EN

Case No COMP/M.3765 -
AMER / SALOMON

Only the English text is available and authentic.

REGULATION (EC) No 139/2004

MERGER PROCEDURE

Article 6(2) NON-OPPOSITION

Date: 12/10/2005

In electronic form on the EUR-Lex website under document

number 32005M3765

Office for Official Publications of the European Communities

L-2985 Luxembourg
 COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 12/10/2005

SG-Greffe(2005) D/205502

In the published version of this decision, PUBLIC VERSION

some information has been omitted
pursuant to Article 17(2) of Council MERGER PROCEDURE
Regulation (EC) No 139/2004 concerning ARTICLE 6(2) DECISION
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possible the information omitted has been
replaced by ranges of figures or a general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.

To the notifying party:

Dear Sir/Madam,

Subject: Case No COMP/M.3765 - Amer/Salomon

Notification of 24.8.2005 pursuant to Article 4 of Council Regulation
No 139/20041

1. On 24.8.2005, the Finnish company Amer Sports Corporation (“Amer”) notified its
intention to acquire the Salomon business segment of Adidas-Salomon (“Salomon”)
within the meaning of Article 3(1)(b) of Council Regulation No 139/2004 on control of
concentrations between undertakings (“the Merger Regulation”).

2. The transaction was referred to the Commission under Art. 4(5) of the Merger
Regulation.

3. After examination of the notification, the Commission has concluded that the notified
operation falls within the scope of the Merger Regulation and, following submission by
the parties of undertakings designed to eliminate competition concerns identified by the
Commission, in accordance with Article 6(2) of the Merger Regulation, does not raise
serious doubts as to its compatibility with the common market and with the functioning of
the EEA Agreement.

1 OJ L 24, 29.1.2004 p. 1.

Commission européenne, B-1049 Bruxelles / Europese Commissie, B-1049 Brussel - Belgium. Telephone: (32-2) 299 11 11.
I. THE PARTIES

4. Amer is a global sporting goods equipment manufacturer and supplier. Amer’s

products are divided into four key brands: ‘Atomic’ (winter sports goods), ‘Precor’
(fitness equipment), ‘Suunto’ (wrist-top computers) and ‘Wilson’ (tennis, golf and
team sports’ equipment).

5. Salomon is active globally in the manufacture and supply of winter sports products,
such as alpine and cross-country skis, snowboards, boots, bindings, snowshoes,
skateboards, hiking footwear, cycling equipment, inline skates and related accessories.
Salomon is currently part of the Adidas-Salomon group.

II. THE OPERATION

6. Amer will acquire from Adidas-Salomon the entire issued share capital in a number of
companies forming the Salomon business, as well as certain intellectual property rights
and assets.

III. CONCENTRATION

7. The proposed transaction constitutes a concentration within the meaning of Article

3(1)(b) of Merger Regulation.

IV. COMMUNITY DIMENSION

8. The concentration does not have a Community dimension within the meaning of
Article 1 of the Merger Regulation as the combined aggregate worldwide turnover of
the undertakings concerned is EUR […] million (Amer: EUR […] million; Salomon:
EUR […] million). The Commission acquired jurisdiction to review the notified
operation by means of referral under Article 4(5) of the Merger Regulation.

V. COMPETITIVE ASSESSMENT

A. Relevant product markets

9. The activities of the parties overlap in the sector of winter sports goods. The parties
have submitted that the winter sports goods sector may be further subdivided into
winter sports soft goods (such as clothes, gloves and bags) and winter sports hard
goods (skis, snowboards and accessories).

10. As regards the winter sports soft goods, the parties have submitted that their presence
in this segment is minimal. In the segment of winter sports hard goods, the parties’
activities overlap in a number of product segments and Member States.

Sales of winter sports hard goods to retailers (“retail markets”)

11. The parties have submitted that the various products designed for different kinds of
skiing and snowboarding are not interchangeable, as different technical solutions are
used for each alpine skiing, cross-country skiing and snowboarding. The parties have
therefore argued that the following relevant product markets exist: (i) alpine skis, (ii)
alpine bindings, (iii) alpine boots, (iv) alpine poles, (v) cross-country skis, (vi) cross-
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 country bindings, (vii) cross-country boots, (viii) snowboards, (ix) snowboard
bindings, (x) snowboard boots.

Alpine skis

12. Alpine skis are essentially skis that are used to come down a mountain. According to
the parties, suppliers have segmented their product portfolio of alpine skis in different
ways - principally according to the skier's competence level – and, while there are
some common descriptions, there is no universally accepted product segmentation. The
parties have submitted that suppliers of branded skis are typically active in all different
product segments of the alpine ski market, and manufacturers are able to quickly and
easily switch production to satisfy demand in these different segments. The parties
have therefore submitted that alpine skis represent a single separate product market.

13. Competitors and customers in their replies to the market investigation have indicated
that different sub-categories of alpine skis exist from the demand side point of view
(such as free-style, racing, carving) and that, from the technical point of view or in
terms of price level, not all skis are substitutable from the consumers’ point of view.
However, the investigation confirms that, from the supply side, most manufacturers
produce and sell all types of skis. The investigation also shows that the technical
differences between categories of skis do not prohibit manufacturers to start or increase
the production of a specific type of ski, should the prices of a product category
increase. Therefore, the Commission considers, for the purpose of this investigation,
one relevant product market for alpine skis.

Alpine bindings

14. Alpine bindings, which are permanently fixed to alpine skis, attach to both the front
and the rear of alpine ski boots. Technically, bindings are set on skis by means of
drilling in skis and screws2. The parties have argued that, from a technical point of
view, any type of alpine ski is compatible with any type of alpine binding and that the
binding technology is not covered by patents. The market investigation has confirmed
this view.

15. According to the parties, bindings were historically manufactured and sold on a
separate, stand-alone basis. The parties have argued, however, that in the last 5 years
most manufacturers sell skis and bindings on an “integrated” basis: the drilling in skis
is now implemented in manufacturers’ factories which implies that only bindings and
skis of the same manufacturer—or sometimes of a ski manufacturer and a binding
manufacturer tied in a partnership—can fit together.

16. Technical and economic motivations account for this development. Technically, ski
manufacturers have identified the ski-binding interface as an important factor in the
overall performance of a ski. To make this interface more efficient, each manufacturer
has developed its own interface. The positions of screws are now specific to each ski
manufacturer so that only one brand of bindings can match. Economically, the
integration of bindings to skis means that manufacturers are assured to sell a pair of
bindings when they sell a pair of skis.

2 A newly introduced technology consists of setting bindings on the skis with a “click mechanism”.

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17. This integration is essentially implemented in two different ways: either the
manufacturer integrates bindings and skis in factories or it just carries out the
necessary

brand-specific drilling in skis and then retailers set bindings on the drilled skis (or skis
with interface). Under the last option, bindings and skis can be shipped to retailers in
the same package or they can be shipped separately. The latter implies that retailers, in
making their orders of bindings, purchase together the bindings that are intended to be
set on skis with a brand-specific interface and those who are intended to be sold
separately. Since these bindings are physically identical, manufacturers are not in a
position to price them differently.

18. According to the parties, more than [>50]% of the Atomic skis leave the factory with
assembled bindings or with a brand-specific interface. Salomon expects this figure to
be [>50%] in the near future for its own sales3. And while it is still possible to buy skis
and bindings separately, it is normally specialists/experts with a particular, mostly
more expensive product in mind who make such purchases.

19. Competitors and customers in their replies to the market investigation have confirmed
the trend of selling skis and bindings in a package. Taking this into account, alpine
bindings to some extent might be seen as an upstream input for ski packages.

20. Nevertheless, since a significant proportion of alpine bindings is still sold on a stand-
alone basis, for the purpose of this decision, alpine skis and alpine bindings are
analysed as separate product markets. The strong commercial links between both
products are nevertheless considered to be one of the most important market features.
In particular, the market structure and competition conditions in alpine bindings must
be considered to be strongly influenced by the market for alpine skis.

Alpine boots

21. The parties have argued that alpine boots form a separate product market, as they are
not substitutable for cross-country boots from the demand side perspective. According
to the parties, supply-side substitutability is equally excluded as different
manufacturing techniques are used in each case. As regards the compatibility of the
various alpine boots with different bindings, the parties have submitted that any alpine
binding can be used with any alpine boot.

22. The parties’ arguments have been largely confirmed in the market investigation and for
the purposes of this decision, a relevant market for alpine boots will be considered.

Alpine ski poles

23. Alpine ski poles are used to assist the skier to move forward and are also used as a
steering device. The parties have submitted that alpine ski poles form a separate
product market. The existence of a separate market is confirmed by the market
investigation.

3 The focus of Salomon’s product portfolio is more in categories, such as free-style and all-mountain, for
which the proportion of consumers who prefer skis with pre-assembled bindings is lower.

