries and applications (such as boiler feed water).7

(18)    Second, the market investigation indicated that membrane based technologies and resin based technologies cannot process the same quality of inlet water. This difference, however, may not significantly impact the substitutability between the two technologies as: (a) in most of the customers' sites the inlet water is of sufficient quality to be treated by both resin based units and membrane based units; and, (b) inlet water quality can be improved by adding a pre-filtration unit. The addition of a pre-filtration stage has an impact on the overall price of the services. The market investigation was however inconclusive as to the impact of such an addition on the prices of the services.8

(19)    The Commission considers that the market definition can be left open as Suez is only marginally active in the supply of resin-based mobile units, had no sales in this area in 2016 and, in any case, the proposed Transaction does not raise serious doubts as to its compatibility with the internal market under any plausible market definition.

4.2.1.2 Geographic market definition

(20)    The Notifying Party submits the market for mobile water services is EEA-wide as suppliers can (and regularly) ship their units across the EEA as transport costs are not significant and no local presence is required by customers.

(21)    The market investigation was not conclusive as to the exact scope of the geographic market.

(22)    Albeit some customers indicated that delivery distances may be a relevant factor, particularly when mobile units are required to handle emergency situations (e.g. unexpected failure of fixed equipment), and that they require the mobile units to be delivered at their site within a limited time frame, it also emerges that a significant proportion of respondents contact suppliers irrespective of their location in the EEA. Respondents to the market investigation also indicated that a number of suppliers render emergency services throughout the EEA.9

(23)    In any case, the Commission considers that the exact geographic market definition can be left open as the proposed Transaction does not raise serious doubts as to its compatibility with the internal market under any  plausible market definition.

(31)    First, the Parties' market shares are limited. In all plausible affected markets – except for the national market for Belgium according to the Frost & Sullivan report – their combined market share is below 30% and the increment brought about by Suez is limited. Customers located in Belgium or having production facilities in Belgium did not raise any concerns and indicated that they generally also contact suppliers located in neighbouring countries (the Netherlands, France, Germany and Luxembourg).

(32)    Second, the Parties are not particularly close competitors.

(33)    [Confidential information on GE Water’s fleet],12 whereas [Confidential information about Suez’ fleet].13 The Notifying Party submits that Veolia has a fleet comparable to GE Water in size and respondents to the  market investigation generally perceive Veolia (i) as having a fleet comparable to that of GE Water, and (ii) as the closest competitor to GE Water. This is consistent with the customers' responses to the market investigation which indicate that the Parties rarely serve the same customers and GE Water competes most often with Veolia.14

(34)    The market investigation also indicated that the Parties are not close competitors in terms of the services they offer on the market, at least for the vast majority of customers. In the course of the market investigation, it emerged that mobile water services are generally sourced for two main reasons: (i) in response to a failure of the fixed water treatment assets present at the customers' sites ("emergency") or (ii) in cases the fixed water assets need to be maintained. In this latter case, the need for the mobile water services is generally planned in advance ("scheduled services"). In general, the same fleet and technology can be used for both services, and suppliers are typically able to supply both services. However, the market investigation indicated that, while GE Water – also thanks to its larger fleet – is an established supplier of both types of services, Suez has more limited activities in the provision of emergency services.

(35)    Third, the vast majority of customers responding to the market investigation indicated that there is sufficient number of alternative suppliers on the market, including Veolia (the market leader together with GE Water), Ecolutia, Berardinello, Ovivo UK, Pall, Lenntech, Logisticon, and Orben.15 The vast majority of the customers responding to the market investigation also indicated that the Parties are not each other's best alternative. None of the respondents to the market investigation indicated Suez as GE Water's best alternative on the market16 and only one indicated GE Water as Suez' best alternative. This respondent however indicated Veolia as well.17

(36)    Fourth, the Merged Entity will also face competition from a number of local players focusing their activity on one or a limited number of Member States.  The vast majority of customers responding to the market investigation  indicated that they indeed consider smaller local suppliers as credible alternatives to GE Water, Veolia and Suez.18

(37)    Fifth, competitors responding to the market investigation indicated that they rarely have insufficient units available to respond to customer requests.19 Therefore, the Commission takes the view that in case of a price increase by the merged entity, competitors – including local suppliers – would have enough spare capacity to accommodate additional demand generated by customers switching away from the merged entity post-transaction.

