Commission, April 21, 2021, No M.10157

Dear Sir  or Madam,

(1) On 12 March 2021, the European Commission received notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which Aurubis AG, (“Aurubis”, Germany) and TSR  Recycling  GmbH  &  Co.  KG  (“TSR”,  Germany), intend to  acquire within the meaning of  Articles 3(1)(b) and 3(4)  of  the Merger Regulation  joint  control  of  newly  incorporated  joint venture (“the JV”, Germany) (the ‘proposed transaction’).3 Aurubis and TSR are designated hereinafter  as  the 'Notifying  Parties'  and Aurubis,  TSR and the JV as the  ‘Parties’.

1. THE  PARTIES

(2) Aurubis  is  a  vertically  integrated  worldwide  provider  of  non-ferrous  metals  and  one of the main copper producers in Europe. The  core  business  of  Aurubis  is  the production of copper cathodes from copper concentrates  and  copper  scrap. Furthermore, Aurubis processes copper cathodes  into  wire  rods and shapes.

(3) TSR, belonging to Remondis SE & Co. KG (Germany),  ultimately  controlled  by Rethmann SE & Co. KG  (Germany),  is  active  in  trading  and  processing  secondary raw material (mainly  scrap)  for steel  producers  and  the  foundry  industry.  TSR collects, stores and  processes  metal,  including  ferrous  and  non-ferrous  metal  scrap,  and to a limited  extent  electronic  scrap.  Moreover,  TSR  offers  waste  disposal services  and environmental  services.

(4) The JV  is  intended  to  be  active  in  cable  scrap  recycling.  The  Notifying  Parties  plan  to pool  their  own  cable  dismantling  facilities  at  Fehrbellin  (Aurubis’  subsidiary CABLO  Metall  Recycling  &  Handel  GmbH,  “Cablo”)  and  Gelsenkirchen  (TSR). The JV’s output will be copper scrap no.  1 (used  for  direct melt),  copper scrap no.  2  and copper scrap used for smelting and  refining  (“CSSR”),  as  well  as  aluminium granules and marginal quantities  of  lead  and  cast  iron  chips.  The  cable  processing  plant in Fehrbellin  has  a  capacity  of  […]t/a  cable  scrap  and  the  plant  in Gelsenkirchen has a capacity of […]t/a cable scrap in total, this is  to  say  […]t/a  regarding Line 1  and  […]t/a  regarding  Line  2,  a  new  production  line  which  will  extend capacity as from 2022. From the cables,  the  JV  will  extract  approximately […]t/a  copper granules with  different qualities.4

i. TSR will provide approximately […]t/a ([…]%) of the  JV’s  total  inputs  of  […]t/a in cables scrap. TSR  will  continue  to  provide […]%  of  the  scrap copper cable to the plant in Gelsenkirchen and TSR’s overall supplies will  represent approximately […]% of the JV’s total  input  volumes.  TSR  will increase its supplies to  the  plant  in  Fehrbellin  from  […]%  in  2019  to  […]%  of the JV’s copper cable scrap input, whereas third parties will  supply  [90-  100]% of aluminium  cable scrap.

ii. Aurubis  will  purchase  approximately  […]%  of  the  JV’s  output volume  in 2021; notably Aurubis will buy […]% of copper  scrap  no.2  and  CSSR,  the other output materials will be mainly  sold  to  third  parties.  Copper  scrap  no.2 and CSSR are currently mainly produced in Fehrbellin. […],  Aurubis  will  purchase  approximately  […]% of the JV’s  total  output.5

2. THE CONCENTRATION

(5) The  joint  venture  agreement  (“JVA”)  was executed  on 13 November  2020.

2.1. Joint control

(6) Under the JVA, Aurubis  holds  [40-50]%  and  TSR [60-70]% of the  shares in the  JV. As a rule, shareholders’ resolutions are passed with a majority of more than […]%. However, the shareholders’ meeting shall pass resolutions  [….]  on  a  number  of  strategic  decisions,6 which  gives Aurubis de  facto veto rights  on  strategic  decisions on business policy and decisions on  budget,  the  business  plan,  major  investments  as  well as the appointment of senior management.7 The  Notifying  Parties  will  therefore  jointly  control  the JV.

2.2. Full-Functionality

(7) The JV will be responsible for  day-to-day  operations,  with  a  dedicated  management, and will be autonomous  in  operational  respect.  The  parents  will  transfer  their  own plants for dismantling and processing cable scrap in Fehrbellin, Cablo and  in  Gelsenkirchen (owned by TSR), including staff, to the JV. Moreover, the JV will be equipped with equity (EUR […]  million)  and  will  receive  shareholder loans  from Aurubis and TSR  (EUR  […]  million),  as  well  as  loans  from  banks,  as  specified  in the  JVA.8  Therefore the  JV  will  have  access to  sufficient resources including finance,  staff,  and assets  (tangible and intangible) to  conduct  the business activities of the  two plants.9

(8) The JV will buy inputs from and sell to  its  parents,  but  it  will  nonetheless  have  an  active role on the market and will be  economically  autonomous  from  an  operational  point  of view.10

(9) With regard to the proportion of sales made to its parents (compared with the total production of the JV), the JV will not exclusively  depend  on its  parents.  The  JV  will have  business  relations  with  third  parties  for at  least  […]%  of  its  sales11 (Aurubis will purchase approx.  […]%  of the  JV’s  total output  in  2021,  and  approx.  […]% as of 2022).

(10) Even if sales to one of the parent companies will be […], this does not remove the full-functional character of the JV, since  those  sales  will  be  commercial  in  character  and done on an arm’s length basis  (commercial  terms  will  be  based  on  standard market terms and therefore on  arm’s length; contracts will be  based on  market standards e.g., LME  copper  price,  treatment  and  refining  charges,  quality  and  penalties for impurities, deliveries etc.;  the  contracts’  duration  will  be  […]  years  and will subsequently be re-negotiated; and  the  JV’s  supply and  sales  will  be  in  competition to other market participants).12 The purchase of inputs from its parent companies  will  also be  done  under  normal  commercial  conditions.  TSR  will  supply the plant in Gelsenkirchen with input materials, primarily copper cable scrap at market-standard terms and on an  arm’s-length  basis.  The  plant  in  Fehrbellin  will continue purchasing copper cable scrap and aluminium cable scrap from third  parties (which will account for approximately […]% of its inputs), in addition  to  receiving  supplies  from  TSR.13  The  JV will therefore  be fully  functional.

2.3. Conclusion

(11) Therefore, the Commission concludes the proposed transaction constitutes  a  concentration within  the  meaning of  the  Merger  Regulation since the JV will perform  on a lasting  basis  all  the  functions  of an autonomous  economic  entity.

3. UNION  DIMENSION

(12) The  undertakings  concerned  have  a  combined  aggregate  world-wide turnover of more than EUR 5 000 million (TSR (Rethmann  Group):  EUR  […]  million;  Aurubis:  EUR […] million).14 Each of them has a Union-wide turnover in excess  of EUR 250 million  (TSR  (Rethmann  Group):  […]  EUR million; Aurubis: EUR […]  million), and they do not achieve more than two-thirds of their  aggregate  Union-wide  turnover within one and the same Member  State.  The  proposed  transaction  therefore  has  a Union  dimension  within  the meaning  of Article  1(2) of the  Merger Regulation.

