Case M.8055 - Coherent / Rofin-Sinar Technologies: REGULATION (EC) No 139/2004 Merger Procedure

EUROPEAN COMMISSION
DG Competition
Case M.8055 -
COHERENT / ROFIN-
SINAR TECHNOLOGIES
Only the English text is available and authentic.
REGULATION (EC) No 139/2004

MERGER PROCEDURE
Article 6(1)(b) in conjunction with Art 6(2)

Date: 26/10/2016
In electronic form on the EUR-Lex website under document

number 32016M8055
EUROPEAN COMMISSION
Brussels, 26.10.2016
C(2016) 7025 final
In the published version of this decision,

some information has been omitted PUBLIC VERSION
pursuant to Article 17(2) of Council
Regulation (EC) No 139/2004 concerning
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possible the information omitted has been
replaced by ranges of figures or a general MERGER PROCEDURE
description.
To the notifying party
Dear Madam(s) and/or Sir(s),
Subject: Case M.8055 – Coherent / Rofin-Sinar Technologies

Commission decision pursuant to Article 6(1)(b) in conjunction with
Article 6(2) of Council Regulation No 139/20041 and Article 57 of the
Agreement on the European Economic Area2
1 OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009, the Treaty on
the Functioning of the European Union ('TFEU') has introduced certain changes, such as the
replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The terminology of
the TFEU will be used throughout this decision.
2 OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE

Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: [email protected].

TABLE OF CONTENT
I. THE PARTIES ............................................................................................................ 3
II. THE OPERATION...................................................................................................... 3
III. EU DIMENSION ........................................................................................................ 3
IV. MARKET DEFINITIONS .......................................................................................... 3
IV.1. Description of the products ............................................................................... 3
IV.2. Product market definition .................................................................................. 4
IV.2.1. Product market definitions for CO2 lasers .......................................... 5
IV.2.2. Product market definitions for ultra-fast lasers ................................. 10
IV.3. Geographic market definition .......................................................................... 10
V. COMPETITIVE ASSESSMENT OF LOW-POWER CO2 LASERS ...................... 11
V.1. The Notifying Party's views ............................................................................ 11
V.1.1. Market shares and main competitors ................................................. 11
V.1.2. Competition from Chinese suppliers ................................................. 13
V.1.3. Constraints from fibre lasers and non-laser technologies.................. 13
V.1.4. Closeness of competition ................................................................... 13
V.1.5. Other competitive constraints on CO2 lasers .................................... 13
V.2. Results of the market investigation and the Commission's assessment .......... 14
V.2.1. Market shares and competitors .......................................................... 14
V.2.2. Competition from Chinese suppliers ................................................. 19
V.2.3. Constraints from fibre lasers and non-laser technologies.................. 19
V.2.4. Closeness of competition ................................................................... 20
V.2.5. Barriers to entry and expansion ......................................................... 22
V.2.6. Vertical expansion of customers ....................................................... 23
V.2.7. Customers' reactions .......................................................................... 23
V.2.8. Conclusion ......................................................................................... 24
VI. COMPETITIVE ASSESSMENT OF ULTRAFAST LASERS ................................ 24
VI.1. The Notifying Party's views ............................................................................ 24
VI.2. Results of the market investigation and Commission's assessment ................ 25
VII. VERTICAL LINKS AND CONGLOMERATE CONSIDERATIONS ................... 25
VIII. REMEDIES ............................................................................................................... 27
VIII.1. Framework for the assessment of the commitments ......................... 27
VIII.2. Commitments submitted by the Notifying Party ............................... 27
VIII.3. Initial Commitments .......................................................................... 28
VIII.3.1.Description of the Initial Commitments ............................................ 28
VIII.3.2.Assessment of the Initial Commitments ............................................ 30
VIII.3.3.Conclusion on the Initial Commitments ............................................ 31
VIII.4. Final Commitments ........................................................................... 31
VIII.4.1.The Commission's market test and Final Commitments ................... 31
VIII.4.2.Assessment of the Final Commitments ............................................. 34
VIII.4.3.Conclusion on the Final Commitments ............................................. 35
IX. CONCLUSION ......................................................................................................... 36
2
(1) On 7 September 2016, the European Commission received a notification of a
proposed concentration pursuant to Article 4 and following a referral pursuant to
Article 4(5) of the Merger Regulation by which the undertaking Coherent, Inc.
('Coherent', USA) acquires within the meaning of Article 3(1)(b) of the Merger
Regulation sole control of Rofin-Sinar Technologies Inc. ('Rofin', USA and
Germany) by way of purchase of shares ('the Transaction').3 Coherent and Rofin
are collectively referred to as 'the Parties'.
I. THE PARTIES
(2) Coherent is a US-based public company that designs, manufactures, services and
markets lasers and related accessories for a diverse group of customers, including
for materials processing applications.
(3) Rofin is headquartered in the US and Germany and specializes in the design,
development, engineering, manufacturing and marketing of lasers and laser-based
system solutions for industrial processing applications.
II. THE OPERATION
(4) On 16 March 2016, Coherent and Rofin entered into an Agreement and Plan of
Merger pursuant to which Coherent is to acquire 100% of the share capital of
Rofin, whereby Coherent will gain sole control over Rofin. The Transaction
therefore constitutes a concentration pursuant to Article 3(1)(b) of the EU Merger
Regulation.
III. EU DIMENSION
(5) The Transaction does not have a Union dimension within the meaning of Article 1
of the Merger Regulation as the turnover thresholds set therein are not met. As the
Transaction was capable of being reviewed under the national competition laws of
Germany, Spain and the United Kingdom, the Notifying Parties requested the
referral of the case to the Commission pursuant to Article 4(5) of the Merger
Regulation on 26 May 2016. The Member States competent to examine the
Transaction did not express their disagreement to the request for referral within
15 working days. The Transaction is therefore deemed to have a Union dimension.
IV. MARKET DEFINITIONS
(6) The Transaction concerns the worldwide markets for lasers and related products.
The Parties both produce different types of lasers and Rofin also produces
downstream laser systems in which lasers are incorporated.
IV.1. Description of the products
(7) The term laser4 is an acronym for “Light Amplification by Stimulated Emission of
Radiation”. As shown in Figure 1 below, lasers generally include:
→ an external energy source that is used to excite the laser medium;
3 Publication in the Official Journal of the European Union No C 338, 15.9.2016, p. 14.
4 The laser is also called laser source, as opposed to laser system, and the two terms are used
interchangeably in the present decision.
3
→ an active laser medium (e.g. gas, solid-state, semiconductor) that emits light
when excited;
→ an optical resonator with a partially-reflective output mirror at one end and a
fully-reflective rear mirror at the other which permits the light to bounce back
and forth between the mirrors through the laser medium.
(8) The energy source excites the laser medium, which converts the energy from the
source into an emission of photons. The photons stimulate the release of more
photons, as they are reflected between the mirrors which form the resonator. The
resulting photons are emitted in the form of a laser beam through an output port.
Figure 1 Diagram of a laser
(9) The laser medium, the optical resonator and the external energy source can all be
different, resulting in many types of lasers with multiple different designs. The
most commonly used laser media are certain gases, solid-state and semiconductor.
The gases used as an active laser medium include CO2, argon ion and excimer.
Solid-state lasers are fibre lasers, disk lasers and rod lasers. Semiconductor lasers
or diode lasers may be used directly in certain applications but are also used as the
energy source for certain solid-state lasers.
(10) All laser media can be produced at various power levels expressed in watts, “W”,
and kilowatts, “kW”, and the beam of the laser can also be produced in pulsed
mode or in continuous wave. Lasers that generate light pulses with extremely short
durations, i.e. less than a few pico-seconds, are called ultrafast lasers. Different
laser media (CO2, excimer, rod etc.) produce laser beams with different
wavelengths. Laser wavelengths can sometimes be important for the type of
material processed, as wavelengths interact better on some materials than others.
IV.2. Product market definition
(11) The areas where the Parties’ activities overlap are CO2 lasers, diode lasers, fibre
lasers and ultra-fast lasers. The Parties have only identified low-power CO2 lasers
as affected markets, which was the focus of the Commission's investigation.
Contrary to the Parties' submissions, some market feedback suggested that ultra-
fast lasers might also be an affected market. Therefore a market investigation was
also carried out in the ultra-fast lasers.
4
(12) In line with the decisional practice of the Commission5 and a decision of the
German Competition Authority ('Bundeskartellamt')6 of 2006, the Parties propose
to describe market conditions by reference to different laser media (distinguishing
for instance between CO2 lasers, excimer lasers, fibre lasers and other) and, when
appropriate, power (distinguishing between lasers of different W or kW ranges).
IV.2.1. Product market definitions for CO2 lasers
(13) The Commission investigated whether the product market for CO2 lasers should be
further sub-segmented into (i) high and low-power CO2 lasers, (ii) a low-end and a
medium segment within low-power CO2 lasers and (iii) different designs of CO2
lasers.
IV.2.1.1. High-power and low-power CO2 lasers
(14) High-power CO2 lasers above 1kW are commonly distinguished from low-power
CO2 lasers below 1kW and the Parties submit – in line with the 2006 decision of
the Bundeskartellamt – that those two types of CO2 lasers fall into different
product markets.
(15) High-power CO2 lasers are primarily used for heavy duty cutting and welding of
predominantly thicker metals as well as for high performance processing of non-
metals, and they differ from low-power CO2 lasers in their design, price point and
other features. In addition, there is a range of power between 600W and 999W in
which there is very little demand, which, the Parties argue, suggests that low power
and high power lasers are distinct.
(16) The technology used for high power and low power CO2 lasers can also be
different; The Parties submit that scaling from 1W to 999W was both possible and
relatively easy to do using the same power supply technology. For power levels
above 1kW a second power supply technology (RF or DC) is needed and the lasers
are often glass tube. Few competitors are active in both the below and the above
1kW power levels. For example, Panasonic, Fanuc, Mitsubishi Electric or
Bystronic are only active above 1kW; Synrad, Universal, Iradion or FEHA are only
active below 1kW.
(17) The responses received from customer and competitors in the Commission's market
investigation7 confirmed that not all manufacturers were active in all ranges and
that there was limited substitutability between lasers below and above 1kW.
Generally speaking, the industry seems to agree on the 1kW cut-off point between
low-power and high-power CO2 lasers.
5 Cases IV/32.800 and IV/33.335 Quantel International – Continuum/Quantel SA, decision,

July 27, 1992, Case M.2781 – Northrop Grumman/TRW, October 16, 2002, paragraph 36.
6 BKartA, B 7 – 97/06, Coherent/Excel: In 2006, the Bundeskartellamt assessed Coherent's acquisition
of competitor Excel (Synrad). The Bundeskartellamt prohibited the transaction due to competition
concerns in the market for sealed-off RF-CO2 lasers with power output up to 600W.
7 See replies to questions 3 and 10 of Q1 Questionnaire to competitors and replies to question 13 of
Q2 Questionnaire to customers.
5
(18) Although the Parties' activities overlap in the above 1kW segment, according to the
Parties' submissions the overlap does not lead to affected markets nor does it
qualify as other market with significant impact. Therefore it will not be discussed
further in this decision.
IV.2.1.2. Low-end and medium power segments within low-power CO2 lasers
(19) The Notifying Party submits that it is not possible to further sub-segment CO2
lasers within the below 1kW power range arguing that the products are so much
differentiated that usually there is no perfect substitution. However, according to
the Parties, it seems conceivable that lasers with power levels sufficiently close to
each other are substitutable, creating a chain of substitution over all low power
CO2 laser sources. Therefore, the Parties submit that, unlike in the case of high
power versus low power, no single cut off point exists.
(20) According to information gathered during the Commission's investigation, it is

possible to further sub-segment the below 1 kW, low-power CO2 lasers according
to their power levels. Prices below 1kW low-power CO2 lasers vary greatly in the
range from 10W to 999W (from USD 300 to USD 80,000), and the power level is
the main factor determining the price. Often, laser prices are compared on a per
watt basis. Different power levels also address different customer needs. Generally
speaking, the lower levels are more suited for coding, marking and engraving, the
higher for cutting and welding and treating textiles and plastics.
(21) A plausible segmentation would be to analyse the low-end power segment

(below 100W) and the mid-power segment (100-999W). Such delineation would be
consistent with Rofin's internal documents8 [reference to internal documents]. In
addition, conditions of competition appear to be different in the below 100W range,
with more competitors present, including Chinese suppliers, and more technologies
competing.9
(22) Customers responding to the Commission's market investigation confirmed the lack
of substitution between the lasers falling in different power segments with some
exceptions on the margins of the segments or for specific applications.
(23) The majority of the respondents10 shared the view that replacing a laser source in
the mid-power segment (100-999W) with another in the low segment
(below 100W) was technically not possible. The power level is tailored to the task
to be executed and a lower power level might not be able to carry out the task at all.
This was still the majority view when the range was reduced, that is to say when
the customers were asked about a possible substitution of a 200W CO2 laser by a
90W CO2 laser. The clear majority said that such substitution was not possible.
Only some respondents indicated11 that in some applications it could be envisaged
8 See for instance documents ID 380-63, [reference to internal documents].

