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 29 sep 2017 16:41 

Acquisition of joint control over Linden Foods by ABP Food Group and Fane Valley

The European Commission has cleared unconditionally under the EU Merger Regulation the proposed acquisition of joint control over Linden Foods by ABP Food Group and Fane Valley. The Commission concluded that the transaction would not adversely affect competition in the EU Single Market.

ABP, Fane Valley, and Linden are active in Ireland and the UK in the purchase and slaughter of live cattle, sheep and lambs, as well as the processing of their meat. The companies also have overlapping activities in the market for sale of fresh and processed meat, and the markets for animal by-products.

ABP already holds a non-controlling interest in Linden and proposes to increase its shareholding to 50% with the effect that, following the transaction, Linden will be jointly controlled by ABP and Fane Valley.

Commission investigation

The Commission conducted a broad investigation in the markets where the activities of the companies overlap:

  • On the potential impact on the markets for the purchasing of live animals for slaughter, the Commission assessed any potential increase of slaughterhouses' buyer power to the detriment of farmers. The Commission found that farmers in Ireland and the UK (including Northern Ireland) are able to switch slaughterhouses if they get better prices for their animals. Various slaughterhouses with spare capacity will continue to operate within reasonable distances to the plants of the parties. Therefore, the Commission found that the merged entity would not be able to offer farmers lower prices for their animals, since farmers will continue to have sufficient alternative buyers for their animals.
  • On competition in the downstream markets relating to the sale of fresh and processed meat, the investigation found that a number of strong competitors will remain active after the merger and that buyers will be able to readily switch to other meat providers.
  • On the collection of animal by-products generated by slaughtering activities, the Commission noted that Linden is not directly active in the processing of animal by-products. The Commission found that alternative providers with spare capacity exist in these markets so that the transaction is unlikely to have a negative impact on slaughterhouses or farmers.

Therefore, the Commission concluded that the proposed transaction would raise no competition concerns on any of the markets concerned.

Companies and products

Fane Valley of the UK is a farmer owned cooperative society active in the slaughtering of cattle and ovine animals, meat processing and the collection and processing of animal by-products in Ireland and the UK.

Linden Foods of the UK is currently solely controlled by Fane Valley, and is active in the slaughtering and processing of cattle and ovine animals in the UK.

ABP Food Group of Ireland is active in the slaughtering of cattle and ovine animals, the processing of their meat and the collection and processing of associated animal by-products in Ireland, the UK, and other European countries.

In 2016, the Commission cleared the acquisition of joint control over Slaney JV by ABP and Fane Valley.

Cooperation with national authorities

The Commission has been in close contact with the national competition authorities in Ireland and the UK. Both authorities have reviewed a parallel transaction, the merger between Dunbia and Dawn Meats, two meat processors active in Ireland and the UK. The assessment of the present transaction by the Commission does not change, irrespective of the outcome of the assessment carried out by the two national competition authorities in relation to the Dunbia/Dawn Meats merger.

Merger control rules and procedures

The transaction was notified to the European Commission on 25 August 2017.

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).

More information will be available on the competition website, in the Commission's public case register under the case number M.8481.

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