Brussels, 30 September 2013
Mergers: Commission approves acquisition of salmon processor Morpol by salmon farmer Marine Harvest, subject to conditions
The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Morpol, the largest salmon processor in the European Economic Area (EEA), by the leading EEA salmon farmer Marine Harvest, both of Norway. The clearance is conditional upon the divestment of the majority of Morpol's salmon farming activities in Scotland. The Commission had concerns that the transaction, as originally notified, would have significantly reduced competition in the market for farming and primary processing of Scottish salmon. The commitments offered by the merging companies address these concerns.
The proposed transaction, as originally notified, would have combined two of the largest farmers and primary processors of Scottish salmon. The merged entity would have had high market shares and its competitors would have been unable to exert a sufficient constraint on it. The acquisition would likely have led to price increases which could have ultimately harmed consumers.
The Commission's investigation showed that there is an important group of customers with a clear preference for salmon farmed in Scotland as compared to salmon farmed in other countries, in particular Norway. As a result, the possibility for customers to buy salmon from other origins would not have been sufficient to defeat a possible price increase of Scottish salmon. Nor would alternative suppliers in Scotland have been able to offset such a price increase given the lack of sufficient spare capacity. Finally, high regulatory barriers make entry in the market for Scottish salmon unlikely in the foreseeable future and in any event insufficient to remove the identified competition problem.
In order to address the Commission's concerns, Marine Harvest committed to divest the largest part of Morpol's salmon farming operations in Scotland, based in Shetland and the Orkneys. These divestments address the competition concerns created by the merger, because they remove a substantial part of the overlap between the parties' activities in the relevant market.
The Commission therefore concluded that the proposed transaction, as modified by the commitments, would not raise competition concerns. This decision is conditional upon full compliance with the commitments.
The Commission also found that the transaction would not raise any competition concerns as regards Norwegian salmon farming and primary processing, and salmon secondary processing.
The transaction was notified to the Commission on 9 August 2013.
Companies and products
Marine Harvest is a Norwegian seafood company which produces farmed salmon and white halibut and offers a wide range of value added products of various seafood species. It has salmon farming and primary processing activities in Norway, Chile, Scotland, Canada, Ireland and the Faroe Islands.
Morpol is a Norwegian producer and processor of salmon. It produces farmed salmon and offers a broad range of value added salmon products. It has salmon farming and primary processing activities in Norway and Scotland.
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).