4. MARKET  DEFINITION

(13) The area of  recycling  ferrous  and  non-ferrous  metals  involves various  activities  including the collection of scrap, its trade and its  processing  for further  supply downstream  to smelters  and  refiners.

(14) The proposed transaction mainly involves the area of copper scrap recycling from end-of-life cables  from  used electronic devices,  appliances, buildings and vehicles.

(15) At the top of  the  value chain,  scrap  collectors,  like  TSR,  and  traders  (intermediaries not involved in collection nor recycling) collect, process and trade cables (primarily end-of-life cables  but  also  some industrial scrap) for dismantling.

(16) At  the  intermediary  level,  cable  dismantlers,  like  the  JV,  remove  the  plastic  coating of these end-of-life cables (which is reused or discarded as waste) and process and recuperate  copper scrap in the  form of granules.

(17) Downstream, smelters and refiners of copper scrap, like Aurubis, source the copper granules from  dismantlers to  produce  pure  copper  in  the form  of  cathodes. Unlike other copper scrap where trade takes  place  directly  between  collectors/traders  upstream and smelters downstream, copper  cables  require  the  intermediary  step  in which  dismantlers  remove  the  plastic. “Dismantling” is different from  “processing”  for the purpose of this decision: dismantling  describes  the  removal  of  plastic  from cables,  whereas  processing  describes  less technically  complex  treatment  of  all  types of scrap, such as sorting  and  shredding.

(18) On the demand side, Aurubis’ market share for copper scrap  exceeds  30%  in  the markets for copper scrap no.2 and CSSR in the EEA, which leads to  two  vertically affected markets as the JV will be active in the upstream market for copper cable dismantling.

(19) On the basis of these considerations, the Commission will analyse the following four markets: the market for the collection and processing of copper scrap, the market for copper cable dismantling and the markets for the demand for copper scrap  no.2  and CSSR respectively.

4.1. Market for the collection and processing of metal scrap

(20) Scrap metal is provided by various  companies, including  large  industrial  companies, scrap metal suppliers, commercial firms,  local  authorities  and  private  customers. Suppliers store their  scrap  metals,  production  residue  and  faulty  batches  and  then  have it recuperated by collecting companies, such as TSR, processed (sorted and shredded) and sold directly to refiners and smelters, or – in the case of cables –  transported to dismantling facilities who  remove  the  plastic  components  and  sell  the metal  components  of the  cables  to smelters and refiners.

4.1.1. Product market

4.1.1.1. The  Commission’s decisional practice

(21) The Commission has in the  past  identified  a  market  for  trade  in  metal scrap,  which it has divided  into  a separate market for  trade in (i)  ferrous  scrap and  a separate market  for trade in (ii) non-ferrous scrap.15 Within the market for non-ferrous scrap, the Commission  also considered  potential sub-segments for trade in (a) aluminium scrap, (b) copper scrap and (c) zinc scrap,  but  left  this  open  in  most  cases,16  also noting that suppliers are flexible in  collecting  and  trading  different  types  of  metal scrap.17

(22) In  previous  decisions,  the Commission considered whether, within the overall market for trade in metal scrap, the market segment for collecting and processing  constitutes a separate market or whether the collection,  processing  and  trade  of processed metal  belong  to one single market,  but ultimately  left  the  question open.18

4.1.1.2. The  Notifying  Parties’  view

(23) The Notifying Parties consider the market for copper  scrap  to  include all  trading activities in  copper scrap on the supply  and demand  side.19

4.1.1.3. The  Commission’s  assessment

(24) First, as to the question whether a distinction between different types of metals  is  warranted, a majority of respondents in the market investigation agreed with the Commission’s  practice  to  distinguish the market  segment for  collecting, processing and trading ferrous scrap from the market segment for collecting and processing  and trading  non-ferrous  scrap.20  Respondents  explained  that different recycling technologies such as shredding and separating machines are needed in ferrous and non-ferrous scrap  recycling  respectively. There are also differences in the importance of logistic costs and  the  networks  necessary  to  conduct  business. Moreover, customer groups and  market  dynamics  are  different.  For  instance,  in ferrous scrap markets, price-setting mechanisms are driven by  supply  and  demand  of steel companies, while prices for non-ferrous scrap are set by  the  London  Metal Exchange (LME).21 Therefore,  for  the  purposes  of  this  decision,  a  distinction  should  be made  between  the  markets  for  collecting,  processing  and  trading  ferrous  scrap from  the  market  segment  for  collecting, processing  and trading  non-ferrous scrap.

(25) Second, within non-ferrous scrap, a majority of respondents who gave their views on whether the market for the  collection,  processing  and  trading  of  non-ferrous scrap should be further  sub-segmented,  argued for a  further  sub-segmentation between copper and aluminium.22 Those who explained their view argued that customers and consumers are different. One respondent  also noted  that  “copper  scrap  is  mainly  used in the limited application at downstream market more than aluminum. A market of aluminum downstream has more wide application.”23 According to another respondent, “different product know-how and different networks/access to customers is required. In addition, even though many traders trade all types of scrap, the "specialists" (e.g. only aluminium) often trade the largest volumes which is an indication for the segmentation.”24 This indicates that different  types  of non-ferrous scrap might constitute separate markets in the market for collection, processing  and  trading.

(26) Third,  as  to  the  question  whether  a  further  distinction  applies  between  the  activities of collecting and processing  on  the  one  hand  and  trading  on  the  other  hand, a majority of respondents supports a broad market definition with respect  to  metal recycling in general.25 According to a respondent, “collecting and processing always includes  trading  of  metals  (the  regained  granules  through  recycling  have  to be traded/sold)”. Other respondents noted that many  companies  in  the  Union  collect  scrap, process and trade it  within  the same  business unit.26

(27) Fourth, the Commission also investigated whether a sub-segmentation for cables  as opposed to other types of scrap might be warranted for the purposes of this decision. However, none  of  the  replies  in  the  market  investigation  indicated  that  cables  and other scrap constitute separate sub-segments of  the  market  for  collection,  processing  and trading  of scrap.

(28) For the purpose of this decision, the Commission  considers  that  the  exact  product market definition for the non-ferrous scrap market can be left open, as the proposed transaction does not raise serious  doubts  as  to  its  compatibility  with  the  internal  market  or  the  functioning  of  the  EEA  Agreement  under any  plausible  market  definition (as under wider market definitions both market  shares  and  market  power  would be even lower),  whether  the  market  is  (i)  sub-segmented  by  type  of  non- ferrous scrap or (ii) sub-segmented  by  activity  (between  collecting  and  processing  on the one hand and trading on the other  hand). In  conclusion,  in  line  with  the Commission’s precedents  and  the  findings  of  the  market  investigation,  for the purposes  of  this decision,  the  Commission  will  analyse  the  narrowest plausible market  which  is the  market  for  the collection  and processing  of copper scrap.

