Dutch frozen food JV on hold after EC competition referral

The planned joint venture involving Royaan and Ad van Geloven (AvG) has been referred to Dutch competition authorities by the European Commission (EC) after concerns that the transaction would threaten competition in the Netherlands were highlighted.

Private equity firms, NPM Capital and Lion Capital intend to acquire joint control of Buitenfood B.V. – including its subsidiary Royaan – and Ad van Geloven Holding B.V.

Aspects of the merger between the food processors – which both produce frozen snacks primarily for the Dutch and Belgian retail markets - will be examined under Dutch competition law under the EU Merger Regulations.

Under the regulation, mergers and acquisitions involving companies with a turnover over certain thresholds are assessed by the EC to prevent concentrations in markets that would affect competition in Europe.

Merger threatens competition​

Preliminary EC findings suggested that the Dutch part of the proposed acquisition would “threaten to significantly affect competition in the market for frozen snacks in the Netherlands,”​ the EC said in a statement.

“The Commission’s investigation conformed that the proposed transaction would lead to significant overlaps in the market for frozen snacks in the Netherlands.”​

“This merged entity would be the most important supplier of frozen snacks in the Netherlands with renowned brands such as Mora and Van Dobben.”​

Combined market shares would also be high in several individual frozen snack categories, where the companies’ products overlap, the statement added.

“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.”​

“​Sufficient” Belgian competition​

The Belgian share of the transaction was approved by the EC after it found that the merged body would still face “sufficient competitors.”​

The Commission cleared the proposed joint venture in Belgium, after it had established the venture’s activities in the country’s frozen snacks market would be limited and would not impede competition.

“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 EC statement added.

When approached by FoodProductionDaily.com on the Dutch competition assessment, an AvG spokesperson said there was no additional news on the decision – having already been on-going for three months.

“There is nothing more to add at this time,”​ the spokesperson added.