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 Cross-country skis

24. Cross-country skis are used to traverse flat or undulating land. According to the
parties, there are two types of cross-country skis: skating and classical. The parties
claim that in

spite of the technical differences between these two types of skis there is a substantial
supply-side substitutability between them. Therefore, they both form one relevant
product market.

25. The parties’ arguments have been confirmed in the market investigation and for the
purpose of this decision, a relevant market for cross-country skis will be considered.

Cross-country bindings

26. The parties have submitted that there are two technology standards used at present for
cross-country bindings: the so called SNS and NNN standards. According to the
parties, the SNS technology is used on approximately 70% of the global market.
Salomon holds the patents for the SNS technology. The competing NNN technology is
patented by Rottefella, a Norwegian company not active in other segments of the
winter sports hard goods sector.

27. Contrary to the alpine ski segment, cross-country bindings are generally not integrated
to cross-country-skis. While market investigation provides some indications that
manufacturers try to promote the move towards integration of cross-country skis and
bindings, the market investigation has confirmed that currently only 10% to 20% of
cross-countries skis are sold on an integrated basis. Furthermore, technical reasons may
hinder any further push to integration. First, setting cross-country bindings on cross-
country skis remains an easy operation and the gain from integrating them in factories
is less obvious than in the alpine ski segment. Second, the interface binding-ski is not
an important factor of performance so that brand-specific innovations leading to
“captive” interfaces are not likely.

28. The parties have argued that both technologies, SNS and NNN, form one product
market for cross-country bindings. Cross-country ski bindings of both standards can be
used interchangeably between all cross-country skis. Third parties in their replies to the
Commission’s questionnaires have confirmed the parties’ arguments.

29. Therefore, for the purpose of this decision, a relevant market for cross-country
bindings will be considered.

Cross-country boots

30. Cross-country boots are made from soft, flexible material and are connected to the
binding only at the toe. As described above, cross-country boots are not substitutable
for alpine boots, due to their very different physical characteristics. Furthermore, due
to the different construction techniques, there are no supply-side substitution
possibilities from alpine boots production to cross-country boots production.

31. The market investigation has confirmed that for each cross-country binding technology
standard (SNS, NNN), a different cross-country boot is used. The main difference rests
in the construction of the sole of the boots which grants the compatibility of the boot
and the binding standard. The manufacturer of cross-country boots therefore needs to
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 obtain a license for the available binding technologies. Accordingly, contrary to the
alpine segment, in which commercial and technological links exist between skis and
bindings, in the cross-country segment such links exist between bindings and boots.

32. The market may be further segmented according to the skiing styles (classical or
skating), but according to the parties an average skier may use the boots for both types
of cross-country skis. Furthermore, the parties submitted that the supply-side
substitutability between classical boots and skating boots is high.

33. The market investigation has confirmed this view. Therefore, for the purpose of this
decision, one relevant product market for cross country boots will be considered.

Snowboards

34. According to the parties, there are two main categories of snowboards: free-style and
free-ride. The free-ride category covers all sorts of gliding – on slope and deep powder
skiing, while the free-style category is generally limited to park and pipe
snowboarding. The parties submit that these two categories of snowboards form one
relevant product market as the manufacturers may easily produce both of them.

35. The market investigation has confirmed the parties’ submissions and for the purposes
of this decision, a relevant product market for snowboards will be considered.

Snowboard bindings

36. The parties submit that there are two main constructions of snowboard bindings: soft
bindings and hard bindings. The differences between them stem from outer surface
appearance, weight, ease of use and use of new technologies.

37. The parties submit that both binding constructions form one relevant product market.
This has been confirmed in the market investigation.

Snowboard boots

38. The parties submit that there are two main constructions of snowboard boots – soft and
hard boots. The main differences between them stem from appearance and fit. The
parties submit that both types of boots form one relevant product market. This has been
confirmed in the market investigation.

Markets for sales of winter sports hard goods to manufacturers (“OEM-

markets”)

39. The parties have submitted that a number of players active on the retail markets
defined above procure skis and bindings from other rival manufacturers, both in the
cross-country and alpine segments. This is in particular the case for manufacturers that
are not integrated—that is, they have no production facilities in both skis or bindings—
or for those who have no sufficient production capacities and who do not wish to invest
to increase them.

40. The parties have submitted that, with a static demand for winter sports equipment,
suppliers that wanted to expand on new markets have often chosen for financial
reasons to contract from rival suppliers who had spare production capacity. This,
together with the fact that most OEM suppliers are also active on downstream markets
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 (i.e. sales to retailers) has led the parties to submit that OEM markets do not constitute
a separate relevant product market.

41. However, since Salomon and Amer are both active as suppliers of winter sports hard
goods to rival companies, the Commission considers that it is still necessary to
examine whether the concentration gives rise to vertical issues. Thus, for the purposes
of this decision, the Commission considers that the OEM markets for alpine skis,
alpine bindings, cross-country skis, and cross-country bindings constitute separate
relevant product markets.

B. Relevant geographic markets

Retail markets

42. From the retailers’ perspective, the geographical scope of the markets is national. The
parties have submitted that a significant proportion of sales still take place at national
level; in particular small retailers have their principal interaction with the national sales
forces of the suppliers.

43. In this respect, the Commission notes that some major distribution networks (e.g.
Intersport, Sport 2000) procure winter sports hard goods through a two-stage process: a
first choice of the brand and product portfolio is made at a European-wide level.
However, in the second stage, each of the national sections makes its sub-selection
taking into account the particularities of the different countries (e.g. consumer
preferences). The market investigation suggests that only very few retailers truly
purchase at an international level (e.g. Decathlon).

44. Furthermore, market investigation shows that consumer preferences vary significantly
across countries. In particular, consumers prefer to purchase national brands when
possible. For instance, Austrians are prone to buy Austrian brands (e.g. Atomic,
Fischer), and French consumers are inclined to buy French brands (e.g. Rossignol,
Dynastar, Salomon). As a result, the market shares of the parties vary significantly
across countries (see below). The market investigation has also confirmed that retail
price variation across countries still can reach [>20]%,4 despite, according to the
parties, national retail prices have converged.

45. As regards geographic market definition the parties have argued that winter sports tourism
supports the trend towards EEA-wide markets for winter sports hard goods, as a
significant part of sales in the most important national markets (i.e. the “Alpine” countries
like Austria, Germany and France) are attributable to tourists. Furthermore, the parties
submitted that the market strategy of the manufacturers (brand positioning, technical
innovations and pricing policies) is not oriented towards some national markets but is at
least EEA-wide in scope. The Commission considers, however, that even though
competition conditions in national markets may be considered to be influenced to some
extent by European-wide or even worldwide supply-side factors like common brand
strategies and product innovation policies, factors discussed above such as national
consumer preferences, price differences, national retail structures and the resulting
differences in market positions at the national level lead the Commission to conclude
that the markets are still national in scope.

4 data provided by the parties.

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46. Therefore, for all the forgoing reasons the Commission considers that the retail markets
for winter sports hard goods – alpine skis, alpine boots, alpine bindings, cross-country
skis, cross-country bindings, alpine ski poles, cross-country boots, snowboards,
snowboard bindings and snowboard boots - are national.

Markets for sales to manufacturers (“OEM”-markets)

47. The parties have submitted that production facilities of manufacturers can be situated
remote from the demand of end-consumers. Salomon manufactures a large proportion
of alpine bindings sold in the EEA in Romania. The ski production capacities of Amer
are concentrated in two plants located in Austria and Bulgaria. The market
investigation has also established that K2, a US-based company which recently
acquired the German ski manufacturer Voelkl, sources its total volume of skis from
manufacturers located in China.

48. More importantly, the investigation has confirmed that suppliers of branded skis which
source their skis from “Original Equipment Manufacturers” (OEMs) typically source
skis and bindings from suppliers located anywhere in Europe (and occasionally from
manufacturers located in the rest of the world).

49. In view of these facts, the Commission considers that the markets for sales of skis and
bindings to manufacturers (“OEM-markets”) are at least EEA wide in scope.

C. Assessment

C.1 Markets for sales of alpine skis and bindings to manufacturers (“OEM-markets”)

50. Amer sells no OEM alpine bindings and it is only marginally active in OEM alpine
skis, whereas Salomon is only active in selling OEM alpine bindings, making [>50]%
of these sales to Amer. Thus, no horizontal overlaps in these markets and no vertical
issues arise from the proposed operation.

C.2 Retail markets for alpine and snowboarding hard goods

Snowboarding hard goods and alpine ski poles

51. In the Austrian market for snowboards the merged entity will hold a market share of
[15-25]%. In all the other national markets the parties’ combined market share is below
that level. Also in snowboard bindings and snowboard boots the merged entity holds
its highest market shares in Austria, reaching [25-35]% (bindings) and [30-40]%
(boots).

