UK clarifies basis for backing DS Smith takeover of Otor

The Office of Fair Trading (OFT) said the acquisition of Otor posed no concerns in terms of the geographic scope – given that the parties did not have any substantive overlap as the French company sold only a very small amount of corrugated packaging into the UK.

The OFT did, however, believe the takeover proposal had a vertical dimension as the French company provides packaging machinery and DS Smith is involved in the sale of such machines. This concern was dismissed as Otor’s presence in this market was described as “minor".

Regarding competitive effects, the body said there was “no evidence to suggest Otor provides a significant competitive constraint in the UK market that would be removed by the merger”.

The body also said it had received no objections to the merger proposal.

Announcing its decision on 12 August, the OFT said it did not have competition concerns for the UK and said the deal would not be referred to the Competition Commission.