31995M0646

COMMISSION DECISION of 30/10/1995 declaring a concentration to be compatible with the common market (Case No IV/M.646 - Repola / Kymmene) according to Council Regulation (EEC) No 4064/89

(Only the English text is authentic).

The paper version of the decision is available through the sales offices of the Office of Official Publications of the European Communities

PUBLIC VERSION

MERGER PROCEDURE

ARTICLE 6(1)(b) DECISION

To the notifying parties

Dear Sirs,

Subject:<ind> Case No. IV/M.646 REPOLA/KYMMENE

<ind> :<ind> Notification of 27.09.1995 pursuant to Article 4 of Council Regulation No. 4064/89

1.<ind> On 27 September 1995 Repola Corporation (Repola) and Kymmene Corporation (Kymmene) notified a proposed concentration by which the two companies enter into a full merger.

I <ind> THE PARTIES

2.<ind> Both companies are Finnish and internationally active primarily in the forest products industry.

3.<ind> Repola is in particular active in the production and sale of printing papers, packaging materials and mechanical woodworking. Repola is also active in the engineering industry, in particular in the production and sale of forest machines, industrial valves, fibre technology and crushing systems. In addition, Repola also has a majority interest in W. Rosenlew Ltd., Finland, which produces flexible plastic packaging products.

4.<ind> Kymmene is in particular active in the production and sale of printing papers, office and packaging papers and plywood and sawn timber.

II <ind> THE CONCENTRATION

5.<ind> The proposed operation is a full merger within the meaning of Article 3(1)a of the Merger Regulation.

<ind> III<ind> COMMUNITY DIMENSION

6.<ind> The combined aggregate worldwide turnover of Repola and Kymmene amounts to more than 5 billion Ecu (Repola 4,635 million Ecu and Kymmene 3,058 million Ecu). Each party has an aggregate Communitywide turnover exceeding 250 million Ecu (Repola 2,988 million Ecu and Kymmene 2,458 million Ecu). Neither Repola nor Kymmene achieved more than two thirds of their turnover in any Member State of the EU. The concentration therefore has a Community dimension within the meaning of Article 1 of the Merger Regulation.

IV <ind> COMPATIBILITY WITH THE COMMON MARKET

<ind> A. Relevant product markets

7.<ind> The parties have identified the following product markets where the proposed merger will result in an addition of market shares: newsprint; magazine paper; industrial wrappings; sack paper; paper sacks; pulp; sawn timber.

<ind> Newsprint

8.<ind> Newsprint is generally defined as paper containing not less than 65% mechanical pulp by weight. It is chiefly used for publication of newspapers. There are different grades of newsprint such as standard, lightweight, coloured and special newsprint. However, according to the parties, all these different grades belong to the same product market due to a high degree of supplyside and demandside substitutability and because of similarity of price levels.

<ind>

9.<ind> As to demandside substitutability, it appears that all grades are used for the printing of newspapers, free sheets and inserts. Moreover, most of the printers who use newsprint are capable of using the various grades without significant alterations or adjustment of the printing machinery.

10.<ind> As to supply side substitutability, account should be taken of the similar technical characteristics and size of the different grades which are produced on the same kind of machinery providing there are the necessary premachine facilities like colour kitchens and bleaching/additive systems.

11.<ind> There are differences in price between the different grades. The price of standard grade newsprint is comparable to lightweight newsprint. There is a 5% to 10% difference between standard and coloured paper and between 3% and 20% with regard to improved newsprint. These differences reflect extra production costs to provide colour or whiteness and are regarded as a supplement or a extra charge with regard to standard newsprint. Printers may change easily from one grade to another on price considerations.

12.<ind> Taking into account the high degree of demand side and supply side substitutability, and since the price differences are not significant enough to separate the grades into separate markets, newsprint can be considered as a single product market.

<ind> Magazine paper

13.<ind> Magazine paper is used for the printing of magazines, catalogues, inserts and general advertising material. There are four main grades of magazine paper:

<ind> supercalendered mechanical printing paper(SC)

<ind> lightweight coated mechanical printed paper (LWC)

<ind> machine finished coated printing paper (MFC)

<ind> mediumweight coated mechanical printing paper (MWC)

14.<ind> In addition to those grades, magazine printers and publishers have traditionally used large volumes of woodfree coated papers in reels (WFC).