52. The market investigation has confirmed that a number of competitors, in particular US-
based brands with a product portfolio focused on the markets of snowboard hard
goods, are present in all of the relevant markets: Burton, Nitro, Nidecker, F2, Crazy
Creek, Rossignol (snowboards); Burton, Snowpro, F2 and Flow (snowboard bindings);
and Burton, Northwave, Rossignol and Vans (snowboard boots). Furthermore, market
investigation shows that, compared to the remaining brands, Atomic and Salomon are
not close competitors. In addition, due to the replies of most of the retailers, not the
branded products offered by the merged entity but the products of brands like Burton
(snowboard, snowboard bindings and snowboard boots) and Northwave (snowboard
boots) must be considered to be “must-have brands”.

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53. For the forgoing reasons the Commission considers that the major competitive
constraints on the merging parties are not affected by the transaction and that no
competition concerns are likely to arise in any markets concerning snowboards,
snowboard bindings and snowboard boots.

54. In addition, based on the information submitted by the parties and confirmed by the
Commission’s market investigation, the parties’ combined market shares in any
national market for ski poles do not exceed 30% and a number of competitors are
present on these markets (Scott, Leki, Komperdell and Rossignol). Therefore, the
Commission also considers that no competition concerns are likely to arise in any
markets concerning alpine ski poles.

Alpine skis and alpine bindings

Major players and commercial links

55. The “Alpine countries” Austria, Germany, Italy and France account for almost 85% of
the EEA-sales volume in alpine ski hard goods. The major players are active in all
national markets. Besides the parties to the transaction, K2, Head and Rossignol
(recently acquired by Quicksilver) are present with their own brands in the markets for
alpine skis and alpine bindings. The brand portfolios of the companies mentioned are
summarized in the following table:

Brand portfolios of leading suppliers

(alpine skis, alpine bindings)

Company Ski brands Binding brand

Amer Atomic, Dynamic, Atomic, Dynamic,

Volant Volant

Salomon Salomon Salomon

Head Head Tyrolia

K2 K2, Völkl Marker

Rossignol Rossignol, Dynastar Look

56. As mentioned above, the market investigation has confirmed the submission of the
parties that strong commercial links exist between the markets for alpine skis and
alpine bindings. Currently almost 70% of the alpine skis are sold with pre-assembled
binding or an interface of a specific binding brand. Accordingly, the market structure
and competition conditions in alpine bindings must be considered to be strongly
influenced by the market for alpine skis.

57. After the recent acquisition of the binding manufacturer Marker by K2 (2004), each of
the leading binding brands today is provided by a group offering also at least one of the
leading ski brands. Contrary to Amer, Salomon, Head, K2 and Rossignol, the
manufacturing activities of Blizzard, Elan and Fischer is still focused on skis only.
These companies manage to offer packages to the retail level by sourcing alpine
bindings from one of the leading binding manufacturers, partly on the basis of OEM-
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 agreements on the production of bindings under the brand of the ski manufacturer (e.g.
OEM-agreement between Fischer and Head/Tyrolia).

Market share structure

58. The parties have combined market shares exceeding 15% in a large number of national
markets for alpine skis and alpine bindings. All these markets have been reconstructed
on the basis of the sales data provided by the parties and their competitors. According
to the results of this exercise, the merged entity will become market leader in most of
the affected national markets for alpine skis and alpine bindings (see table below).

Market structure of the retail markets of

alpine skis / alpine bindings
(2004; % of sales in value)

Country Skis Bindings

Amer Sal. A/S Fisch Head Blizz. Amer Sal. A/S Head Fisch Ross
Austria [30- [10- [40- [10- [0- [0- [30- [10- [50- [20- [10- [0-
40%] 20%] 50%] 20%] 10%] 10%] 40%] 20%] 60% 30%] 20%] 10%]
Ross K2 Head Ross K2 Head
UK [10- [20- [40- [10- [10- [0- [10- [30- [50- [10- [10- [10-
20%] 30%] 50%] 20%] 20%] 10%] 20%] 40%] 60% 20%] 20%] 20%]
Ross K2 Head Head Ross K2
Netherlands [20- [10- [30- [10- [10- [0- [20- [10- [30- [20- [10- [0-
30%] 20%] 40%] 20%] 20%] 10%] 30%] 20%] 40%] 30%] 20%] 10%]
Ross Fisch Head Ross Fisch Head
Finland [20- [10- [30- [20- [10- [0- [20- [20- [40- [10- [10- [0-
30%] 20%] 40%] 30%] 20%] 10%] 30%] 30%] 50%] 20%] 20%] 10%]
Ross Fisch Head Ross Head Fisch
Sweden [10- [20- [30- [20- [10- [10- [10- [20- [30- [10- [10- [10-
20%] 30%] 40%] 30%] 20%] 20%] 20%] 30%] 40%] 20%] 20%] 20%]
Ross K2 Head Ross K2 Head
Spain [10- [10- [30- [20- [20- [10- [20- [10- [40- [20- [10- [10-
20%] 20%] 40%] 30%] 30%] 20%] 30%] 20%] 50%] 30%] 20%] 20%]
Ross Head K2 Ross Head K2
France [10- [10- [20- [40- [0- [0- [10- [20- [40- [40- [0- [0-
20%] 20%] 30%] 50%] 10%] 10%] 20%] 30%] 50%] 50%] 10%] 10%]
Ross Elan Blizz Ross Head Elan
Poland [10- [10- [20- [30- [10- [0- [10- [10- [30- [40- [10- [0-
20%] 20%] 30%] 40%] 20%] 10%] 20%] 20%] 40%] 50%] 20%] 10%]
K2 Ross Head Head K2 Ross
Germany [10- [0- [20- [10- [10- [10- [10- [0- [20- [10- [10- [10-
20%] 10%] 30%] 20%] 20%] 20%] 20%] 10%] 30%] 20%] 20%] 20%]
Fisch Ross Blizz Fisch Ross Head
Czech Rep. [10- [0- [20- [20- [10- [10- [10- [0- [20- [30- [10- [10-
20%] 10%] 30%] 30%] 20%] 20%] 20%] 10%] 30%] 40%] 20%] 20%]
Tec K2 Ross Tec Ross K2
Italy [0- [10- [10- [20- [10- [10- [0- [10- [20- [20- [10- [10-
10%] 20%] 20%] 30%] 20%] 20%] 10%] 20%] 30%] 30%] 20%] 20%]

In several countries like Austria and the UK the merged entity will reach market shares
of above 35% in alpine skis and above 50% in alpine bindings with a significant lead
over its strongest competitors. In other countries like France, Poland, Spain, Finland
and Sweden the parties’ combined market shares will meet or exceed 30% and the
combined market shares of the merged entity and its strongest competitor will exceed
55%, in some countries even 75%.

Competitive effects
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59. Despite the fact that the geographical scope is still national, the markets for alpine skis
and alpine bindings are characterized by some market features common for all Member
States. Since these general market conditions are relevant for the assessment whether
and to which extent the proposed transaction may give rise to any competition concern,
these common market features will be discussed separately before assessing the
competitive effects of the proposed transaction on a country-by-country basis.

Dominance / non-coordinated (unilateral) effects

60. Based on the results of market investigation, the assessment whether the merged
entity’s high market shares in several countries give rise to the concern that the
proposed transaction may lead to a dominant position or an increased leeway of the
merged entity for unilateral price increases (“non-coordinated effects”) has to take into
account the following aspects which are common for almost all the affected national
markets for alpine skis and alpine bindings:

61. The results of market investigation have confirmed the submission of the parties that
the retailers’ brand portfolio in average comprises 5-7 different alpine ski brands and
4-5 alpine binding brands. Price negotiations between suppliers and retailers are based
on the assignation of the suppliers’ products to specific retail “price points“. The
wholesale price level is the result of negotiations on the retailers’ sales margin as well
as volume discounts per product and product category. The retail prices of skis cover a
range of around €149 up to €899, the retail prices of alpine bindings a range of around
€99 up to €299. The “price points” are most commonly defined in steps of €50 (i.e.
€149, €199, €249 etc.). Accordingly, the competition process in the markets for alpine
skis and alpine bindings is characterized by the aim of the suppliers to assign more
products to the highest price point possible.

62. Furthermore, the parties have submitted and the market investigation has confirmed
that – besides price – the competition in the markets of alpine skis and alpine bindings
is also driven by product differentiation and brand positioning. In addition to the large
number of different types of skis and bindings offered at several price levels and
quality standards (e.g. cross-carver, slalom-carver, all-mountain skis, racing-skis, free-
style), each supplier endeavours to assign to its products a specific brand image.
According to the parties, the products of Amer and Salomon provide quite different
brand images - Atomic a strong “racing” image, Salomon a “lifestyle” image.

63. The market investigation in addition shows that competition in alpine skis and alpine
bindings is also driven by product innovations. In particular, the product cycle for
alpine skis is relatively short with each supplier providing at least minor product
innovations each winter season. Regular ski tests carried out by several ski magazines
also make the quality and performance of the products one of the most important
factors of market success.

