Starcin Holding France SAS — Combination C-2024/10/1190

Notice under Section 6(2) of the Competition Act, 2002 given by Starcin Holding France SAS

CORAM:

Ms. Ravneet Kaur Chairperson

Mr. Anil Agrawal Member

Ms. Sweta Kakkad Member

Mr. Deepak Anurag Member

Order under Section 31(1) of the Competition Act, 2002

1. On 1st October 2024, the Competition Commission of India (‘Commission’) received a notice (‘Notice’) under sub-section (2) of Section 6 of the Competition Act, 2002 (‘Act’) given by Starcin Holding France SAS (‘Acquirer’ / ‘Starcin’). The Notice was filed pursuant to the execution of the Sale and Purchase Agreement dated 26th June 2024 amongst Starcin, Fosroc Group Holdings Limited (‘Fosroc’ / ‘Seller’) and JMH FZE.

2. The Proposed Combination envisages the acquisition of 100% of the issued shares of Fosroc Top One Limited (‘Fosroc Top One’), Fosroc Top Two Limited (‘Fosroc Top Two’) and Fosroc Supply FZE (‘Fosroc Supply’) [hereinafter, collectively referred to as the ‘Target Companies’] by Starcin, an indirect wholly-owned subsidiary of Compagnie de Saint-Gobain S.A. (Saint-Gobain) [hereinafter, Starcin, Saint-Gobain, and Target Companies are collectively referred to as the ‘Parties’].

3. In terms of Regulation 14 of the Competition Commission of India (Combinations) Regulations, 2024, vide letter dated 15th October 2024, certain information and clarifications were sought from the Acquirer. The Acquirer submitted the response dated 5th November 2024, after seeking an extension of time. Since the response was not complete, another letter was issued on 14th November 2024 and the Acquirer furnished the response dated 19th November 2024.

4. Starcin, a Saint-Gobain group company, provides an array of services, including strategy and commercial development, legal, financial, accounting, information technology, and management services for the benefit of its subsidiary companies or any other companies in which it holds a direct or indirect stake. Additionally, Starcin is involved in acquiring, subscribing, holding, managing, and disposing of shares and securities.

5. Saint-Gobain’s business lines include the production and sale of products, solutions, and services for construction and housing including building glass, plaster boards, ceilings, insulation products, mortars and building chemicals, and pipes. Saint-Gobain also manufactures high-performance solutions such as automotive glass, ceramics, abrasives, and performance plastics. Saint-Gobain’s main business lines in India are flat and automotive glass products and solutions, home solutions, gypsum, insulation, mortars, abrasives, glazing systems, ceramics, and chemical-based admixtures.

6. Fosroc is an international manufacturer and supplier of high-performance, low-volume chemicals for the construction industry, with a focus on building materials and chemical-based admixtures. Fosroc has 20 manufacturing plants including in the United Kingdom (‘UK’), Europe, the Gulf States, Saudi Arabia, and Asia. Fosroc is ultimately owned by JMH International Limited (‘JMH International’). The ultimate beneficial owners of JMH International are Dr. James Muir Hay and Mrs. Fitriani Hay.

7. Fosroc Top One and Fosroc Top Two are holding companies incorporated in the UK and Fosroc Supply is a trading company incorporated in the United Arab Emirates (‘UAE’). Fosroc Top One, Fosroc Top Two, and Fosroc Supply are wholly-owned subsidiaries of Fosroc.

8. The Target Companies together hold, directly or indirectly, shares in the various companies (‘Group Companies’). The Group Companies are engaged in the manufacturing of chemical-based admixtures, concrete works, mortars, waterproofing, industrial flooring, and sealants globally and in India. In India, only two companies are present viz., Fosroc Chemicals (India) Private Limited (‘Fosroc Chemicals India’) and Fosroc Engineering Services Private Limited (‘Fosroc Engineering India’).

9. Based on the information provided in the Notice, it is observed that the Parties (directly and indirectly) exhibit horizontal overlaps in the production and sale of the following products: a) Chemical-based admixtures, b) Mortars, c) Concrete works, d) Waterproofing, e) Sealants, and f) Industrial flooring.