15.<ind> It is the opinion of the parties that, although the technical specifications and prices for those grades vary, they all belong to one single market for magazine paper.

16.<ind> There is a degree of supply side substitutability between some of the grades but, according to information from producers, generally new machines are designed for one grade only.

17.<ind> As to demand side substitutability, SC, LWC, MFC and MWC are more used for large circulation print of magazines. By comparison, WFC is more used for nonmagazine products like books, annual reports and mainly for shorter run, high quality advertising applications (commercial printing).

18.<ind> The different prices reflect different qualities in terms of grammage, brightness level and printing properties. SC has the lowest price while the prices of MFC, LWC and MWC are up to 20% higher. WFC has the highest price, up to 40% higher than the price of SC.

19.<ind> The Commission has asked competitors and customers if they consider the different grades of magazine paper as forming one single product market. Basically, all agree that SC, MFC, LWC and MWC belong to the same product market. However, as to the question whether the WFC grade also belongs to that market the answers are ambiguous.

20.<ind> Conclusion: A distinction could be made between on the one hand SC, MFC, LWC and MWC, and on the other hand WFC because of the different characteristics, end uses and the price difference between the two product groups. However, according to information provided by competitors and customers this distinction is not evident. In any case, it is not necessary to decide whether WFC belongs to the same product market as SC, MFC, LWC and MWC, since even if the WFC grade is considered to form a separate product market the operation does not raise doubts as to its compatibility with the common market.

<ind> Industrial wrappings made from paper

21.<ind> Industrial wrappings made from paper are used for, among others, wrappings of paper reels and sheets, lumber and sawn goods for industrial purposes. These packaging materials are designed to preserve the wrapped products which are often transported over long distances from physical damage, including damage caused by unusual climate conditions.

22.<ind> According to the parties, industrial wrappings made from paper are partially interchangeable with plastic industrial wrappings. Since paper is more porous than plastic, it is used to wrap industrial products which require a flow of air. However, for those products which do not require a constant flow of air, plastic industrial wrappings are used interchangeably with paper industrial wrappings.

23.<ind> Conclusion: The fact that for specific purposes plastic wrappings cannot replace industrial wrappings made from paper may not be a sufficient justification for considering paper wrappings as a separate marked. However, even if paper wrappings are considered to form a separate market the operation will not raise doubts as to its compatibility with the common market.

<ind> Sack paper

24.<ind> Sack paper is strong brown paper made from virgin pulp or recycled fibre and used for the production of paper sacks. It is not substitutable with other materials (such as corrugated case materials) either on the demand side or on the supply side, and accordingly forms a distinct product market as held by the Commission in a previous case (see IV/M.499 Jefferson Smurfit/St.Gobain). Users of the sack paper are the sack and bag manufactures.

<ind> Paper sacks

25.<ind> Paper sacks are made of sack paper and are used in particular for the transportation of cement, gypsum, other construction materials, fertilizers, animal foodstuffs and similar products.

26.<ind> Paper sacks are either single or multiwalled and bleached or unbleached. However, according to the parties, these do not formseparate product markets because of the high degree of demand side and supply side substitutability between them.

27.<ind> As to single and multiwalled paper sacks, the degree of demand side substitutability is low because of different end uses. On the supply side, single and multiwalled sacks are made by the same producers, the same machines can be used and, in addition, single and multi walled sacks are made from the same types of sack paper. This supply side substitution could be expected to happen in practice because the main industrial clients often pursue a policy of multiple sourcing.

<ind>

28.<ind> According to the parties, there is a high degree of demand side substitutability between bleached and unbleached paper sacks. On a functional level, both types can be used for precisely the same purposes and therefore, although some customers prefer one type over another, customers would switch to the other if there was a small but significant increase in the price of one type.

29.<ind> Conclusion: Although all paper sacks are produced and purchased to fulfil the same function, a distinction could be made between singlewalled and multiwalled paper sacks because of different end use of the products. However, this distinction is not necessary since both types are made by the same producers which can easily switch from production of one type to another. As to a distinction between bleached and unbleached paper sacks, the existence of a high degree of similarity in end use, as pointed out by the parties, means that customers would switch to the other type if prices on one type increase. Therefore, all four types of paper sacks belong to the same product market.