64. Due to the fact that suppliers need to assign a strong brand image to their products and
due to the relevance of technological know-how, product performance and product
innovation for market success, the barriers to entry to the markets for alpine skis and
alpine bindings for actors not active in neighbouring product or geographical markets
(barriers to “green-field entry”) must be considered to be substantial. Market
investigation has also confirmed that the barriers to entry and expansion for companies
active in neighbouring markets are significantly lower.

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65. Furthermore, according to the parties, a few large buyers account for around 30-50% of
the sales of each party in most of the markets. In addition, the market investigation has
provided indications that, at least in some of the affected national markets, larger
retailers (like the French-based retailer Decathlon) are able and willing to promote
expansion strategies of smaller brands. In addition, market investigation has confirmed
that – at least in some of the Member States – larger retailers like Decathlon
(“Quechua”) and Intersport (“TecnoPro”) in recent years launched and promoted
private label brands.

66. Although it may be true that large sports good retailers - like Decathlon, Metro-Group
or the buyer groups like Intersport and Sport 2000 - are important customers, any
hypothetical buying power of large retailers is mitigated to a significant extent by the
strength of the brands provided by the parties. The market investigation has confirmed
that at least in some of the national markets - like France and Austria – the brands of
the merged entity must be considered to be “must have brands” even for larger
retailers.

Collective dominance / coordinated effects

67. As mentioned above, in several countries like France, Poland, Spain, Finland and
Sweden the parties’ combined market shares will reach or exceed 30% and the
combined market shares of the merged entity and its strongest competitor will reach or
exceed 55% (see table above). As regards the assessment whether these high combined
market shares of the merged entity and its largest competitor give rise to the concern
that the proposed transaction may lead to coordinated effects, the analysis of the
Commission is based on the following general considerations:

68. For coordinated market conduct / collective dominance being implemented and
sustained effectively, general market conditions have to (i) make it easy for the firms to
reach a mutually acceptable coordinative outcome, (ii) make it easy for the firms to
detect any deviation from the expected behaviour (detection of “cheating”), and (iii)
make it easy for the firms to punish any deviation in such a way that for each firm the
coordinative outcome is the most favourable (i.e. profitable) market conduct (effective
“retaliation”).

69. In assessing the relevant factors that contribute to these necessary conditions for
coordinated effects, the Commission considers that the markets for alpine skis and
alpine bindings in general are not conducive to coordinated market conduct for the
following reasons:

70. The parties submitted and market investigation has confirmed that the sales volumes
and prices of alpine skis and bindings are rather stable. But market investigation has
also confirmed that, due to the product innovations presented each year, the life cycle
of the products concerned is rather short. Consequently, despite the stability of sales
volumes and prices, the markets for alpine skis and bindings are characterized by
technology- and fashion-related dynamics.

71. Furthermore, as mentioned above, the products concerned are highly differentiated
with respect to technology, brand image and price points. The product portfolio of
Salomon in winter season 2005/2006 will comprise 43 different types of alpine skis
and 22

12
 different types of alpine bindings grouped into 6 different product categories. Amer
will offer 49 types of skis and 36 types of bindings grouped into 7 product categories.
Consequently, a mutually acceptable coordinative market conduct would have to cover
a very wide range of very different parameters (type of ski, quality, brand image, price
points etc.).

72. Furthermore, due to the diversity and wide variety of product characteristics and price
points the markets for alpine skis and alpine bindings are not very transparent.
Accordingly, market behaviour is not easy to monitor and attempts of “cheating” are
not easy to detect.

Austria

73. In the Austrian market for alpine skis, the combined market share of the parties reaches
[40-50]% giving them a lead over their strongest competitors Fischer ([10-20]%), Head
([0-10]%) and Blizzard ([0-10] %).

74. A significant impediment of effective competition caused by coordinated effects can be

excluded for these markets, since the general conditions of the markets on alpine skis
and bindings described above together with the asymmetry of market shares are not
conducive to such behaviour.

75. In addition, a significant impediment of effective competition by unilateral price

increases of the merged entity can be excluded for the following reasons:

76. The market investigation has confirmed the view submitted by the parties that,
compared to the remaining brands, Atomic and Salomon are not close competitors.
Since Austrian consumers have strong preferences for “Austrian” brands as well as for
ski brands with a “racing” image, mainly other “Austrian” ski brands like Fischer and
Head which also provide a stronger “racing” image than the “French” ski brand of
Salomon are seen to be the closest competitors of Atomic.

77. Taking further into account that the retailers’ brand portfolio in average comprises 5 to
7 ski brands, the Commission considers the major competitive constraints on the
merging parties as not being significantly affected by the transaction. In particular, the
merged entity will not have a leeway to increase prices unilaterally because customers
would be able and willing to switch to competing brands.

78. The combined market share of the parties in the Austrian market for alpine bindings
([50-60]%) exceeds their market position in alpine skis. Nevertheless, a substantial
impediment of effective competition as a result of the proposed transaction can also be
excluded for the following reasons:

79. Due to the strong commercial links between alpine skis and alpine bindings, the market
position in alpine bindings generally reflects the success of a particular brand in the
alpine skis market. This applies in particular to the current market position of Amer.
The parties have submitted and the market investigation has confirmed that the vast
majority of the bindings sold by Amer are sold as part of Atomic ski with pre-
assembled bindings. The major competitors of Amer in the Austrian ski market
(Fischer, Head and Blizzard) combine other binding brands (Marker, Tyrolia) to their
skis when sold as a package. Therefore, the major competitors to the parties in the

13
 market for alpine bindings (Marker and Tyrolia) have the backup of strong ski brands
(Fischer, Blizzard and Head).

80. Furthermore, as mentioned above, retailers, in making their orders for bindings,
generally purchase together the bindings that are intended to be set on skis with
interface and those who are intended to be sold separately. Since these bindings are
physically identical, manufacturers are not in a position to price them differently.
Consequently, despite their high market shares, neither for bindings sold in packages
nor for bindings sold on a stand-alone basis, the parties to the transaction will have an
increased leeway to behave independently in the market for bindings.

81. For all the foregoing reasons, the Commission considers that competition concerns are
unlikely to arise on the markets for alpine skis and alpine bindings in Austria.

UK, Netherlands

82. The market structure of the markets for alpine skis in the UK and the Netherlands
shows similarities in terms of market shares with the Austrian market, although the
former markets are much smaller (less than one tenth each) than the later one. The
combined market shares of the parties will be high (UK: [35-45]%; Netherlands: [30-
40]%), giving them a significant lead over its strongest competitor Rossignol (UK: [10-
20]%; Netherlands: [10-20]%). K2 as the third largest competitor in both countries
reaches similar market shares (UK: [10-20]%; Netherlands: [10-20]%).

83. A significant impediment of effective competition caused by coordinated effects can be

excluded for these markets, since the general conditions of the markets on alpine skis
and bindings, and the asymmetry of market shares are not conducive to such
behaviour.

84. Neither for the UK nor the Netherlands the results of market investigation have
established Amer and Salomon as close competitors. Furthermore, it has to be taken
into account that – contrary to the Austrian market – the consumers in the countries
concerned do not have strong preferences for specific “national” brands. Competitive
pressure therefore in particular comes from other “non-Austrian” ski brands with a
strong “racing” image like K2/Voelkl.

85. Furthermore, as mentioned above, in these countries, the vast majority of skis are
bought to be used in other countries; various parties to the investigation have indicated
that the possibility for consumers to buy easily their skis abroad (in the skiing resorts)
exerts a pressure on the retail prices in their home countries, which, in turn would limit
the possibility for manufacturers to increase the prices charged to retailers.

86. In the markets for alpine bindings in the UK and the Netherlands the merged entity
reaches market shares of [45-55]% and [30-40]%. Market investigation shows that the
strong commercial links between alpine skis and alpine bindings also exist in the UK
and the Netherlands. This implies that coordinated or/and non-coordinated effects
specific to the segment of bindings are very unlikely to occur. Furthermore, the major
competitors of the parties in alpine bindings (K2/Marker, Head/Tyrolia,
Rossignol/Look) are also present in these countries, holding significant market shares
of [5-15]% - [20-30]%.

14
87. For all the foregoing reasons, the Commission considers that competition concerns are
unlikely to arise on the markets for alpine skis and alpine bindings in the UK and the
Netherlands.

France

88. France represents one of the most important markets of alpine skis and alpine bindings
in Europe. The market share of the merged entity in the market for alpine skis in
France is [20-30]% (Amer: [5-15]%; Salomon: [15-25]%). With Rossignol holding a
market share of [40-50]%, the combined market share of the two leading suppliers in
the French market post merger will be [70-80]%. All the other brands will hold market
shares of less than [5-15]%. In the market for alpine bindings the merged entity reaches
a market share of [35-45]% and Rossignol holds a share of [40-50]%.

89. Despite the fact that Rossignol and the merged entity will hold more than [70-80]% of
the markets for alpine skis and alpine bindings, the Commission considers that an
effective coordination of market behaviour will be unlikely post merger.

