After assessing the proposed deal under EU Merger Regulation the EC has now conditionally cleared the merger between Lutosa and McCain – subject to the divestment of Lutosa's branded retail business in Europe.
Because Lutosa's activities overlap with those of the global market leader McCain in the production and sale of processed potato products - in particular frozen French fries – the Commission's investigation showed that the transaction, as initially notified, risked reducing competition significantly in the Belgian retail market for branded frozen French fries and potato specialties.
Moreover, the EC suggested that the merger would result in one company with a large combined market share – without sufficient competitive constraints from the one remaining competitor or from private label products.
In order to remove those concerns, McCain offered to sell off the retail business operated under the ‘Lutosa’ brand in the European Economic Area (EEA) to a suitable purchaser.
The divestment will include an EEA-wide exclusive licence for the ‘Lutosa’ brand in the retail sector, together with the necessary know-how and staff – something that McCain suggests will remove the overlap for branded potato products in the Belgian retail sector.
The Commission therefore concluded that the transaction, as modified by these commitments, would not raise competition concerns anymore.