<ind> Pulp

30.<ind> Pulp is made from either wood or waste paper or a combination of both. It is then used by paper producers to make various types of paper products. About half of the pulp produced in EEA is sold on the open market. The other half is produced by vertically integrated undertakings for use in there own paper mills. Although pulp reveals different properties depending on the type of wood used, and although there are several main types depending on uses rather than wood type, the Commission has in previous cases held that pulp forms a single product market (see for example IV/M.210 Mondi/Frantschach)

<ind> Sawn timber

31.<ind> Sawn timber is used in construction, e.g. for flooring and staircases. It is also used for furniture, interior walls, doors, window frames, civil engineering and packaging.The parties find, that because of a high degree of supplyside interchangeability the market for sawn timber cannot be divided depending on the type of timber.

32.<ind> Since the type of sawn timber is determined by the type of forrests available to the producer, supply side substitution is not in the short run a possibility. From the demand side the existence of different wood types with specific qualities and high price variations depending on wood type suggest that sawn timber cannot be considered a single market but rather that there exists several markets depending on wood types. However, it is not necessary to define the product market more precisely since even considering narrow product sectors, for example pine, the operation does not raise doubts as to its compatibility with the common market.

<ind> B. Geographic market

<ind> Newsprint and magazine paper

33.<ind> The Commission has in a previous case held that competition in newsprint takes place at least at a community level (Case No. IV/M.210 Mondi/Frantschach). Newsprint and magazine paper can be transported efficiently over long distances and there is a substantial intraEuropean trade in these products. Finland, Sweden and Norway are the major European traders of newsprint and magazine paper due to the fact that those countries have a huge surplus production of the products. Consequently, companies from Finland, Sweden and Norway supply large quantities of newsprint and magazine paper to the rest of Western Europe. However, there is also substantial trade of newsprint and magazine paper between countries in the rest of the EEA area. In addition, import of newsprint from nonEEA countries, in particular from Canada, takes place. In 1994 Canadian producers had considerable market shares in the UK (approximately 20%), in France and in Italy (approximately 10% respectively).

34.<ind> Nearly all major producers of newsprint and magazine paper sell the products in almost all major Member States. However, large European manufactures tend to have pockets of strength in their respective "home" territories. This is in particular true in Finland, Sweden and Norway in which countries national manufacturers supply nearly all newsprint and magazine paper. Such a pattern might be evidence of the existence of separate geographic markets. However, this situation with low import volumes does not necessarily imply barriers to entry. Account has to be taken of the fact, that the Nordic countries are large exporters of the products in question and that the size of their own markets are relatively small. In the case of Finland, the total volume of sales of newsprint and magazine paper represents approximately 2% of the entire EEA market. This may be the reason why other Nordic and Continental European suppliers have not focused on the Finnish market.

35.<ind> According to information provided by competitors as well as the parties' customers in Finland and in the rest of Europe, the markets for newsprint and magazine paper are at least Community wide. Most if not all major customers of newsprint pursue a policy of multiple sourcing from national and/or international suppliers. Replies from customers have given no indication of barriers to entry which could prevent major customers to purchase from suppliers operating paper mills in other EEA countries. Information about sales prices in several major EU countries as well as in Finland, which the parties have provided, indicates the existence of competition on a EEA level.

36.<ind> In conclusion, information provided by the parties, the main competitors and the customers indicates, that the markets for newsprint and magazine paper are at least EEA wide.

<ind> Industrial wrappings made of paper

37.<ind> According to the parties, the market for industrial wrappings made of paper is at least EEA wide. It appears, that there is an extensive European trade of industrial wrappings made of paper since transport costs do not pose a significant hurdle for companies to sell throughout Europe. Most producers of industrial wrappings made of paper have sales operations throughout several Member States and the product is shipped directly from the factory to the customer. In the case of Repola, some of its largest customers are in Austria, the Netherlands and Germany. Consequently, the market for industrial wrappings made of paper can be considered as at least EEA wide.

<ind> Sack paper

38.<ind> The geographical scope of sack paper is at least the EEA wide as recognized by the Commission in a previous case (IV/M.499 Jefferson Smurfit/St. Gobain). In this case the Commission held that because of extensive European wide trade of sack paper the market for sack paper can be considered to be at least the EEA area.

<ind>

<ind> Paper sacks

39.<ind> The parties find, that the market for paper sacks must be considered European wide. They argue that there is an increasing crossborder trade in paper sacks and refer to the fact, that currently a Swedish company exports paper sacks into Finland. In addition, according to the parties, the major customers of paper sacks pursue a policy of global sourcing.