4.1.2. Geographic market

4.1.2.1. The  Commission’s decisional practice

(29) The Commission found the  market  for  trade  in  metal  scrap  and  its  sub-segments  to  be at least  EEA-wide  and possibly  worldwide.27

(30) As regards the geographic scope of the market for collecting and  processing of metal scrap,  the  Commission  indicated  that  the geographic dimension  is smaller than  that of the trading market. It left open whether the markets are national  or  regional,  in particular with respect to collection activities, which might only take place within a  catchment radius  (of approximately  200 km)  of each facility.28

4.1.2.2. The  Notifying  Parties’  view

(31) The Notifying Parties submit that the  geographic  market  for the  collection  and processing  of  non-ferrous scrap  (including  sub segments)  is EEA-wide. The  Notifying Parties submit that the distances that the  scrap  is  transported  by  the collecting and processing companies depend on the location  of  the  companies,  the  density of customers and  collection  points  in  the  regional  area,  the  transport connection, the means of transport and the availability of a suitable  return  freight. Moreover, the transport distances also depend on the weight and  the  composition  of scrap. Depending on market conditions and market  reality,  scrap  is  regularly  also collected  over  distances  of more  than  200-300  km.  Moreover,  the  transport costs for different distances do not differ significantly from each other  and  scrap  can  be transported  easily  over  long distances.29

4.1.2.3. The  Commission’s  assessment

(32) The market investigation was inconclusive whether the market for collection  and processing of copper  scrap  (including  cables)  should  be  defined  as  regional,  national or EEA-wide.30 A majority of respondents in the market investigation replied that companies active  in  the  collection  of  copper  cables  collect  throughout  Germany  as well as other  EEA  Contracting  Parties.31  Prices  for  copper  cable  scrap  are  broadly the same across at least Germany, with some minor differences  reflecting  transport costs.32 However, several  replies indicated that  collection  usually  takes  place  within a radius that grows and shrinks depending on the copper price. In fact, it appears that copper cables may be transported over shorter distances than  other  types  of copper scrap, as a market participant explained: “As copper cables consist of  about  60% plastic waste it is not economical to transport them over large distances.”33

(33) A majority of respondents also replied that  they  trade  copper scrap,  including  cables, for dismantling in all of Germany as well as  in  other  European  countries.34 Transport costs play an important role, which  means  that copper  scrap  and  cables  are  transported over longer distances when the  copper  price  is  higher and  shorter distances  when the  copper price  is lower.35

(34) In  conclusion,  in  line  with  the  Commission’s  precedents  and  the  findings  of  the market investigation, the geographic market  definition can  be  left  open,  as  the proposed transaction does not raise serious doubts as to  its  compatibility  with  the  internal market or the  functioning  of  the  EEA  Agreement  under any  plausible geographic market definition. No affected markets arise regardless of whether (i) the  market for collection and processing of copper scrap is defined as regional (within catchment areas of 200 km), national or EEA-wide  and  whether  (ii)  the  market  for  trade in copper scrap is defined as national, EEA-wide or worldwide.36 Given some concerns by market participants  related  to  the  market  for  collection  of copper  scrap, the  Commission  will  analyse  the  market  for collection  and processing of  copper scrap at regional, national  and EEA-wide  level.

4.2. Market for copper cable  dismantling

(35) Cable dismantling  plants  receive  end-of-life-cables  from  collectors  and  traders.

(36) They then use various types of shredding and cutting systems in order to separate the different  qualities  of  ferrous  and  non-ferrous  metals  from  the  other  cable  materials (e.g. removing the outer layer  of plastic  and  recovering  the  copper  content,  usually  in the  form  of granules).

(37) The recycled raw materials are purchased downstream by steelworks, smelters and foundries, or by metal scrap traders who,  in  turn,  resell  the  inputs  for further  processing.

4.2.1. Product market

4.2.1.1. The  Commission’s decisional practice

(38) The Commission has not yet considered a  separate  market  for copper  cable dismantling.

4.2.1.2. The  Notifying  Parties’  view

(39) The Notifying Parties consider that there is a separate  market  for copper  cable dismantling,  which  is  distinct  from the  market  for CSSR, and distinct from aluminium  cable  dismantling.  The  Notifying  Parties  submit  that cable  dismantling requires special  equipment  and  know-how.  It  is  only after  dismantling that  cables can be  recycled and  provided  for metallurgical  processes  further  down  the  value chain. Therefore, not all market players active in the copper scrap  market  also  buy  copper cable scrap for  dismantling, but  only  cable  dismantling  companies.37

4.2.1.3. The  Commission’s  assessment

(40) The market investigation supports the Notifying Parties’ view that the  dismantling  of  copper cables constitutes a separate product market, distinct from the  collection, processing and trading of other copper scrap.38 Some respondents  explained  that  not every processor can  dismantle  copper  cables,  as  dismantling  requires special equipment and facilities.39

(41) The  results  of  the  market  investigation also supported  the Notifying Parties’ argument that copper cable scrap for dismantling constitutes a separate market from  CSSR. A  majority  of  respondents  view  these  as  not  interchangeable  or substitutable.40 In the words of a respondent, “the scrap for dismantling requires a processing step (shredding/sorting) that the smelters typically do not have in-house” and although copper granules  derived  from copper  cable  scrap  are  the  same  material as can be derived from copper scrap other than cables, “refiners typically do not buy cable scrap but only the dismantled granulates.”41 A few  respondents  also  argued that market entry is relatively  easy  in  the market  for collection  and processing of scrap, but that more complex recycling  steps  (such  as  dismantling)  make  it  more difficult  to enter  the  market  for  cable dismantling.42

(42) The  Commission  considers  that  for  the  purposes  of  analysing the markets  involved  in cable recycling, a  distinction  between  collection  and  processing  on  the  one  hand  and dismantling on  the  other  hand  is  warranted,  as  cable  collectors collect  and process all types of scrap and cable dismantlers are much more specialised and only dismantle cables, and in consequence, only some scrap collectors also offer cable dismantling,  which  translates into different competitive dynamics in these two markets.

(43) Therefore, in  line  with  the  Notifying  Parties’  submission  and  the  findings of  the market  investigation,  for  the  purposes  of  this decision,  the  Commission  will  analyse  the impact of the proposed transaction on a separate market for copper  cable dismantling.

4.2.2. Geographic market

4.2.2.1. The  Commission’s decisional practice

(44) The Commission has not yet considered a  separate  market  for copper  cable dismantling.

4.2.2.2. The  Notifying  Parties’  view

(45) The Notifying Parties consider the market for copper  cable  dismantling  to  be  worldwide, given that cable scrap can be  transported  over  long  distances  due  to  the high  value of  metals  contained  in  the  cables,  demonstrated  by  the  high export volumes of copper cable  scrap from  the Union.43

4.2.2.3. The  Commission’s  assessment

(46) In  the  market  investigation,  a  majority  of  respondents  replied  that  companies  active  in the dismantling of copper cables source copper cables  at an at least  national level,  often  also  in other EEA  contracting  parties.44

(47) The  Commission’s  investigation  showed  that in  recent years, copper  cables were only collected and traded within the EEA, since China and other South  East  Asian countries imposed an import  ban  on  different  types  of  waste,  including  cables.45 Before this import ban, exports of end-of-life cables, in particular to China, were  significant.

(48) In conclusion, in line with the Notifying Parties’  submission  and  the  findings  of  the  market investigation, the  geographic  market  definition can  be  left  open  between national and EEA-wide, as  the  proposed  transaction does  not  raise  serious  doubts  as to  its  compatibility  with  the  internal  market  or  the  functioning  of  the  EEA Agreement under  any plausible market definition.

4.3. Market for copper scrap products

4.3.1. Product market

4.3.1.1. The  Commission’s decisional practice

(49) As for the demand-side of the market for copper scrap, the Commission found in Aurubis/Metallo Group Holding that a further segmentation of the market for copper scrap by purity grade is warranted. The Commission  found  distinct  markets  for  (i)  copper scrap for direct melt (copper scrap no.1), (ii)  copper scrap no.  2, (iii)  copper scrap for smelting  and refining  (“CSSR”)  and  (iv) e-scrap.