10. It is further submitted that there are no vertical/complementary linkages between the business activities of the Parties.

Relevant Product Market(s)

11. Chemical-based admixtures: It is submitted that chemical-based admixtures are added to cement, concrete, and mortar in controlled amounts to modify and improve their properties and to provide them with specific qualities. Chemical-based admixtures can be segmented into chemical-based admixtures for concrete and mortar (‘concrete admixture’)1 and chemical-based admixtures for cement (‘cement admixture’)2. It is submitted that there is a high degree of supply-side substitutability between the chemical-based admixtures but on the demand side, chemical-based admixtures for concrete and mortars are not generally considered alternatives to cement admixtures because each type of admixture is designed to modify cementitious products in different ways. The business activities of the Parties overlap in both these segments.

12. Mortars: It is submitted that mortars are usually made of sand, binders (such as cement), and various additives (for example, pigments or waterproof compounds). They are used to bind construction materials together or to fill the gaps between them. Mortar may be segmented into ready-mix mortars (mixed at the factory) and on-site/ site-mix mortars (mixed at the construction site). Ready-mix mortars may be further segmented based on the form into dry mortars (supplied in a dry powder form), wet mortars (ready-mixed with water at the factory), and ready-to-use paste mortars. Further, dry ready-mix mortars may be sub-segmented into construction, tile-fixing, and façade. The business activities of the Parties overlap in the ready-mix mortars segment and its dry ready-mix mortars sub-segment. At the narrowest level, there is overlap in the construction and tile-fixing sub-segments.

13. Concrete works: It is submitted that concrete works include a variety of products that are used to treat the surface of concrete or to repair concrete structures, including to fill cracks and voids, protect concrete structures against chemicals and corrosion, and allow the application of coatings. Concrete works may be segmented into polymer concrete, injection resins, resin-based grouts, anchoring resins, bonding agents, primers, impregnations (including coats/coatings), corrosion protection/control, structural reinforcing/strengthening, and ancillary products. It is submitted that from the supply-side perspective, concrete works have many common characteristics and it is not difficult or costly to switch supply between different types of concrete works as the expertise and 1 Concrete admixtures are sold to concrete and mortar producers who use these admixtures in mixes with cement, water, and aggregates to enhance the workability and hardened properties of the final product. 2 Cement admixtures are typically added to the cement blend to reduce the energy required to grind this material and thereby producing cement powder of the desired finesse. Chemical-based admixtures for cement are sold to upstream cement producers and are used in clinker mills to facilitate the grinding process.

customer base is broadly similar across all concrete works products. Suppliers of concrete works products often supply a wide range of products to ensure a comprehensive product offering to their customers. However, there is limited demand-side substitutability between different types of concrete works products. Thus, segmentation of concrete works based on product type has been considered. The business activities of the Parties overlap in the segments of injection resins; resin-based grouts; bonding agents; primers; impregnations; corrosion protection/ control; and ancillary products.

14. Waterproofing: It is submitted that waterproofing is the treatment of surfaces or built volumes to prevent the penetration or infiltration of water into surfaces. It includes a wide range of solutions such as solid or liquid membranes made with various materials such as bitumen, acrylic, and Polyurethane (‘PU’) or formulated for application using injection systems. Due to limited demand-side substitutability on the basis that different types of waterproofing may be used to address different needs, segmentation of waterproofing based on application type and technology has been considered. Its segments are liquid-applied membranes with reactive coatings PU; liquid-applied membranes with reactive coatings PU Acrylic (‘PUA’); liquid-applied membranes (others: asphalt, epoxy, Polymethyl Methacrylate -‘PMMA’); liquid-applied membranes modified emulsions acrylic under tiles, liquid-applied membranes modified emulsions acrylic for other applications, liquid-applied membranes modified emulsions bitumen; bitumen membranes/ felts; Thermoplastic Polyolefin (‘TPO’)/ Polyvinyl Chloride (‘PVC’)/ High Density Polyethylene (‘HDPE’) bonding sheets; other non-liquid membranes (foils, tapes, etc.); injection systems epoxy; injection systems PU; injection system damp proofing; waterstops and waterproofing ancillaries. The business activities of the Parties overlap in the segments of liquid-applied membranes with reactive coatings PU; liquid-applied membranes with reactive coatings PUA; liquid-applied membranes (others: asphalt, epoxy, PMMA); liquid-applied membranes modified emulsions bitumen; bitumen membranes/felts; TPO/PVC/HDPE bonding sheets; other non-liquid membranes (foils, tapes, etc.); and waterstops.

