EU Commission Clears Animal Feed Acquisition of Agricola by Forfarmers

The Commission's investigation revealed that the transaction would not risk shutting out rivals from the affected markets, primarily because of the modest combined market shares of the parties and the presence of a number of alternative suppliers.

5 Jul 2012 --- The European Commission has cleared under the EU Merger Regulation the proposed acquisition of British animal feed producer Agricola, the holding company of BOCM Pauls, by the Dutch agricultural commodities and feed producer Forfarmers. The Commission found that the transaction would not raise competition concerns because of the limited increment in market share resulting from the acquisition and the presence of sufficient competitors on the markets concerned.

The Commission's investigation confirmed that the limited overlap between the parties' activities in the markets for the supply of certain types of animal feed in the United Kingdom, the Netherlands and Germany would not significantly alter the market structure and that there would be sufficient competitors on the markets concerned.

The Commission also assessed the vertical relationships arising from the transaction as the parties are active in the supply of certain ingredients that are used in the production of compound feed.

The Commission's investigation revealed that the transaction would not risk shutting out rivals from the affected markets, primarily because of the modest combined market shares of the parties and the presence of a number of alternative suppliers.

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

The proposed transaction was notified to the Commission on 31 May 2012.

Forfarmers is the holding company for an international group of companies mainly active in the production and sale of agricultural commodities such as compound feed, fertilisers and seeds. Forfarmers produces broiler breeders and provides miscellaneous agricultural services as well as supplying raw materials to the feed, food and fuel industries through its participation in Cefetra B.V. Its production facilities are located in the Netherlands, Belgium and Germany.

Agricola is the holding company for a group of companies which operates under the trade name BOCM Pauls. BOCM Pauls is mainly active as a supplier of animal feed in the UK. It sells compound feed and blended feed for all types of livestock, especially cattle, pigs and poultry, under various trademarks. It also provides supplies to livestock farmers who home-mix their animal feed. All its production facilities are located in the UK where it generates most of its turnover.

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

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