(50) Copper scrap no.1 comprises scrap  that  is  not  used  for  the  production  of cathodes, but is melted directly into products  further  down  the  copper  value chain,  such  as copper rod and copper shapes. Its  copper  content  is  particularly  high  and  it  is  generally  more expensive and  follows a different price  setting formula.46

(51) Copper scrap no. 2 is  defined  as scrap  with  copper content  of 94%-96% and  with  little or no  non-metallic  impurities.47

(52) CSSR comprises different types  of  copper  scrap  materials,  which  are  non-standard  and require  special  metallurgical  know-how  and  equipment  to  process,  and  therefore is  highly  differentiated in  terms  of material  composition  and origin.48

(53) E-scrap is copper scrap from electronic equipment, consists mainly of printed circuit boards and is always  low  grade.49  The  JV will  not  be active  in  e-scrap.

4.3.1.2. The  Notifying  Parties’  view

(54) While they do not generally contest the Commission’s market definition practice, the Notifying Parties submit that  their  purchases  of copper  cable  scrap  do  not  form  part of the purchasing side of the CSSR market,  but  constitute  a  separate  market  (see Section 4.2.1.2).

4.3.1.3. The  Commission’s  assessment

(55) The findings of the market  investigation  were  in  line  with  the  findings  of  the  Commission in  Aurubis/Metallo Group  Holding:  a  majority  of  respondents considered that  copper  scrap  and copper  concentrate are  not  substitutable from a demand-side point of view, or at least not  completely  interchangeable,  as  is  the  case  for  copper scrap no. 1, copper scrap no. 2 and  CSSR.50

(56) In  line  with  the  Commission’s  precedents  and  the  submission  of  the  Notifying  Parties, the Commission considers it appropriate to analyse the markets under the  narrowest plausible product market definition, as  the  proposed  transaction  does  not  raise serious doubts as  to  its  compatibility  with  the  internal  market  or  the  functioning of the EEA Agreement under any plausible market definition (as under wider market definitions both market shares and market power would  be  even  lower).  The Commission  will  therefore  consider  separately  the  markets  for  (i)  copper  scrap  no.1,

(ii)  copper scrap no.2 and (iii)  CSSR.

4.3.2. Geographic market

4.3.2.1. The  Commission’s decisional practice

(57) Specifically, the Commission found  the  markets  for  copper  scrap  no.  2  and  CSSR to be EEA-wide.51 As for the market for copper scrap  no.1,  the  Commission  did  not  assess its geographic scope in Aurubis/Metallo Group Holding. In previous decisions which  analysed  a  broader  product market  including  all  copper  scrap,  the  Commission found such  market  for  copper  scrap or secondary copper products to  be at least EEA-wide  and  in some  cases worldwide.52

4.3.2.2. The  Notifying  Parties’  view

(58) In the opinion of the Notifying Parties the geographic scope of the  market for copper  scrap no.1 is  worldwide.53 In  the  Notifying  Parties’  view,  the  markets  for  copper scrap no. 2 and CSSR are worldwide due to the intensive international copper scrap trade.54

4.3.2.3. The  Commission’s  assessment

(59) As for the buyers of copper scrap such as Aurubis, a  majority  of  respondents  buy copper scrap (no.1, copper  scrap  no.2 and  CSSR) in the  EEA or worldwide.55  From the point  of view  of Aurubis  and  its  competitors,  transport  costs  of copper scrap  play a role when the material is purchased outside the EEA. Although Aurubis and its  competitors do not pay the transport costs themselves, the  relation  between  transport costs and metal price determine how far suppliers will  transport  the  copper  scrap,  as some  participants in  the market  investigation explained.56

(60) In  line  with  the  Commission’s  precedents  and  the  submission  of  the  Notifying  Parties, the Commission considers it appropriate to analyse the markets under the  narrowest plausible geographic market definition, as  the proposed  transaction does not raise serious doubts as to its  compatibility  with  the  internal  market  or  the functioning of the EEA Agreement  under  any  plausible  market  definition (as  under  wider market  definitions both  market  shares  and  market  power  would  be  even lower). In conclusion, for the purposes of this decision, the relevant markets are the EEA-wide or worldwide market for demand for  copper  scrap  no.1,57  and  the  EEA- wide  markets  for copper scrap no.2 and CSSR.

5. COMPETITIVE  ASSESSMENT

(61) The proposed transaction gives rise to two vertically  affected  markets,  as  Aurubis’ market share as a purchaser in the downstream market for two types of copper scrap exceeds [30-40]% in the EEA: [30-40]% with regard to copper scrap no. 2 and  [30- 40]% with regard to CSSR. The upstream market is the market for copper cable dismantling, where  the  JV  is  active  with  an  expected  market  share  at  national  level  of [10-20]% and [0-5]% at EEA  level.

(62) A further vertical relationship resulting from the proposed creation  of  the  JV  can be found between the  upstream  market  for the  collection  and  processing  of  copper scrap, where TSR is active and the downstream market for  copper cable  dismantling, where the JV will be active. In the  market  investigation,  some participants  voiced concerns that the Parties might  foreclose access  of  copper  scrap  collectors to  the  cable  dismantling  facilities  of  the  JV.  Some  cable  dismantlers  and  scrap traders voiced  concerns  that  TSR might stop supplying  them  with  cables.

(63) However, this market  is  not  technically  affected, as  TSR’s  market  share  in  the upstream market for collecting and processing copper scrap, TSR’s market share was [0-5]% EEA-wide, [5-10]% in Germany, [10-20]% in a 200  km  radius  around Fehrbellin and [5-10]% in  a  200  km  radius  around Gelsenkirchen.58  In  the downstream market, the JV’s expected market share will be [10-20]% in the German market and [0-5]% in  an  EEA-wide market.  In  light  of  the  concerns  raised,  the vertical  relationships will nevertheless be discussed below.

5.1. Legal test for the assessment of vertical effects

(64) The legal test for the  assessment  of  vertical  effects  is  set out  in  the  Merger Regulation.  In  addition,  the  Commission  will base  its assessment  on  the principles set out in the Guidelines on the assessment of non-horizontal mergers (‘Non-

Horizontal  Merger  Guidelines’).59

(65) 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  vertical  merger,  thereby reducing  these  companies’  ability  and/or incentive to  compete.60

(66) Two forms of foreclosure can be distinguished in a  vertical  relationship:  input  and customer  foreclosure:

(67) Input foreclosure arises where, post-transaction, the new entity would be  likely  to  restrict access to the products or services that it would have otherwise supplied to downstream competitors, 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 vertical merger.61 For input foreclosure to be a  concern,  the  vertically  integrated firm resulting from the  merger  must  have  a  significant degree  of  market power in the  upstream market.  Only  in  such  a  case  can the  merged  firm be expected to  have  a  significant  influence  on  the  conditions  of  competition  in  the  upstream market and, in consequence, potentially on prices and supply conditions in  the downstream market.62 By  reducing  access  to  its  own upstream products  or  services, the merged  entity  would  only  have  the  ability  to  foreclose  downstream  competitors  if it could  negatively  affect  the  overall  availability  of  inputs  for  the  downstream  market  in terms of  price  or  quality.  This  might  happen  in  case  the  remaining upstream suppliers are less efficient, or lack the  ability  to  expand  output  in  response  to  the supply  restriction, for example  because  they  face capacity  constraints.63

(68) Customer foreclosure may occur when a  supplier  integrates  with  an  important customer in the downstream market. Because of this downstream  presence,  the integrated company 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. This in turn may raise downstream rivals’ costs as obtaining supplies  of  the  input  under similar  prices  and  conditions  as  absent  the vertical merger might become more difficult.64 For customer foreclosure to be a concern,  the vertical merger must involve a  company  which  is  an  important  customer with  a significant degree of market  power  in  the  downstream  market.  If,  on  the  contrary, there is a sufficiently large customer  base,  at  present  or  in  the  future,  that  is  likely  to turn to independent suppliers,  the  Commission  is  unlikely  to  raise competition  concerns  on that ground.65

(69) The Non-Horizontal Merger Guidelines note  that Commission  is  unlikely  to  find concern in non-horizontal mergers where the  market  share  post-merger  of  the  new entity in each of the  markets  concerned  is  below  [30-40]% and  the  post-merger HHI is  below  2 000.66

5.2. The  Notifying  Parties’ view

(70) The Notifying  Parties  submit  that no  customer foreclosure  or  input  foreclosure concerns  arise  as a result  of the  proposed transaction.