(38)    Sixth, the proposed Transaction would not eliminate an important competitive force from the market. The majority of customers responding to the market investigation indicated that neither of the Parties is particularly price aggressive.20

(39)    Seventh, a number of competitors indicated that there are no specific applications for which there are no (or limited) alternatives to the Parties.21

(40)    Finally, respondents to the market investigation indicated that there has been entry of new players in the recent past, such as, for example, Orben and EnviroFalk in Germany and Induss in Belgium.

(41)    One large customer raised concerns arguing that alternative mobile  water  service providers do not have fleets of sufficient size to be able to serve large customers requiring both scheduled maintenance services and emergency services at multiple sites. In this respect, the Commission notes that a number of competitors possess fleets larger than Suez, with the same technologies, and as such they appear to be capable of also serving the needs of customers who require services at more than one plant at a time. One small customer also expressed some concern that it may not be able to find suitable alternatives at  the same price.22 However, given the number of players active in the market, the Commission considers that sufficient competition will remain to ensure effective price competition post-merger.

4.2.2.3 Conclusion

(42)    In light of the above and the results of the market investigation and the evidence available to it, the Commission takes the view that the proposed Transaction does not give rise to serious doubts as to its compatibility with the internal market on the market for the provision of mobile water services irrespective of the exact product and geographic market definition retained.

4.3 DOWNSTREAM WATER TREATMENT CHEMICALS (HORIZONTAL OVERLAP)

(43)    The Parties horizontally overlap in the production and sale of downstream water treatment chemicals. The addition of chemicals to a water treatment system enables to obtain water of the required quality, and it also aids the efficiency of the system as a whole by preventing processes such as scaling and corrosion, which could otherwise cause problems for the operation of an industrial plant, and even cause plant shutdowns if repairs are subsequently needed.

4.3.1 Market definition

4.3.1.1 Product market definition

(44)    In the past the Commission considered water treatment chemicals as forming part of a separate product market. In a past decision, the Commission considered plausible to further segment the market(s) for downstream chemicals in municipal and industrial water treatment and further according to the industry served (hydrocarbon processing industry (HPI); chemical processing industry (CPI); food and beverage industry; power generation; and the pulp and paper industry).23

(45)    In past cases24 the Commission also considered segmenting between the following categories of different chemicals used in industrial water treatment: (i) chemicals for influent and effluent water treatment and (ii) chemicals for water cooling and boiling applications.

(46)    The Notifying Party claims that the product market definition can be left open as the proposed Transaction will not generate competition concerns irrespective of the market definition retained.

(47)    The Commission agrees with the Notifying Party and takes the view that that the product market definition can be left open as the proposed Transaction does not raise serious doubts as to its compatibility with the internal market irrespective of the market definition retained.

4.3.1.2 Geographic market definition

(48)    In previous decisions25, the Commission has considered the market for the supply of downstream water treatment chemicals, and all the plausible segmentations of that product market, to be likely EEA-wide in scope. The exact market definition was however left open.

(49)    For the purpose of the present decision, the Commission takes the view that the product market definition can be left open as the proposed Transaction does not raise serious doubts as to its compatibility with the internal market irrespective of the market definition retained.

4.3.2 The Commission's assessment

(50)    The only plausible markets affected by the proposed Transaction are: (i) the supply of downstream water chemicals to the CPI industry, and (ii) the supply of downstream water treatment chemicals for boiling water applications.

(51)    On the market for the supply of downstream water chemicals to the CPI industry in the EEA, the combined market share of the Parties is [40-50]%, with an increment brought about by the proposed Transaction of less than [0-5]%  (Suez).

(52)    The Commission takes the view that the proposed Transaction will therefore not materially change the structure of the market and that Suez, in light of its rather limited presence both on the affected sub-segment as well as on the broader market for the supply of downstream water treatment chemicals,26 is a rather distant competitor to GE Water. Also, the Commission notes that post- transaction the merged entity will face competition from a number of strong and established competitors, including Nalco, Dorf Ketal, Kurita, Chimec and Solenis.

