European Commission Approves Givaudan’s Quest Acquisition

22/02/07 The European Commission has cleared under the EU Merger Regulation the proposed acquisition by Swiss based Givaudan S.A of the flavouring and fragrance business of Imperial Chemical Industries trading under the name Quest International of the Netherlands. After examining the operation, the Commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Quest supplies a range of flavourings and fragrances for use in products such as processed foods, drinks, perfumes and cosmetics. Givaudan is also active in the manufacture and sale of flavourings and fragrances and, like Quest, has limited activities in the manufacture and sale of aroma chemicals which are used as raw materials in the production of flavours and fragrances.

Although the takeover would give Givaudan a leading position in the European markets for flavours and fragrances, the Commission’s examination of the proposed transaction showed that Quest and Givaudan are not the closest competitors in these markets and that the combined firm would continue to face competitive pressure from several established multinational players with significant market shares as well as many smaller competitors to which customers could switch in the event of price increases.

In the market for aroma chemicals, the merged entity would not become the leading player and the presence of several strong, effective competitors with significant market shares would guard against the risk of any anti-competitive effects from the merger.