9 See confirmed non-confidential minutes of a call with El.En on 03 August 2016 and confirmed non-
confidential minutes of a call with Universal on 21 September 2016, see also replies to question 24 of
Q1 Questionnaire to competitors, and replies to question 18 and 25 of Q2 Questionnaire to customers.
10 See replies to questions 3 and 5 to the email inquiry to customers on purchasing data and substitution
sent on 16 September.
11 Four respondents out of 17 said they could revert to lower powers.
6
to purchase a lower power laser source but also explained that the speed of
execution or the quality of the finishing would suffer.
(24) The substitution from a lower power (below 100W) CO2 laser source to a higher,
mid-power CO2 laser source (100-999W) was unanimously discarded based on
economic considerations. The laser sources are priced per watt, where the average
price of a watt is between USD 70 and 120. Respondents highlighted that the price
differences between power levels are not marginal: a 200W, for example, can
cost 3, 4 or 5 times as much as a 30W laser source. Therefore, going beyond the
power level laid down in the specification of the laser system would
disproportionately raise the input costs for the final product. From the technical
point of view, some respondents explained that replacing a higher power CO2 laser
source with a lower power CO2 laser source could be envisaged. Respondents
underlined, however, also that the size of a laser source grows with its power
output. Therefore the entire construction of a laser system would need to be
adapted when changing to a higher power laser source, putting further limitations
on substitution.
(25) From the supply side perspective, there is very little overlap in terms of
competitors. While there are a number of suppliers in the below 100W CO2 laser
segment, only very few of them offer lasers above 100W, and entry into the mid-
power segment has been confirmed as lengthy and costly. In addition, competition
from other laser sources appears to differ in the below 100W and 100-999W
segments. Although the Bundeskartellamt did not at the time consider it necessary
to define separate markets for the below 100W and the 100-999W segments, it
considered that the below 100W CO2 segment was more open to competition also
from other laser technologies, such as fibre and YAG laser technology, than the
above 100W CO2 segment.
(26) In addition, few12 respondents were of the view that a laser source manufacturer in
the below 100W segment could readily launch products in the 100-999W segment.
Although there were some examples13, it was acknowledged that entry took time
and was not easy: moving to higher power levels is not solely a question of scaling
but additional know how is required and the new product also needs to establish its
reputation, even if it introduced by an established manufacturer. Thus, not every
supplier is present in every power range. The higher number of competitors and
also the more pronounced presence of Asian suppliers below 100W14 indicates that
the below 100W CO2 laser sources could constitute a separate product market.
(27) Respondents also indicated that there was also a split between the below 100W and
above 100W power range CO2 lasers in terms of applications they are suited for:
below 100W lasers were typically used for marking and encoding, the above 100W
products were rather suited for cutting and drilling. Respondents explicitly
12 3 out of 17 respondents to question 1 of the email inquiry to customers on purchasing data and
substitution sent on 16 September.
13 E.g. Iradion moved from 50W to 250 and Synrad to 400W in the last few years.
14 See replies to question 18 of Q2 Questionnaire to customers.
7
suggested the further segmentation of the low power range into a segment
below 100W and another above.15
(28) There are thus strong indications that the market for low-power CO2 lasers should
be further sub-segmented at least into a below 100W and a 100-999W segment
based on limited demand-side and supply-side substitutability. However, it is not
necessary to conclude on the exact market definition as regards the segments for
power levels, as serious doubts as to the Transaction's compatibility with the
internal market ("serious doubts") arise in low- power CO2 lasers irrespective of
that potential sub-segmentation. Serious doubts arise both in the overall market for
all low-power CO2 lasers as well as in the potential sub-segment for 100-999W
CO2 lasers.
IV.2.1.3. Different designs of low-power CO2 lasers
(29) Low-power CO2 lasers could be further segmented according to a variety of design
differences, including (i) sealed and semi-sealed lasers16, (ii) glass tube, metal tube
and ceramic tube lasers17, (iii) direct current or radio frequency stimulated lasers18
or (iv) pulsed and continuous wave ("CW") lasers19. The Parties submit that all
those types of low-power CO2 lasers belong to the same product market. In
contrast, the Bundeskartellamt found in 2006 that the relevant market was the
market for sealed-off RF-CO2 lasers.
(30) The Commission's market investigation did not give a clear answer as to whether
the low power CO2 lasers should be further sub-segmented along the above lines.
Evidence confirms the delineation of the Bundeskartellamt, where sealed, metal
tube and RF stimulated low power CO2 are characteristics that seem to go in hand.
The same applies to semi sealed/sealed glass tube DC stimulated CO2 lasers. In
general, but not exclusively20, most European and North American firms
manufacture the former, most Chinese the latter.
(31) Respondents to the Commission's market investigation noted that glass tube lasers
in the low power segment were either suited only for very specific applications21 or
15 See replies to question 11 of Q1 Questionnaire to competitors and also the confirmed non-confidential
minutes of a call with El.En on 03 August 2016.
16 Semi-sealed CO2 lasers consume the gas over time so that the gas needs to be refilled. Their use is
not very common in low-power CO2 lasers up to 1kW. The Bundeskartellamt found that CO2 lasers
under the power of 600W were always sealed and that there were practically no CO2 lasers between
the range of 600W and 999W. Semi sealed lasers were used in the power ranges above 1000W and
therefore were not part of the relevant product market.
17 The optical resonator of the CO2 laser can be made of glass, metal or ceramic resulting in diverging
production costs for manufacturers and diverging operating costs for customers. For instance, glass
tube low-power CO2 lasers are cheaper but also less durable than ceramic or metal tube CO2 lasers.
18 Low-power CO2 lasers can be stimulated through radio frequency ("RF") or direct current ("DC"). In
DC low-power CO2 lasers, the electric current is directly inserted in the CO2 gas through electrodes
which leads to a faster depletion of the CO2. In contrast, there is no direct contact with the gas in RF
low-power CO2 lasers which leads to a longer lifespan.
19 Pumping may occur in a pulsed mode (i.e. the laser is switched on and off during its end-use
application) or in continuous mode.
20 Except for some specialty products using water cooled DC power supplies, such as in case of harsh
environments.
21 E.g. see the products of German glass tube laser manufacturer FEHA.
8
not substitutable with metal tube laser sources due to their inferior product quality
and lifetime. As regards quality, respondents noted that low power glass tube lasers
were not able to be pulsed at high frequency, and had less power stability, which
puts considerable limitations to their usability, especially in industrial applications.
Glass tube CO2 lasers are also larger and thus more complicated to integrate into
laser systems and they require more maintenance. Their average lifetime is
ca. 4 times less than for a metal or ceramic tube laser source.
(32) Many respondents also noted that the price difference between the low power glass
tube/DC CO2 lasers and metal/ceramic-tube/RF-CO2 lasers was very high; RF
lasers can be 5-6 times more expensive than DC lasers. However, the lifetime of
RF lasers is also much higher at 30 000 hours vs. 2 000 hours on average.
Therefore, although glass tube/DC CO2 lasers are considerably cheaper22 most
respondents in Europe and North America do not consider purchasing glass
tube/DC low power CO2 laser sources and customers of low power CO2 laser
sources would or could not substitute metal tube lasers with glass tube lasers, and
RF stimulated lasers with DC stimulated lasers.23
(33) Replies were more mixed as concerns substitution between CW mode and pulsed
mode. The majority of the respondents discarded such substitution, but for some
applications some substitution appears possible.24
(34) From a supply side perspective25 most replying laser manufacturers were of the
view that there was little substitutability between glass and metal or ceramic tube
CO2 lasers: They involve different technologies, material handling, manufacturing
processes, electronic designs as well as different excitation (DC for glass-tube
lasers). Manufacturers have already specialised, switching would involve high
costs and time, additional R&D would be necessary. Most replies were similar for
the case of DC vs RF, RF was noted to be the technology that required more know-
how and skill to produce. Manufacturing CW and pulsed mode lasers was in
general considered to be more comparable to one another, however, not all
competitors agreed and the Commission's investigation was somewhat inconclusive
in this respect.
(35) There are thus indications that, in line with the Bundeskartellamt's previous
findings, the market for low-power CO2 lasers should be further sub-segmented
into glass-tube DC lasers on the one hand and metal-tube/ceramic-tube RF lasers
on the other hand due to limited demand-side and supply-side substitutability
However, it is not necessary to conclude on the exact market definition concerning
a possible sub-segmentation of low power CO2 laser sources according to glass or
metal tube, sealed or semi sealed, RF or DC and CW or pulsed mode laser sources,
as serious doubts arise already at the broader market definition comprising all these
technologies.
22 See for example confirmed non-confidential minutes of a call with Iradion on 02 August 2016.
24 See replies to question 10 of Q1 Questionnaire to competitors, replies to questions 11, 14, 15 and 16
of Q2 Questionnaire to customers and replies to, questions 14, 16, 17 and 18 of Q3 Questionnaire to
laser system customers.
25 See replies to question 9 of Q1 Questionnaire to competitors.
9
IV.2.2. Product market definitions for ultra-fast lasers
(36) Ultra-fast ("UF") or ultra-short pulse ("USP") lasers generate light pulses with
extremely short durations, from a few femtoseconds (10-15 f-seconds)26 to a few
picoseconds (10-11 p-seconds).27 UF lasers are used in commercial applications but
also in the scientific and research applications. UF lasers cut, drill and structure
extremely sensitive materials with micron-scale precision and are therefore ideal
tools for applications in the electronics, semiconductor, micro technology, and
medical device manufacturing industries as well as certain clinical procedures.
They are technologically sophisticated machines and are significantly higher priced
(above EUR 100 000 and up to 250 000 EUR for a unit) than CO2 lasers.
(37) In line with the Parties' submissions, the Commission considers that ultrafast lasers
falls into a separate product market from CO2 lasers and lasers based on other
types of laser media. For the purposes of this decision, any further sub-
segmentation within ultrafast lasers can be left open. No competition concerns arise
in ultrafast lasers due to Rofin's limited activities in this product so far and the
existence of alternative suppliers.
IV.3. Geographic market definition
(38) The Notifying Party submits that the geographic markets for all lasers are
worldwide which is in line with the Commission and Bundeskartellamt
precedents28.
(39) According to the Parties, lasers are principally manufactured in the US, Germany,
Japan and China and are purchased by customers on a worldwide basis. The Parties
submit that all major laser suppliers sell the same laser products worldwide because
there are no differences in local regulatory requirements and standards and
transport costs are relatively low. Furthermore, the Parties submit that prices do not
differ significantly in the different geographic areas.
(40) The majority of respondents to the market investigation agreed that the relevant
geographic market for CO2 laser sources should be worldwide.29 This is based on
the fact that most European and North American laser source and laser system
manufacturers replying to the questionnaire market their products worldwide,
under the same brand name and applying the same prices. Respondents reported
that transport costs were low.
(41) Some answers indicated however that the relevant geographic market could
exclude China; half of the respondents reported30 high customs duties hindering
26 Femto- is a unit prefix (symbol f) in the metric system denoting a factor of 10−15.
27 Pico-, likewise, is a unit prefix (symbol p) in the metric system denoting a factor of 10-12.
28 Case M.2781 – Northrop Grumman/TRW, para. 56 where it was submitted that the geographic
market for laser systems used in commercial applications should be worldwide in scope; BKartA, B 7
– 97/06, Coherent/Excel, paras. 70-71.
29 See replies to question 14 of Q1 Questionnaire to competitors, replies to question 18 of
Q2 Questionnaire to customers and replies to, question 20 of Q3 Questionnaire to laser system
customers.
Q2 Questionnaire to customers and replies to, questions 14, 16, 17 and 18 of Q3 Questionnaire to
laser system customers
10
exports especially into China. Additionally, nearly all respondents confirmed that
they or their customers would not source from China31, and rather do so from
Europe and North-America. Only roughly half of the responding competitors and
customers thought that Chinese manufacturers were exerting competitive pressure
on prices in low-power CO2 lasers at all.32
(42) However, it is not necessary to conclude whether the relevant geographic market
for CO2 laser sources is worldwide or worldwide excluding China, as serious
doubts arise with respect to low power CO2 laser sources in both respects.
V. COMPETITIVE ASSESSMENT OF LOW-POWER CO2 LASERS
(43) The Parties' activities give rise to horizontally affected markets in relation to
low-power CO2 lasers.
V.1. The Notifying Party's views
V.1.1. Market shares and main competitors
(44) According to the market share estimates submitted by the Parties for the power
range 0-999W, the Transaction would bring together the current number one,
Coherent, and number three, Rofin, with a combined worldwide market share
of [40-50]%. The market shares of the Parties and their competitors are set out in
Table 1.
Table 1. The Parties' market shares (by value, 2015) in the below 1kW CO2 segment
Worldwide EEA
Revenue Revenue
Share Share
mUSD mUSD
Coherent […] [20-30]% […] [20-30]%
Rofin […] [10-20]% […] [20-30]%
Combined […] [40-50]% […] [40-50]%
Synrad […] [20-30]% […] [20-30]%
El En […] [0-5]% […] [5-10]%
Iradion […] [0-5]% NA NA
Universal […] [0-5]% NA NA
Coding system manufacturers
(Videojet, Markem-Imaje, […] [5-10]% […] [5-10]%
Han's Lasers)
Others (including Chinese […] […]
[20-30]% [5-10]%
suppliers)
Total 300.8 100% 80.8 100%
Source: the Parties
31 See replies to question 22 of Q1 Questionnaire to competitors, replies to questions 20 and 25 of

Q2 Questionnaire to customers, and replies to question 27 of Q3 Questionnaire to laser system
customers.
32 See replies to question 23 of Q1 Questionnaire to competitors, replies to questions 26 of
Q2 Questionnaire to customers and replies to, question 33 of Q3 Questionnaire to laser system
customers.
11
(45) The Notifying Party argues that, in any event, post-Transaction customers will still
have ample choice of high quality low power CO2 lasers from a number of
suppliers, in particular from Synrad, El.En, Iradion, Universal and FEHA:
a. The Parties argue that Synrad is a strong competitive force as the largest
competitor with an installed base of 200 000 lasers and a CO2 laser portfolio in
the 10-400W range. The Parties submit that Synrad is Rofin's closest
competitor as most of Rofin's customers who double-source usually do not
source from Coherent as a second supply, but from Synrad the Parties allege.
According to the Parties, this can be seen in the customer lists submitted by
them. The Parties note further that the recently launched pulsed lasers enable
Synrad to compete much more fiercely with them.
b. El.En, an Italian vertically integrated laser source and laser system

manufacturer active since 1981, is submitted by the Parties as being a strong
and experienced competitor in low power CO2 lasers between 150W
and 850W. The Parties claim that El.En has a special competitive advantage
offering blade lasers between 350W and 850W that are the same size, which,
according to the Parties results in important cost savings for system
integrators. The Parties submit further, that although vertically integrated,
El.En sells lasers also on the merchant market.
c. The US-based Iradion is, according to the Parties, a particularly innovative

competitor on the market, having introduced CO2 lasers with ceramic optical
resonator for the power ranges 40W-500W. These need very little maintenance
and are generally longer lived, thus saving significant costs to integrators and
end customers.
d. Universal is a laser system manufacturer that vertically integrated by starting

in house laser source production some 15 years ago. The Parties claim that
Universal's CO2 portfolio is broad, extending up to a power range of 500W
and that Universal offers distinctive products such as a 'hybrid' laser that
integrates both CO2 and fibre laser at the same time.
e. The Parties submit further that the German mid-sized enterprise FEHA also
has two series of low power CO2 lasers in many power ranges and offers
worldwide service and maintenance.
(46) Moreover, the Parties believe that additional competition in low power CO2 lasers
is generated by several so-called “coding manufacturers”33, including Videojet,
Epilog and Markem-Imaje, which specialize in marking applications, and
potentially from a number of other vertically integrated OEMs, such as Kern
Electronics, Han’s Laser, Wuhan Golden, MACSA, Taufenbach, Lumenis, Alma
Laser, Aesculight, Angiodynamics Inc., PLC Systems, Inc., and Deka.
33 Laser coding manufacturers refer to the suppliers of laser tools which apply a code, (including bar
codes), dates and other variable or unique information to a package or transit container. There is a
whole range of machines and equipment carrying out these functions, from simple mechanical stamps
or over-printers to sophisticated ink jet and laser coders applying computer generated data. These
machines are usually attached to a larger packaging machine such as a cartoner, filler or wrapper.
Modern ink jet and laser coders can be programmed to carry a large amount of variable information
such as lot number, date code; sequential coding based on a unique serial number which is recorded in
a secure database.
12
V.1.2. Competition from Chinese suppliers
(47) In the Parties' view, one of the most significant drivers influencing competition in
CO2 lasers is the increasing competition from Chinese/Asian laser manufacturers,
which put pressure on prices charged by CO2 laser suppliers in Europe and North
America. The Parties list a number of Chinese manufacturers (such as Beijing Reci,
Chengdu WeeGiant, Jilin Yongli, Beijing EFR or Suzhou Tianhong) producing
CO2 lasers based on glass tube and on metal tube designs that serve the Chinese
market but also seek to expand internationally.
(48) While the Parties are aware that Chinese lasers are mostly sold in China and that
European or North American laser system manufacturers only sporadically
purchase them, they hold that the competitive pressure on lasers is nevertheless
there, namely from Chinese competition on the downstream laser system level:
there, Chinese suppliers seem to compete more globally, putting pressure also on
European and North American input prices upstream.
V.1.3. Constraints from fibre lasers and non-laser technologies
(49) The Parties regard fibre technology as the other most significant external driver
influencing competition in CO2 lasers. Fibre has some advantages (first of all cost),
over CO2 lasers and has been expanding rapidly during the past decade. Although
the Parties acknowledge that fibre technology is not yet ideal for marking or coding
of materials such as wood, paper or fabrics, they believe it to be only a matter of
time until full substitution, considering the progress made so far and the continued
R&D efforts.34
(50) The Parties also regard non-laser technologies as competitive constraints for CO2
lasers. In some instances, they explain, laser cutting can be substituted by
mechanical cutting, which creates pressure on laser prices. The Parties submit that,
as a result, non-laser technologies can exert strong competitive constraints on laser-
based materials processing applications.
V.1.4. Closeness of competition
(51) The Parties claim that Coherent and Rofin are not each other's closest competitors
as they offer different products: First, Coherent allegedly focuses on CO2 lasers
with a power output below 99W for which Synrad is its closest competitor. Second,
Coherent has no low-power CO2 lasers above 400W, whereas Rofin’s low-power
CO2 lasers start at 100W and go up to 650W; therefore, the Parties claim that El.En
is Rofin's closest competitor as El.En covers the same power range as Rofin.
(52) Furthermore, the Parties submit that their low-power CO2 lasers serve different
applications and that, accordingly, there are only […] common customers in their
respective top 50 customers lists.
V.1.5. Other competitive constraints on CO2 lasers
(53) The Parties also argue that most customers are large and sophisticated OEMs with
significant countervailing buyer power. For Coherent the Parties describe that [over
34 E.g. the development of the 2µm fibre laser seems to bring a new wave of substitution of CO2 for
fibre.
13
half] of the turnover made with low-power CO2 lasers were achieved with [fewer
than ten] customers.
(54) Furthermore, the Parties claim that customers could integrate vertically and start
producing lasers themselves as there are already some companies producing both
lasers and laser systems (e.g. El.En, Epilog or Universal).
(55) The Parties add that should the merged entity try to raise prices of CO2 lasers, laser
system manufacturers that are currently vertically integrated could respond by
expanding production of lasers and entering the merchant market.
(56) The Parties reckon that apart from the R&D costs, there are no high barriers to
entry; they claim that production costs are not significant and that it is not essential
to have a global distribution network or reach high economies of scale. Long term
customer contracts are rare. Therefore, new competitors could also easily emerge.
V.2. Results of the market investigation and the Commission's assessment
V.2.1. Market shares and competitors
V.2.1.1. All low-power CO2 lasers
(57) According to the Parties' estimates, set out in Table 1 in paragraph (44), the Parties'
combined market shares at the worldwide level are [40-50]%. They are followed by
competitors Synrad ([20-30]%), El.En ([0-5]%), Iradion ([0-5]%) and Universal
([0-5]%). Furthermore, the Parties submit that they compete with coding system
manufacturers, among them Videojet and Markem-Imaje, (together [10-20]%) and
other suppliers, among them Chinese manufacturers, (together [20-30]%).
(58) However, the investigation revealed that these market shares underestimate the
Parties' actual position on the market for low-power CO2 lasers for the following
reasons.
(59) First, market share figures provided by the Parties seem to take into account not
only merchant market sales but also internal sales of vertically integrated
manufacturers such as El.En and Universal which are both vertically integrated.
Therefore, the market shares of these competitors are presumably substantially
lower and the overall market smaller than estimated by the Parties.
(60) Second, there are indications that the Chinese laser source manufacturers exert
limited competitive pressure on the Parties' business, mainly for quality reasons
(for more see paragraphs (75) to (77)).
(61) Third, market participants' estimates35 are systematically higher for the Parties'
market shares ranging from 60% to monopoly in CO2 lasers.
35 See confirmed non-confidential minutes of a call with El.En on 03 August 2016; confirmed non-
confidential minutes of a call with IGP on 04 August 2016 and confirmed non-confidential minutes of
a call with Trumpf on 03 August 2016.
14
(62) Fourth, some of the CO2 laser competitors as presented by the Parties do not
compete on par with the Parties or compete only in a smaller segment of low-
power CO2 lasers:
a. Although Synrad is indeed a strong competitor which was identified by many

