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Proposed Acquisition by Contitech Global Holding Netherlands B.V. of Printing Solutions Sweden Holding AB from Trelleborg AB
28 June 2022
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Reference: | CCCS 400-140-2022-003 |
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Notifying Parties: | ContiTech Global Holding Netherlands B.V. Trelleborg AB |
Notifying Date: | 17 June 2022 |
Summary of transaction: | (i) the names of the merger parties; Purchaser: ContiTech Global Holdings Netherlands B.V. ("ContiTech") Target: Printing Solutions Sweden Holding AB (the "Target") Seller: Trelleborg AB ("Trelleborg", together with ContiTech and the Target, the "Parties"). (ii) a description of the transaction; The notification relates to a proposed acquisition by ContiTech of 100% of the total issued shares in the Target from Trelleborg (the "Proposed Transaction"). (iii) a description of the business activities of the merger parties worldwide and in Singapore; Business Activities of the Merger Parties Worldwide ContiTech ContiTech is Continental AG's engineered rubber products group that supplies technical rubber products and plastics technology. ContiTech's key industries / activities include, but are not limited to:
Trelleborg and Target Trelleborg provides engineered polymer solutions that seal, damp and protect critical applications. Trelleborg's key industries / activities include, but are not limited to:
The Target is a wholly-owned subsidiary of Trelleborg. The Target is in the printing industry and its product offering includes printing blankets for offset and digital printing, carrier sleeves for flexo printing as well as a supplementary local Italian coated fabrics business (the "Target Business"). The Target Business comprises Trelleborg’s Printing Solutions activities, and is the entire scope of business activities that will be transferred to ContiTech as part of the Proposed Transaction. For the avoidance of doubt, the Target only operates the Target Business and no other business. Business Activities of the Merger Parties in Singapore ContiTech ContiTech engages in various activities in Singapore through its subsidiaries. Its activities in Singapore include, but are not limited to the supply of:
Trelleborg and Target Trelleborg engages in various activities in Singapore through its subsidiaries. Its activities in Singapore include, but are not limited to the:
The Target, as a corporate entity, does not currently operate the Target Business in Singapore. The activities in Singapore relating to the Target Business are currently operated by Trelleborg, and include the supply of flat-backed / fabric printing blankets, and self-adhesive printing blankets. For the avoidance of doubt, the Target Business that will be transferred to ContiTech will also include the activities in Singapore relating to the Target Business as part of the Proposed Transaction. (iv) a description of the overlapping goods or services, including brand names; The Parties submit that in Singapore, ContiTech and the Target, with the Target Business, primarily overlap in the supply of flat-backed / fabric printing blankets, to among others, printing blankets distributors and end-user customers such as printing plants / printing houses. In respect of the flat-backed / fabric printing blankets market in Singapore: ContiTech sells its products in Singapore under the following brand names:
The Target Business, which is part of Trelleborg, sells its products in Singapore under the following brand name: i. Vulcan. (v) a description of substitute goods or services; The Parties are of the view that given the uniformity of all types of printing blankets, with the exception of metal back printing blankets, all types of offset printing blankets, including flat-backed / fabric printing blankets, are substitutable for each other after minor adjustments. According to the Parties, these substitutes are offered by the Parties as well as other competing offset printing blankets manufacturers, such as Flint Group, Meiji Rubber & Chemical Co. Ltd., Kinyosha Co. Ltd., and other various Chinese manufacturers (e.g. Shanghai Xinxing Printing Equipment Co., Ltd., Shanghai Youlong Rubber Products Co. Ltd., Beijing Sanyou Weiye Rubber Chemical Co., Ltd., Hangzhou YuanYang Industries Co. Ltd., and Shanghai Sanding Printing Rubber Product Manufacture). (vi) The applicant's views on: a. definition of the relevant market(s); The Parties submit that the relevant product market for the purpose of the Proposed Transaction should be the market for the supply of offset printing blankets (the "Relevant Product Market"). However, the Parties further submit that the primary overlapping product supplied by the Parties in Singapore is that of flat-backed / fabric printing blankets. Offset printing blankets are consumables used for offset printing. They consist of a reinforced rubber sheet in a press that receives the inked impression and transfers it to the surface being printed. Offset printing blankets have a back layer made of either textile materials (fabric or flat-backed) or metal (metal back) requiring slightly different production techniques. In addition to flat-backed and metal back printing blankets, there are:
The Parties submit that, in spite of certain differences between printing blankets' back layers or use in printing or varnishing, all such variations are part of the same relevant market. This is because they are both supply-side (manufacturers generally produce all blanket types) and demand-side substitutes (they can be installed on any offset printing machine and customer choice is guided by price and grades of print quality), being sold to the same customers. Thus, the Parties submit that the relevant product market should be considered as the market for the supply of offset printing blankets, without further segmentation. With respect to the Relevant Product Market, the Parties submit that the Relevant Product Market is global in scope for the following reasons:
b. the way in which competition functions in this market; The Parties submit that they primarily overlap in the supply of flat-backed / fabric printing blankets in Singapore. Given that the characteristics of flat-backed / fabric printing blankets are largely uniform, the Parties submit that besides technical functionality, price is the most important parameter in the customers' decision-making process. There is healthy competition in the flat-backed / fabric printing blankets sector as customers are willing and have switched to new market entrants mainly due to their lower prices. c. barriers to entry and countervailing buyer power Barriers to entry The Parties submit that there are no significant and insurmountable barriers to entry for the Relevant Product Market, in Singapore or globally. With specific reference to Singapore, given that the Parties are primarily present in the supply of flat-backed / fabric printing blankets market in Singapore, the Parties submit that there are also no technical, regulatory or IP related barriers to entry with respect to the supply of flat-backed / fabric printing blankets market in Singapore, for the following reasons:
Countervailing buyer power The Parties submit that local intermediate customers (i.e. distributors in Singapore) are able to self supply through obtaining their flat-backed / fabric printing blankets from printing blanket manufacturers (including both Parties) around the world. End-user customers are also able to switch suppliers easily and quickly, without incurring any significant technical or commercial switching costs in the process. These factors above will allow both intermediate and end-user customers to exert strong countervailing power on the merged entity post-Proposed Transaction. d. the competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant). Non-coordinated effects The Parties submit that the Proposed Transaction will not give rise to any non-coordinated effects for the following reasons:
Coordinated effects The Parties submit that the Proposed Transaction will not give rise to any coordinated effects for the following reasons:
Vertical effects According to the Parties, there are no existing or potential vertical relationships between the Parties. |
Decision: | Following its assessment, CCCS has concluded that the Proposed Transaction, if carried into effect, will not infringe the section 54 prohibition of the Competition Act 2004. |
Decision Date: | 27 October 2022 Read the media release. Read the Grounds of Decision. |