Mergers: Commission approves acquisition of joint control over Danish animal by-products company Daka by SARIA and Danish Crown

European Commission

Press release

Brussels, 29 June 2012

Mergers: Commission approves acquisition of joint control over Danish animal by-products company Daka by SARIA and Danish Crown

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of joint control over the newly created company Daka Denmark A/S by SARIA Bio-Industries AG & Co. KG of Germany and Danish Crown A/S of Denmark). Daka Denmark will take over the business activity of the Danish cooperative Daka a.m.b.a. The Commission's investigation confirmed that the proposed transaction would not significantly alter the structure of the markets concerned and that the merged entity would continue to face competition from a number of players.

The Commission examined the overlaps between the parties' activities on a number of markets related to the processing of animal by-products, such as animal meals and fats. The Commission also assessed the vertical links arising from Danish Crown's position as the largest slaughterhouse in Denmark and the parties' downstream activities in the sourcing and processing of animal by-products.

The Commission's investigation confirmed that the proposed transaction would not raise any horizontal competition concerns as the parties mostly operate in different Member States. In those markets where the parties' activities do overlap, namely certain markets for the supply of category 3 animal fats and proteins and the supply of category 2 animal meals, they will still face sufficiently strong competition after the merger to exclude competitive concerns.

Regarding the vertical relationship, the Commission found that the proposed transaction would not significantly change the structure of the markets concerned. This is because Danish Crown already supplies most of its output of animal by-products to Daka and SARIA is not active in the slaughtering of animals and has no rendering plants for animal by-products in Denmark. The parties' ability or incentive to shut out competitors from access to the collection of animal by-products or to raw animal by-products would therefore not be affected by the transaction.

The Commission therefore concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA)¹ or any substantial part of it. The transaction was notified to the Commission on 24 May 2012.

Companies and products

SARIA recycles and manages animal, vegetable and agricultural by-products. It manufactures products and ingredients for human consumption, animal nutrition, agricultural and industrial applications, biodiesel and biogas. SARIA is part of the privately-owned Rethmann Group which also has activities in waste disposal, water management and recycling, and in logistics.

Danish Crown is a company vertically integrated in the slaughtering of pigs and cattle, meat processing and meat trading. It is based in Denmark but has activities worldwide. It is solely controlled by the cooperative Leverandørselskabet Danish Crown AmbA.

The newly established company Daka will take over the business activities of the Danish cooperative Daka a.m.b.a. and will therefore be active in animal rendering (abattoir by-products) and the manufacture of different products that are used inter alia in the pet food, animal feed, oleo-chemical and fertilizer industry or as fuel substitutes in energy production.

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 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).

A non-confidential version of today's decision will be available at:

http://ec.europa.eu/competition/elojade/isef/case_details.cfm?proc_code=2_M_6285