90. As mentioned above, the general market conditions of the markets for alpine skis and
alpine bindings are not conducive to collective dominance and coordinated market
conduct. Furthermore, coordinated effects of the proposed transaction in the French
markets are also hampered by the presence of the two other major integrated suppliers
of alpine skis and bindings (Head/Tyrolia, K2/Voelkl/Marker).

91. Even if the current market shares of these companies are low, market investigation has
shown that – although some barriers to expansion like consumers’ preference for the
“French” brands exist – the threat of expansion strategies by smaller “foreign” brands
represents a significant competitive constraint. Amer itself has started to expand and to
become an important actor only in the last five years.5 Market investigation has also
confirmed that this expansion strategy was supported and promoted by Decathlon, the
largest sport good retailer in the French market.

92. Based on the results of market investigation, the Commission also considers that a
leeway of the merged entity for unilateral price increase can be excluded for the
following reasons:

93. First, as mentioned above, market investigation shows that brand image and positions
are regarded as more important factors than price in consumer choices. In this regard,
Amer and Salomon have positioned their brands differently, as they have respectively
“racing” and “lifestyle” images. Second, the presence of the trade brands of Decathlon
(“Quechua”) and Intersport (“TecnoPro”) which account for [0-10]% of the market
puts downward pressure on prices.

94. For all the foregoing reasons, the Commission considers that competition concerns are
unlikely to arise on the markets for alpine skis and alpine bindings in France.

Poland, Spain, Finland and Sweden

5 Atomic had been present on the French market since the end of the 1980’s.

15
95. The structure of the markets for alpine skis and bindings in Poland, Spain, Finland and
Sweden shows similarities with the French markets. The combined market shares of the
merged entity and Rossignol reach [50-60]% (Spain) up to [60-70]% (Poland) in alpine
skis and [60-70]% (Spain) up to [70-80]% (Poland) in alpine bindings. With the exception
of Poland in each of these national markets the merged entity will have the market share
lead over Rossignol (for details see table above):

96. A significant impediment of effective competition caused by coordinated effects can be

excluded for these markets, since – as described in more detail above – the general
conditions of the markets for alpine skis and bindings do not contribute to an effective
coordination of market conduct.

97. An effective coordination of market conduct between the merged entity and Rossignol
is also hampered by the presence of other major integrated suppliers of alpine skis and
bindings in each of the markets. In addition to the major integrated supplier of alpine
skis and bindings also Fischer and Blizzard reach significant market shares in the
markets for alpine skis in Sweden, Finland and Poland.

98. A significant impediment of effective competition caused by non-coordinated effects

can also be excluded for the following reasons:

99. Again, the market investigation has not provided any indication that, compared to the
remaining brands, Atomic and Salomon are close competitors. Furthermore, contrary to
the market situation in Austria and the UK, the leading integrated manufacturers reach
significant market shares of more than [5-15]%. In this context it has also to be taken
into account that – contrary to the French market – the barriers to expansion in these
countries are significantly lower due to the lack of strong preferences of the consumers
for specific “national” brands.

100. For all the foregoing reasons, the Commission considers that competition concerns are
unlikely to arise on the markets for alpine skis and alpine bindings in Poland, Spain,
Finland and Sweden

Germany, Italy, Czech Republic

101. The combined market shares of the parties in the markets for alpine skis in Germany
and Italy are below 30% (Germany: [20-30]%; Italy: [10-20]%). The market
investigation has confirmed that, due to the strong preferences of the final consumer
for “national” brands, the strongest competitive constraints on the merged entity in
these markets come from the “German” and “Italian” ski brands respectively
(Germany: K2/Voelkl [10-20%]; Italy: Tecnica/Nordica: [20-30%]). In the Czech
Republic the market share of the merged entity reaches [20-30]%. But due to the
limited presence of Salomon the market share increment is low (0-10]%) and the
structure of the markets will therefore not be affected to any appreciable extent.

102. Due to the high proportion of skis sold with pre-assembled bindings the market
structure in alpine bindings mainly reflects the market shares in the markets for alpine
skis. The combined market shares of the parties in Germany ([20-30]%), Italy ([20-
30]%) and the Czech Republic ([15-25]%) only slightly exceed (Germany, Italy) or are
even below (Czech Republic) their respective market shares in alpine skis.
Furthermore, all the major competing binding brands (Head/Tyrolia, K2/Marker,
Rossignol/Look) are also present in these markets reaching market shares of more than
[5-15]%.
16
103. For all the foregoing reasons, the Commission considers that competition concerns are
unlikely to arise on the markets for alpine skis and alpine ski bindings in Germany,
Italy and the Czech Republic.

Alpine boots

General market conditions

104. The value of the EEA alpine boots market is around EUR 200 million. The market
volume has been relatively stable for the past few years. Except for K2, all the
integrated suppliers of alpine skis and alpine bindings are also present in the markets
for alpine boots with their own boots brands. Contrary to the markets for alpine skis
and bindings, in which its market presence – except for Italy – is rather limited, the
Italian-based company Tecnica/Nordica reaches significant market shares in alpine
boots in most countries. Furthermore, smaller brands like Alpina and Dalbello as well
as private labels reach significant market shares.

105. As mentioned above, due to the existence of international standardization, there are no
limitations as regards the compatibility of alpine bindings and alpine boots. Furthermore,
the parties submitted and market investigation has confirmed that consumers assign the
highest priority to the fit of the boots to the feet. Compared with the markets for alpine
skis and bindings, brand image as well as product innovations are much less important for
success in the market for alpine boots.

Competitive effects

106. The parties have combined market shares exceeding 15% in a number of national
markets for alpine boots. In several countries the merged entity will reach market
shares of above 35% and will become market leader. Nevertheless, the Commission
considers that competition concerns are unlikely to arise in any of the national markets
for alpine boots for the following reasons.

107. In Austria, the parties, according to their own submission, hold [30-40]% of the market
(Amer: [5-15]%, Salomon: [20-30]%) and the largest competitor, Tecnica/Nordica, has
a market share of [20-30]%. The Commission’s investigation, however, has established
that the parties’ market share is lower ([30-40]%) and that of Tecnica/Nordica higher
([30-40]%). Head and Dalbello hold market positions of [5-15]% and [5-15]%.
Furthermore, the integrated manufacturer Rossignol is also present in the market,
currently holding a market share of [0-10]%. Additional competitive pressure on the
merged entity comes from several private labels which currently account for [0-10]%
of the market.

108. Due to the significant market position of Tecnica/Nordica as well as the presence of other
resourceful competitors (Rossignol, Head) and smaller brands (Dalbello, private labels)
the Commission considers that competition concerns are unlikely to arise in the market for
alpine boots in Austria.

109. In Finland, the data submitted by the parties suggest that they account for [30-40]% of
the boots market (Amer: [0-10]% Salomon: [20-30]%). The largest competitor again is

Tecnica/Nordica ([15-25]%), Rossignol holds [10-20]% and Head [0-10]% of the

Finnish market. These market positions have been largely confirmed in the
Commission’s market investigation.
17
110. The asymmetry in market shares—e.g. the presence of a number of competitors of
different size—makes the likelihood of coordination very low. Regarding non-
coordinated effects, Finnish customers have indicated that the closest competitor to
Atomic alpine boots is Tecnica/Nordica. Accordingly, compared to the remaining
brands, Atomic and Salomon are not close competitors. None of the competitors or
customers contacted has indicated that competition would be negatively affected by the
proposed transaction.

111. For all the foregoing reasons, the Commission considers that competition concerns are
unlikely to arise in the market for alpine boots in Finland.

112. In Sweden, the data submitted by the parties suggests that they account for [40-50]% of
the boots market (Amer: [0-10]% Salomon: [30-40]%). The largest competitor is
Tecnica/Nordica ([20-30]%), Rossignol has [0-10]% and Head [0-10]% of the market.
These market positions have been largely confirmed in the Commission’s market
investigation.

113. The asymmetry in market shares—e.g. the presence of a number of competitors of

different size—makes the likelihood of coordination very low. Concerning non-
coordinated effects, similarly to Finland, Swedish customers have indicated that
Tecnica/Nordica is a close competitor to Atomic in alpine boots. Given this, the
Commission concludes that Tecnica/Nordica is in a particularly good position to offset
any attempts by the new entity to unilaterally raise prices.

114. For the foregoing reasons, the Commission considers that competition concerns are
unlikely to arise in the market for alpine boots in Sweden.

115. For Spain, the parties have estimated that they account for [40-50]% of the market
(Amer: [5-15]%, Salomon: 30-40]%) and that Rossignol has [30-40]% of the market.
Market investigation based on the sales data of the parties and their major competitors
suggests that the parties’ market share is slightly higher, some [40-50]% (Amer: [10-
20]%; Salomon: [30-40]%). Tecnica/Nordica has some [20-30]% and Rossignol [10-
20]%. Furthermore, also Head is present in the market holding a market share of [5-
15]%.