(71) First, Aurubis and TSR have insignificant customer and supplier  relationships  and exchanges are limited to small  quantities of mainly  non-ferrous metals.67

(72) Second, sufficient competitors who purchase copper cable scrap and  recycle  copper  cable  scrap  remain  active  in  the  market.  In  Germany,  these  competitors include Zirec, KMR, Alba, Loacker, Lewandowski, Zimmer, Schrott-Bosch, MVM, Phönix, SK-Metals, MKV-Nordenham and Prossmann. In the EEA, examples include KMT, SMK, GP-Eco, Gruba, Manera Silvio  SRL,  Nexans,  Suez,  Salzburger Metallverwertung  and Recytel.68

(73) Third, the JV is not an  important  provider  of an  essential  input  product  for  Aurubis. The JV will supply approximately […]% of all copper scrap sourced by Aurubis per year.69 Even under a further segmentation of the market for copper scrap, the JV as a supplier  has a marginal  position  on all  plausible segments  (below […]%).70

(74) Fourth, a sufficient  number  of  suppliers  remain  active  on  the  market  from  which copper processing companies can purchase  copper  scrap  no.  1,  copper scrap  no.  2 and CSSR.71 The Notifying Parties estimate that copper  cable  recyclers  who  will compete with the JV generally have spare capacity, on average roughly 10-20%. In addition to  long-term  contracts  and  thus  have  medium-term  planning capability, a part of the existing capacities is reserved for spot business, so that copper  cable  dismantlers can promptly react to changes in the copper price, also by introducing additional  night and weekend  shifts.72

(75) Fifth, CSSR, copper scrap no. 2 and copper scrap no. 1 are recycled not only from copper cable scrap, but from various sources  and  types  of copper  scrap. This  means that not only the JV, but all cable dismantlers as suppliers  of  scrap  are  easily  substitutable from  the  perspective  of the demand side.73

(76) Finally, scrap volumes, which need to  be  processed  in  the  EEA,  continue  to  rise  and will further  expand  the involved markets  in  the  upcoming years.74

5.3. The  Commission’s  assessment

5.3.1. No customer foreclosure in relation to copper scrap no.2 and CSSR

(77) The Commission considers that the Parties will not have the ability or  incentive  to  foreclose access to customers of copper scrap no.2 and CSSR for other  cable  dismantlers,  nor  would  a  foreclosure strategy  have a  significant detrimental  effect, for  the following  reasons:

(78) First, although Aurubis is the largest buyer of  copper  scrap  no.2  and  CSSR  in  the  EEA,  its  market  shares  in  2019  were  [30-40]% for copper scrap  no.2 and  [30-40]% for CSSR. This leaves copper cable dismantlers the possibility to sell to Aurubis’ competitors which represent nearly [60-70]% of demand for copper scrap  no.2  and nearly  [60-70]% of demand  for CSSR.

(79) Second, cable dismantlers would have a number of different alternative  customers  to  which they could  switch  in  case  Aurubis  stopped  buying  from  them. Although  the main competitors in the EEA are  relatively  small  compared  to  Aurubis,  each  with market shares below 10% in terms of demand in  the  last  three years,  there is nevertheless a number of them  with  an  appreciable  size.  In  addition,  a  number  of these  main competitors is  active  on  the  market:  Brixlegg,  Boliden,  KGHM  and Atlantic Copper are the main buyers for copper  scrap  no.2  and  Brixlegg,  Boliden, KGHM are the main buyers  for  CSSR.  A  large  share  of demand  for  copper  scrap no.2 and CSSR is accounted for by exports to non-EU  countries.75 Moreover,  the  market  investigation  indicated  that there  are  sufficient  buyers of  copper cable  scrap.76 Therefore, it is unlikely that the Parties would have  the  ability  to  foreclose access to customers  for  copper scrap no.2 and CSSR.

(80) Third, Aurubis could  not  exclusively  rely  on the  JV  and  TSR to  source  copper scrap, as the JV will only be  able  to  provide  […]%  of Aurubis’  needs  ([…]%  of its  needs for copper scrap no.2 and […]% of its needs for  CSSR).77  Although  scrap  volumes might continue to rise, the Parties have no plans to expand  the  JV’s  capacity  in  the  coming years apart from the planned ramp-up of Line 2 in Gelsenkirchen,  a  new production line  which  will  result  in  extended  capacity,  but  has  already  been  included in the expected output of the JV.  The  JV  will  first  aim  at  fully  utilising  this new  capacity in addition to the already existing capacities.78 Even  once  line  2  in  Gelsenkirchen is in  full  operation,  Aurubis  will  have  to  continue  buying the  vast majority of its copper scrap needs (ca. […]%)  from  other  dismantlers,  and  the  very small proportion of  copper  scrap  that it  will  acquire from the  JV  will  not substantially alter its current market  position vis  a  vis  other  cable  dismantlers. Therefore, it is  unlikely  that  the  Parties  would  have  the  incentive  to  foreclose  access to customers  for  copper scrap no.2 and CSSR.

(81) Fourth, also in the future, it is unlikely that the Parties would have the incentive  to  foreclose access to copper scrap no.2  and  CSSR  for Aurubis’  competitors,  as  it  would require a significant  investment  in  the  JV’s  capacity.  The  market  investigation  was  inconclusive regarding  the  Notifying  Parties’ claim that the involved markets are likely to grow  in  the  coming  years.79  Rather,  the  market  investigation  suggested  that the market dynamics are uncertain. Some participants expect some growth in the short-term because higher availability of end-of-life cables and  because  of  higher demand due to the  electrification  in  several  sectors,  especially  automotive.  On  the other  hand, if  China’s  import  restrictions  are  lifted, European  sites will probably have lots of  spare  capacity.  Also, supply  will  depend  on  environmental  regulations  and demand may decrease due to alternative technologies available (e.g.  glass  fibre  cables),  and  due  to  tighter requirements for  plastic disposal.  Some  companies  also pointed out to  large  fluctuations  in  the  market  in  the  past.80  Against  this  background, an  investment  to  significantly  increase the JV’s  capacity  beyond the  planned  ramp- up of Line 2 in  Gelsenkirchen  would  appear to be unlikely.