(53)    On the market for the supply of downstream water treatment chemicals for boiling water applications in the EEA, the Parties combined share will be [20- 30]%, with an increment of [5-10]% brought about by the proposed Transaction.

(54)    On this market, the merged entity will continue to face competition from a number of credible and established competitors such as Nalco ([30-40]%), Solenis ([20-30]%) and Kurita ([10-20]%).

4.3.3 Conclusion

(55)    In light of the above and the results of the market investigation and the evidence available to it, the Commission considers that the proposed Transaction will not give rise to serious doubts as to its compatibility with the internal market on the market for the supply of downstream water treatment chemicals.

4.4 MEMBRANES AND WATER/WASTEWATER FACILITIES (VERTICAL LINK)

(56)    GE Water manufactures components that are used in water and wastewater treatment facilities. In particular, GE Water is active in the supply of the following types of membrane: (i) ultrafiltration membranes, (ii) nanofiltration membranes, (iii) reverse osmosis membranes, (iv) membrane bioreactors (MBRs).

(57)    Suez uses membranes as an input for the design and construction (as well as for the operation and maintenance) of water and wastewater treatment facilities.

(58)    Membranes are also fitted in mobile water units.27 While GE Water is already vertically integrated (as it manufactures membranes and it supplies mobile water services), the proposed Transaction may strengthen the merged entity's position in the downstream market (where both Parties are active), and as a consequence it may change the Parties' incentives to pursue vertical foreclosure strategies.

4.4.1 Market definition

4.4.1.1 Membranes (upstream markets)

(59)    The Notifying Party submits28 that the relevant upstream market is that for the design and construction of technical solutions for water and wastewater treatment and that it is not appropriate to further segment this market because suppliers can easily provide substitute products or they would be able to switch production quickly and at a little cost to satisfy customer demands. Irrespective of the exact product segmentation, the Notifying Party considers the upstream market(s) to be at least EEA-wide in scope.

(60)    The market investigation indicated that different types of membranes cannot be used interchangeably as each type provides a different level of filtration and  they are typically used for different applications.29

(61)    The market investigation also did not support the Notifying Party's view that different types of membranes belong to the same relevant market on the basis of supply-side substitutability. Respondents to the market investigation indicated that to start manufacturing a new type of membrane would take more than two years and would entail significant investments.30

(62)    In light of the above, the Commission takes the view that each membrane type constitutes a separate relevant product market.

(63)    As regards the geographic scope of each of the plausible product markets, the market investigation indicated that manufacturers typically supply membranes across the entire EEA (and also outside the EEA) and that transport costs do not significantly affect the extent to which suppliers can competitively serve customers located far from their production facility.31

(64)    On this basis, the Commission takes the view that the geographic market of each membrane type is at least EEA-wide in scope.

4.4.1.2 Water and wastewater treatment facilities (downstream markets)

(65)    In line with the Commission's recent decisional practice,32 the Notifying Party submits that no distinction needs to be made between design, engineering and construction services ('EPC'), and operation and maintenance ('O&M') services related to water and wastewater treatment facilities. This is mainly in view of  the fact that it is typical for companies that have designed and constructed a facility to be responsible for the ongoing maintenance of that facility.33

(66)    The Notifying Party further submits that the downstream market can be segmented by customer type (industrial customers vs municipalities) and facility type (wastewater treatment vs water treatment facility).34

(67)    The market investigation was inconclusive as to whether any of these distinctions is appropriate.35 In any case, the exact product market definition can be left open as the proposed Transaction does not raise concerns under any plausible market definition.