116. Given the relative disparity in the market shares of the market players, the Commission
considers that coordinated effects are unlikely to arise after the merger. Concerning
non-coordinated effects, Spanish customers have indicated that the closest competitor
to Amer in alpine boots is Tecnica/Nordica. Given this and the fact that
Tecnica/Nordica has [20-30]% of the market, the Commission considers that the new
entity is unlikely to be in a position to use unilaterally any market power.

117. Therefore, the Commission considers that competition concerns are unlikely to arise in
the market for alpine boots in Spain.

118. In the UK, the parties hold, according to their own estimates, [65-75]% of the market
(Amer: [0-10]%, Salomon: [60-70]%). The data submitted to the Commission by boot
manufacturers, however, show that the parties’ market position is much lower, [40-

50]%. The market share increment stemming from Amer’s activities in this market is
only [0-10]%. The largest competitors on this market are Tecnica/Nordica ([20-30]%),
Rossignol ([10-20]%) and Head ([5-15]%).

18
119. Given the asymmetry of the market shares, the limited market share of Amer and the
number of players active on this market, the Commission considers that coordination is
a very unlikely outcome of the merger. As concerns non-coordinated effects, in view of
the small market share increment stemming from Amer’s limited activities and given
the strong market position of Tecnica/Nordica, the Commission does not consider that
the merger has any appreciable effect on the market structure. Competitors or
customers active in the UK have not raised any concerns.

120. For the foregoing reasons, the Commission considers that competition concerns are
unlikely to arise.

121. In France the merged entity’s market share reaches [30-40]%, in Poland the combined
market share of the parties is [30-40]% and in Germany the merged entity hold a market
share of [20-30]%. Amer’s presence in these countries is very limited (France: [0-10]%;
Poland: [0-10]%; Germany: [0-10]%).

122. Furthermore, in France Tecnica/Nordica ([20-30]%) as well as Rossignol ([20-30]%) hold

significant market shares. The strongest competitors of the merged entity in Germany are
Tecnica/Nordica ([15-25]%) and Head ([15-25]%). In Poland, the market leader is
Rossignol ([40-509%) with Head and Alpina holding market shares of [5-15]% and [0-
10]%.

123. For the forgoing reasons, the Commission concludes that competition concerns are
unlikely to arise in the markets for alpine boots in France, Germany and Poland.

C.3 Cross-country ski hard goods

General situation

124. The cross-country sector represents the smallest segment of the markets for winter
sports hard goods. It accounted for 11% of the total sales of winter sports hard goods
for the season 2003/2004. The total value of the sales at world-wide level is EUR 145
million6.

125. It is reported that 45% of the European sales of cross-country skis are made in the
Nordic countries7. The most important national markets in Central Europe are
Germany —total sales in 2004 of EUR 22 million (EUR 10 million for skis, EUR 4
million for bindings and EUR 8 million for boots)—and Austria—total sales in 2004 of
EUR 11 million (EUR 6 million for skis, less than EUR 2 million for bindings and less
than EUR 4 million for boots). In France, the total sales in the cross-country ski
segment in 2004 amounted to about EUR 10 million—EUR 4 million for skis, EUR 3
million for bindings and EUR 3 millions for boots.

126. As stated above, only a small proportion of skis is sold with pre-assembled bindings.
Boots fit only one of the two types of bindings (SNS, NNN) and the boots
manufacturers need to obtain licenses for the manufacturing of the sole of the boots.
The parties submitted and the market investigation has confirmed that consumers

6 Source: Fédération française des industries du sport (FIFAS), Dossier sectoriel sur les sports d’hiver pour la
saison 2003/2004, May 2005.

7 Source: Id.

19
 generally first choose their boots, giving high priority to the fit with their feet, and
then, accordingly, choose the bindings. Accordingly, the choice of the binding standard
(SNS, NNN) is dependent on the choice of the boots brand.

OEM markets for skis and bindings and cooperation agreements among
manufacturers

127. As regards sales of skis to rival manufacturers, one of the most important actors is
Fischer. According to the parties, Fischer’s capacity in cross-country skis is of about 1
million pairs of skis per year. By contrast, the parties have submitted that other ski
manufacturers’ capacities is far less significant: the other manufacturers with the two
largest capacities are Amer ([<300.000 pairs) and Rossignol ([<250.000] pairs). The
other competitors have either smaller capacities or, like Salomon, no capacity at all.

128. To be active on the markets of cross-country skis, Salomon sources its skis from
Fischer under a set of agreements described below. The parties have submitted that in
2004 Fischer sold [<75.000] pairs of skis to Salomon, that is, based on the parties’
estimates, [0-10]% of Fischer’s total production capacity and [5-15]% of Fischer’s
world-wide sales. Amer does not source skis from rival manufacturers8. Hence, the
operation does not give rise to vertically affected markets.

129. As regards sales of bindings to rival manufacturers, Salomon and Rottefella are the
only companies active on this segment. As mentioned above, Salomon manufactures
all the bindings based on the patented SNS standard, whereas Rottefella produces all
the bindings with the patented NNN standard.

130. The parties have submitted that Salomon was historically not supplying bindings to
competitors and sold them directly to retailers. Nevertheless, in 2003, it agreed to
supply bindings to Fischer under the Fischer brand —and, in exchange, entered the ski
market by procuring Salomon-branded skis from Fischer—under the agreements
described below. As regards Rottefella, according to the investigation, it also sells
bindings directly to retailers under its own brand-name.

131. In 2004, Fischer sold [<300.000] bindings to retailers world wide, all sourced from
Salomon. This represents about [25-35%] of Salomon’s total capacity and [45-55%] of
Salomon’s total sales in bindings. As for Rottefella, the investigation has found that
[>50%]% of the world-wide production of the company is sold to retailers under its
own brand and the remaining [<50%]% is sold under OEM agreements to Rossignol
and, until now, to Amer.

132. Since Salomon manufactures [>50%]% of the world-wide bindings among which
nearly [45-55%] is sold to Fischer, Salomon holds a market share that is greater than
25% on the OEM market for cross-country bindings. Post-merger, Amer will switch
from Rottefella (NNN) to Salomon (SNS).

133. Nevertheless, this does not give rise to competition concerns, as discriminatory prices
or foreclosure against Fischer are unlikely since it is in the best interest for Salomon to
have strong partners as part of the SNS pool: the higher the number of SNS boot

8 Atomic uses […]% of its production capacities and at the same time procures […] pairs of skis from
Pamporovo Ski Ltd. (Bulgaria), which is not affiliated with an actual or potential competitor.

20
 manufacturers, the more prominent becomes the SNS standard. Consequently, it is
unlikely that Salomon will give to Fischer incentives to switch to another standard.

134. Besides these supply agreements, some manufacturers have also engaged in
cooperation agreements. Rottefella, together with a pool of skis and boots
manufacturers (Rossignol, K2/Madshus, and Alpina) has recently launched a new
binding system (the “Nordic-Integrated-System-(NIS)-standard”) that should replace
the NNN system. Salomon—based on the cooperation agreements described below—
has started to develop a new binding standard (“ski-binding-boot-interface”) which
should replace the SNS technology9.

Cooperation agreements between Fischer and Salomon in cross-country

135. The current state of the cooperation between Fischer and Salomon in cross-country
skis and bindings is governed by three agreements: the General Letter of Intent of
March 5, 1999; the Nordic SNS Norm agreement of March 5, 1999 and its addendum
of January 11, 2001; the Memorandum of understanding of February 3, 2003 and its
addendum of December 12, 2003.

136. The General Letter of Intent provides that […]

137. Under the Nordic SNS Norm agreement and its addendum […]

138. With the Memorandum of understanding, Fischer and Salomon have started a
cooperation agreement in the field of cross-country skis and bindings. With this new
agreement, Salomon and Fischer respectively started to sell skis and bindings to
retailers under their own brand, whereas both companies continued to sell to retailers
boots bearing their brand10. The most important clauses of this agreement are:

a) price setting and mark-up sharing: Fischer, as a buyer of Salomon bindings, agrees
with Salomon on the selling prices of Fischer bindings to retailers. […] (Article 4
of the Memorandum);

b) Distribution: Fischer and Salomon agree […] (Article 5.2 of the Memorandum);
the addendum to the Memorandum provides that Fischer and Salomon […]

c) R&D: Salomon and Fischer agree to lead joint research and development projects
for a new cross-country ski/binding/boot-interface system (Article 6 of the
Memorandum);

d) SNS partnership: […] (Article 7 of the Memorandum);

e) Sponsorship in racing: […] (Article 8 of the Memorandum).

f) Steering committee: […]. (Article 9 of the Memorandum).

g) Termination clause: […]

9 However, the cooperation of Fischer and Salomon is still at an early stage as the project mentioned is at the
stage of prototype.

10

21
139. The above described agreements create strong links between Fischer and Salomon.
Considering the extent of the cooperation in relation to price determination, distribution
and marketing of the respective products, the agreements facilitate the alignment of
their competitive behaviour (determination of price, brand positioning, etc.).

