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European Commission

Press release

Brussels, 28 September 2012

Mergers: Commission clears acquisition of German dairy cooperative Milch-Union Hocheifel by rival Arla

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of the German dairy farmers' cooperative Milch-Union Hocheifel by fellow cooperative Arla Foods. The Commission concluded that the transaction would not raise competition concerns, because it would not significantly alter the market structure and the merged entity would continue to face sufficient competition.

The Commission's investigation examined the impact of the proposed transaction on a number of markets for dairy products in different countries where the merging parties' activities overlap.

This assessment was carried out at the same time as that of Arla's proposed acquisition of Milk Link in the UK (see IP/12/1038). In this case, Arla offered remedies, namely the divestiture of Milk Link's long-life milk and dairy drinks business, including the transfer of brands and the production facilities located at Crediton (Devon), UK.

In view of these remedies, the Commission concluded that the proposed transaction would not raise competition concerns in the market for long-life milk in the UK.

In the other markets examined, the Commission also concluded that the transaction would not raise competition concerns.

The transaction was notified to the Commission on 24 August 2012.

Background

The Commission examined the impact of the transaction on the markets for which the merging parties' activities overlap. These markets are the supply of fresh milk (Germany), long-life milk (Germany, Denmark, Sweden and the UK), long-life dairy cream, kondensmilch and long-life coffee cream (EU level, Germany, Denmark and Greece) and long-life flavoured dairy drinks (EU level, Germany, Denmark and Sweden).

The Commission's investigation confirmed that the proposed transaction would not raise competition concerns on any of the markets examined as the increments in market share in most of the affected markets are limited and the merged entity will continue to face competition from a number of competitors in all affected markets.

Companies and products

Arla is a dairy cooperative owned by Danish, Swedish and German dairy farmers. It is active in the production and sale of a variety of dairy products with its main markets being Scandinavia, Germany and the UK.

MUH, a German farmers’ co-operative, is active in the production of a range of long-life milk products. MUH has no milk processing facilities outside Germany although it generates revenues from exports and has subsidiaries in France (sales), Luxembourg (procurement) and Belgium (procurement).

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 on the case is available at:

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_6627

Contacts :

Antoine Colombani (+32 2 297 45 13)

Marisa Gonzalez Iglesias (+32 2 295 19 25)


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