EC cleared the acquisition of Cocoa Ingredients Division of Petra Foods by Barry Callebaut

Brussels, 7-6-2013 — /europawire.eu/ —  The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the Cocoa Ingredients Division of Petra Foods Limited of Singapore by Barry Callebaut AG of Switzerland. The Commission’s investigation confirmed in particular that customers would still have sufficient alternative suppliers in all markets concerned and that the merged entity would continue to face competition from a number of other strong competitors.

The Commission examined the competitive effects of the proposed acquisition in the markets for the procurement of cocoa beans and the production and sale of semi-finished cocoa products (cocoa liquor, cocoa butter and cocoa powder) where the parties’ activities overlap. The Commission also examined the vertical relationships between these activities and the market for industrial chocolate, where Barry Callebaut is active.

The Commission’s investigation found that the markets for cocoa products are relatively concentrated, with some major international players such as ADM and Cargill. However, the Commission’s investigation showed that the parties’ activities are relatively complementary and that the proposed transaction would not lead to a significant deterioration of competition in the markets concerned.

In particular, the Commission found that the parties’ position in the global market for the procurement of cocoa beans remains sufficiently moderate, even under the assumption that the markets for the procurement of cocoa beans of different geographic origins are separate. In the markets for the production and sale of semi-finished cocoa products, the parties’ activities focus on different regions, since Petra Foods is mainly active in Asia. The Commission therefore found that the increment brought by the proposed transaction is relatively limited within the European Economic Area (EEA) and that customers would continue to have a sufficient number of suppliers. The merged entity would also continue to face competition from two strong competitors (ADM and Cargill) as well as from a sufficiently large number of smaller players.

Concerning the vertical relationship, the Commission’s investigation found that there were sufficient alternative suppliers in the markets concerned and that the proposed transaction would not significantly deteriorate competition in these markets.

The Commission therefore concluded that the transaction would not raise competition concerns.

The transaction was notified to the Commission on 26 April 2013.

Companies and products

Barry Callebaut is a Swiss-based producer of cocoa products active worldwide across the cocoa value chain, i.e. the procurement of cocoa beans as well as the production and sale of semi-finished coca products and industrial chocolate. The Cocoa Ingredients Division of Petra Foods is active in the procurement of cocoa beans and the production and sale of semi-finished coca products mainly in Asia-Pacific.

Merger control rules and procedures

The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.

The vast majority of notified 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).

More information is available on the Commission’s competition website in the public case register under the case number M.6872 .