40.<ind> However, a national market for paper sacks is indicated in the case of Finland by the fact that, according to the parties, in Finland both Kymmene and Repola produce primarily for Finnish customers and sell directly to those customers from their production plants. The two companies operate three paper sacks plants in Finland from which they supply [Deleted; business secret: between 85% and 95%.] of the total Finnish consumption of paper sacks. The remaining [Deleted; business secret: between 5% and 15%.] is supplied by a Swedish producer. While, according to the parties, in the last several months, Russian and Swedish producers have begun making inroads into the Finnish market, the parties estimate that the total sales from foreign producers in 1995 will amount to a market share of [Deleted; business secret: less than 15%.]. (Repola also operates paper sack plants in Spain and Holland, from which the company produce primarily for national customers).

41.<ind> In a previous Commissiondecision from 1994 the Commission found that paper sacks have low density and thus incur relatively high transport costs which limit delivery ranges to a radius of between 200 and 300 kilometres (IV/M.499 Jefferson Smurfit/St.Gobain). This confirms, that in a relatively remote country such as Finland the market is national.

42.<ind> In conclusion, as held in the above mentioned Commissiondecision, the geographical scope of paper sacks is limited because of relatively high transport costs. The national nature of this market is supported by the fact, that in several years Finnish producers have been nearly the sole providers of paper sacks to the Finnish market. Thus, there is a separate Finnish market for paper sacks.

<ind> Pulp

43.<ind> As the Commission recognized in several decisions, to the extent that pulp is traded on the open market, it is an internationally traded product and the geographical dimension of the product market is at least Communitywide (see for example IV/M.166 Torras/Sarrio). The question whether the market is broader, can be left open since even on an EEAwide basis the operation does not raise serious doubts as to its compatibility with the common market.

<ind> Sawn timber

44.<ind> According to the parties, the geographic dimension of the sawn timber market is at least EEAwide. Because sawn timber is flat, it can be transported efficiently over significant distances. In addition, due to the durable nature of the product, special treatment of the product or particular fast means of transport are not necessary. Thus, the market for sawn timber can be considered to be at least EEA wide.

V <ind> ASSESSMENT

<ind> Newsprint and magazine paper

45.<ind> Currently, Repola is a major player on the EEA market for newsprint with a share of [Deleted; business secret: less than 15%.] while Kymmene is a relatively minor European player with at share of [Deleted; business secret: less than 5%.]. Thus, on the market for newsprint the parties' combined market share in 1994 amounts to [Deleted; business secret: less than 20%.] (volume).

46.<ind> On the EEA market for newsprint, although Kymmene's market share is small the new company will be the major European player with a share of [Deleted; business secret: less than 20%.] (in 1994). However, several other companies obtain strong positions: Stora Kopparbergs (a Swedish company) with [Deleted; business secret: more than 10%.], Haindl Papier (a German company) with [Deleted; business secret: more than 10%.]; Norske Skogindustrier (a Norwegian Company) with [Deleted; business secret: more than 10%.]. Next come two other Nordic companies each with [Deleted; business secret: more than 10%.].

47.<ind> On the EEA market for magazine paper the parties combined share in 1994 amounts to [Deleted; business secret: less than 25%.] (Repola [Deleted; business secret: between 8% and 15%.]; Kymmene [Deleted; business secret: between 8% and 15%.]). If the WFC grade is considered to form a separate market, Kymmene's share on such an EEA market for WFC magazine paper is [Deleted; business secret: less than 15%.]. Repola does not produce the WFC grade. The parties' shares on an EEA market for magazine paper from which the WFC grade is separated will not be substantial different from the above mentioned overall market shares.

48<ind> Also in magazine paper, the new company will be the major European player with a share of [Deleted; business secret: less than 25%.] (in 1994). According to the parties, on this market their main competitors are Stora Kopparbergs, Norske Skogindustrier, Svenska Cellulosa Aktiebolaget SCA and Haindl Papier (each with shares approximately [Deleted; business secret: between 5% and 15%.]). In addition, there are several other significant European manufactures of magazine paper, for example KNPLeykam and Enso.

49.<ind> All the above mentioned competitors on the markets for newsprint and magazine paper are large companies which operate in at least several Member States.