(68)    The Notifying Party submits that the downstream market(s) should be considered as EEA-wide in scope and that a national-level market definition would not be appropriate in light of the substantial cross-border sales and the lack of significant transport costs.36 The Commission takes the view that the exact geographic scope of the downstream market(s) can be left open as the proposed Transaction does not raise serious doubts even under a narrow (national) market definition.37

4.4.1.3 The Commission's assessment

(69)    A vertical merger may result in anti-competitive effects due to foreclosure. Foreclosure concerns a situation where actual or potential rivals' access to supplies or markets is hampered or eliminated as a result of the merger, thereby reducing these companies' ability and/or incentive to compete.38

(70)    Two forms of foreclosure can be distinguished in a vertical relationship: input and customer foreclosure. Input foreclosure occurs where the merger is likely to raise the costs of downstream rivals by restricting their access to an important input. Customer foreclosure occurs where the merger is likely to foreclose upstream rivals by restricting their access to a sufficient customer base.39

(71)    Input foreclosure arises where, post-merger, the new entity would be likely to restrict access to the products or services that it would have otherwise supplied absent the merger, thereby raising its downstream rivals' costs by making it harder for them to obtain supplies of the input under similar prices and conditions as absent the merger.40

(72)    Customer foreclosure may occur when a supplier integrates with an important customer in the downstream market. Because of this downstream presence, the merged entity may foreclose access to a sufficient customer base to its actual or potential rivals in the upstream market (the input market) and  reduce  their ability or incentive to compete. In turn, this may raise downstream rivals' costs by making it harder for them to obtain supplies of the input under similar prices and conditions as absent the merger.41

(73)    For an input or customer foreclosure scenario to raise competition concerns, three cumulative factors need to be taken into account: (i) the ability of the merged entity to engage in foreclosure; (ii) the incentives of the merged entity to

Nonetheless, the Commission considers it unlikely that the proposed  Transaction would result in customer foreclosure. As suppliers can typically target both industrial and municipal customers with the same membrane,48 the alternatives available in the downstream markets for GE Water's upstream competitors include both types of customers. Suez' share on the aggregate  market including both industrial and municipal customers is approximately [20- 30]% for water facilities and [20-30]% for wastewater facilities. Therefore, even if Suez were to source all its membrane requirements from GE Water post- transaction, upstream suppliers would still be able to address more than 70% of the downstream demand generated by EPC and O&M suppliers of water and wastewater facilities.49

(79)    In addition, GE Water's competitors could also market their membranes to mobile water suppliers. As discussed in paragraph (24), the Parties have an estimated combined market share of, at maximum, [30-40]% in the supply of mobile industrial water treatment. When considering all mobile water applications (see paragraph (11)), the Parties' combined market share is below [20-30]%.50

(80)    In light of the above, the Commission considers that GE Water's upstream competitors would have sufficient routes to market their membranes, and therefore the merged entity would not have the ability to foreclose upstream competitors even if Suez were to source all its membrane requirements from GE Water post-transaction.51

4.4.2 Conclusion

(81)    In light of the above and of the available evidences, the Commission concludes that the proposed Transaction does not raise serious doubts as to its compatibility with the internal market as a result of non-horizontal effects.

5.CONCLUSION

(82)    For the reasons set out above, 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.

1    OJ L 24, 29.1.2004 p. 1. 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 24, 29.1.2004, p. 1 (the 'Merger Regulation').

3    Publication in the Official Journal of the European Union No C200, 23.6.2017, p. 29.

4    Form CO, paragraph 59.

5    Form CO, paragraphs 65 to 68.

6    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 5, and Replies to questionnaire Q1 – questionnaire to competitors – mobile water, question 3.

7    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 5.1, and Replies to questionnaire Q1 – questionnaire to competitors – mobile water, question 3.1.

8    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 7, and Replies to questionnaire Q1 – questionnaire to competitors – mobile water, question 4.

9    Replies to questionnaire Q2 – questionnaire to customers – mobile water, questions 16 and 17

10   Market shares provided in value.

11   Guidelines ont he assessment  of horizontal mergers under the Council Regulation on the control of concentrations between undertakings (Horizontal Merger Guidelines) OJ C31,05.02.2004.

*      Should read : [20-30]

**     Should read : [10-20]

***    Should read : [30-40]

****   Should read : [40-50]

*****  Should read : [20-30]

****** Should read : [60-70]

12    Form CO, paragraph 85.

13    Form CO, paragraph 82.

14    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 22.

15    Replies to questionnaire Q2 – questionnaire to customers – mobile water, questions 24 and 31.

16    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 28.

17    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 29.

18    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 34.