customers as their first choice after either Rofin or Coherent36 the Commission
has also been made aware that Synrad's CO2 lasers were less reliable and
tended to present quality issues in the higher powers.37 Further, most of
Synrad's products are situated in the below 100W range.
b. While El.En has a product portfolio as broad as the Parties' and is considered4
to be a strong competitor, particularly in the upper power ranges. However, as
a vertically integrated undertaking, it appears to focus primarily on laser
systems and less on the sales of individual laser sources.38 Also, customers
pointed to some recurring quality issues in the case of El.En. El.En considers
that it could potentially expand capacity in lasers39. Yet, its market share is still
very low compared to the Parties. It thus appears unlikely that it could impose
a credible competitive constraint on the Parties in the near future.
c. Another vertically integrated actor, Universal, has been reported by

respondents to be particularly strong in the lower power segments only,
principally under 150W. Moreover, Universal does not believe it competes
with Coherent and Rofin, the latter serving industrial customers and
positioning their products in a much higher price category than Universal. In
Universal's view40, the lower end of the Parties' products and the top end of
Universal's portfolio overlap only minimally. Universal does not consider the
CO2 laser business as its growth business. It sees itself competing more in
laser systems than sources and considers Trotec, Gravograph, Epilog and GCC
as its main competitors.
d. Iradion is a relatively new entrant to the CO2 laser source business and
manufactures a much more limited range of power levels than the Parties up to
a maximum of 250W. Iradion was indeed mentioned by respondents as
innovative with long life ceramic tube CO2 lasers that require practically no
maintenance. Iradion was nevertheless not seen as competing on par with the
Parties due to the lack of a worldwide sales and support network41. Customers,
when asked whether Iradion could be an alternative to the Parties, also
mentioned some specific weaknesses, such as low pulsing capacity and the
lack of water cooled product versions.42 Iradion itself confirmed43 that the lack
of their pulsed lasers was a handicap for competing with the Parties.

37 E.g. see confirmed non-confidential minutes of a call with Jeanologia on 08 August 2016, confirmed
non-confidential minutes of a call with GMI on 22 September 2016.
38 E.g. see confirmed non-confidential minutes of a call with Iradion on 02 August 2016.
39 See El.En's reply to question 55 of Q1 Questionnaire to competitors.
40 See confirmed non-confidential minutes of a call with Universal on 28 September 2016.
41 See replies to questions 39 and 40 of Q2 Questionnaire to customers.
43 See confirmed non-confidential minutes of a call with Iradion on 02 August 2016.
15
e. FEHA44 only manufactures glass tube CO2 lasers that use the so-called "slow-
flow" system, which is an open system with an external gas bottle. FEHA
considers these as niche-products that are employed for very specific
applications and which represent less than 1% of the total market for CO2
lasers according to FEHA's estimates. Furthermore, FEHA has difficulties to
provide services worldwide.
f. Coding manufacturers Markem Imaje and VideoJet flagged by the Parties as

smaller competitors turned out to produce CO2 laser sources only below 100W
and only for captive use.45 They do not supply the merchant market at all,
unless with some spare parts on their own installed base. Competitors were
either not aware of them as competitors or regarded them as customers.46
(63) The Commission has collected merchant market sales data for low-power CO2
lasers from a number of the Parties' competitors. When those actual sales are taken
into account (and the market size is adapted accordingly), the Parties' combined
market share is higher, but still in the 40-50% range at the worldwide level. When
sales of Chinese suppliers are removed (due to indications that the market could be
worldwide excluding China, see paragraph (41), and that quality differences
exclude Chinese suppliers from supplying European customers, see
paragraphs (75) to (77)), the Parties' combined market share increases to 50-60%.
(64) The Commission's investigation has shown, therefore, that the Parties' combined
market position in the market for low-power CO2 lasers is strong (at 40-60%) and
that none of their smaller competitors mentioned above could exercise a credible
competitive constraint on the Parties.
V.2.1.2. Sub-segment of 100-999W low-power CO2 lasers
(65) The Parties argue that the relevant product market should include all power levels
below 1kW. However, as outlined above in paragraphs (19) to (28), there are
strong indications supporting a narrower market definition that encompasses a
power range of 100W-999W ('mid-power segment'). It is in line with such
segmentation, that Rofin does not offer the full range of CO2 lasers from 0-999W,
but focuses exclusively on CO2 lasers above 100W. Furthermore, the vast majority
of the Parties' worldwide and EEA-wide low-power CO2 revenues come from the
100-999W segment (worldwide: […] of combined revenues in low-power CO2;
EEA: […]).
44 See confirmed non-confidential minutes of a call with FEHA on 23 September 2016.

45 See VideoJet's reply to question 25 of Q1 Questionnaire to competitors.
46 See replies to questions 31 and 32 of Q1 Questionnaire to competitors and replies to questions 30
and 31 of Q2 Questionnaire to customers.
16
(66) The market shares for this mid-power segment, as submitted by the Parties on
request of the Commission, are shown in Table 2 below. The Transaction would in
this mid-power segment combine the largest two suppliers and consequently lead to
very high combined market shares:
Table 2. The Parties' market shares (by value, 2015) in the below 100-599W CO2 segment
Worldwide EEA
Revenue Revenue
Share Share
mUSD mUSD
Coherent […] [30-40]% […] [30-40]%
Rofin […] [10-20]% […] [30-40]%
Combined […] [50-60]% […] [60-70]%
Synrad […] [10-20]% […] [10-20]%
El En […] [0-5]% […] [10-20]%
Iradion […] [0-5]% NA NA
Universal […] [0-5]% NA NA
Coding system manufacturers
(Videojet, Markem-Imaje, […] [0-5]% NA NA
Han's Lasers)
Others (including Chinese […] […]
[20-30]% [5-10]%
suppliers)
Total 173.5 100% 45.1 100%
Source: the Parties
(67) According to the Parties' estimates, combined market shares for 100-999W47 CO2
laser sources are significant. Synrad (up to [10-20]%) would remain the most
important competitor of the Parties, followed by smaller competitors like El.En,
Iradion and Universal with a market share between [0% and 10]%. Thus, on a
hypothetical market for 100-999W CO2 lasers, the Transaction would reinforce the
market leader which would post-Transaction be at least four times the size of
Synrad, the next largest competitor.
(68) However, the investigation revealed that even these share data would underestimate
the Parties' actual position on the 100W-999W CO2 market for reasons similar to
the ones already set out for the overall low-power CO2 lasers in section V.2.1.1:
(69) First, market share figures provided by the Parties seem to take into account not
only merchant sales but also internal sales of vertically integrated manufacturers.
(70) Second, there are strong indications that the Chinese laser source manufacturers do
not form part of the relevant market for lasers of 100-999W, thus their alleged sales
should not be included (for more, see paragraphs (75) to (77)).
(71) Third, third party estimates of the Parties' market shares48 appear consistently
higher than the data furnished by the Parties, in particular as regards the 100-999W
power range.
47 100-599W, as provided by the Parties.

48 See confirmed non-confidential minutes of a call with El.En on 03 August 2016; confirmed non-
confidential minutes of a call with IGP on 04 August 2016 an confirmed non-confidential minutes of
a call with Trumpf on 03 August 2016.
17
(72) Fourth, some of the CO2 laser competitors as presented by the Parties for the
100-999W segment do not compete on par with the Parties or compete only in a
smaller segment of the 100-999W power range:
a. As set out in paragraph (62)a, customers consider that Synrad's CO2 lasers in
the above 100W range are less reliable and have some quality issues.49
b. El.En appears to be primarily focused rather on laser systems and less on the
sales of individual lasers50 and customers noted some recurring quality issues,
as set out in paragraph (62)b.
c. The vertically integrated Universal was reported by respondents to be

particularly strong in the lower power segments only, principally under 150W.
This was confirmed by Universal itself51 identifying the 25W-75W power
range as the most representative for their products. While Universal claimed
that indeed a CO2 laser source with maximum output of 500W had recently
been developed, the experience in the higher power ranges of Universal is still
limited as it has sold such new products so far only in low numbers and only
for research purposes. Furthermore, Universal does not consider the CO2 laser
source business as their growth business. Moreover, and as set out in
paragraph (62)c, Universal does not believe it competes with Coherent and
Rofin.
d. Iradion manufactures a much more limited range of power levels than the
Parties and up to a maximum of 250W. As set out in paragraph (62)d, it was
not seen as competing on par with the Parties due to the lack of a worldwide
sales and support network, lack of pulsing capacity and lack of water cooled
product versions.
e. FEHA only manufactures a niche glass tube CO2 laser that uses the so-called
"slow-flow" system and FEHA has difficulties to provide services worldwide,
as set out in paragraph (62)e.
f. Coding manufacturers Markem Imaje and VideoJet do not supply the merchant
market with lasers above 100W, as set out in paragraph (62)f.
(73) The Commission has collected merchant market sales data for low-power CO2
lasers in the 100-999W segment from a number of the Parties' competitors. When
those actual sales are taken into account (and the market size is adapted
accordingly), the Parties' combined market share is higher, but still in the 50-60%
range at the worldwide level. When sales of Chinese suppliers are removed (due to
indications that the market could be worldwide excluding China, see
paragraph (41), and that quality differences exclude Chinese suppliers from
supplying European customers, see paragraphs (75) to (77)), the Parties' combined
market share increases to 70-80%.
49 E.g. see confirmed non-confidential minutes of a call with Jeanologia on 08 August 2016; confirmed
non-confidential minutes of a call with GMI on 22 September 2016.
50 E.g. see confirmed non-confidential minutes of a call with Iradion on 02 August 2016.
18
(74) The Commission's investigation has shown, therefore, that the Parties' combined
market position in the market for low-power CO2 lasers in the 100-999W range is
strong (at 50-80%) and that none of the smaller competitors mentioned above could
seriously constrain the Parties in the relevant market.
V.2.2. Competition from Chinese suppliers
(75) Overall, the market investigation did not confirm the Parties' claim that Chinese
CO2 laser producers exert strong competitive pressure on the Parties and their
European and North American competitors or that they likely will do so in the near
future.
(76) Customers report that Chinese suppliers have not visibly penetrated the EEA
market as their products do not meet the quality and reliability expectations of EEA
customers.52 Chinese producers, it was claimed, appear to be using mostly outdated
technology to produce low cost and low quality products for the Chinese market,
while the Parties were seen as suppliers for high-end and higher priced laser.53
These customers' views are supported by the Parties' major competitors who do not
consider Chinese suppliers as competitors.54 Respondents indicated that, if
anywhere, Chinese suppliers have gained a foothold only in the low-end 1-99W
power range for marking applications.55 It was further remarked that Chinese input
prices were much cheaper, by several orders in magnitude, which was impossible
to follow.
(77) Moreover, less than half of the respondents56 considered that European and North
American laser system manufacturers were competing with Chinese laser system
manufacturers. In addition, the Parties' market share in China is also elevated
([30-40]% in the 100-999W segment; around [50-60]% if Synrad is included)
which means that a substantial number of Chinese systems manufacturers also
incorporate the higher-value lasers of the Parties and Synrad in their systems.
V.2.3. Constraints from fibre lasers and non-laser technologies
(78) The market investigation did not confirm the Parties' claim of (i) possible
substitution of low-power CO2 lasers by other types of lasers, mainly fibre lasers,
and (ii) non-laser based technologies exerting significant competitive pressure on
low-power CO2 laser suppliers.
(79) Although there has been a tendency towards substitution of CO2 lasers by fibre
lasers, this development appears to be limited to the high-power CO2 lasers above
1kW. Fibre lasers proved to be a competitive constraint for high-power CO2 lasers
for the cutting and welding of thick materials or metals for example. The picture is,
however, different in the low-power CO2 segment. Low-power CO2 lasers are
used for many applications where it is technically not possible, significantly less

