Commission Approves Acquisition of Mivisa by Crown

17 Mar 2014 --- The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Mivisa Envases, S.A.U. of Spain by Crown Holdings, Inc. of the United States. Both Crown and Mivisa manufacture metal food cans used for fruit and vegetables, fish and seafood, pet food as well as ready-made meals.

The clearance is conditional upon (i) the divestment of Crown's plants producing metal cans in Spain and (ii) the divestment of Mivisa's metal food cans plant in the Netherlands. The Commission was concerned that following the acquisition, the level of competition in markets for metal food cans in the Benelux, France, Spain and Portugal would have been too weak to avoid price increases. The commitments offered by Crown address these concerns.

The Commission concluded that the proposed transaction, as originally notified, would have given the merged entity very high market shares in the Benelux, France, Spain and Portugal and would have eliminated an important and aggressive competitor from the market, Mivisa. In each area, only one sizeable competing supplier would have remained (Ardagh in the Benelux, France and Portugal and Auxiliar in Spain). The Commission considered that this remaining supplier would have had limited incentives to compete with the merged entity. Other players would also have had limited ability to supply customers with large volumes and product ranges. Given this lack of alternatives, customers would have likely faced price increases.

In order to address the Commission's concerns, Crown offered to divest its metal cans plants in La Rioja, Murcia, Coruxo-Vigo, Ugao-Miravalles and Montmeló. Crown will also install in the Vigo plant an additional production line, in order to enable this facility to serve Portuguese customers with sufficient capacity for all the sizes of cans which Crown and Mivisa currently sell in Portugal. As a result, the divested plant in Vigo will impose a competitive constraint on the merged entity not only in Spain but also in Portugal. The Commission concluded that the plant in La Rioja can serve clients in southern France, as Mivisa does presently. In addition Mivisa's plant producing metal food cans in Horst (the Netherlands) will also be divested. This facility is also currently used to serve Mivisa's customers in northern France.

In view of the remedies proposed, the Commission concluded that the transaction, as modified, would raise no competition concerns. This decision is conditional upon full compliance with the commitments.

The transaction was notified to the Commission on 24 January 2014.

The Commission did not identify competition concerns with respect to the production and supply of food metal cans in Germany and in Hungary, mainly because of the presence of significant alternative suppliers in addition to Ardagh (such as: Silgan, CanPack and PikoPack in Hungary and its adjacent areas and Silgan, G&M and CanPack in Germany and its adjacent areas) with sufficient capacity to counteract any attempt by the merged entity to increase prices.

Crown is a multinational company that manufactures various packaging products for consumer goods (including aerosols, beverage packaging, food cans and metal closures). Crown operates production plants worldwide.

Mivisa is headquartered in Spain and has production facilities also in Hungary, the Netherlands, Morocco and Peru. It is primarily active in the manufacturing of tinplate food cans, metal closures and stand-alone can ends.