Completed acquisition by Ahlstrom Corporation of the consumer wipes business of Fiberweb plc

Affected market: Nonwoven roll goods

No. ME/3147/07

Please note that the full text of the decision can be downloaded by using the link on the right. What follows are extracts regarding the parties, the transaction, jurisdiction, third party views, assessment and decision.

The OFT's decision on reference under section 22 given on 24 August 2007. Full text of decision published 4 September 2007.

Please note that square brackets indicate text or figures which have been deleted or replaced with a range at the request of the parties for reasons of commercial confidentiality.

PARTIES

Ahlstrom Corporation (Ahlstrom) is a Finnish company active in the manufacture of a wide range of fibre-based materials.

Fiberweb plc (Fiberweb) is active in the manufacture and supply of nonwoven roll goods for use in wipes products. It also has a downstream business converting nonwoven roll goods into final wipe end products, which is not part of this transaction. In 2006, the turnover of its consumer wipes business (which has been acquired by Ahlstrom) in the EU was €[ ] million and €[ ] (£[ ]) in the UK.

TRANSACTION

Ahlstrom acquired from Fiberweb the entire issued share capital of its consumer wipes business and assets, Fiberweb Holdings SL, (the acquired business). [see note 1] Completion of this transaction occurred on 25 May 2007. The administrative deadline is 4 September 2007 and the statutory deadline expires on 24 September 2007.

JURISDICTION

As a result of this transaction Ahlstrom and the acquired business have ceased to be distinct. The parties overlapped in the supply of nonwoven products in roll good form (nonwoven roll goods) for industrial and consumer wipes production and have combined shares of supply in the UK in excess of 25 per cent, so the share of supply test in section 23 of the Enterprise Act 2002 (the Act) is met. The OFT therefore believes that it is or may be the case that a relevant merger situation has been created.

THIRD PARTY VIEWS

The OFT received few responses to its request for comment on this merger. Some customers raised concerns that the merger has strengthened Ahlstrom's position in the supply of nonwoven roll goods. These concerns have been addressed in the competitive analysis above.

ASSESSMENT

The parties overlapped in the manufacture and supply of nonwoven roll goods for the production of industrial and consumer wipes.

With regards to the supply of nonwoven roll goods for industrial wipe production, the merged entity has a share of supply of [0-10] per cent (increment of [0-5] per cent) in the EEA. Furthermore, there are a number of competitors who will continue to act as a sufficient constraint on the merged entity post-merger, so competition concerns do not arise.

For the supply of nonwoven roll goods for consumer wipe production, the merged entity is the largest supplier with a share of supply of approximately [20-30] per cent (increment of [10-15] per cent) in the EEA. However, the presence of a number of relatively large competitors, combined with the relative ease in which customers can switch to alternative suppliers, are considered to pose a sufficient constraint on the merged entity post-merger.

Consequently, the OFT does not believe that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.

DECISION

This merger will therefore not be referred to the Competition Commission under section 22(1) of the Act.

NOTE

1. The description of the acquired business as the consumer wipes business of Fiberweb reflects its pre-merger description within the Fiberweb Group. However the acquired business supplies nonwoven products in roll good form for the production of industrial wipes as well as consumer wipes.

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