(82) Finally, even if the JV  further  increased its  capacity  in  the  future,  any  foreclosure attempt  would  incite other  cable  dismantlers  to  increase their  capacity  in  order  to offer dismantling services to the  foreclosed  market  participants.  The  results  of  the market  investigation  indicate  that  barriers  to  entry  in  the  market  for  the  dismantling of copper scrap are relatively high, as cable dismantling requires special equipment, regulatory approvals, industrial know-how, experienced  staff,  and  it  takes  more  than one year to start operating.81 However,  existing  suppliers  can  expand  their  capacity  more easily. In the market  investigation,  most  companies  expressed  that currently  excess  capacity  for copper  cable  dismantling  in  Europe  is  available.  Some respondents  noted  that capacity  was initially insufficient when China stopped sourcing cables in 2018, but that capacity has been adjusted by now.82 Moreover, in response to the import ban on  end-of-life  cables  by  China,  new  capacity  has  been built in the EEA as well (e.g. in Poland and the Benelux countries), according to a respondent  in  the market  investigation.83  This indicates that cable dismantlers are able to adjust capacity to changes in supply and demand. Therefore any customer foreclosure attempt by the JV would incite cable  dismantlers  to  increase  capacity  in  order to dismantle  the  cables  collected by  TSR’s  competitors.  Hence,  it  is  unlikely  that the Parties will have the ability or incentive to foreclose access to the JV as an expansion of capacity would incite competitors to react,  leading  to  overall  more available capacity  which  would  be a procompetitive  effect.

5.3.2. No input foreclosure in relation to copper scrap no.2 and CSSR

(83) The Commission considers that the Parties will not have  the  ability  or  incentive to foreclose access to inputs of copper scrap no.2 and CSSR  for  other  smelters  and refiners,  nor  would  a  foreclosure  strategy  have a  significant detrimental  effect, for  the  following  reasons:

(84) First, as outlined in paragraph (67),  for input  foreclosure  to  be  a  concern,  the vertically integrated firm resulting from the merger must have a  significant  degree  of  market power in the upstream market, which is not  the  case  here.  The  JV’s  market share in copper cable dismantling is expected to be  at  [0-5]%  EEA-level  and  [10-  20]% in  Germany.  The  Notifying  Parties  estimate  the  HHI  for copper  cable dismantling in the EEA to  be  [100-200]  in the  EEA and  [300-400] in Germany.84  As the JV has  no  significant  market  power  in  the  upstream  market,  although  Aurubis plans to buy […]% of the JV’s output of copper scrap no.2 and CSSR, Aurubis’ competitors would still have  access  to  the  JV’s  competitors  which  represent  [80-  90]% of the market for copper cable dismantling in  Germany  and  [90-100]%  in  the EEA.

(85) Second, the results of the market investigation indicated that there  are  numerous companies  active  in  the  dismantling  of  copper  cables,  even  for the  narrowest plausible geographic market limited to  Germany,85 from  which  Aurubis’  competitors could source. In fact, only three competitors of Aurubis who replied to the market investigation currently source from  the  JV’s  cable  dismantling  facilities, compared  to eight who do not source from the JV.86 All competitors of Aurubis who replied to the market investigation stated that they would still have sufficient supplies even in  case  Aurubis bought all output of copper scrap no.2 and CSSR produced by the JV.87 Therefore, although Aurubis plans to buy […]%  of the  JV’s  output  of copper  scrap  no.2 and CSSR produced by the JV, it is  unlikely  that  the  Parties  would  have  the  ability to foreclose the access to copper scrap no.2 and  CSSR for its  competitors,  as  the  JV has  no significant  degree  of market  power in the  upstream market.

(86) Third, is  not  planned  and  unlikely  that  the  JV  further  expands  its  capacity  in  the future,  see paragraph  (81).

(87) Fourth, even in  this unlikely  case,  such  an  expansion of  capacity  of  the  overall market would  have  a procompetitive effect, as explained in paragraph  (82).

(88) Finally,  the  market  investigation  moreover  indicated  that end-of-life  cables  only account for 30-40% of all copper scrap, so that the majority  of copper scrap supply would not be significantly affected by changes in the market for copper  cables dismantling.88 Therefore, a  foreclosure strategy  by  the JV  would  not  be  successful, as Aurubis’ competitors would be able  to  buy  copper  scrap  no.2  and  CSSR  from other cable dismantlers as  well  as  copper  scrap  suppliers  other  than cable  dismantlers.

5.3.3. Conclusion on input and customer foreclosure in relation to copper scrap no.2 and CSSR

(89) In view of the above,  the  Commission  concludes  that  the  proposed  transaction  does not raise serious doubts as to its compatibility with  the  internal  market  and  the functioning of  the  EEA  Agreement  in  relation to  the  vertical  link  between  the national or EEA-wide market for copper cable  dismantling  upstream  and  the  EEA-  wide  markets  for copper scrap no.2 and CSSR  downstream.

5.3.4. No customer foreclosure in relation to copper cables dismantling

(90) The Commission considers that the Parties will not have  the  ability  or  incentive to foreclose access to customers of  copper  cables  for dismantling, i.e. cable dismantlers, for TSR’s competitors active in the collection and  processing  of copper  scrap, nor would a foreclosure strategy have a significant detrimental effect, for the following  reasons:

(91) First, for customer foreclosure to be  a  concern,  the  company  in  the  downstream market must  have  a  significant  degree  of  market  power,  as  outlined  in  paragraph  (68).  This is not  the case  here,  as  the  JV  only  has  an  [10-20]%  market  share  at national level and [0-5]% at EEA level. The Notifying Parties estimate  the  HHI  for  copper cable dismantling in the EEA to be [100-200] in the EEA and [300-400] in Germany.89 As the JV has no significant market power in the  downstream  market,  although TSR plans to increase its supplies of copper scrap to the JV, the JV’s  competitors would still  have  access to  the  JV’s  competitors  which  represent  [80- 90]% of the German market for copper cables  dismantling  and  [90-100]%  at  EEA level.

(92) Second, collectors of copper scrap would still have access to numerous other cable dismantlers (see paragraph (78)). Also, according to a majority of respondents in  the market investigation, in case  TSR  became  the  exclusive  supplier  of copper  cables  of the JV, competitors of TSR would  still  have  sufficient  customers  to  which  they  could sell  copper cables  for dismantling.90

(93) Third,  TSR currently already supplies its cable dismantling facilities in Gelsenkirchen  and  will  continue  to do  so  post-transaction,  so  the  proposed transaction does not have an impact on supply structures there. The Notifying Parties expect that the  Fehrbellin  dismantling  facility  will  continue  to  retain its  existing suppliers in the future,  assuming  that  the  commercial  conditions  remain  unchanged. TSR’s share  in  supply  of copper cables  dismantling  will  be  [40-50]%.91  Therefore,  it is unlikely that the Parties would have the ability to foreclose access to customers  for copper cable dismantling.

(94) Fourth, it is not planned and unlikely that the JV  further  expands  its  capacity  in  the  future,  see paragraph  (81).

(95) Finally, even in this unlikely case, such expansion of  capacity  of  the  overall  market would  have  a procompetitive effect, as explained in  paragraph (82).