15. Sealants: It is submitted that sealants are substances used to block the passage of fluids through the surface of joints or openings in materials such as sanitary joints, roofing joints, expansion joints, and window and door joints. Sealants may be segmented based on end-user into DIY customers/consumers, professional and industrial applications and further based on technology into acrylic, polysulfide, PU, silicone, and silyl-modified polymers. It is submitted that from a demand side, the same sealants are generally used by different types of customers, including professional construction businesses and DIY consumers. However, sealant products supplied by the Parties are not readily available as off-the-shelf products in retail stores for DIY use in India. Thus, the Parties only cater to the professional sector in the market for sealants. Accordingly, only the professional segment has been considered as an overlapping segment. Further, it is submitted that sealants based on different technologies/materials are used interchangeably because they have similar performances, applications, and prices. From a supply side, sealants based on different technologies are generally produced with the same or similar raw materials, equipment, and know-how and suppliers can easily switch production between different segments with no or limited costs and in a relatively short time. Notwithstanding the same, a further segmentation based on technology is considered and the Parties exhibit overlap in the segments of acrylic sealants, PU sealants, and polysulfide sealants.

16. Industrial flooring: It is submitted that there is supply-side substitutability across all industrial flooring products. However, due to limited demand-side substitutability, given that the customers may use different types of industrial flooring technology/materials to address different needs, a segmentation is carried out. Segments of industrial flooring are PU, epoxy industrial, MMA, vinyl ester, cementitious, and hybrid PU/cementitious flooring. The business activities of the Parties overlap in the segments of epoxy industrial, PU industrial, and cementitious flooring.

17. The organized segment of all the abovementioned markets and all their abovementioned segments/sub-segments are also considered.

Relevant Geographic Market(s)

18. The Parties have submitted that they have considered the geographic market as pan-India for all markets/segments/sub-segments based on factors such as no local specification requirements for these products in India, homogenous conditions of competition across all the regions/states of India, presence of various players on a nationwide basis, similar consumer preferences/ requirements in different parts of India, etc.

19. The Commission decided to leave the delineation of the relevant market open, as it was observed that the Proposed Combination is not likely to cause appreciable adverse effect on competition (‘AAEC’) in any of the plausible relevant market(s) in India.

20. Based on the submissions of the Acquirer, the Commission noted that the combined market share of the Parties for the chemical-based admixtures market and concrete admixture segment is in the range of [20-25]%, and cement admixture segment is in the range of [5-10]%. The incremental market share for the chemical-based admixtures market, concrete admixture segment, and cement admixture segment is in the range of [5-10]%, [5-10]%, and [0-5]%, respectively. For all other overlapping markets and their segments/sub-segments, the incremental market share is in the range of [0-5]% and there are various other players present in each market. Based on the foregoing, it appears that the Proposed Combination is not likely to raise competition concerns.

21. Considering the material on record, including the details provided in the Notice and the assessment of the Proposed Combination based on the factors stated in Section 20(4) of the Act, the Commission is of the opinion that the Proposed Combination is not likely to have AAEC in India. Therefore, the Commission approves the Proposed Combination under Section 31(1) of the Act.

22. This order may be revoked if, at any time, the information provided by the Acquirer is found to be incorrect.

23. The information provided by the Acquirer shall be treated as confidential in terms of and subject to provisions of Section 57 of the Act.

24. The Secretary is directed to communicate to the Acquirer accordingly.