EU Commission Clears AGRANA and Ybbstaler Joint Venture

The Commission's investigation confirmed that although the two companies are active at the same points along the value chain, the joint venture's market position would be too limited to raise competition concerns.

5 April 2012 --- The European Commission has cleared under the EU Merger Regulation the creation of a joint venture by the Austrian companies AGRANA and RWA which will bring together their respective activities in the production of apple juice concentrate and other fruit-related products. The Commission's investigation confirmed that the joint venture, which will trade under the name YBBSTALER AGRANA JUICE GMBH, would continue to face a number of other competitors active in apple juice concentrate, both in the European Economic Area (EEA) and beyond. Customers would therefore still have a number of alternative suppliers in the markets concerned.

The Commission examined the competitive effects of the proposed transaction along the supply chain for apple juice concentrate from the procurement of the apples used to produce the concentrate to its sale to downstream customers in the drinks industry. The Commission's investigation confirmed that although the two companies are active at the same points along the value chain, the joint venture's market position would be too limited to raise competition concerns.

The Commission also looked at AGRANA's and RWA's activities in the production of fruit juice concentrates other than apple as well as a number of other fruit-based products. In all instances, the Commission's investigation found that, despite a number of overlaps between the two companies' activities, the joint venture's position on these markets would not reach a level to raise competition concerns. The Commission's investigation also confirmed that the vertical relationships between the joint venture and its two parent companies would raise no competition concerns, because of the relatively limited market shares of the parties on the markets concerned

The Commission therefore concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it.

The transaction was notified to the Commission on 29 February 2012.

This decision forms the anti-trust prerequisite for concluding the transaction. The closing is planned for early June 2012.

The newly founded joint venture, YBBSTALER AGRANA JUICE GmbH, will have its head offices in Kröllendorf|Lower Austria and will have 14 production sites, located in Austria, Denmark, Germany, Hungary, Poland, Romania, the Ukraine and China. Besides fruit juice concentrates, the joint venture will also produce fruit purees and natural flavourings as well as direct juices for use by the beverages industry. Annual sales revenues will be around €350m and fully consolidated by AGRANA.

“The merger of these companies is an important step to consolidate our position in the fruit juice concentrate market,” says Johann Marihart, CEO of AGRANA.

“The joint venture is a win-win constellation for Ybbstaler and AGRANA Juice, and aims to further increase our competitiveness in increasingly global fruit juice concentrate markets,” adds Klaus Buchleitner, CEO of RWA Raiffeisen Ware Austria AG.

AGRANA, the refiner of agricultural raw materials in the areas of sugar, starch and fruit, is the leading sugar company in Central and Eastern Europe and a top producer of special starch products in Europe. In the fruit segment, AGRANA is the top global producer of fruit preparations for the dairy industry and one of the leading producers of fruit juice concentrates in Europe. With approximately 8,000 personnel at 53 production facilities in 26 countries, AGRANA generates global revenues of over €2bn.

RWA, the wholesaler and service provider of the Raiffeisen Lagerhaus (Raiffeisen warehouses) in Austria, provides a wide range of goods and services. These range from the marketing of agricultural products, the trade in farm supplies and building materials as well as household and garden products and a wide range of different services. Besides its tasks performed on behalf of the Raiffeisen-Lagerhaus warehouses, RWA is also a holding company with subsidiaries in Austria and in selected neighbouring Eastern European countries. In 2011, the RWA Group generated revenues of around €2.5bn.