53 See replies to questions 38, 39 and 40 of Q2 Questionnaire to customers.
54 See replies to question 23 of Q1 Questionnaire to competitors.
55 See replies to question 24 of Q1 Questionnaire to competitors and to question 25 of Q2 Questionnaire
to customers.
56 See replies to question 23 of Q1 Questionnaire to competitors and to question 26 of Q2 Questionnaire
to customers.
19
efficient or not economical to substitute CO2 lasers with fibre lasers. Such
applications mainly concern organic and transparent materials, such as wood,
paper, textiles, glass or certain plastics.57 In the low-power CO2 laser segment,
fibre lasers only compete with low-power CO2 lasers for a small minority of
applications, namely coding and marking applications, which concerns only CO2
lasers at the lowest end of the power range (below 100W). For the vast majority of
other applications for which low-power CO2 technology is used, the CO2
technology remains largely uncontested by other laser technologies including fibre
lasers. Respondents to the market investigation expressed correspondingly the view
that substitution of CO2 lasers by fibre lasers has been reaching its saturation and
market participants do not expect to see more substitution in the near future.58
(80) These findings are supported by industry reports59 confirming that the market for
low-power CO2 lasers stabilises and will even grow. Furthermore, the Parties'
internal analyses of the CO2 market also expect [reference to internal documents].
This indicates that low-power CO2 lasers are not expected to be replaced by fibre
lasers technologies to any significant extent.
(81) Similarly, substitution of low-power CO2 lasers by non-laser technologies was

almost unanimously ruled out by respondents to the market investigation60 quoting
a number of setbacks this would entail, notably concerning efficiency, accuracy,
replicability, redundancy, speed, safety and environmental impact. Laser source
customers would need to completely change business model and effectuate the
corresponding investments. Often such substitution was reported as unfeasible. At
the same time, industry reports and internal documents61 of the Parties all suggest
that the market for materials processing is steadily growing, by [5-10]% per
annum. Thus, a change of technology from laser to non-laser technology does not
seem to be regarded as a reasonable option for most customers. Many participants
submitted that switching to non-laser technologies (e.g. reverting to mechanical
cutting or marking) would represent a step back in technological progress.
V.2.4. Closeness of competition
(82) Within its investigation, the Commission found strong indications that the Parties
despite their claim not to be closest competitors compete closely on the market.
57 See replies to question 7 of Q1 Questionnaire to competitors, to question 9 of Q2 Questionnaire to

customers and to, question 11 of Q3 Questionnaire to laser system customers.
58 See replies to question 11 of Q2 Questionnaire to customers. It was noted that fibre lasers with
different wavelengths (5-10 micron) are being developed; however, it is not clear when those will
penetrate the market and which applications will be affected in the end. IGP expects this to happen in
5 to 10 years. See confirmed non-confidential minutes of a call with IGP on 03 August 2016 and
confirmed non-confidential minutes of a call with Trumpf on 03 August 2016.
59 Micro and Low Power Laser Materials Processing - Market Analysis and Forecast for Laser Sources
and Laser Systems, by Optech Consulting, February 2016 p. 22-23.
60 See replies to question 6 of Q1 Questionnaire to competitors, replies to questions 7 and 8 of
Q2 Questionnaire to customers and replies to questions 7 and 8 of Q3 Questionnaire to laser system
customers.
61 See reply to q12 of RFI2 Coherent internal document [reference to internal documents].
20
(83) First, Coherent's claim that it focuses its low-power CO2 business on the below
100W segment is contradicted by its sales data, which shows that [more than 50]%
of its revenues stem precisely from the 100-999W segment, where the overlap with
Rofin is the highest.
(84) Second, it is true that, to a certain extent, the Parties target different customers as
submitted by the Parties. That said, […] out of Coherent's top five applications
overlap with Rofin's top five applications: […]. Moreover, the Parties' customer
focus is not to be viewed statically. For example, Coherent's internal documents
show that Coherent was specifically considering targeting customers for […]62.
More generally, Coherent seeks to increase its presence in […], where Rofin has
traditionally been stronger.63 Both Parties appear well-placed to be chosen by
customers for new projects which may require customization and which could lock
in the customer for a while.64
(85) Third, while the product portfolio of the Parties is not a perfect match across the
various power levels in the 100-999W segment, Coherent's internal documents
show that Rofin, together with Synrad, exercised significant dynamic pressure on
Coherent to develop new products: "[reference to internal documents]".65
Conversely, Rofin's documents appear to consider Coherent as its closest rival.66
(86) Fourth, results of the market investigation confirmed that the Parties are seen by
customers and competitors widely as closest or close competitors:
a. Among customers, when asked in the market investigation to name the closest
alternative to Coherent products, two thirds named Rofin. Many of the
remaining customers saw Rofin as the second closest competitor. Conversely,
when asked for the closest alternative to Rofin, an equal proportion of
respondents identified Coherent as closest alternative. Respondents also
affirmed that both companies' strategic positioning in terms of quality level
and pricing was similar.67
b. Competitors reported68 that competition between the Parties was very high,
especially so in the higher power ranges.
c. Coherent69 stated not having CO2 lasers above 400W. However, respondents
systematically believed Coherent had such a product and some confirmed
having purchased Coherent products above 400W, up to 500W.
62 See Annex 17a to the Form CO, Rofin Business Summary: RSUK, Sept.2015.
66 See Annex 17c to the Form CO, Rofin strategy meeting and Sales notes, Business update May 2016.
67 See replies to question 38 of Q2 Questionnaire to customers, see also confirmed non-confidential
minutes of a call with GMI on 22 September 2016.
68 See replies to question 36 of Q1 Questionnaire to competitors, confirmed non-confidential minutes of
a call with Iradion on 02 August 2016.
69 E.g. see Iradion's reply to question 29 of Q1 Questionnaire to competitors, El.En's reply to
question 36 of Q1 Questionnaire to competitors, see also confirmed non-confidential minutes of a call
with SEI on 02 September 2016.
21
d. Respondents70 indicated that a specific strength and competitive differentiator
for both Parties was their extensive network of global sales and technical
support.
(87) To conclude, evidence gathered suggests that Rofin is a close competitor of

Coherent in the overall low-power CO2 lasers (the other close competitor being
Synrad). In the 100-999W segment where Synrad is significantly weaker than
Rofin, evidence gathered suggests that Rofin is an even closer competitor of
Coherent.
V.2.5. Barriers to entry and expansion
(88) The results of the market investigation point towards high barriers to entry and
expansion on the laser market.
(89) Competitors and customers71 explained that barriers to entry were high and that no
market entry was expected in the West in the foreseeable future for the following
reasons:
(90) First, product development is lengthy and can take up to three years even for an
already established supplier. A certain portfolio size is also necessary to enter the
market. Iradion, the pure CO2 player which is a relatively new entrant to the
market was established in 2007 and started marketing low power CO2 lasers up to
250W in 2010. Iradion confirmed72 that a further extension of its product portfolio
into the higher power ranges was indeed desirable, submitted however, that the
introduction of a new, 500W laser source, for instance, faced significant technical
obstacles and would require additional 2-3 years at least and EUR 1.5-2 million
investment. Every new power level, Iradion explained, is a new development from
scratch, with very little synergies. The magnitude of investment and the difficulty
of expansion were also emphasized by FEHA.73
(91) Second, economies of scale are important in view of decreasing laser prices.
Trumpf underlines74 the importance of economies of scale on this mature market
and explains that it is impossible to undercut prices without scale. Product cost was
seen as a key driver of competition also by Synrad.75 Also, gaining customers faces
obstacles. For a customer to switch requires investment adapting the machines to
the new laser source. For that reasons many customers do not qualify two suppliers
and cannot double-source.76
70 See replies to questions 39 and 40 of Q2 Questionnaire to customers and confirmed non-confidential

minutes of a call with FEHA on 23 September 2016.
Q2 Questionnaire to customers, and confirmed non-confidential minutes of a call with FEHA on
23 September 2016, confirmed non-confidential minutes of a call with El.En on 03 August 2016.
72 See confirmed non-confidential minutes of a call with Iradion on 02 August 2016.
73 See confirmed non-confidential minutes of a call with FEHA on 23 September 2016.
74 See confirmed non-confidential minutes of a call with Trumpf on 03 August 2016.
75 See Synrad's reply to question 43 of Q1 Questionnaire to competitors.
76 See for instance confirmed non-confidential minutes of a call with Iradion on 02 August 2016 and
confirmed non-confidential minutes of a call with Trumpf on 03 August 2016, confirmed non-
confidential minutes of a call with Biebuyck on 08 August 2016.
22
(92) Third, reputation and field-proven technology are key to win orders with industrial
clients.77
(93) Fourth, contrary to the Parties' perception, most suppliers need to have a
sufficiently responsive service network.
(94) El.En submitted78 that it could expand production of lasers, and that it even had
plans to do so. Also Iradion considers expansion possible while at the same time
indicating that such expansion would require substantial investment and patents,
new machines and personnel. As regards the vertically integrated system
manufacturers, it was noted79 several times that they focus their competitive efforts
on the laser systems and not on the sources, even though they were to some extent
already active on the laser source market.
(95) For the reasons outlined in paragraphs (89) to (94) above, entry or expansion that
could challenge the merged entity's position in the near future appears unlikely.
Even if competitors that are currently all significantly smaller than the Parties
expanded their production it would require significant investment and time until
they could become equivalent competitors to the Parties on the market and
compensate for the loss of competition between the Parties.
V.2.6. Vertical expansion of customers
(96) Also the possibility of vertical integration appears to be a far stretch and rather
unlikely according to the results of the market investigation.
(97) Customers have firmly stated, that they would not be able to start in-house
production and that the vertically integrated companies typically started as
producers of lasers and then expanded into systems and not the reverse. Universal
explained80 that they indeed expanded into the production of laser sources some
15 years ago. However, it was submitted that this was enabled by particular
circumstances, as Universal's founder was a photonics expert. For firms without
this particular expertise, as Universal states, vertical integration is not realistic.
(98) Moreover, responding customers almost unanimously rejected81 the idea of starting
their own production of laser sources, quoting a variety of compelling reasons,
such as the long development time, R&D and financial investment needed, the risk
of failure, and the problem of scale in the light of their limited demand for lasers.
V.2.7. Customers' reactions
(99) A large proportion of responding customers voiced concerns about product

continuity and the potential reduction of choice after the Transaction. Customers
fear that the reduction of choice will be followed by a deterioration of product
quality, reduced service levels and ultimately also price increases for low power
77 See e.g. confirmed non-confidential minutes of a call with Jeanologia on 08 August 2016.
78 See El.En's reply to question 55 of the Questionnaire to competitors.
79 See confirmed non-confidential minutes of a call with Universal on 28 September 2016, confirmed
non- confidential minutes of a call with Iradion on 02 August 2016.
23
CO2 lasers.82 Customers' estimates of combined market shares for low power CO2
laser sources varied between 60 and 90%.
V.2.8. Conclusion
(100) As outlined above, the Transaction would create a new clear market leader in low-
power CO2 lasers with shares of 40-60%. Further, the Transaction would eliminate
Rofin as Coherent's close competitor leaving only Synrad as a main competitor.
There are few other alternative suppliers and they do currently not compete on par
with the Parties in a market where barriers to entry and expansion are high.
(101) As regards the segment of 100-999W, the Transaction would equally create a new
clear market leader with shares of 50-80%, being four times larger than its next
competitor Synrad in an already highly concentrated market where barriers to entry
and expansion are high. Further, the Transaction would eliminate Rofin as a
particularly close competitor of Coherent leaving only few alternative suppliers
which do currently not compete on par with the Parties.
(102) Therefore and based on the assessment set out in paragraphs (57) to (99), the
Commission considers that the Transaction would significantly impede effective
competition with regard to low-power CO2 lasers under any plausible market
definition set out above. The Transaction therefore raises serious doubts as to its
compatibility with the internal market.
VI. COMPETITIVE ASSESSMENT OF ULTRAFAST LASERS
(103) The Parties' activities overlap horizontally in the manufacture and sale of UF laser
sources and their laser source sales are vertically related to Rofin's manufacture of
UF laser systems.
VI.1. The Notifying Party's views
(104) The Notifying Party submits that neither the horizontal, nor the vertical overlap
between the Parties in UF lasers leads to affected markets.
(105) Based on the various market sizes estimated by three independent industry
reports83, Coherent's market share in UF lasers is between [5-10]% and [10-20]%.
The Parties submit that in 2015 Rofin […], attributing it a [0-5]% market share.
(106) The Parties note numerous competitors in this segment, notably Trumpf, with
market shares estimated between [10-20] and [20-30]%, Amplitude, with shares
similar to Coherent's, and High Q and Photonics Industries, which follow closely.
A number of smaller competitors, with shares of [0-5]%, are also present in this
segment.
(107) In addition, the Parties argue that Coherent and Rofin focus on different
applications, Coherent on the scientific, Rofin more on the industrial.
82 See replies to question 55 of Q2 Questionnaire to customers and also confirmed non-confidential

minutes of a call with Innolas on 23 September 2016, etc.
83 Optech Consulting “Micro and low power laser materials processing” 2015, Strategies Unlimited,
“Ultrafast Lasers – Trends and five-year forecast Strategies Unlimited, Worldwide Market for
lasers 2016.
24
(108) As concerns Rofin's sales of laser systems, the Parties estimate their market share
to be [5-10]% worldwide. Rofin is vertically integrated, however, […].
VI.2. Results of the market investigation and Commission's assessment
(109) Coherent markets laser sources only, whereas Rofin manufactures UF laser
systems, branded StarFemto and StarPico, and has recently started selling laser
sources separately as well.
(110) A market investigation was carried out in order to verify the Parties' market shares
and positions.
(111) Respondents confirmed that although Rofin was not selling laser sources en mass,
it had the capacity to do so and was a credible player on the UF market.
Respondents saw the Transaction as a chance for further vertical integration that
will enhance the Parties' competitiveness in UF laser systems. In the area of UF
lasers it was noted84 that start-ups, although there exist some on the market, are
difficult to accept, as the machines are very high value, capital intensive to
manufacture and long term support needs to be guaranteed. Therefore, the laser
source manufacturer needs to be a financially solid, long established player. The
Parties' global reach was again noted as a distinctive competitive advantage that
many other manufacturers did not have.85
(112) However, in general, customers saw enough competition remaining on the market
post-Transaction.86
(113) In addition, the turnover figures competitors reported87 for their own sales of UF
lasers were systematically higher than what the Parties estimated, which indicates
that in the case of UF lasers the Parties may have overestimated their own market
shares. Respondents mostly identified the vertically integrated competitor Trumpf
as the largest player and noted the presence of numerous other competitors.
(114) Rofin's internal documents showed that Rofin […]88.
(115) Consequently, the concentration notified does not raise serious doubts as to its
compatibility with the internal market concerning the horizontal overlaps between
the Parties' UF laser businesses.
VII. VERTICAL LINKS AND CONGLOMERATE CONSIDERATIONS
(116) Rofin also produces laser systems, including CO2 laser systems, for which there is
a vertical relationship with the Parties' production of low-power CO2 lasers. Due to
the Parties' high market shares in low power CO2 lasers, this vertical relationship
leads to affected markets. If the relevant product market is defined more narrowly,
84 See e.g. confirmed non-confidential minutes of a call with Innolas on 23 September 2016, confirmed
non-confidential minutes of a call with Sauer on 26 September 2016.
85 See e.g. confirmed non-confidential minutes of a call with Innolas on 23 September 2016 and
confirmed non-confidential minutes of a call with Sauer on 26 September 2016.
86 See replies to email inquiry on the impact of the Transaction on the ultra-fast laser market sent on
09 September 2016.
87 See replies to email inquiry on ultra-fast laser sales and market size sent on 26 September 2016.
88 See replies to email inquiry on ultra-fast laser sales and market size sent on 26 September 2016.
25
encompassing the power ranges 100-999W no vertical relationship is created
between the Parties' activities.
(117) The Parties explain, that Rofin produces only one laser system89 with low power
CO2 lasers, for which it uses 30W CO2 laser. Rofin does not produce any CO2
lasers below 100W […]. The Parties submit that both Rofin's sales of CO2 laser
systems and […].
(118) The market investigation did not indicate any concern regarding input or customer
foreclosure as a consequence of the Transaction.90
compatibility with the internal market concerning the vertical relationship between
the Parties' low power CO2 laser businesses and Rofin's production of low power
CO2 laser systems,
(120) Many respondents considered it beneficial and procompetitive that the Parties
combine their product offerings across the different laser models. However, some
market participants alluded91 to conglomerate concerns by stating that the Parties
could become dominant by combining their broad portfolios of different types of
lasers and could bundle the products.
(121) Yet, as stated in the Non-Horizontal Merger guidelines92, the fact that the merged
entity will have a broad portfolio of products does not, as such, raise competition
concerns. The so called 'one-stop-shopping' might be preferred by customers for
reasons such as saving on transaction costs.
(122) In order for conglomerate non-coordinated effects to arise, the Parties must have
the ability and the incentive to foreclose their competitors by bundling or tying.
Furthermore, it has to be assessed whether a foreclosure strategy would have
significant detrimental effect on competition, thus causing harm to consumers.93
(123) In the present case, respondents to the market investigation raised the increased
power to bundle different products as a potential impact of the Transaction.
However, foreclosure of competitors through bundling is conceivable only if there
is a large common pool of customers for the individual products concerned. Yet,
the power of the Parties post-Transaction to bundle remains limited as different
types of lasers, such as fibre, CO2, ultra-fast, etc. are suited for specific and
different applications. Customers for CO2 lasers do not necessarily buy other types
of laser sources. There are some indications that certain customers may have a
preference purchasing CO2 lasers of various power levels from the same supplier,
89 Rofin's laser system is called Powerline C30, it marks results on plastics and glass as well as on
organic materials like wood, paper and leather.
90 See replies to question 59 of Q1 Questionnaire to competitors, replies to questions 55-60 of
Q2 Questionnaire to customers and questions 51-54 of Q3 Questionnaire to laser system customers.
91 See Trumpf's and Synrad's reply to question 55 of Q1 Questionnaire to competitors. Innolas
Photonic's reply to question 59 of Q2 Questionnaire to customers.
92 Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control
of concentrations between undertakings, 2008/C 265/07, paragraphs 92 and 104.
93 Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control
of concentrations between undertakings, 2008/C 265/07, paragraphs 93-94.
26
e.g. if their systems are customised for the design of one specific supplier.94
However, there is no clear evidence that this concerns the majority of customers or
that this applies across various types of laser sources.
(124) This is supported by the fact that suppliers are not the same across different types
of lasers; e.g. IGP and Trumpf are not active in low power CO2 lasers but are
reported to be the leaders on fibre and ultra-fast lasers respectively, where the
Parties are present but much weaker than the leading competitors.
(125) The majority of customers95 responding to the market investigation explained to

prefer to multi-source the CO2-lasers needed if multi-sourcing is possible. It
appears, thus, unlikely that the Parties would be able to successfully bundle their
products across different types of lasers as already within one type of laser
customers try to multi-source, e.g. to encourage competition, security of supply etc.
compatibility with the internal market concerning the vertical link between the
Parties with respect of low power CO2 lasers. Furthermore, the concentration
notified does not raise serious doubts as to its compatibility with the internal
market concerning the combination of the Parties' product portfolios, as anti-
competitive conglomerate effects are unlikely to occur.
VIII. REMEDIES
VIII.1. Framework for the assessment of the commitments
(127) Where a concentration raises serious doubts as regards its compatibility with the
internal market, the Parties may undertake to modify the concentration so as to
remove the grounds for the serious doubts identified by the Commission.
(128) As set out in the Commission's Remedies Notice96, such commitments have to
eliminate the competition concerns entirely, and have to be comprehensive and
effective from all points of view.
(129) In assessing whether commitments will maintain effective competition, the