50.<ind> According to the parties, a considerable bargaining pressure is exercised by customers due to increasing concentration in the publishing industry. Furthermore, according to information provided by the parties and by the major customers, multiple sourcing is a must in the printing industry in order to reduce the risk of shortage of paper. Thus, a high transparency of prices exists and the customers could in principle easily switch their purchase from one supplier to another in order to obtain a competitive price.

51.<ind> As Finnish producers the parties have particular strong positions in Finland. In newsprint, in 1994 Repola had a share of [Deleted; business secret: between 40% and 60%.] while Kymmene was a less important player in Finland with a [Deleted; business secret: between 5% and 15%.] share. In magazine paper, in 1994 Repola had a share of [Deleted; business secret: between 25% and 35%.] and Kymmene a share of [Deleted; business secret: between 25% and 35%.]. Thus, on the markets for newsprint and magazine paper the parties' combined shares in Finland amounted to [Deleted; business secret: between 50% and 70%.] on both markets. However, because these markets are at least EEA wide, high local market shares do not translate into market power. There are many European producers of newsprint and magazine paper, including large and financially strong companies, from which Finnish customers could purchase newsprint and magazine paper if they wish to do so.

52.<ind> In conclusion , on these markets the concentration does not raise serious doubts as to its compatibility with the common market since the markets are EEA wide and the parties' postmerger market shares will not exceed [Deleted; business secret: less than 25%] on any of the markets. Furthermore, the parties will face competition from several competitors and large customers can easily switch their purchase from one supplier to another.

<ind> Distribution of newsprint and magazine paper

53.<ind> Repola is one of six members of the sales organisation Finnpap Marketing Association. Finnpap is a joint sales organisation which markets the paper products of the members (newsprint, magazine paper, etc.) on a world wide basis. Kymmene markets its products through its own sales network and is not a member of Finnpap.

54.<ind> In the notification the parties had not made clear their plans as to whether the marketing of paper produced by Repola will remain in Finnpap or whether all the paper products of the new company will be marketed through Kymmene's own distribution network. If Repola had continued to distribute its products through Finnpap's network, a link between Kymmene's paper marketing and the other producers represented by Finnpap would have emerged. In such a situation the scope of the merger would be extended to include the combined sales of the new company together with the other Finnish producers selling through Finnpap. Given this background, in order to eliminate any possible concerns about the role of Finnpap due to the operation, the parties have decided to commit themselves not to sell paper products through the Finnpap joint sales agency. In a letter to the Commission the parties have confirmed that they will cease to market or sell any of their products through Finnpap. This decision will take effect [Deleted; business secret.]. The Commission has taken note of the content of this letter.

<ind> Industrial wrappings made from paper

55.<ind> On the EEA market for industrial wrappings made from paper the parties' combined market share is [Deleted; business secret: less than 25%.] (in 1994 [Deleted; business secret: less than 20%.], of which Repola and Kymmene had shares of [Deleted; business secret: less than 15%.] and [Deleted; business secret: less than 10%.] respectively).

56.<ind> As was the case on the markets for newsprint and magazine paper, as Finnish producers of industrial wrappings made from paper the parties have strong positions in Finland. In 1994 Repola had a share of [Deleted; business secret: between 35% and 45%.] and Kymmene a share of [Deleted;business secret: between 20% and 30%.]. Thus, on this market the parties' combined shares in Finland amounted to [Deleted; business secret: between 55% and 75%.]. However, for the same reasons as in newsprint and magazine paper, because the market is at least EEA wide, high local market shares do not translate into market power. There are many European producers of industrial wrappings made from paper of which several currently are active on the Finnish market. These include Assi Doman /Orebro (a swedish company with an EEA market share of [Deleted; business secret: less than 15%.], PWA Duffel (a Belgian company with an EEA share of [Deleted; business secret: less than 10%.]) and Fiskeby (a Swedish company with an EEA market share of [Deleted; business secret: less than 10%.]).

57.<ind> In conclusion, on this market the operation does not raise serious doubts as to its compatibility with the common market since the parties' postmerger market share on the EEA market will not exceed 20% and because the parties will face competition from several large competitors.

<ind> Sack paper

58.<ind> On this market no competition problem can be expected since the parties' EEA market share is insignificant ([Deleted; business secret: less than 6%.]).

<ind> Pulp

59.<ind> On the market for pulp no competition problem can be expected since on the open market the parties postmerger market share in the EEA are far below 15%.