5.3.5. No input foreclosure in relation to copper cables dismantling

(96) The Commission considers that the Parties will not have  the  ability  or  incentive to foreclose access to inputs  of  copper  cables  for dismantling  for other cable dismantlers which compete with the JV, nor would a foreclosure  strategy  have  a significant detrimental  effect,  for  the following  reasons:

(97) First, as outlined in paragraph (67),  for input  foreclosure  to  be  a  concern,  the vertically integrated firm resulting from the merger must have a  significant  degree  of  market power in the  upstream  market,  which  is  not  the  case  here.  TSR’s  market share in the upstream  market  for collecting  and  processing  copper  scrap,  TSR’s market share was [0-5]% EEA-wide, [5-10]% in Germany, [10-20]% in  a  200  km radius around Fehrbellin and  [5-10]%  in  a  200  km  radius  around  Gelsenkirchen.92 This leaves cable dismantlers the possibility to buy from TSR’s competitors,  which represent nearly [90-100]% of the market even at the narrowest plausible geographic market definition.

(98) Second, the market investigation  showed  that  there  are  numerous  companies  offering  the collection and processing of copper cables even in Germany,93 as well as at local level.94 In the EEA and Germany, TSR’s main competitors  in  the  area  of collecting  copper scrap are Scholz Recycling (with  approx.  [0-5]% market  share  at EEA  level  and approx. [0-5]% in Germany), DEUMU (with approx. [0-5]% at EEA-level and approx. [0-5]% in Germany) and European Metals Recycling (approx. [5-10]% at EEA-level and approx. [0-5]% in Germany). Other competitors are Derichebourg (at EEA-level, with approx. [0-5]%) and Alba (in Germany, with approx. [0-5]%).95 Considering a 200 km radius around Fehrbellin, the main  competitors  of  TSR  with  regard to collecting and processing copper scrap are Alba (approx. market share of [5-10]%), Theo Steil (approx. market share of [5-10]%) and KMR Kabelmetall- Recycling (approx. market share of [0-5]%). Considering a 200 km radius around Gelsenkirchen,  main competitors of  TSR  and  Remondis  with regard to  collecting and processing copper  scrap  are  Siegfried  Jacob  Metallwerke  (approx.  market  share of [0-5]%), Müller & Sohn (approx. market share of [0-5]%) and Grafenberg-Metall (approx. market  share  of  [0-5]%).  Furthermore, a  large  number  of  smaller competitors is active both at national and regional  level.  TSR’s  competitors  do  not appear to  be less  efficient  (see paragraph (67)), or to  lack  the  ability to  expand  output in  response  to  the  supply restriction.  The  Notifying  Parties  confirmed  that the storage capacities for copper scrap of TSR do not differ significantly from other competitors.96 Therefore, it is  unlikely  that the  Parties  would  have  the  ability  to foreclose  access to inputs  for  copper cable  dismantling.

(99) Third, it is unlikely  that  TSR  would  have  an  incentive  to  stop  supplying  competitors of the JV, given that the JV’s capacity only allows it to  offtake  a small fraction of the cables TSR collects. Therefore, other buyers  of  copper  cables  scrap  for  dismantling  will  continue  to have  sufficient  suppliers,  including TSR and  various other  competitors.

(100) Fourth, it is not planned and unlikely that the  JV  further  expands  its  capacity  in  the  future,  see  paragraph  (81).  The  Commission  also  investigated  whether  TSR  is  likely to increase its capacity and upstream market share. The results  of  the  market  investigation show that entry barriers in the market  for  collection  and  processing  of  cables are low. A majority of  respondents  considered  entry “relatively  easy”, explaining that requirements  for entry  are limited to  a  licence, basic infrastructure and some knowledge of the market.97 Therefore, the Commission considers that a significant  increase  in  TSR’s  market  share  is unlikely  in  the  short term.

(101) Finally, even in the unlikely case  that the  JV  further  expands  its  capacity,  such expansion of capacity of the overall market would have a procompetitive effect, as explained  in  paragraph  (82).  Therefore,  a  future  foreclosure  strategy  would  not  have a significant  detrimental effect on competition  in the  market.

5.3.6. Conclusion on input and customer foreclosure in relation to copper cables dismantling

(102) In view of the above,  the  Commission  concludes  that  the  proposed  transaction  does not raise serious doubts as to its compatibility with  the  internal  market  and  the functioning of  the  EEA  Agreement  in  relation  to  the  vertical  link  between  the regional, national or EEA-wide market for collection and processing of copper scrap upstream and the national or EEA-wide market  for copper  cable  dismantling downstream.

5.3.7. No conglomerate non-coordinated effects

(103) Pursuant  to  the  Non-Horizontal  Merger  Guidelines, conglomerate mergers  may  lead to competition problem in the  form  of foreclosure  effects.  This  may be the  case when the combination of  products  in  related  markets  may  confer on  the  integrated company the ability and incentive to  leverage  a  strong  market  position  from  one  market to another closely related market by means of tying or bundling or other exclusionary practices. 98 In the context of the proposed  transaction, the  Parties might  offer both cable collection and processing and dismantling as a bundle. However, the Commission  considers  that the  proposed  transaction is  unlikely  to lead to conglomerate effects. For the reasons outlined in Section 5.3.1 to 5.3.5,  foreclosure  effects do not arise. The Notifying Parties  also  confirmed  that  there  are  no  other  markets  in  which  the  proposed  transaction  may  have  a  significant  impact  according  to the  definition  in  Section  6.4 of the  Form CO.99

6. CONCLUSION

(104) For the above reasons, the European Commission  decides  not  to  oppose  the  proposed transaction 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.

NOTES :

1 OJ L 24, 29.1.2004, p. 1 (the ’Merger Regulation’). With effect from 1 December 2009, the Treaty on the Functioning of the European Union (the ‘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 1, 3.1.1994,  p. 3 (the ‘EEA  Agreement’).

3 Publication in the Official  Journal of the European Union No C 93, 19.3.2021,  p. 36.

4 Form CO, paragraphs 19 and 29.

5 Form CO, paragraph 84.

6  Adoption and binding declaration of the business plan including the budge t; appropriation of the company’s profit, collection of payments on the capital contributions assumed by the shareholders; adoption of resolutions in the appointment and dismissal of managing directors as well as on their discharge; acquisition or disposal of assets with a market value exceeding EUR […]; and business policies and strategy of the company as well as any changes in this respect.

7 Form CO,  paragraphs 71 et seq.

8 Reply to request for information 3 of 21 April 2021. See also Annex 3.1.3 to the Form CO in Sections 6.2. and 6.3.

9 Form CO, paragraph 80.

10 Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on  the control of concentrations between undertakings (“CJN”), OJ C 95, 16.4.2008,  p. 1-48, paragraph 98.

11 Form CO, paragraph 83.

12 Form CO, Section 3.

13 Form CO, paragraph 82.

14 Turnover calculated in accordance with Article 5 of the Merger Regulation.

15 See e.g. COMP/M.5714 – Scholz/Scholz   Austria/Kovosrot,   paragraph 8, COMP/M.4469   – Scholz/Voestalpine/Scholz Austria, paragraphs 10, COMP/ECSC.1358  – Scholz/Alba/Elsa.

16 See e.g. COMP/M.5714 – Scholz/Scholz   Austria/Kovosrot,   paragraph 8; COMP/M.4469   – Scholz/Voestalpine/Scholz Austria, paragraph 13.

17 COMP/M.4469  – Scholz/Voestalpine/Scholz Austria, paragraph 13.

18 COMP/M.5714   –   Scholz/Scholz   Austria/Kovosrot,   paragraph 9, COMP/M.4495   –   Alfa ACCIAI/Cronimet/Remondis/ TSR Group, paragraphs 16 et seq.