Commission considers all relevant factors, including the type, scale and scope of
the proposed commitments, with reference to the structure and particular
characteristics of the market in which the Transaction is likely to significantly
impede effective competition, including the position of the Parties and other
participants on the market.97
VIII.2. Commitments submitted by the Notifying Party
(130) In order to render the concentration compatible with the internal market, the
Notifying Party has modified the notified concentration by entering into
commitments.
94 See e.g. confirmed non-confidential minutes of a call with Iradion on 02 August 2016.
96 Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under
Commission Regulation (EC) No 802/2004 (OJ C 267, 22.10.2008, p. 1-27).
97 Remedies Notice, paragraph 12.
27
(131) The Notifying Party submitted three successive sets of commitments in order to
address the serious doubts raised by the Transaction. The Parties first submitted
remedies on 5 October 2016, which were improved through a revised remedy
proposal on 11 October 2016 ("Initial Commitments"). After the Commission
gathered the views of market participants on the Initial Commitments ("market
test"), and informed the Parties of the remaining concerns, the Notifying Party
submitted the Final Commitments on 19 October 2016.
(132) The Commission considers the Final Commitments sufficient to ensure that the
Transaction no longer raises serious doubts as to its compatibility with the internal
market.
VIII.3. Initial Commitments
(133) In the commitments submitted on 5 October 2016, the Notifying Party proposed to
divest Rofin's entire global CO2 laser manufacturing for CO2 lasers of 0-999W
("the Divestment Business").
(134) The Commission raised a number of preliminary issues which called into question
already prima facie the viability and competitiveness of the Divestment Business
concerning the scope of proposed transfers of technology and intellectual property
rights, sufficient coverage of the sales and after-sales network, and the scope of the
transitional arrangements. Subsequently, the Notifying Party submitted a second set
of commitments on 11 October 2016 which built on overall approach of the
commitments dated 5 October, and brought a number of modifications to address
the issues raised by the Commission. The commitments of 5 October 2016, as
amended on 11 October 2016, shall be hereinafter referred to as the Initial
Commitments.
VIII.3.1. Description of the Initial Commitments
VIII.3.1.1. Overall perimeter of the Divestment Business
(135) The Divestment Business as defined in the Initial Commitments consists primarily
in Rofin's plant in Hull/UK opened in February 2016. It regroups the
manufacturing of all of Rofin's low-power CO2 laser sources (0-999W) and
includes also the production of a low power CO2 laser system named Multiscan.
The Divestment Business also includes specific testing and repair equipment in the
Rofin service centre located in […] China and additional quality control equipment
located in Rofin's facility in […] Germany.
(136) The Divestment Business would include (i) most of the patents it currently uses for
the production of CO2 lasers, (ii) its R&D capacity related to CO2 lasers, and
(iii) all of the Hull facility's personnel and IT systems. The title to the Rofin-Sinar
brand would not be transferred to the Divestment Business.
(137) The proposed divestment of the entire Rofin activities in low power CO2 laser
sources removes the entire horizontal overlap in low-power CO2 laser sources of
the Parties. In view of the proposals in the Initial Commitments, the Commission's
assessment will focus on the issues important for the viability and competitiveness
of the Divestment Business, namely the transfer of intellectual property rights and
excluded assets, the sales and after-sales network, and the transitional
arrangements.
28
VIII.3.1.2. Intellectual property rights and excluded assets
(138) The Initial Commitments stipulate that concerning the patents relevant solely for
low power CO2 laser sources (patents for a gas laser device and for mode selection
technique), the Divestment Business retains exclusivity on its patented technology
for the entire range of low power CO2 laser sources (up to 999W).98 For these two
patents, the merged entity would only receive an exclusive licence for CO2 laser
sources of 1000W and above.99 While the patent for an integrated pre-power
amplifier, used also for non-low power CO2 lasers, would be transferred to the
merged entity, the Divestment Business will receive an exclusive back-licence for
the entire low-power CO2 product range up to 999W.100 The Initial Commitments
also clarify that the licence to patents will include “a license to any additional
tangible or intangible assets such as know-how, models or test data”.101
(139) The Initial Commitments also include a reverse carve-out of the R&D projects and
patents relating to the Divestment Business' activity in […]. Those R&D projects
and patents would therefore be transferred to the merged entity under the Initial
Commitments.
(140) Finally, concerning rights to the brand, the Divestment Business would be able to
continue to use the product/model names (such as "SC", "SR", OEM n iX,
"Multiscan VS") but would not receive the title to the Rofin-Sinar brand for its low
power CO2 laser products. The Initial Commitments however envisage an optional
licence for the Divestment Business to use the Rofin brand for low power CO2
laser products for up to […] after the divestment, but only to sell pre-branded stock
and spare parts held by the Divestment Business at the moment of the divestment.
VIII.3.1.3. Sales and after sales network
(141) The Divestment Business would retain the existing sales organisation of Rofin
Sinar UK. In addition, the Initial Commitments stipulate that the staff from other
parts of the Rofin-Sinar group that presently contributes significantly or in part to
the Divestment Business' sales efforts would continue to do so until the divestment.
The commitments also allow for additional […] sales staff located in other Rofin
locations, and […] servicing staff from the Rofin service facility in […] to be
transferred to the Divestment Business at the purchaser's option.
(142) To reflect the importance of the worldwide servicing network for the viability and
competitiveness of the Divestment Business, the Initial Commitments […].
VIII.3.1.4. Transitional agreements
(143) The Initial Commitments include a number of transitional agreements, mainly for:
a. the supply of [certain components] from the merged entity's facility in […] for
a period of […];
98 Retained in the Final Commitments, clause 12 of the Schedule.

99 Modified in the Final Commitments, see paragraph (157).
100 Modified in the Final Commitments, see paragraph (157).
101 Retained in the Final Commitments, clauses 12 and 13.
29
b. the [testing of certain products] by the merged entity's facility in […] for a
period of […]. In addition, the Commitments stipulate an option for the buyer
to obtain a [licence] to any process know how or other intellectual property
owned by the combined entity which is needed to enable the Divestment
Business to develop [an alternative source of supply].
c. the supply of [certain components] from the Divestment Business to the

merged entity's facility in […] for a period of […].
(144) The Initial Commitments include the option that any such agreement be terminated
(a) at any time, by mutual agreement, or (b) at the request of the Divestment
Business at any time after […] years from the divestment, subject to a […] notice.
(145) In addition, the Initial Commitments also envisage other transitional arrangements:
a. the hosting of the Divestment Business' testing equipment in [China] and the
provision of repair and testing services in [China] for a period of […], and
b. support to the Divestment Business concerning marketing and IT services, for

a period of, respectively, […] from the divestment.
VIII.3.2. Assessment of the Initial Commitments
(146) In section V, the Commission concluded that the Transaction raised serious doubts
as to its compatibility with the internal market concerning non-coordinated effects
due to the Parties' overlap in the market for all low power CO2 lasers, as well as in
the segment for CO2 laser sources between 100W and 999W.
VIII.3.2.1. Suitability to remove the identified competition concerns
(147) The proposed divestment of the entire Rofin activities in low power CO2 laser
sources removes the entire horizontal overlap in low power CO2 laser sources of
the Parties. The Commission therefore considered that the Initial Commitments
were in principle suitable to remove the identified competition concerns entirely.
VIII.3.2.2. Divestment of a viable and competitive business
(148) The Commission considered that the Initial Commitments were, subject to the
views of respondents to the Commission's market test, in principle suitable to
ensure the viability and competitiveness of the Divestment Business as far as the
low power CO2 laser sources are concerned:
a. concerning intellectual property rights and technology for low power CO2
lasers, the Initial Commitments ensure that the Divestment Business retains a
comparable competitive position vis-à-vis the merged entity/Coherent as
before the Transaction. In particular, the Divestment Business retains
exclusivity over its own existing technology for the product range up to 999W.
Contrary to the proposed commitments of 5 October 2016, it no longer shares
its patented technology with the merged entity and retains access to the
technology for the entire range of low power CO2 products.
b. the Commission's investigation showed that an international service and sales

network is one of the strengths of Rofin's current low power CO2 laser
business and it is essential for the Divestment Business to stay competitive and
for the competition conditions pre-merger to be preserved. The provisions on
30
sales and after-sales network ensure that the divestment business will continue
to have access to the sales organisation and personnel currently accounting for
[a majority] of the sales of the Divestment Business. Notably, the existing
sales organisation of the Divestment Business could be strengthened by the
transfer of […] sales staff, and by […] dedicated servicing staff from Rofin's
servicing facility in […], both at the option of the purchaser.
Moreover, the Initial Commitments include an explicit additional criterion for

the selection of the purchaser of the Divestment Business, which […].
c. concerning the terms of the transitional agreements, the Initial Commitments

stipulate a duration of […] and […], depending on the agreement. While these
periods are rather long, the purchaser will have an early termination option for
the transitional agreements. The Divestment Business' independence will be
further strengthened by a licence on the technology for […] allowing to
develop an alternative source of […].
VIII.3.2.3. Potential purchasers
(149) The requirements for the purchaser of the Divestment Business set out in the Initial
Commitments correspond to the standard requirements contained in the model text
for divestiture commitments of the Commission.102 They require, in particular, that
(i) the purchaser must be independent of and unconnected to the Parties, (ii) the
purchaser must have the financial resources, proven expertise and incentive to
maintain and develop the Divestment Business as a viable and competitive force,
and (iii) the acquisition by the purchaser must not be likely to create prima facie
competition concerns nor give rise to a risk that the implementation of the
commitments will be delayed.
(150) As already mentioned in paragraph (148)b, given the relevance of the global sales
and after-sales network for the viability and competitiveness of the Divestment
Business, the Initial Commitments contain an additional criterion for the selection
of the purchaser of the Divestment Business, […].
VIII.3.3. Conclusion on the Initial Commitments
(151) On the basis of the above, the Commission informed the Notifying Party of its
preliminary view that the Initial Commitments were in principle capable of
removing the identified serious doubts, subject to the outcome of the market test in
particular on possible remaining concerns about the viability and competitiveness
of the Divestment Business.
VIII.4. Final Commitments
VIII.4.1. The Commission's market test and Final Commitments
(152) The Commission's market test indicated that the majority of respondents that took a
position considered the Initial Commitments as sufficient to remove any
competition concerns (75%), while around 25% of such respondents considered the
proposal to be insufficient to remove serious doubts, mostly due to concerns on
102 Paragraph 17 of the model text, available at http://ec.europa.eu/competition/mergers/legislation/

template commitments en.pdf.
31
viability and competitiveness of the Divestment Business.103 None of the
responding laser source customers stated that they would a priori not buy laser
sources from the Divestment Business or raised concerns as to the suitability of the
Divestment Business as potential supplier.
(153) The majority of the respondents who took a position considered that the
Divestment Business comprises all the key personnel, resources, supply contracts
and other assets necessary for it to remain an active and independent competitive
force.
(154) Several respondents expressed an interest in purchasing the Divestment Business,

subject to certain conditions and improvements, and only one company expressed
an interest without further conditions. The replies from respondents to the market
test on the question whether a suitable purchaser should already be active in low
power CO2 lasers were balanced. On the one hand, 45% of respondents that took a
view consider that it should be already active in the manufacturing of low power
CO2 laser sources, on the other hand, 55% of respondents propose that the
purchaser should already be active in laser sources other than low power CO2.104 A
number of respondents105 held that laser system manufacturers would not be a
suitable purchaser, as their primary interest would be to incorporate the purchased
laser source technology into their own systems and not so much to compete for the
supply of laser sources to other system manufacturers.106
(155) The respondents raised a number of specific concerns related to the viability and
competitiveness of the Divestment Business. These concerns were relayed to the
Notifying Party which in turn modified its remedy proposal and submitted a final
set of commitments on 21 October 2016 ("the Final Commitments"). The Final
Commitments contain a number of modifications to address the remaining
concerns, which are presented and assessed in headings VIII.4.1.1 to VIII.4.1.3
below.
VIII.4.1.1. Intellectual property rights
(156) A number of respondents to the Commission's market test107 indicated that the
design of the technology transfers in the Initial Commitments would impair the
competitiveness of the Divestment Business. According to these respondents, the
Divestment Business would be able to enter the power range above 999W (range
between 1000W and 2000W), for which the demand could be growing in the next
years, based on the currently used technology platform, scaled up from current
power levels (650W maximum). However, the Initial Commitments envisage the
grant of an exclusive licence to the merged entity for the power levels above 999W.
For these power levels, the Divestment Business could therefore not use the
103 See replies to question 1 of the questionnaire Commitments – Market Test dated 12 October 2016.
106 The Commission will take into account the purchaser's profile in the purchaser approval process when
assessing (i) the purchaser's proven expertise and incentive to maintain and develop the Divestment
Business as a viable and competitive force, and (ii) existence of prima facie concerns associated to the
purchaser.
107 See replies to questions 9 and 10 of the questionnaire Commitments – Market Test dated
12 October 2016.
32
existing low power CO2 laser technology platform to complete the existing
pipeline projects, as it would be reserved to Coherent/the combined entity which
currently already offers CO2 laser sources just above 999W. According to the
respondents to the market test, the exclusive licence would thus be liable to block
or considerably delay the ability of the Divestment Business to extend and
diversify its product offering, thus impairing its competitiveness and growth
prospects.
(157) To address these concerns, the Final Commitments stipulate that for the patents
which will be retained by the Divestment Business, the merged entity will receive a
non-exclusive licence for CO2 laser sources of 1000W and above. Likewise, for
the integrated pre-power amplifier patent (to be transferred to the merged entity),
the Divestment Business would not only receive an exclusive licence for the CO2
laser sources up to 999W, but also a non-exclusive licence for CO2 laser sources of
1000W and above.108
(158) Concerning the use of product brands, a large majority of respondents to the
Commission's market test109 considered that a period of at least one year is needed
for the Divestment Business to effectively rebrand its low power CO2 laser
portfolio, during which period it should be able to continue to use the Rofin-Sinar
brand. This is, amongst others, also important for system producers, who would
need to adapt their sales materials and certifications to the new brand.
(159) In this respect, the modifications brought about by the Final Commitments include,
at the option of the purchaser, a licence to the Divestment Business for the use of
the brand "Rofin-Sinar Hull" for the sales of low power CO2 laser sources for a
period of up to […].110 Thus, the licence would no longer be limited to pre-branded
stock and spare parts.
VIII.4.1.2. Carbon monoxide laser project
(160) The Initial Commitments envisage a transfer of the Rofin-Sinar UK's project to
develop a carbon monoxide (CO) laser source. Certain respondents to the
Commission's market test however spontaneously raised concerns about the
transfer of such CO laser technology to Coherent.111 A respondent, for example,
observed that CO2 laser and CO laser technology are closely related, not only
having a similar machine design and engineering know-how, but also share similar
applications and customer groups. The respondent expects the CO segment to grow
at the expense of the CO2 technology. According to the aforementioned
respondents, the transfer of the CO laser technology to the merged entity would
limit the ability of the Divestment business to diversify its product portfolio and
thus impair its competitiveness.
108 Final Commitments, clauses 12 and 13 of the Schedule.

