On Feb. 25, 2014, the European Commission announced it is investigating the alleged provision of misleading market data by the parties to the Ahlstrom-Munksjö merger.
In October 2012, Ahlstrom and Munksjö notified the EC that the label and processing businesses of Ahlstrom Corporation and Munksjö AB were to be transferred to a new company, later named Munksjö Oyj. The Commission's review of the proposed transaction found that the parties were the only manufacturers of heavyweight abrasive paper backings in the European Economic Area (EEA), and that their combined share of the global market was over 80 percent. In its decision of May 2013 (which will not be affected by the current proceedings), the Commission approved the transaction subject to the divestment of Ahlstrom's abrasive paper business.
In January 2013, the companies supplied internal documents to the Commission which estimated the overall size of the EEA and worldwide markets for abrasive paper backings and, specifically, heavyweight abrasive paper backings, to be significantly lower and, consequently, their own market share significantly higher, than stated in the original merger notification.
The Commission's announcement provides a reminder that undertakings notifying a merger must set out a true best estimate of the markets and market share in question. Failure to do so could result in a fine of up to 1 percent of worldwide turnover.
The Commission's press release is available here.
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