19 Form CO, paragraph 138.

20 Replies to question 4 of the eQuestionnaire.

21 Replies to question 4.1 of the eQuestionnaire.

22 Replies to question 4.1 of the eQuestionnaire.

23 Replies to question 4.1 of the eQuestionnaire.

24 Replies to question 6.1 of the eQuestionnaire.

25 Replies to question 5 of the eQuestionnaire.

26 Replies to question 5.1 of the eQuestionnaire.

27 See e.g. COMP/M.5714 – Scholz/Scholz Austria/Kovosrot, paragraph 11, COMP/ M.4781 –Norddeutsche Affinerie/Cumerio, paragraphs 25 et seq., COMP/M.6541 –Glencore/Xstrata, paragraphs 246 et seq., COMP/M.4469  –Scholz/Voestalpine/Scholz Austria, paragraphs 14 and 15.

28 COMP/M.5714 – Scholz/Scholz Austria/Kovosrot, paragraph 11, COMP/M.4469 – Scholz/Voestalpine/Scholz Austria, para. 15; COMP/ECSC.1358  – Scholz/Alba/Elsa.

29 Form CO, paragraph 129.

30 Replies to question 9.1 of the eQuestionnaire. “Smaller companies tend to buy more regionally. Larger and traditionally supra-regional companies (such as TSR, EMR, Nordschrott) are buying throughout Germany and abroad also.” “Collection of copper cables is a more regional/local market whereas dismantling can be national or even international. Then larger the company then more international its sourcing of material will be. Depending on the type of cable and the supply and demand situation prices may vary internationally.”

31 Replies to question 9 of the eQuestionnaire.

32 Replies to question 11 of the eQuestionnaire.

33 Reply to question 9.1 of the eQuestionnaire.

34 Replies to question 12 of the eQuestionnaire.

35 Replies to question 9.1 of the eQuestionnaire. “The higher the price of scrap metal, the less transport costs matter, but generally transport costs are an important factor influencing the decision how far from the dismantling facility cables for dismantling are collected.”

36 The proposed transaction does not lead to affected markets if a separate market for trade in copper scrap is considered (TSR’s market share is [0-5]% at worldwide level,  [0-5]% EEA-wide and  [5-10]  %  in Germany, see Form CO table 8). Therefore this market  will not be further discussed in this decision.

37 Form CO, paragraph 146.

38 Replies to question 8 of the eQuestionnaire.

39 Replies to question 8.1 of the eQuestionnaire.

40 Replies to question 7 of the eQuestionnaire.

41 Replies to question 7.1 of the eQuestionnaire.

42 Replies to question 4.1 of the eQuestionnaire. “The market for the collection of scrap needs to be distinguished from the market for the processing of scrap. While market entry to the former is relatively easy and accordingly a lot of small and medium size players offer collection services, market entry to the latter is relatively difficult because processing (if it consists in more than mere manual sorting) requires equipment and thus capital, know-how, staff and access to purchasers of processed scraps. For this reason the suppliers of processing services are often also active as collectors but not the other way around.”

43 Form CO, paragraph 150.

44 Replies to question 10 of the eQuestionnaire.

45 Call with a market participant on 11 February  2021.

46 COMP/M.9409  – Aurubis/Metallo Group  Holding, para. 159 et seq.

47 COMP/M.9409  – Aurubis/Metallo Group  Holding, para. 166 et seq.

48 COMP/M.9409  – Aurubis/Metallo Group  Holding, para. 159 et seq.

49 COMP/M.9409 – Aurubis/Metallo Group Holding, paras. 166 et seq. Since the JV will not be active in e- scrap, no overlaps or vertical relationships arise from the proposed transaction. Therefore, this market will not be further discussed in this decision.

50 Replies to question 7 of the eQuestionnaire.

51 COMP/M.9409  – Aurubis/Metallo Group Holding, paras. 250 et seq. and 333 et seq.

52 See e.g.   COMP/M.6541 – Glencore/Xstrata,   paragraphs 246 et seq, COMP/M.4469 – Scholz/Voestalpine/Scholz Austria, paragraphs 14, 15.

53 Form CO, paragraph 158.

54 Form CO, paragraph 214.

55 Replies to question 13 of the eQuestionnaire.

56 Replies to question 13.2 of the eQuestionnaire.

57 TSR’s market share on the supply  side amounted  to [0-5]% worldwide and [0-5]% EEA-wide in  2019.  The JV’s market share on the supply side is expected to be [0-5]% worldwide and [0-5]% EEA-wide. On  the demand side, Aurubis reached a market share of [0-5]% worldwide and [0-5]% EEA-wide in  2019. (Form CO, paragraph 208). Therefore, no affected markets arise for copper scrap no.1, so this market will not be further discussed in this decision.

58 Response to RFI 2 of 9 April 2021.

59 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)

60 Non-Horizontal Merger Guidelines, paragraph 29.

61 Non-Horizontal Merger Guidelines, paragraph 31.

62 Non-Horizontal Merger Guidelines, paragraph 35.

63 Non-Horizontal Merger Guidelines, paragraph 37.

64 Non-Horizontal Merger Guidelines, paragraph 58.

65 Non-Horizontal Merger Guidelines, paragraph 61.

66 Non-Horizontal Merger Guidelines, paragraph 25.

67 Form CO, paragraph 199.

68 Form CO, paragraph 199.

69 Form CO, paragraph 199.

70 Form CO, paragraph 246.

71 Form CO, paragraph 199.

72 Response to request for information 1 of 29 March 2021.

73 Form CO, paragraph 246.

74 Form CO, paragraph 39.

75 Annex 7 to the Form CO.

76 Replies to question 16 of the eQuestionnaire: […], etc.

77 Form CO, Table 21.

78 Form CO, paragraph 21.

79 Replies to question 21 of the eQuestionnaire.

80 Replies to question 21 of the eQuestionnaire.

81 Replies to question 18 and 18.1 of the eQuestionnaire.

82 Replies to question 20 of the eQuestionnaire.

83 Replies to question 18 of the eQuestionnaire.

84 Response to request for information 2 of 9 April 2021.

85 Replies to question 15 of the eQuestionnaire: […], etc.

86 Replies to question 22 of the eQuestionnaire.

87 Replies to question 22 of the eQuestionnaire.

88 Replies to question 17 of the eQuestionnaire.

89 Response to request for information 2 of 9 April 2021.

90 Replies to question 24 of the eQuestionnaire.

91 Form CO, paragraph 82 and 83.

92 Response to RFI 2 of 9 April 2021.

93 Replies to question 14 of the eQuestionnaire: […], etc.

94 Replies to question 14 of the eQuestionnaire, for the Fehrbellin  area: […];  for the Gelsenkirchen  area: […].

95 Response to request for information 2 of 9 April 2021.

96 Form CO, paragraph 14. Form CO,  paragraph 258.

97 Replies to question 18 and 18.1 of the eQuestionnaire. “For the collection of cables you need a licence, a yard, a financial background and knowledge about product and market.” (Reply to question 18.1)

98 Non-horizontal Merger Guidelines, paragraph 93.

99 Form CO, paragraph 249. Markets under Section 6.4 of the Form CO are markets where (i) any of the Parties has a market share larger than 30% and any other party to the concentration is a potential competitor into that market, (ii) any of the Parties has a market share larger than 30% and any other party to the concentration holds important intellectual property rights for that market, (iii) any of the Parties has a market share larger than 30% in neighbouring markets, i.e. markets for products  which are complementary to each other/belong to a range of products generally purchased by the same set of customers for the same end use.