110 Final Commitments, clause 15 of the Schedule.
111 See replies to questions 1 and 20 of the questionnaire Commitments – Market Test dated
12 October 2016.
33
(161) To address this concern, the Final Commitments abandon the transfer to the
merged entity of the project to develop CO technology, which will thus remain
with the Divestment Business.112
VIII.4.1.3. Transitional supply agreements
(162) Concerning […] DC power supplies, for which the Initial Commitments only
offered a transitional supply agreement, some respondents to the Commission's
market test113 indicated that, due to certain product requirements (for example, use
in humid or high temperature environments), such technology is not necessarily
widely available on the market and the product development is rather lengthy. A
respondent suggested that the Divestment Business should be offered an optional
licence for such technology, in line with that for […].
(163) The Final Commitments stipulate an option for the buyer to obtain a fully-paid
non-exclusive licence to any know how or other intellectual property owned by the
combined entity which is needed to enable the Divestment Business to develop an
alternative source of supply for […] DC power supplies.
VIII.4.2. Assessment of the Final Commitments
(164) The Commission considers that, in addition to removing the identified competition
concerns entirely, the Final Commitments address the outstanding issues related to
the viability and competitiveness of the Divestment Business:
a. Concerning intellectual property rights and technology, the Final

Commitments now remove the remaining limitations for the Divestment
Business to use its existing technology in the development of products at
1000W and above, and abandon the transfer of the CO laser project to the
combined entity. Consequently, the commitments preserve the competitiveness
and viability of the Divestment Business by securing the full ability to extend
its product offering going forward.
b. Concerning the transitional period for rebranding, the Commission notes that
the majority of respondents to the Commission's market test indicated that at
least one year would be needed for the Divestment Business to rebrand its low
power CO2 lasers. The Commission nonetheless considers that a licence to use
the "Rofin Sinar Hull" brand for up to […] from the Divestment as proposed in
the Final Commitments is sufficient. Firstly, the terms of the licence have been
strengthened: the duration of the licence is increased from […] and the licence
is no longer limited to the existing stock of products branded before the
divestment, but to all products sold during the […] period. Secondly, the
Divestment Business is facing sophisticated buyers with a good knowledge of
the laser source market, who are often regular or repeat buyers and thus have
an established relationship with the laser source supplier. Thirdly, while the
customers may need additional time to adapt the product documentation and
certificates due to the rebranding of the laser sources integrated in the laser
systems they produce, such adaptations do not appear to be complex and
112 The project no longer appears on the list of excluded assets in Section 3 of the Schedule to the Final
Commitments.
113 See replies to questions 4 to 6 of the questionnaire Commitments – Market Test dated
12 October 2016.
34
requiring long lead times. For these reasons, the Commission considers that the
[…] period is sufficiently long to allow the Divestment Business the time to
effectively rebrand its products.
c. Concerning the transitional agreements, the Final Commitments further

strengthen the independence of the Divestment Business by complementing
the guarantees for continued supplies of […], allowing the Divestment
Business to develop an independent source of supplies.
VIII.4.3. Conclusion on the Final Commitments
(165) For the reasons outlined above, the Final Commitments entered into by the
undertakings concerned are sufficient to eliminate the serious doubts as to the
compatibility of the Transaction with the internal market.
(166) Under the first sentence of the second subparagraph of Article 6(2) of the Merger
Regulation, the Commission may attach to its decision conditions and obligations
intended to ensure that the undertakings concerned comply with the commitments
they have entered into vis-à-vis the Commission with a view to rendering the
concentration compatible with internal market.
(167) The fulfilment of the measures that give rise to the structural change of the market
is a condition, whereas the implementing steps which are necessary to achieve this
result are generally obligations on the parties. Where a condition is not fulfilled, the
Commission’s decision declaring the concentration compatible with the internal
market is no longer applicable. Where the undertakings concerned commit a breach
of an obligation, the Commission may revoke the clearance decision in accordance
with Article 6(3) of the Merger Regulation. The undertakings concerned may also
be subject to fines and periodic penalty payments under Articles 14(2) and 15(1) of
the Merger Regulation.
(168) The commitments in section B of the Final Commitments of the Annex constitute
conditions attached to this decision, as only through full compliance therewith can
the structural changes in the relevant markets be achieved. The other commitments
set out in the Annex constitute obligations, as they concern the implementing steps
which are necessary to achieve the modifications sought in a manner compatible
with the internal market.
(169) Therefore full text of the Final Commitments is attached as Annex to this Decision
and forms an integral part of it.
35
IX. CONCLUSION
(170) For the above reasons, the Commission has decided not to oppose the notified
operation as modified by the commitments and to declare it compatible with the
internal market and with the functioning of the EEA Agreement, subject to full
compliance with the conditions in section B of, and Schedule to the commitments
annexed to the present decision and with the obligations contained in the other
sections of the said commitments. This decision is adopted in application of Article
6(1)(b) in conjunction with Article 6(2) of the Merger Regulation and Article 57 of
the EEA Agreement.
For the Commission
(signed)
Margrethe VESTAGER
Member of the Commission
36
COMP/M.8055 – COHERENT / ROFIN-SINAR
COMMITMENTS TO THE EUROPEAN COMMISSION
Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 as amended (the “Merger
Regulation”), Coherent, Inc. (the “Notifying Party”/“Coherent”) hereby enters into the
following Commitments (the “Commitments”) vis-à-vis the European Commission (the
“Commission”) with a view to rendering the acquisition of Rofin-Sinar Technologies, Inc.
(“Rofin”) by Coherent, Inc. (the “Concentration”) compatible with the internal market and the
functioning of the EEA Agreement.
This text shall be interpreted in light of the Commission’s decision pursuant to Article 6(1)(b) of
the Merger Regulation to declare the Concentration compatible with the internal market and the
functioning of the EEA Agreement (the “Decision”), in the general framework of European
Union law, in particular in light of the Merger Regulation, and by reference to the Commission
Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under
Commission Regulation (EC) No 802/2004 (the “Remedies Notice”).
Section A. Definitions
1. For the purpose of the Commitments, the following terms shall have the following meaning:
Affiliated Undertakings: undertakings controlled by the Parties and/or by the ultimate parents of
the Parties, whereby the notion of control shall be interpreted pursuant to Article 3 of the Merger
Regulation and in light of the Commission Consolidated Jurisdictional Notice under Council
Regulation (EC) No 139/2004 on the control of concentrations between undertakings (the
“Consolidated Jurisdictional Notice”).
Assets: the assets that contribute to the current operation or are necessary to ensure the viability
and competitiveness of the Divestment Business as indicated in Section B, paragraph 5 (a), (b),
(c) and (d) and described more in detail in the Schedule.
Coherent: Coherent, Inc., a company incorporated under the laws of the State of Delaware with
its seat in Santa Clara, California, having its business address at 5100 Patrick Henry Drive, Santa
Clara CA 95054, California, United States of America.
Closing: the transfer of the legal title to the Divestment Business to the Purchaser.
Closing Period: the period of […] from the approval of the Purchaser and the terms of sale by the
Commission.
Confidential Information: any business secrets, know-how, commercial information, or any
other information of a proprietary nature that is not in the public domain.
Conflict of Interest: any conflict of interest that impairs the Trustee's objectivity and
independence in discharging its duties under the Commitments.
Divestment Business: the business as defined in Section B and in the Schedule which Coherent
commits to divest.
Divestiture Trustee: one or more natural or legal person(s) who is/are approved by the
Commission and appointed by Coherent, Inc. and who has/have received from Coherent the
exclusive Trustee Mandate to sell the Divestment Business to a Purchaser at no minimum price.
Effective Date: the date of adoption of the Decision.
.. 1 ..
First Divestiture Period: the period of […] from the Effective Date.
Hold Separate Manager: the person appointed by Coherent for the Divestment Business to
manage the day-to-day business under the supervision of the Monitoring Trustee.
Key Personnel: all personnel necessary to maintain the viability and competitiveness of the
Divestment Business, as listed in the Schedule, including the Hold Separate Manager.
Monitoring Trustee: one or more natural or legal person(s) who is/are approved by the
Commission and appointed by Coherent and who has/have the duty to monitor Coherent’s
compliance with the conditions and obligations attached to the Decision.
Parties: the Notifying Party and the undertaking that is the target of the Concentration.
Personnel: all staff currently employed by the Divestment Business, including staff seconded to
the Divestment Business, shared personnel as well as the additional personnel listed in the
Schedule.
Purchaser: the entity approved by the Commission as acquirer of the Divestment Business in
accordance with the criteria set out in Section D.
Purchaser Criteria: the criteria laid down in paragraph 16 of these Commitments that the
Purchaser must fulfil in order to be approved by the Commission.
Rofin-Sinar: Rofin-Sinar Technologies Inc., a company incorporated under the laws of the State
of Delaware with its headquarters at 40984 Concept Drive, Plymouth, Michigan 48170, United
States of America.
Schedule: the schedule to these Commitments describing more in detail the Divestment Business.
Trustee(s): the Monitoring Trustee and/or the Divestiture Trustee as the case may be.
Trustee Divestiture Period: the period of […] from the end of the First Divestiture Period.
Section B. The commitment to divest and the Divestment Business

Commitment to divest
2. In order to maintain effective competition, Coherent commits to divest, or procure the divestiture
of the Divestment Business by the end of the Trustee Divestiture Period as a going concern to a
purchaser and on terms of sale approved by the Commission in accordance with the procedure
described in paragraph 17 of these Commitments. To carry out the divestiture, Coherent commits
to find a purchaser and to enter into a final binding sale and purchase agreement for the sale of the
Divestment Business within the First Divestiture Period. If Coherent has not entered into such an
agreement at the end of the First Divestiture Period, Coherent shall grant the Divestiture Trustee
an exclusive mandate to sell the Divestment Business in accordance with the procedure described
in paragraph 29 in the Trustee Divestiture Period.
3. Coherent shall be deemed to have complied with this commitment if:
(a) by the end of the Trustee Divestiture Period, Coherent or the Divestiture Trustee has
entered into a final binding sale and purchase agreement and the Commission approves the
proposed purchaser and the terms of sale as being consistent with the Commitments in
accordance with the procedure described in paragraph 17; and
(b) the Closing of the sale of the Divestment Business takes place within the Closing Period.
4. In order to maintain the structural effect of the Commitments, Coherent shall, for a period of 10
years after Closing, not acquire, whether directly or indirectly, the possibility of exercising
influence (as defined in paragraph 43 of the Remedies Notice, footnote 3) over the whole or part
of the Divestment Business, unless, following the submission of a reasoned request by Coherent
.. 2 ..
showing good cause and accompanied by a report from the Monitoring Trustee (as provided in
paragraph 43 of these Commitments), the Commission finds that the structure of the market has
changed to such an extent that the absence of influence over the Divestment Business is no longer
necessary to render the proposed concentration compatible with the internal market.
Structure and definition of the Divestment Business
5. The Divestment Business is currently conducted by Rofin’s subsidiary, Rofin-Sinar U.K. Ltd.,
Meadow Road, Bridgehead Business Park, Kingston Upon Hull HU13 0DG, United Kingdom.
The legal and functional structure of the Divestment Business as operated to date is described in
the Schedule. The Divestment Business, described in more detail in the Schedule, includes all
assets and staff that contribute to the current operation or are necessary to ensure the viability and
competitiveness of the Divestment Business, in particular:
(a) all tangible and intangible assets (including intellectual property rights);
(b) all licences, permits and authorisations issued by any governmental organisation for the
benefit of the Divestment Business;
(c) all contracts, leases, commitments and customer orders of the Divestment Business; all
customer, credit and other records of the Divestment Business; and
(d) the Personnel.
6. The Divestment Business is a largely stand-alone business. It will however include the benefit,
for a transitional period after Closing and on terms and conditions equivalent to those at present
afforded to the Divestment Business, of the current arrangements under which Rofin-Sinar or its
Affiliated Undertakings supply products or services to or receive products or services from the
Divestment Business, as detailed in the Schedule, unless otherwise agreed with the
Purchaser. Strict firewall procedures will be adopted so as to ensure that any competitively
sensitive information related to, or arising from such supply arrangements (for example, product
roadmaps) will not be shared with, or passed on to, anyone other than the individuals involved in
continuing to support the Divestment Business during the hold separate period and as may be
required by law (e.g. to permit Coherent to comply with its statutory reporting requirements and
legal obligations).
Section C. Related commitments

Preservation of viability, marketability and competitiveness
7. From the Effective Date until Closing, Coherent shall preserve or procure the preservation of the
economic viability, marketability and competitiveness of the Divestment Business, in accordance
with good business practice, and shall minimise as far as possible any risk of loss of competitive
potential of the Divestment Business. In particular Coherent undertakes:
(a) not to carry out any action that might have a significant adverse impact on the value,
management or competitiveness of the Divestment Business or that might alter the nature
and scope of activity, or the industrial or commercial strategy or the investment policy of
the Divestment Business;
(b) to make available, or procure to make available, sufficient resources for the development
of the Divestment Business, on the basis and continuation of the existing business plans to
the extent consistent with the terms herein;
(c) to take all reasonable steps, or procure that all reasonable steps are being taken, including
appropriate incentive schemes (based on industry practice), to encourage all Key
Personnel to remain with the Divestment Business, and not to solicit or move any
Personnel to Coherent’s remaining businesses. Where, nevertheless, individual members
of the Key Personnel exceptionally leave the Divestment Business, Coherent shall provide
.. 3 ..
a reasoned proposal to replace the person or persons concerned to the Commission and the
Monitoring Trustee. Coherent must be able to demonstrate to the Commission that the
replacement is well suited to carry out the functions exercised by those individual
members of the Key Personnel. The replacement shall take place under the supervision of
the Monitoring Trustee, who shall report to the Commission.
Hold-separate obligations
8. Coherent commits, from the Effective Date until Closing, to keep the Divestment Business
separate from the businesses it is retaining and to ensure that unless explicitly permitted under
these Commitments:
(i) management and staff of the business retained by Coherent have no involvement in the
Divestment Business (save as required to permit Coherent to comply with its statutory reporting
requirements and legal obligations);
(ii) the Key Personnel of the Divestment Business have no involvement in any business
retained by Coherent and do not report to any individual outside the Divestment Business, and
(iii) the Personnel named in Annexes 552, 553 and 554 of the Schedule are ring-fenced from
and have no involvement in the low power CO2 part of the retained business and do not report to
any individual in respect of the Divestment Business outside the Divestment Business.
9. Until Closing, Coherent shall assist the Monitoring Trustee in ensuring that the Divestment
Business is managed as a distinct and saleable entity separate from the businesses retained by
Coherent. Immediately after the adoption of the Decision, Coherent shall appoint a Hold Separate
Manager. The Hold Separate Manager, who shall be part of the Key Personnel, shall manage the
Divestment Business independently and in the best interest of the business with a view to ensuring
its continued economic viability, marketability and competitiveness and its independence from the
businesses retained by Coherent. The Hold Separate Manager shall closely cooperate with and
report to the Monitoring Trustee and, if applicable, the Divestiture Trustee. Any replacement of
the Hold Separate Manager shall be subject to the procedure laid down in paragraph 7(c) of these
Commitments. The Commission may, after having heard Coherent, require Coherent to replace
the Hold Separate Manager.
10. To ensure that the Divestment Business is held and managed as a separate entity the Monitoring
Trustee shall exercise Coherent’s rights as shareholder in the legal entity or entities that constitute
the Divestment Business (except for its rights in respect of dividends that are due before Closing),
with the aim of acting in the best interest of the business, which shall be determined on a stand-
alone basis, as an independent financial investor, and with a view to fulfilling Coherent’s
obligations under the Commitments. Furthermore, the Monitoring Trustee shall have the power to
replace members of the supervisory board or non-executive directors of the board of directors,
who have been appointed on behalf of Coherent. Upon request of the Monitoring Trustee,
Coherent shall resign as a member of the boards or shall cause such members of the boards to
resign.
Ring-fencing
11. Coherent shall implement, or procure to implement, all necessary measures to ensure that it does
not, after the Effective Date, obtain any Confidential Information relating to the Divestment
Business and that any such Confidential Information obtained by Coherent before the Effective
Date will be eliminated and not be used by Coherent. This includes measures vis-à-vis Coherent’s
appointees on the supervisory board and/or board of directors of the Divestment Business. In
particular, the participation of the Divestment Business in any central information technology
network shall be severed to the extent possible, without compromising the viability of the
Divestment Business. Coherent may obtain or keep information relating to the Divestment
Business which is reasonably necessary for the divestiture of the Divestment Business or the
.. 4 ..
disclosure of which to Coherent is required to enable it to comply with its statutory reporting
requirements and legal obligations.
Non-solicitation clause
12. Coherent undertakes, subject to customary limitations, not to solicit, and to procure that Affiliated
Undertakings do not solicit, the Key Personnel transferred with the Divestment Business for a
period of […] after Closing.
Due diligence
13. In order to enable potential purchasers to carry out a reasonable due diligence of the Divestment
Business, the Parties shall, subject to customary confidentiality assurances and dependent on the
stage of the divestiture process:
(a) provide to potential purchasers sufficient information as regards the Divestment Business;
(b) provide to potential purchasers sufficient information relating to the Personnel and allow
them reasonable access to the Personnel.
Reporting
14. Coherent shall submit written reports in English on potential purchasers of the Divestment
Business and developments in the negotiations with such potential purchasers to the Commission
and the Monitoring Trustee no later than 10 days after the end of every month following the
Effective Date (or otherwise at the Commission’s request). Coherent shall submit a list of all
potential purchasers having expressed interest in acquiring the Divestment Business to the
Commission at each and every stage of the divestiture process, as well as a copy of all the offers
made by potential purchasers within five days of their receipt.
15. Coherent shall inform the Commission and the Monitoring Trustee on the preparation of the data
room documentation and the due diligence procedure and shall submit a copy of any information
memorandum to the Commission and the Monitoring Trustee before sending the memorandum
out to potential purchasers.
Section D. The Purchaser

