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Acquisition of KoroFrance by Cargill Cleared

by 5m Editor
21 November 2011, at 12:00am

EU - The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the French company KoroFrance, the holding company of the animal feed Provimi Group, by the US based company Cargill.

The Commission concluded that the proposed transaction would not raise competition concerns as the merged entity would continue to be constrained by a number of other players.

The Commission particularly examined the competitive effects of the proposed acquisition in the markets for the supply of compound feed and feed mixes, as well as on crude and refined seed oil.

The investigation showed that the horizontal overlaps between the activities of Cargill and KoroFrance in animal compound feed and feed mixes would not raise competition concerns given the relatively limited combined market position of the merging parties and the presence of a sufficient number of alternative suppliers, in the European Economic Area (EEA) 1 .

The Commission also assessed the vertical integration of Cargill's activities on the crude and refined seed oil markets and those of KoroFrance in the animal feed sector.

It concluded that competitors of KoroFrance were unlikely to be shut out from the market as they would be able to source their needs of crude seed oil from alternative suppliers.

Although Cargill has high market shares in the supply of refined seed oil to the feed industry in some Member States, there is also no foreclosure risk mainly because the animal feed industry represents a small share of the total demand for refined seed oil and the merged entity will remain a small customer of these oils.

The Commission therefore concluded that the transaction would not significantly impede effective competition in the EEA or any substantial part of it. The proposed transaction was notified to the Commission on 11 October 2011.

5m Editor

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