Affected market: Manufacture and supply of metallised paper
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
The OFT’s decision on reference under section 33(1) given on 20
November 2007. Full text of decision published 10 November 2008.
Please note that square brackets indicate figures or text which
have been deleted or replaced at the request of the parties for reasons
of commercial confidentiality.
Glatfelter Lydney Ltd (Glatfelter) is a UK subsidiary of P.H.
Glatfelter Company, a global manufacturer of specialty papers and
engineered products. Its products include vacuum coated products (also
referred to as metallised products), such as metallised paper and film
that it manufactures at its facility in Gernsbach, Germany.
Metallised Products Limited (MPL) is active in the production and
sale of metallised papers which it produces in Caerphilly, UK. In the
year ended 31 March 2007, MPL’s UK turnover was £2.7 million.
Glatfelter intends to acquire MPL. A satisfactory Merger Notice was
submitted on 24 October 2007. The statutory deadline expires on 20
As a result of this transaction, Glatfelter and MPL will cease to be
distinct within the meaning of section 26(1) of the Act. The parties
overlap in the supply of metallised paper in the UK with a combined
share of supply exceeding 25 per cent. Thus, 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 arrangements are
in progress or in contemplation which, if carried into effect, will
result in the creation of a relevant merger situation.
THIRD PARTY VIEWS
There was no response to the OFT's Invitation to Comment. The majority
of third parties (both customers and competitors) contacted by the OFT
were unconcerned. The only concern raised was in relation to the
manufacture and supply of metallised paper for the brewing industry
which has been addressed above.
This proposed merger relates to the manufacture of metallised products,
in particular metallised paper, where the merging parties overlap.
The question whether the market for metallised products should be
segmented on the basis of base material (paper, film, cartonboard or
textiles) or end use applications (for examples labels or packaging) can
ultimately be left open as the proposed transaction raises no
competition concerns even in the event of narrow market definitions. The
relevant geographic scope is at least EEA (if not wider) as the merging
parties each supply to different EEA countries from a single factory in
Germany (Glatfelter) and the UK (MPL).
The merging parties estimate their combined market share in metallised
paper in Europe to be [20-30] per cent (by volume) increment [10-20]
per cent. The three next largest competitors have estimated market
shares between 8 and 14 per cent. Post-merger, the OFT believes there
will be at least five sizeable credible competitors that will continue
to impose sufficient competitive constraint on the merged entity in the
supply of metallised products, including metallised paper for labels for
the beverage and brewing industry.
In addition, the merged entity will continue to face competition from
producers of alternative types of materials. The OFT believes, on the
basis of the nearly unanimous responses from customers, competitors and
independent market research that other processes and alternatives will
continue to offer some constraint.
Consequently, the OFT does not believe that it is or may be the case
that the merger may be expected to result in a substantial lessening of
competition within a market or markets in the United Kingdom
This merger will therefore not be referred to the Competition Commission
under section 33(1) of the Act.