16. In order to be approved by the Commission, the Purchaser must fulfil the following criteria:
(a) The Purchaser shall be independent of and unconnected to the Parties and their Affiliated
Undertakings (this being assessed having regard to the situation following the divestiture).
(b) The Purchaser shall have the financial resources, proven expertise, and incentive [… to]
develop the Divestment Business as a viable and active competitive force in competition
with the Parties and other competitors. [and reference to sales and after-sales network];
(c) The acquisition of the Divestment Business by the Purchaser must neither be likely to
create, in light of the information available to the Commission, prima facie competition
concerns nor give rise to a risk that the implementation of the Commitments will be
delayed. In particular, the Purchaser must reasonably be expected to obtain all necessary
approvals from the relevant regulatory authorities for the acquisition of the Divestment
Business.
17. The final binding sale and purchase agreement (as well as ancillary agreements) relating to the
divestment of the Divestment Business shall be conditional on the Commission’s approval. When
Coherent has reached an agreement with a purchaser, it shall submit a fully documented and
reasoned proposal, including a copy of the final agreement(s), within one week to the
Commission and the Monitoring Trustee. Coherent must be able to demonstrate to the
Commission that the purchaser fulfils the Purchaser Criteria and that the Divestment Business is
being sold in a manner consistent with the Commission's Decision and the Commitments. For the
.. 5 ..
approval, the Commission shall verify that the purchaser fulfils the Purchaser Criteria and that the
Divestment Business is being sold in a manner consistent with the Commitments including their
objective to bring about a lasting structural change in the market. The Commission may approve
the sale of the Divestment Business without one or more Assets or parts of the Personnel, or by
substituting one or more Assets or parts of the Personnel with one or more different assets or
different personnel, if this does not affect the viability and competitiveness of the Divestment
Business after the sale, taking account of the proposed purchaser.
Section E. Trustee
I. Appointment procedure
18. Coherent shall appoint a Monitoring Trustee to carry out the functions specified in these
Commitments for a Monitoring Trustee. Coherent commits not to close the Concentration before
the appointment of a Monitoring Trustee.
19. If Coherent has not entered into a binding sale and purchase agreement regarding the Divestment
Business one month before the end of the First Divestiture Period or if the Commission has
rejected a purchaser proposed by Coherent at that time or thereafter, Coherent shall appoint a
Divestiture Trustee. The appointment of the Divestiture Trustee shall take effect upon the
commencement of the Trustee Divestiture Period.
20. The Trustee shall:
(a) at the time of appointment, be independent of the Parties and their Affiliated
Undertakings;
(b) possess the necessary qualifications to carry out its mandate, for example have sufficient
relevant experience as an investment banker or consultant or auditor; and
(c) neither have nor become exposed to a Conflict of Interest.
21. The Trustee shall be remunerated by the Notifying Parties in a way that does not impede the
independent and effective fulfilment of its mandate. In particular, where the remuneration
package of a Divestiture Trustee includes a success premium linked to the final sale value of the
Divestment Business, such success premium may only be earned if the divestiture takes place
within the Trustee Divestiture Period.
Proposal by Coherent
22. No later than two weeks after the Effective Date, Coherent shall submit the name or names of one
or more natural or legal persons whom Coherent proposes to appoint as the Monitoring Trustee to
the Commission for approval. No later than one month before the end of the First Divestiture
Period or on request by the Commission, Coherent shall submit a list of one or more persons
whom Coherent proposes to appoint as Divestiture Trustee to the Commission for approval. The
proposal shall contain sufficient information for the Commission to verify that the person or
persons proposed as Trustee fulfil the requirements set out in paragraph 20 and shall include:
(a) the full terms of the proposed mandate, which shall include all provisions necessary to
enable the Trustee to fulfil its duties under these Commitments;
(b) the outline of a work plan which describes how the Trustee intends to carry out its
assigned tasks;
(c) an indication whether the proposed Trustee is to act as both Monitoring Trustee and
Divestiture Trustee or whether different trustees are proposed for the two functions.
.. 6 ..
Approval or rejection by the Commission
23. The Commission shall have the discretion to approve or reject the proposed Trustee(s) and to
approve the proposed mandate subject to any modifications it deems necessary for the Trustee to
fulfil its obligations. If only one name is approved, Coherent shall appoint or cause to be
appointed the person or persons concerned as Trustee, in accordance with the mandate approved
by the Commission. If more than one name is approved, Coherent shall be free to choose the
Trustee to be appointed from among the names approved. The Trustee shall be appointed within
one week of the Commission’s approval, in accordance with the mandate approved by the
Commission.
New proposal by Coherent
24. If all the proposed Trustees are rejected, Coherent shall submit the names of at least two more
natural or legal persons within one week of being informed of the rejection, in accordance with
paragraphs 18 and 23 of these Commitments.
Trustee nominated by the Commission
25. If all further proposed Trustees are rejected by the Commission, the Commission shall nominate a
Trustee, whom Coherent shall appoint, or cause to be appointed, in accordance with a trustee
mandate approved by the Commission.
II. Functions of the Trustee
26. The Trustee shall assume its specified duties and obligations in order to ensure compliance with
the Commitments. The Commission may, on its own initiative or at the request of the Trustee or
Coherent, give any orders or instructions to the Trustee in order to ensure compliance with the
conditions and obligations attached to the Decision.
Duties and obligations of the Monitoring Trustee
27. The Monitoring Trustee shall:
(i) propose in its first report to the Commission a detailed work plan describing how it
intends to monitor compliance with the obligations and conditions attached to the Decision.
(ii) oversee, in close co-operation with the Hold Separate Manager, the on-going
management of the Divestment Business with a view to ensuring its continued economic viability,
marketability and competitiveness and monitor compliance by Coherent with the conditions and
obligations attached to the Decision. To that end the Monitoring Trustee shall:
(a) monitor the preservation of the economic viability, marketability and
competitiveness of the Divestment Business, and the keeping separate of the
Divestment Business from the business retained by the Parties, in accordance with
paragraphs 7 and 8 of these Commitments;
(b) supervise the management of the Divestment Business as a distinct and saleable
entity, in accordance with paragraph 9 of these Commitments;
(c) with respect to Confidential Information:
− determine all necessary measures to ensure that Coherent does not after the
Effective Date obtain any Confidential Information relating to the
Divestment Business, save as required to permit Coherent to comply with
its statutory reporting requirements and legal obligations,
− in particular strive for the severing of the Divestment Business’
participation in a central information technology network to the extent
possible, without compromising the viability of the Divestment Business,
.. 7 ..
− make sure that any Confidential Information relating to the Divestment
Business obtained by Coherent before the Effective Date is eliminated and
will not be used by Coherent, and
− decide whether such information may be disclosed to or kept by Coherent
as the disclosure is reasonably necessary to allow them to carry out the
divestiture or as the disclosure is required by law;
(d) monitor the splitting of assets and the allocation of Personnel between the
Divestment Business and Coherent or Affiliated Undertakings;
(iii) propose to Coherent such measures as the Monitoring Trustee considers necessary to
ensure their compliance with the conditions and obligations attached to the Decision, in particular
the maintenance of the full economic viability, marketability or competitiveness of the
Divestment Business, the holding separate of the Divestment Business and the non-disclosure of
competitively sensitive information;
(iv) review and assess potential purchasers as well as the progress of the divestiture process
and verify that, dependent on the stage of the divestiture process:
(a) potential purchasers receive sufficient and correct information relating to the
Divestment Business and the Personnel in particular by reviewing, if available, the
data room documentation, the information memorandum and the due diligence
process, and
(b) potential purchasers are granted reasonable access to the Personnel;
(v) act as a contact point for any requests by third parties, in particular potential
purchasers, in relation to the Commitments;
(vi) provide to the Commission, sending Coherent a non-confidential copy at the same
time, a written report within 15 days after the end of every month that shall cover the operation
and management of the Divestment Business as well as the splitting of assets and the allocation of
Personnel so that the Commission can assess whether the business is held in a manner consistent
with the Commitments and the progress of the divestiture process as well as potential purchasers;
(vii) promptly report in writing to the Commission, sending Coherent a non-confidential
copy at the same time, if it concludes on reasonable grounds that Coherent or Rofin is failing to
comply with these Commitments;
(viii) within one week after receipt of the documented proposal referred to in paragraph 17
of these Commitments, submit to the Commission, sending Coherent a non-confidential copy at
the same time, a reasoned opinion as to the suitability and independence of the proposed
purchaser and the viability of the Divestment Business after the Sale and as to whether the
Divestment Business is sold in a manner consistent with the conditions and obligations attached to
the Decision, in particular, if relevant, whether the sale of the Divestment Business without one or
more Assets or not all of the Personnel affects the viability of the Divestment Business after the
sale, taking account of the proposed purchaser;
(ix) assume the other functions assigned to the Monitoring Trustee under the conditions
and obligations attached to the Decision.
28. If the Monitoring and Divestiture Trustee are not the same [legal or natural] persons, the
Monitoring Trustee and the Divestiture Trustee shall cooperate closely with each other during and
for the purpose of the preparation of the Trustee Divestiture Period in order to facilitate each
other's tasks.
.. 8 ..
Duties and obligations of the Divestiture Trustee
29. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no minimum price the
Divestment Business to a purchaser, provided that the Commission has approved both the
purchaser and the final binding sale and purchase agreement (and ancillary agreements) as in line
with the Commission's Decision and the Commitments in accordance with paragraphs 16 and 17
of these Commitments. The Divestiture Trustee shall include in the sale and purchase agreement
(as well as in any ancillary agreements) such terms and conditions as it considers appropriate for
an expedient sale in the Trustee Divestiture Period. In particular, the Divestiture Trustee may
include in the sale and purchase agreement such customary representations and warranties and
indemnities as are reasonably required to effect the sale. The Divestiture Trustee shall protect the
legitimate financial interests of Coherent, subject to Coherent’s unconditional obligation to divest
at no minimum price in the Trustee Divestiture Period.
30. In the Trustee Divestiture Period (or otherwise at the Commission’s request), the Divestiture
Trustee shall provide the Commission with a comprehensive monthly report written in English on
the progress of the divestiture process. Such reports shall be submitted within 15 days after the
end of every month with a simultaneous copy to the Monitoring Trustee and a non-confidential
copy to Coherent.
III. Duties and obligations of the Parties
31. Coherent shall provide and shall cause their advisors to provide the Trustee with all such co-
operation, assistance and information as the Trustee may reasonably require to perform its tasks.
The Trustee shall have full and complete access to any of Rofin’s or the Divestment Business’
books, records, documents, management or other personnel, facilities, sites and technical
information necessary for fulfilling its duties under the Commitments and Rofin and the
Divestment Business shall provide the Trustee upon request with copies of any document.
Coherent, Rofin, and the Divestment Business, as the case may be, shall make available to the
Trustee one or more offices on their premises and shall be available for meetings in order to
provide the Trustee with all information necessary for the performance of its tasks.
32. Coherent shall provide the Monitoring Trustee with all managerial and administrative support that
it may reasonably request on behalf of the management of the Divestment Business. This shall
include all administrative support functions relating to the Divestment Business which are
currently carried out at headquarters level. Coherent shall provide and shall cause its advisors to
provide the Monitoring Trustee, on request, with the information submitted to potential
purchasers, in particular give the Monitoring Trustee access to the data room documentation and
all other information granted to potential purchasers in the due diligence procedure. Coherent
shall inform the Monitoring Trustee as to possible purchasers, submit lists of potential purchasers
at each stage of the selection process, including the offers made by potential purchasers at those
stages, and keep the Monitoring Trustee informed of all developments in the divestiture process.
33. Coherent shall grant or procure Rofin SL to grant comprehensive powers of attorney, duly
executed, to the Divestiture Trustee to effect the sale (including ancillary agreements), the Closing
and all actions and declarations which the Divestiture Trustee considers necessary or appropriate
to achieve the sale and the Closing, including the appointment of advisors to assist with the sale
process. Upon request of the Divestiture Trustee, Coherent shall cause the documents required for
effecting the sale and the Closing to be duly executed.
34. Coherent shall indemnify the Trustee and its employees and agents (each an “Indemnified Party”)
and hold each Indemnified Party harmless against, and hereby agrees that an Indemnified Party
shall have no liability to Coherent for, any liabilities arising out of the performance of the
Trustee’s duties under the Commitments, except to the extent that such liabilities result from the
wilful default, recklessness, gross negligence or bad faith of the Trustee, its employees, agents or
advisors.
.. 9 ..
35. At the expense of Coherent, the Trustee may appoint advisors (in particular for corporate finance
or legal advice), subject to Coherent’s approval (this approval not to be unreasonably withheld or
delayed) if the Trustee considers the appointment of such advisors necessary or appropriate for
the performance of its duties and obligations under the Mandate, provided that any fees and other
expenses incurred by the Trustee are reasonable. Should Coherent refuse to approve the advisors
proposed by the Trustee the Commission may approve the appointment of such advisors instead,
after having heard Coherent. Only the Trustee shall be entitled to issue instructions to the
advisors. Paragraph 34 of these Commitments shall apply mutatis mutandis. In the Trustee
Divestiture Period, the Divestiture Trustee may use advisors who served Coherent during the
Divestiture Period if the Divestiture Trustee considers this in the best interest of an expedient sale.
36. Coherent agrees that the Commission may share Confidential Information proprietary to them
with the Trustee. The Trustee shall not disclose such information and the principles contained in
Article 17 (1) and (2) of the Merger Regulation apply mutatis mutandis.
37. Coherent agrees that the contact details of the Monitoring Trustee are published on the website of
the Commission's Directorate-General for Competition and they shall inform interested third
parties, in particular any potential purchasers, of the identity and the tasks of the Monitoring
Trustee.
38. For a period of 10 years from the Effective Date the Commission may request all information
from Coherent that is reasonably necessary to monitor the effective implementation of these
Commitments.
IV. Replacement, discharge and reappointment of the Trustee
39. If the Trustee ceases to perform its functions under the Commitments or for any other good cause,
including the exposure of the Trustee to a Conflict of Interest:
(a) the Commission may, after hearing the Trustee and Coherent, require Coherent to replace
the Trustee; or
(b) Coherent may, with the prior approval of the Commission, replace the Trustee.
40. If the Trustee is removed according to paragraph 39 of these Commitments, the Trustee may be
required to continue in its function until a new Trustee is in place to whom the Trustee has
effected a full hand over of all relevant information. The new Trustee shall be appointed in
accordance with the procedure referred to in paragraphs 18 to 25 of these Commitments.
41. Unless removed according to paragraph 39 of these Commitments, the Trustee shall cease to act
as Trustee only after the Commission has discharged it from its duties after all the Commitments
with which the Trustee has been entrusted have been implemented. However, the Commission
may at any time require the reappointment of the Monitoring Trustee if it subsequently appears
that the relevant remedies might not have been fully and properly implemented.
Section F. The review clause