19    Replies to questionnaire Q1 – questionnaire to competitors– mobile water, question 37

20    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 33.

21    Replies to questionnaire Q1 – questionnaire to competitors – mobile water, question 29.

22    Replies to questionnaire Q2 – questionnaire to customers – mobile water, question 40.

23    Case M.8297 - GE / Baker Hughes

24    Case M.7207 - Clayton Dubilier & Rice / Ashland Water Technologies; Case M.5327, Ashland / Hercules

25    Case M.8297 - GE / Baker Hughes, Case M.7207 - Clayton Dubilier & Rice / Ashland Water Technologies; Case M.5327, Ashland / Hercules.

26    Under any conceivable market segmentation, Suez' share is below [5-10]%. On the market for the supply of downstream water treatment chemicals (industrial + municipal) Suez' 2016 EEA market share has been estimated at [0-5]% while on the market for the supply of downstream water treatment chemicals to industrial customers (also 2016 EEA??) at [0-5]%.

27    Parties' response to RFI5, question 6.

28    Form CO, paragraphs 142 and 145.

29    Replies to questionnaire Q3 – suppliers of membranes, question 2, and Replies to questionnaire Q4 – customers of membranes, question 4.

30    Replies to questionnaire Q3 – suppliers of membranes, question 4.2.

31    Replies to questionnaire Q3 – suppliers of membranes, questions 7 and 8, and and Replies to questionnaire Q4 – customers of membranes, question 7.

32    Case M.5934, Veolia Water UK and Veolia Voda / Subsidiaries of United Utilities Group.

33    Form CO, paragraphs 167 and 168.

34    Form CO, paragraphs 167 to 171. Ultrafiltration, nanofiltration and reverse osmosis membranes can be used in both water and wastewater treatment facilities whilst MBRs are only fitted into wastewater facilities.

35    Replies to questionnaire Q3 – suppliers of membranes, questions 3.1 and 3.2.

36    Form CO, paragraphs 174 to 178.

37    The competitive assessment of vertical foreclosure risks for the purpose of this case is not dependant on a national geographic market definition since membranes are purchased and sold on at least an EEA- basis.

38    Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of concentrations between undertakings, OJ C 265, 18.10.2008, p. 6 (‘Non-Horizontal Guidelines’), paragraphs 29– 30.

39    Non-Horizontal Guidelines, paragraphs 29–30.

40    Non-Horizontal Guidelines, paragraph 31.

41    Non-Horizontal Guidelines, paragraph 58.

42     Non-Horizontal Guidelines, paragraphs 32 and 59.

43    GE Water’s market share in the EFA is approx [10-20]% for ultrafiltration menbranes ; [5-10]% for nanofiltration menbranes [10-20] 0% for reverse osmosis menbranes, [10-20] 20% for MBRs, Source : Form Co Tables 23 and 24 Market share in value.

44    Replies to Questionnaire Q4-Customers of menbranes, Question 12.

45    Replies to Questionnaire Q4-Customers of menbranes, Question 14.

46    As the merged entity would lack any ability to foreclose access to the imput (menbranes) the Commission considers that there is no need to assess wether the merged entity would have an incentive to do so.

47    The Market size figures in Table 3 also include sales of suppliers that have some menbrane manufacturing capabilities in-house and therefore do not source (or source to a limited extent) menbranes from third parties. However, sales generated by these suppliers account for a relatively small share of the market (approx 10-15%) and therefore Suez’ position does not materially differ if such sales are excluded from the market share estimates.

48    Response to RFI5, question 6, and Replies to questionnaire Q3 – suppliers of membranes, question 3.1.

49    The Commission also notes that the market share estimates submitted by the Notifying Party are based on the so- called 'total addressable market' as seen by Suez. In other words, the market shares are estimated on the basis of Suez' win rate in tenders in which the company participated. This tends to overstate Suez' actual share as the company does not participate in all projects, especially in the case of industrial customers as these customers, unlike municipalities, do not always organise formal tenders.

50     Form CO, table 15.

51     As the merged entity would lack any ability to foreclose access to a sufficient customer base, the Commission considers that there is no need to assess whether the merged entity would have an incentive to do so.