Effects of the transaction on the markets of sales to retailers

National markets for cross-country boots

140. According to the calculations of the Commission, and consistent with the parties’ own
submission, Amer’s market shares in the national cross-country boots markets are
marginal, as the market share increment amounts generally only to 1 to 2%. The
exceptions are Austria ([0-10]%) and Spain ([0-10]%), where Amer’s market shares are
slightly higher.

141. In all Member States where the parties have overlapping activities, there are important
competitors, notably Fischer, Rossignol, Matshus, Jalas and Alpina.

142. The Commission considers that because the market share increment stemming from
Amer’s very limited presence in the cross-country boot segment is very small, the
structure of the markets will not be affected to any appreciable extent. Therefore,
neither non-coordinated nor coordinated effects are likely to take place post-merger.
None of the competitors or customers contacted by the Commission have raised any
concerns. Therefore, for the foregoing reasons the Commission considers that
competition concerns are unlikely to arise in the markets for cross-country boots.

National markets for cross-country skis

143. The parties have combined market shares exceeding 15% in a number of national
markets for cross country skis. All these markets have been reconstructed on the basis
of the sales data provided by the parties and their competitors (see table below).

22
 Market structure of the retail markets of
cross country skis
(2004; % of sales in value)

Austria Amer Salomon A/S Fischer Ross. Others

[30-40%] [0-10%] [30-40%] [40-50%] [0-10%] [10-20%]
Germany K2 Ross.
[0-10%] [0-10%] [20-30%] [50-60%] [10-20%] [0-10%]

France Ross. K2
[10-20%] [0-10%] [20-30%] [30-40% [20-30%] [0-10%]

Finland K2 Karhu
[10-20%] [0-10%] [20-30%] [20-30%] [10-20%] [10-20%]
Italy K2 Ross.
[10-20%] [0-10%] [10-20%] [30-40%] [20-30%] [0-10%]

Sweden K2 Ross.
[10-20%] [0-10%] [10-20%] [20-30%] [30-40%] [0-10%]

Spain Ross.
[40-50%] [0-10%] [40-50%] [40-50%] [0-10%]
Poland K2 Ross.
[10-20%] [0-10%] [10-20%] [0-10%] [40-50%] [10-20%]
Czech K2 Ross.
Republic
[10-20%] [0-10%] [10-20%] [10-20%] [20-30%] [10-20%]

144. As can be seen from the table above, the combined market shares of the parties are
below [20-30]% in every country apart from Austria, Germany, France and Spain. In
these markets other important competitors such as Rossignol, K2, Karhu and Peltonen
are present, besides Fischer, so that the Commission considers that competition
concerns stemming from non-coordinated effects are unlikely to arise on these markets.

145. On the basis of the data submitted by the cross-country skis manufacturers, the
combined market shares of the parties in Austria reach [30-40]% (Amer: [30-40]%;
Salomon: [0-10]%). The Austrian company Fischer holds a market share of [40-50]%
in Austria. Other competitors are Rossignol (market share of [0-10]%) and other
brands (trade-brands, local competitors: [10-20]%).

146. In Germany, the market share of Amer is [10-20]% and that of Salomon amounts to [0-
10]%. Fischer’s market share is [50-60]%. The other main competitor is K2/ Madshus
with a market share of [10-20]% followed by Rossignol ([0-10]%). Nordic competitors
(Peltonen, Karhu) are also active on the market.

147. In France, the merged entity’s market share is [20-30]% (Amer: [10-20]%; Salomon:
[0-10]%). Fischer holds a market share of [30-40]%. Rossignol and K2/ Madshus have
a market share of respectively [20-30]% and [0-10]%.

148. As regards Spain, the parties have some [40-50]% of the market (Amer: [35-45]%,
Salomon: [0-10]%). Fischer has [40-50]% of the market and Rossignol [0-10]%.

23
149. In these four countries, the Commission considers that the proposed operation does
not increase the risk of price increases through non-coordinated effects: the merged
entity would still face competition from Fischer, Rossignol, K2/Madshus and trade
brands, as well as the potential entrance of brands that are active in neighbouring
countries (e.g. no Nordic brands are yet active in Austria).

Coordinated effects

150. As regards coordinated effects, and without taking into account the set of agreements
between Fischer and Salomon, the Commission considers that the characteristics of the
product market are not conducive to coordinated effects, even in those countries where
the combined market share of Amer/Salomon and Fischer reaches a very high level
([80-90]% in Austria, [70-80]% in Germany, [55-65]% in France and [80-90]% in
Spain, see above).

151. First, competition on the markets of cross-countries skis is characterised by

technological and brand-related dynamics which leads to product differentiation, steady
introduction of innovations and clear brand positioning. Most of these non-price
competition parameters are decided on an European wide basis and are not specific to
one country. The Commission does not exclude a priori the possibility of coordinated
effects on prices on some national markets characterized by the existence of non-price
competition. Nevertheless, without taking into account the set of agreements between
Fischer and Salomon, the Commission believes, for reasons detailed below, that the
factors driving competition on the markets of cross-country skis make coordination
improbable.

152. Second, the high combined market shares of the first two competitors in Austria and
Germany and of the first three competitors in France are not underpinned by a high
degree of market share symmetry. In Austria the new entity has a market share of [30-
40]% and Fischer is leader with [40-50]%; in Germany the distance between these two
companies is higher: Fisher’s market share is [50-60]% and Amer/Salomon’s market
share is [20-30]%; in France Amer/Salomon has a market share of about [20-30]%,
Fischer of about [30-40]% and Rossignol of about [20-30]%.

153. Third, the likelihood of coordination is further diminished by potential competition.

Albeit “green-field” entries in the market for cross-country skis appear unlikely due to
the limited dimensions of the markets, the cost associated (in terms of advertising,
establishing a distribution channel, etc.) and the presence of strong national players,
entry by some players active in neighbouring markets, which already own established
brands for other winter sports goods and have links with retailers is more likely.

154. As regards transparency on the market, the Commission notes that even if the number
of products on the market is limited, the market is sufficiently diversified to render
monitoring of competitors’ actions difficult. In addition, dynamic pricing makes it
difficult to align pricing paths.

155. On the other hand, following the proposed operation, the link between Fischer and
Salomon will be extended to Amer—that is, the main competitor in cross-country skis
to Salomon and Fischer in Austria, Germany and France). Amer is the second largest
competitor in Austria and Germany and the third largest competitor in France. Despite
the characteristics of the markets as evidenced above, this situation gives rise to serious
doubts concerning the possibility that the new market structure will lead to coordinated

24
 behaviour by Fischer and the new merged entity to coordinate their behaviour on the
markets for cross country skis.

156. As a result of the extension to Amer of the cooperation agreements between Salomon
and Fisher, both Amer/Salomon and Fischer will have access to strategic information
on the production decisions, as well as on the cost structure of their main competitor.
As a result of the cooperation agreements, the parties are in possession of commercial
information which determines their competitive behaviour. Close and detailed
knowledge of each others’ cost structures, common price policy, as well as possession
of other commercially sensitive information on marketing, new product development,
branding and brand positioning allows them to anticipate and align their competitive
behaviour. Possession of the above referred information could allow the parties to
closely monitor each others behaviour and quickly detect any deviation from the
common policy.

157. Finally, for the same reasons given above for alpine skis and bindings, the Commission
considers that the presence of large retailers does not result in significant buyer power
in the markets for cross-country skis.

158. For the above reasons, the Commission has concluded that the notified operation would
raise serious doubts in the markets for cross country skis in Austria, Germany and
France.

159. As regards Spain, the Commission has estimated that the number of pairs of skis sold
on this market in 2004 was around 2 500, which amounts to EUR 150 000 (compared
to EUR 10 million for the German market). Furthermore, the market shares calculated
are very rough estimates as 100 pairs of ski represent 4% of the market. This means
that, even if the new entity, together with Fischer, apparently holds [80-90] of the
market, there is little room for non-competitive behaviour as these shares are very
unstable due to the size of the market. Therefore, under these very special
circumstances, the Commission concludes for the purposes of this decision that
coordinated effects on the market for cross country skis in Spain are unlikely to arise.

National markets of cross-country bindings

Non-coordinated effects

160. As mentioned above, an important feature of the sales of cross-country bindings is that
they are generally driven by the sales of cross-country boots: once the consumer
chooses its boots, the options for bindings are narrowed down to the bindings that have
a standard (i.e. NNN or SNS) compatible with the boots.

161. The impact of the operation is that the pool of boot manufacturers that use SNS
standard will be stronger, so that the market shares of SNS bindings in countries where
Amer is active will also increase. The players that are currently active on the bindings
markets are Salomon and Fischer for the SNS standard, and Rottefella, Rossignol, and
Amer for the NNN standard. Fischer, Rossignol and Amer procure their bindings from
Salomon and Rottefella and sell them under their own brand name.

