Royaan and Ad Van Geloven Merger 'Would Restrict Competition', Says Authority

After a preliminary investigation, the Commission found that this proposed transaction would threaten to significantly affect competition in the market for frozen snacks in the Netherlands.

Jan 17 2012 --- The European Commission has referred, under the EU Merger Regulation, the assessment of the Dutch part of a proposed combination of the activities of the Dutch companies Royaan and Ad Van Geloven (AvG) in the market for frozen snacks, to the Dutch competition authority, at the latter's request.

After a preliminary investigation, the Commission found that this part of the proposed transaction would threaten to significantly affect competition in the market for frozen snacks in the Netherlands. Those aspects will now be examined by the Dutch Competition Authority under national law. At the same time the Commission has approved the Belgian part of the transaction, because the overlaps between the parties' activities are limited in these markets and the merged entity will continue to face sufficient competitors.

The Commission’s investigation confirmed that the proposed transaction would lead to significant overlaps in the market for frozen snacks in the Netherlands. The merged entity would be the most important supplier of frozen snacks in the Netherlands with renowned brands such as Mora and Van Dobben. The combined market shares would also be high in a number of individual categories of frozen snacks where Royaan and AvG overlap.

In the Commission's view, the Dutch competition authority is best placed to investigate the effect of the transaction on the Dutch market. The Commission has therefore referred the assessment of the Dutch part of the transaction to the Dutch competition authority.

With regard to the market for frozen snacks in Belgium, the Commission's investigation found that the overlaps between the parties are limited and that other players will put sufficient constraints on the merged entity. The Commission concluded that this part of the transaction would not significantly impede effective competition in the European Economic Area (EEA) and has therefore cleared the proposed transaction with regard to the market for frozen snacks in Belgium.

The transaction was notified to the Commission on 15 November 2011.

Royaan and AvG produce branded and private label frozen snacks for the retail market and the out of home market (through wholesalers) primarily in the Netherlands and Belgium. In the retail market Royaan sells frozen snacks under the brand names Van Dobben, Bakker, Mayam and Tjendrawasih. In the out of home market, it sells frozen snacks under brands such as Van Dobben, Buitenhuis, Kweekkeboom and Willie Doktor. In the retail market AvG sells frozen snacks under brand names such as Hebro, Mora and De Bourgondiër. In the out of home market, it sells frozen snacks under brand names such as Ad van Geloven and Welten Snacks.

Buitenfood B.V. (the holding company of Royaan) and AvG are currently owned by private equity firms, respectively NPM Capital N.V. (NPM) of the Netherlands and Lion Capital LLP of the United Kingdom. NPM is a subsidiary of SHV Holdings N.V., a Dutch company active in trade and distribution of liquefied petroleum gas, trade in food and non-food consumer articles, provision of private equity, exploration and production of oil and gas, heavy lifting and renewable energy.