42. The Commission may extend the time periods foreseen in the Commitments in response to a
request from Coherent or, in appropriate cases, on its own initiative. Where Coherent requests an
extension of a time period, it shall submit a reasoned request to the Commission no later than one
month before the expiry of that period, showing good cause. This request shall be accompanied by
a report from the Monitoring Trustee, who shall, at the same time send a non-confidential copy of
the report to the Notifying Party. Only in exceptional circumstances shall Coherent be entitled to
request an extension within the last month of any period.
43. The Commission may further, in response to a reasoned request from Coherent showing good
cause waive, modify or substitute, in exceptional circumstances, one or more of the undertakings
.. 10 ..
in these Commitments. This request shall be accompanied by a report from the Monitoring
Trustee, who shall, at the same time send a non-confidential copy of the report to Coherent. The
request shall not have the effect of suspending the application of the undertaking and, in
particular, of suspending the expiry of any time period in which the undertaking has to be
complied with.
Section G. Entry into force

44. The Commitments shall take effect upon the date of adoption of the Decision.
[Signed on behalf of Coherent, Inc.]

October [21], 2016
.. 11 ..
SCHEDULE
1. The Divestment Business as operated to date has the following legal and functional
structure:
(1) Rofin-Sinar U.K. Limited (“RSUK”) is a 100% subsidiary of Rofin-Sinar Technologies Europe
SL. Its ultimate parent company is Rofin-Sinar Technologies Inc. (“RSTI”). RSTI is
headquartered in Plymouth (United States) and in Hamburg (Germany). RSUK operates as an
autonomous entity within the Rofin group. An organisational chart for the Rofin-Sinar group is
attached at Annex 511. An organisational chart for the Divestment Business is attached as
Annex 571.
(2) The structural links between RSTI and RSUK are summarized in this graphic:
ROFIN-SINAR TECHNOLOGIES INC.

Plymouth, USA
ROFIN-SINAR TECHNOLOGIES EUROPE S.L.

Barcelona, Spain
ROFIN-SINAR U.K. LTD.

Kingston-upon-Hull, United Kingdom
(3) RSUK has its registered office at the following address:

Rofin-Sinar U.K. Ltd.,
Meadow Road,
Bridgehead Business Park,
Kingston Upon Hull,
HU13 0DG
Registered in England: 3477444
Tel.: +44 1482 650088
Fax: +44 1482 650022
(4) The business was established in early 1998 to develop and extend RSTI’s CO2 laser product range
to include sealed CO2 lasers below 1000W (“low power CO2 lasers”). Prior to this, RSTI only
sold high power CO2 lasers of 1000W and above manufactured in its Hamburg (Germany)
facility.
(5) Today, RSUK manufactures (i) a wide range of sealed CO2 laser sources at power levels from
100W to 650W for industrial processing and marking applications, such as its SR, SC, and OEM
series, and (ii) its low power CO2 laser system products called Multiscan VS. Coherent is
proposing to sell both of these businesses (i.e. the sources and systems businesses) in their
entirety.
(6) RSUK’s lasers are employed in a variety of industries including automotive, aerospace, packing,
electronics and in a number of applications involving cutting, drilling, welding, marking of
plastics, metal, fabrics and ceramics. RSUK is the only company/site within the Rofin group
.. 12 ..
which is active in the production of low power CO2 lasers. RSUK’s low power CO2 laser
products are sold and distributed through Rofin's worldwide sales and service organization and by
third-party distributors.
(7) As at 3 October 2016, RSUK employs […] people, has a turnover of approximately GBP
26 million (FY 2016) and exports [>90]% of its products to over 50 countries worldwide.
2. In accordance with paragraph 5 of these Commitments, the Divestment Business

includes, but is not limited to:
(a) main tangible assets:
(8) The Divestment Business is comprised of the entire Bridgehead Business Park site, consisting of a
new, purpose built 80,000 sq. ft. factory near the Humber Bridge in Hull, which was opened in
February 2016:
RSUK facility
(9) The Divestment Business also includes:

- All plant and machinery belonging to RSUK, including certain assets located in […]
(Germany) and […] (China); and
- All fixtures and fittings belonging to RSUK.
(10) A detailed list of the tangible assets used and owned by RSUK is provided at Annex 551.
(b) main intangible assets:

(11) The patents listed on Annex 551 are registered in the name of RSUK on behalf of the Rofin
group. In this Form,
• References to “gas laser device patents” are to U.S. patent US8116348 filed on October
21, 2008 and to the other patents and patent applications referred to in Annex 551 in
respect of the same invention,
• References to “mode selection technique for a laser patents” are to European patent
EP2362502 filed on January 14, 2011 and to the other patents and patent applications
referred to in Annex 551 in respect of the same invention,
.. 13 ..
• References to “integrated pre-power amplifier patents” are to UK patent GB2505315 filed
on August 7, 2013 and to the other patents and patent applications referred to in
Annex 551 in respect of the same invention, and
• [Reference to patents used exclusively for non-low power CO2 lasers that is to be
transferred to Coherent/Rofin].
(12) Title to the gas laser device patents and to the mode selection technique for a laser patents shall be
retained by RSUK, subject in each case to the grant to Coherent from RSUK of [a license in
respect of high power CO2 laser sources]. Any license will include a license to any additional
tangible or intangible assets such as know-how, models or test data.
(13) Title to the integrated pre-power amplifier patents (which today are used predominantly for
[non-low power CO2] but which are being used by RSUK for the development of low power CO2
laser sources) shall be transferred from RSUK to a Coherent/Rofin company, subject to the grant
of [licenses to RSUK]. Any license will include a license to any additional tangible or intangible
assets such as know-how, models or test data.
(14) Title to [the fourth family of] patents (used exclusively for [non-low power CO2] lasers) shall be
transferred from RSUK to a Coherent/Rofin company. These patents are therefore “excluded
assets”, as the term in used in Part 3 of the Schedule to the Commitments.
(15) Pending the sale of the Divestment Business, and at the option of the Purchaser, for up to […]
after Closing, the Divestment Business shall have a royalty-free license to use the brand “Rofin-
Sinar Hull”, and any pre-branded stock and spare parts with the current marks used in association
with the sale of the low power CO2 laser sources and systems marketed by RSUK. This license is
granted on the condition that RSUK and/or the Purchaser shall indemnify Coherent and/or Rofin
from any and all damages caused to the brand “ROFIN”, “Rofin-Sinar” and related brands and
marks.
(c) the following main licences, permits and authorisations:

(16) RSUK has all governmental licences, permits and authorisations required to operate the facilities
and business located at Bridgehead Business Park. Coherent does not anticipate any difficulties in
transferring these governmental licences, permits and authorisations.
(17) RSUK is accredited to the ISO9001-2008 quality standard and uses the latest lean manufacturing
techniques, to ensure a flexible world-class manufacturing environment that is responsive to
customer needs and requirements.
(d) the following main contracts, agreements, leases, commitments and understandings:
(18) To the extent applicable, and where permitted under the terms of the existing contracts and
agreements, Coherent will transfer, assign, or grant to the Purchaser all such contracts and
agreements.
(e) the following customer, credit and other records:

(19) All relevant data, books, records, and other documents exclusively related to or necessary for the
operation of RSUK including existing customer records and supplier records.
(20) A non-exhaustive list of RSUK customers of low power CO2 laser sources, showing total turnover
generated by each (in EUR and as a percentage of total turnover), in the financial year 2015 is
attached as Annex 581.
.. 14 ..
(21) A non-exhaustive list of RSUK Multiscan customers, showing total turnover generated by each
(in EUR and as a percentage of total turnover), in the financial year 2015 is attached as
Annex 582.
(f) the following Personnel:

(22) A list of all personnel working for RSUK at Hull (together with a short description of their
functions, up-to-date as at September 2016) is attached as Annex 571. The names and functions
of other RSTI personnel who contribute to the sales effort of RSUK are listed in Annexes 552,
553 and 554.
(g) the following Key Personnel:

(23) The names of Key Personnel are listed at Annex 572.
(h) the arrangements for the supply with the following products or services by Coherent
or Affiliated Undertakings for transitional periods of up to five and ten years after Closing:
Supply arrangements to RSUK
(24) Given the autonomous nature of RSUK, the divestiture should be accomplished without difficulty,
with few (if any) transitional arrangements being required. These agreements are necessary in
order to avoid supply disruptions to customers of both RSUK and other Rofin subsidiaries.
(25) [A Rofin-Sinar subsidiary currently supplies certain components] to RSUK. Coherent shall
continue to meet RSUK’s requirements on arm’s length terms as is currently the case under the
existing arrangement between RSUK and […] during the hold separate period and for […] years
after the Closing. At the request of the Divestment Business, Coherent shall grant a […] license
to the Divestment Business of any know-how or other intellectual property used by Coherent/[…]
which is needed to enable RSUK to develop an alternative source of supply [of these
components].
(26) [Another Rofin-Sinar subsidiary currently supplies certain components and services to] RSUK
[…]. Coherent shall continue to [meet RSUK's requirements] on arm’s length terms as is
currently the case under the existing arrangement between RSUK and […] during the hold
separate period and for […] years after the Closing. At the request of the Divestment Business,
Coherent shall grant a […] license to the Divestment Business of any know-how or other
intellectual property used by Coherent/[…] which is needed to enable RSUK to develop an
alternative source of supply [of these components and services].
(27) The supply agreements referred to in paragraphs (25) and (26) may be terminated:
• at any time, by mutual agreement, or
• at the request of the Divestment Business, on […] notice, given no earlier than […] years
after the Closing.
(28) […]. Until the Closing, and, at the option of the Purchaser, for a period of up to […] months
thereafter, arrangements shall be made for RSUK to be provided with marketing support from
[…] on a mutually agreed upon basis with the hold separate manager, the Monitoring Trustee and
members of the Coherent clean team.
(29) The Divestment Business has its own IT systems (with the exception of a VPN link between
RSUK and [a Rofin-Sinar facility in] China which is used for […]. Arrangements will be made to
ensure that a suitable link is maintained with [the facility in China] until the Closing, and, at the
option of the Purchaser, for a period of up to […] months thereafter.
.. 15 ..
(30) Certain sales and service support will also be required by RSUK during the hold separate period
and for a transitional period after the Closing.
(31) Three groups of sales and service support personnel shared between RSUK and the Rofin group
have been identified.
(32) [… including reference to Annex 552]:
• […]
• […].
(33) [… including reference to Annex 553].
(34) [… including reference to Annex 554].
Supply arrangements to Coherent-Rofin group
(35) RSUK is also a supplier of [certain components to another Rofin-Sinar subsidiary]. These are
integrated into other Rofin systems […] and these systems are then sold to partners or customers.
Arrangements shall be made for this supply agreement to continue on arm’s length terms as is the
case under the existing arrangement […] during the hold separate period and for […] years after
the Closing.
(36) The supply agreement referred to in paragraph (35) may be terminated:
• at any time, by mutual agreement, or
• at the request of the Divestment Business, on […] notice, given no earlier than […] years
after the Closing.
3. The Divestment Business shall not include:

(37) One R&D project […] shall be excluded from the scope of the Divestment Business.
(38) Title to two sets of patents shall be transferred by RSUK to a Coherent/Rofin entity, as described
in detail at paragraphs (13) and (14) above.
4. If there is any asset or personnel which is not covered by paragraph 2 of this

Schedule but which is both used (exclusively or not) in the Divestment Business and
necessary for the continued viability and competitiveness of the Divestment Business, that
asset or adequate substitute will be offered to potential purchasers.
(39) Blank.
.. 16 ..
ANNEXES TO THE SCHEDULE
Annex 511 – Organisational chart of RSTI
[...]
Annex 551 – Patents registered in the name of the Divestment Business
[...]
Annexes 552, 553, 554 – Shared personnel
[...]
Annex 571 – Organisational chart of the Divestment Business
[...]
Annex 572 – List of Key Personnel
[...]
Annex 581 – Customer list for low power CO2 laser products
[…]
Annex 582 – Customer list for Multiscan products
[...]
.. 17 ..

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EUROPEAN COMMISSION

Only the English text is available and authentic.

REGULATION (EC) No 139/2004

Article 6(1)(b) in conjunction with Art 6(2)

In electronic form on the EUR-Lex website under document

In the published version of this decision,

To the notifying party

Dear Madam(s) and/or Sir(s),

Subject: Case M.8055 – Coherent / Rofin-Sinar Technologies

Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE

Tel: +32 229-91111. Fax: +32 229-64301. E-mail: [email protected].

II. THE OPERATION

IV. MARKET DEFINITIONS

IV.1. Description of the products

→ an external energy source that is used to excite the laser medium;

Figure 1 Diagram of a laser

IV.2. Product market definition

IV.2.1. Product market definitions for CO2 lasers

IV.2.1.1. High-power and low-power CO2 lasers

5 Cases IV/32.800 and IV/33.335 Quantel International – Continuum/Quantel SA, decision,

(20) According to information gathered during the Commission's investigation, it is

(21) A plausible segmentation would be to analyse the low-end power segment

8 See for instance documents ID 380-63, [reference to internal documents].

IV.2.1.3. Different designs of low-power CO2 lasers

IV.3. Geographic market definition

V. COMPETITIVE ASSESSMENT OF LOW-POWER CO2 LASERS

V.1. The Notifying Party's views

V.1.1. Market shares and main competitors

31 See replies to question 22 of Q1 Questionnaire to competitors, replies to questions 20 and 25 of

b. El.En, an Italian vertically integrated laser source and laser system

c. The US-based Iradion is, according to the Parties, a particularly innovative

d. Universal is a laser system manufacturer that vertically integrated by starting

V.1.3. Constraints from fibre lasers and non-laser technologies

V.1.4. Closeness of competition

V.1.5. Other competitive constraints on CO2 lasers

V.2. Results of the market investigation and the Commission's assessment

V.2.1. Market shares and competitors

V.2.1.1. All low-power CO2 lasers

a. Although Synrad is indeed a strong competitor which was identified by many

c. Another vertically integrated actor, Universal, has been reported by

36 See replies to question 41 of Q2 Questionnaire to customers.

f. Coding manufacturers Markem Imaje and VideoJet flagged by the Parties as

V.2.1.2. Sub-segment of 100-999W low-power CO2 lasers

44 See confirmed non-confidential minutes of a call with FEHA on 23 September 2016.

47 100-599W, as provided by the Parties.

c. The vertically integrated Universal was reported by respondents to be

V.2.2. Competition from Chinese suppliers

V.2.3. Constraints from fibre lasers and non-laser technologies

52 See replies to question 25 of Q2 Questionnaire to customers.

(81) Similarly, substitution of low-power CO2 lasers by non-laser technologies was

V.2.4. Closeness of competition

57 See replies to question 7 of Q1 Questionnaire to competitors, to question 9 of Q2 Questionnaire to

(87) To conclude, evidence gathered suggests that Rofin is a close competitor of

V.2.5. Barriers to entry and expansion

70 See replies to questions 39 and 40 of Q2 Questionnaire to customers and confirmed non-confidential

V.2.6. Vertical expansion of customers

V.2.7. Customers' reactions

(99) A large proportion of responding customers voiced concerns about product