<ind> Sawn timber

60.<ind> The parties postmerger market shares on the EEA market is approximately [Deleted; business secret: between 3% and 7%.]. Even if the product markets are considered very narrowly, (the parties are primarily active in pine, and even if this product sector was considered a separate market the parties combined market shares on the EEA market would not exceed 10%) the operation does not raise serious doubts as to its compatibility with the common market

<ind> Paper sacks

61.<ind> Repola operates paper sack plants in Spain and Holland but since Kymmen does not operate sack plants outside Finland the operation will not add to Repola's market shares in these countries.

62.<ind> On the Finnish market for paper sacks the parties' shares are as follows(volume):

<tab> 1992 <tab> 1993 <tab> 1994

Repola <tab> [Deleted; business secret: between 35% and 55%.] <tab> [Deleted; business secret: between 35% and 55%.] <tab> [Deleted; business secret: between 35% and 55%.]

Kymmene <tab> [Deleted; business secret: between 35% and 55%.] <tab> [Deleted; business secret: between 35% and 55%.] <tab> [Deleted; business secret: between 35% and 55%.]

Combined <tab> [Deleted; business secret: between 70% and 100%.] <tab> [Deleted; business secret: between 70% and 100%.] <tab> [Deleted; business secret: between 70% and 100%.]

63.<ind> As shown, Repola and Kymmene have in all three years nearly shared the Finnish market for paper sacks. By the operation, the parties will be the sole providers of paper sacks on that market. Considering (1) that the parties have dominated this market for several years, (2) that there is spare capacity left on the existing plants owned by the parties and (3) that it is a mature market (4) in which a significant increase in demand cannot be expected, it is not likely that new companies will enter this market.

<ind> Modifications to the original concentration plan on the market for paper sacks

64.<ind> On the basis of the above, the Commission has come to the conclusion that the proposed operation will raise serious doubts as to its compatibility with the common market, because it will lead to the creation of a dominant position on the Finnish market for paper sacks as a result of which effective competition will be significantly impeded in the common market. However, Repola and Kymmene have entered into commitments vis à vis the Commission relating to the market for paper sacks which remove the serious doubts in the manner described below:

65.<ind> Repola operates in Finland two plants for the production of paper sacks, a plant located at Pori (the Pori plant) and a plant located at Ikaalinen (the Ikaalinen plant). Kymmene operates one plant located at Karhula (the Karhula plant). The Karhula plant is a joint venture between Kymmene (65%) and Enzo Gutzeit (35%). The capacity of the plants and their production in 1994 are as follows:

<tab> Capacity (mio sacks/y) <tab> Prod. ( mio sacks 1994)

The Pori plant <tab> [Deleted; business secret: between 20% and 30%.] <tab> [Deleted; business secret: between 20% and 30%.]

The Ikaalinen plant <tab> [Deleted; business secret: between 10% and 20%.] <tab> [Deleted; business secret: between 10% and 20%.]

The Karhula plant <tab> [Deleted; business secret: between 30% and 40%.] <tab> [Deleted; business secret: between 30% and 40%.]

Total <tab> [Deleted; business secret: between 60% and 85%.] <tab> [Deleted; business secret: between 60% and 85%.]

66.<ind> Concerning these plants, Repola and Kymmene have entered into commitments vis à vis the Commission. The text of these commitments is annexed to the present decision and forms an integral part thereof.

67.<ind> Briefly, the commitments involve the divestiture of [Deleted; business secret.]. Consequently, the effect of thecommitment will be that the operation will not result in an addition of market shares since [Deleted; business secret.] will be divested. If the parties should not be able to fulfil the undertaking to divest by the end of the aforesaid period, conditions as to the timing and the execution of the divestiture are laid down in the commitments. Furthermore, the parties undertake to keep the plants as ongoing concerns until the date of divestiture.

VI<ind> CONCLUSION

68.<ind> For the above mentioned reasons, and especially in light of the commitments given by Repola and Kymmene, the Commission has concluded that the notified operation does not raise serious doubts as to its compatibility with the common market. This decision is adopted in application of Article 6(1)(b) of Council Regulation No 4064/89.

For the Commission

ANNEX CONTAINING COMMITMENTS BY REPOLA CORPORATION AND KYMMENE CORPORATION is considered as being business secrets.