suez / ge water and process technologies - european...

EUROPEAN COMMISSION DG Competition

Case M.8452 - SUEZ /

GE WATER AND

PROCESS

TECHNOLOGIES

Only the English text is available and authentic.

REGULATION (EC) No 139/2004

MERGER PROCEDURE

Article 6(1)(b) NON-OPPOSITION

Date: 19/07/2017

In electronic form on the EUR-Lex website under

document number 32017M8452

Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË Tel: +32 229-91111. Fax: +32 229-64301. E-mail: [email protected].

EUROPEAN COMMISSION

Brussels, 19.7.2017

C(2017) 5203 final

To the notifying party:

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.

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.

PUBLIC VERSION

In the published version of this decision, some

information has been omitted pursuant to Article

17(2) of Council Regulation (EC) No 139/2004

concerning non-disclosure of business secrets and

other confidential information. The omissions are

shown thus […]. Where possible the information

omitted has been replaced by ranges of figures or a

general description.

2

(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

4 Form CO, paragraph 59.

3

(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

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.

4

(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.

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

7

(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

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.


8

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


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


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


9

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.


4.3.1.1 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

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.

10

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.

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.

11


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

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.

12

(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

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.

14

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.

For the Commission

(Signed)

Margrethe VESTAGER

Member of the Commission

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.

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