162. The activities of Amer on bindings are very limited. Amer reaches its highest market
shares in Austria ([0-10]%), Germany ([0-10]%) and Spain ([0-10]%). By contrast,
25
 Salomon is the market leader in most European countries as it is historically the
primary provider of SNS bindings and SNS standard is the most popular standard
(approximately 70% of the European market for patented bindings, whereas the NNN
standard represents 30% of the sales).

163. In Austria, the combined market share of the new entity would be [55-65]%. Fischer
holds there a market share of [20-30]%, and Rottefella11 of [10-20]%.

164. In Germany, the combined market share of the new entity would be [60-70]%. Fischer
holds a market share of [10-20]%, and Rottefella of [10-20]%.

165. In Spain, the combined market share of the new entity would be [70-80]%. Fischer is
not active on this market, and Rossignol holds a market share of [20-30]%.

166. On these markets, the Commission considers that the risk of price increases through
non-coordinated effects is unlikely as Amer’s activities in bindings are very limited.
The position of the merged entity in bindings is substantially equivalent to that of
Salomon alone before the merger. More importantly, the Commission considers that
the existing competitors and particularly Fischer and Rottefella are in a position to
offset any attempts by the merged entity to raise prices. They are established
competitors. Therefore, competition concerns giving rise to non-coordinated effects are
not likely to arise in any of the cross-country bindings markets.

Coordinated effects

167. As regards coordinated effects, the Commission considers that, despite the set of
agreements between Amer and Fischer (see above), the likelihood of coordination is
not increased by the operation essentially for the same reasons indicated for the low
likelihood of coordination in cross-country skis.

168. In addition, the Commission considers that some of the characteristics of the bindings
market differ from those in the skis market. In particular, as explained above, the
choice of the binding depends on the choice of the boot. Therefore, the market shares
are more volatile in the bindings market than in the skis market, because if a boot
manufacturer decides to switch to another standard, this has an important impact on the
market shares in the binding markets. The investigation shows that such a switch has
taken place in the past. More particularly, the large retailer Intersport has switched
from using the NNN standard to the SNS standard in Germany and Austria. Therefore,
unlike in the cross country skis markets, the market positions of the players may
change due to the changes in the cross-country boots markets.

169. Furthermore, the Commission notes that Rossignol, K2/Madshus and Alpina, three
important players in cross-country skiing that use the NNN system, are already present
in the German and Austrian markets for cross-country skis and boots and – with
significant market shares – in neighbouring product or geographic markets. Although
in the Austrian and German markets for cross-country bindings Salomon’s SNS-
technology currently is the predominant binding standard, the investigation shows and
the above given example demonstrates that there are no technical or financial barriers

11 Under its own brand and under the brand of Rossignol.

26
 to an expansion of the NNN standard as a consequence of a hypothetical increase in
price of the SNS standard.

170. Moreover, the Commission notes that in 2001, Salomon introduced a further
development of its SNS binding standard (“SNS Pilot”). The new system currently
covers [10-20]% of the Salomon’s production of bindings. Also, Salomon and
Rottefella, with their respective partners, have recently introduced substantial
innovations of products. Therefore, there is evidence of product innovation which
renders coordination more difficult.

171. For all the above reason, the Commission considers that the notified operation does not
raise serious doubts on markets of cross-country bindings as to its compatibility with
the common market and the EEA.

VI. MODIFICATIONS TO THE ORIGINAL CONCENTRATION

172. In order to remove the serious doubts raised by the proposed concentration and
described above, Amer has submitted undertakings pursuant to Article 6(2) of the EC
Merger Regulation, which are intended to remove the competitive concerns identified
above. The undertakings are attached to this decision and form an integral part thereof.

Undertakings

173. In order to address the competition concerns raised by the Commission, Amer has
undertaken the following:

a) elimination of the articles of the Memorandum dated 3 February 2003 relating:

- the determination of the prices of the skis and bindings supplied to each other
based on […],

- the coordination on the distribution level,

- the […],

- the […] clause as regards the racing segment,

- the implementation of the agreement through […];

b) implementation of the commitments within an interim period of […].

Assessment of remedies

174. These modifications to the agreements mean that, essentially, the Memorandum of
Understanding will be changed into a supply agreement for skis: the supply of skis by
Fischer to Salomon and Amer will continue, but that the elements in the agreements,
which facilitate coordination of the commercial strategies (determination of price,
brand positioning, etc.) will be removed.

175. In particular, the elimination of information’s exchange on prices, costs and

commercial behaviour and of other clauses limiting the independence of behaviour
should significantly reduce the risks of coordinated effects on the market. The
Commission considers that stronger commitments, e.g. severing the links between
27
 Amer/Salomon and Fischer altogether, are not necessary and could even be counter
productive in that they may weaken Fischer: the loss of the OEM sales of skis to
Salomon may lead to a reduction of its production of about [5-15]%, and the end of the
supply of Salomon bindings would force Fischer to switch to another standard without
necessarily being conducive to more competition between the two standards.

176. Thus, for all the foregoing reasons, the Commission considers that the commitments of
the parties are sufficient to remove the serious doubts that could arise as a result of the
operation in the market for cross-country skis in Austria, Germany and France.

VII. CONCLUSION

177. For the above reasons, the Commission has decided not to oppose the notified
operation and to declare it compatible with the common market and with the EEA
Agreement, subject to the condition of full compliance with the commitments annexed
to the present decision and to the obligation of full compliance with the other sections
of the said commitments. This decision is adopted in application of Articles 6(1)(b)
and 6(2) of Council Regulation (EC) No 139/2004.

For the Commission

signed
Neelie KROES
Member of the Commission

28
COMMITMENTS TO THE EUROPEAN COMMISSION

Pursuant to Article 6(2) of Council Regulation (EC) No. 139/2004 (the “Merger
Regulation”), Amer Sports Corporation (“Amer”) hereby provides the following
commitments, (the “Commitments”) in order to enable the European Commission (the
“Commission”) to declare the acquisition by Amer of the sole control of the Salomon
business of adidas-Salomon AG (“Salomon”, and together with Amer, the “Parties”)
compatible with the common market and the EEA Agreement by its decision pursuant to
Article 6(1)(b) of the Merger Regulation (the “Decision”).

The Commitments shall take effect upon the date of adoption of the Decision.

The Commitments are submitted on the understanding that they will be returned prior to the
Commission issuing the Decision if on further investigation the Commission concludes that
the proposed concentration does not give rise to serious doubts as to its compatibility with
the common market in the area concerned or if otherwise no longer considered necessary.

This text shall be interpreted in the light of the Decision to the extent that the Commitments
are attached as conditions and obligations, in the general framework of Community law, in
particular in the light of the Merger Regulation, and by reference to the Commission Notice
on remedies acceptable under Council Regulation (EC) No 4064/89 and under Commission
Regulation (EC) No 447/89.

Section A. Definitions

1. For the purpose of the Commitments, the following terms shall have the following meaning:

Addendum to Memorandum of Understanding: the addendum to the Memorandum of

Understanding, dated 10 December 2003.

Initial Period: the period of […] after the date of the Decision.

Memorandum of Understanding: Memorandum of Understanding between Fischer

GmbH and Salomon S.A., dated 3 February 2003.

Section B. Termination and amendment of contracts

2. Amer notes that the Memorandum of Understanding is of significant commercial

importance to both Fischer and Salomon. Accordingly, during the Initial Period
Amer undertakes to procure that Salomon use reasonable endeavours to agree with
Fischer only such amendments to the Memorandum of Understanding that will
eliminate the European Commission’s concerns about close links between Salomon
and Fischer, as set forth more specifically in paragraph 4 below. Amer
acknowledges that such amendments should go no further than strictly necessary to
eliminate the Commission’s concerns.

3. Amer commits to use reasonable endeavours to procure the amendment of the

Memorandum of Understanding as follows:

29
 a. Article 4 (Determination of products prices) will be deleted and replaced with a
clause providing that […]

b. Article 5.2 (Distribution) will be deleted together with the guidelines adopted
pursuant to the Addendum to Memorandum of Understanding;

c. Article 8 (Racing) will be deleted;

d. Article 9 (Implementation) will be deleted;

e. Consequential changes shall be made throughout the agreement.

4. If by the end of the Initial Period, despite the reasonable efforts of Amer to procure
the amendment of the Memorandum of Understanding in accordance with the
provisions of paragraph 4 above, Amer and Fischer have not concluded an
agreement that is in compliance with the terms of the Commitments, Amer
undertakes to procure that Salomon serves notice of termination of the
Memorandum of Understanding in accordance with Article 14 (Commencement and
Termination) within one week after the end of the Initial Period.

Section C. Related commitment

5. In order to maintain the effect of the Commitments, Amer shall not enter into any
new cooperation agreement in respect of cross country skis with Fischer until the
Commission is satisfied that an absence of cooperation between Amer and Fischer is
no longer necessary to render the proposed concentration compatible with the
common market.

Section D. Review

6. The Commission may, in response to a request from Amer justified by exceptional

circumstances or a radical change in market conditions, such as […] waive, modify,
or substitute any one or more of the undertakings in these Commitments.

30