ABP and Fane Valley Linden Foods takeover approved

By Aidan Fortune

- Last updated on GMT

The ABP/Fane Valley acquisition of Linden Foods has been approved
The ABP/Fane Valley acquisition of Linden Foods has been approved

Related tags Livestock Beef Lamb

The European Commission has unconditionally cleared the proposed acquisition of joint control of Linden Foods by ABP Food Group and Fane Valley.

Following an investigation, it was concluded that the transaction would not adversely affect competition in the EU Single Market.

Before the proposal, ABP already held a non-controlling interest in Linden and proposed to increase its shareholding to 50% with the effect that, following the transaction, Linden will be jointly controlled by ABP and Fane Valley.

In a statement, the Commission explained that it conducted a “broad investigation in the markets where the activities of the companies overlap”​.

ABP, Fane Valley, and Linden are all active in Ireland and the UK in the purchase and slaughter of live cattle, sheep and lambs, as well as the processing of their meat. The companies also have overlapping activities in the market for sale of fresh and processed meat, and the markets for animal by-products.

“On the potential impact on the markets for the purchasing of live animals for slaughter, the Commission assessed any potential increase of slaughterhouses' buyer power to the detriment of farmers,”​ the statement said.

“The Commission found that farmers in Ireland and the UK (including Northern Ireland) are able to switch slaughterhouses if they get better prices for their animals. Various slaughterhouses with spare capacity will continue to operate within reasonable distances to the plants of the parties. Therefore, the Commission found that the merged entity would not be able to offer farmers lower prices for their animals, since farmers will continue to have sufficient alternative buyers for their animals.

“On competition in the downstream markets relating to the sale of fresh and processed meat, the investigation found that a number of strong competitors will remain active after the merger and that buyers will be able to readily switch to other meat providers.”

By-products was also considered to be a non-issue by the Commission.

“On the collection of animal by-products generated by slaughtering activities, the Commission noted that Linden is not directly active in the processing of animal by-products. The Commission found that alternative providers with spare capacity exist in these markets so that the transaction is unlikely to have a negative impact on slaughterhouses or farmers.

“Therefore, the Commission concluded that the proposed transaction would raise no competition concerns on any of the markets concerned.”

In 2016, the Commission cleared the acquisition of joint control over Slaney JV by ABP and Fane Valley.

Separate transactions

The competition authority had also been deciding on a merger deal between Dunbia and Dawn Meats. On this issue, and its potential impact on the ABP, Linden Foods and Fane Valley situation, the Commission said:

“The Commission has been in close contact with the national competition authorities in Ireland and the UK. Both authorities have reviewed a parallel transaction, the merger between Dunbia and Dawn Meats, two meat processors active in Ireland and the UK. The assessment of the present transaction by the Commission does not change, irrespective of the outcome of the assessment carried out by the two national competition authorities in relation to the Dunbia/Dawn Meats merger.”

Who’s Who in the deal?

Fane Valley is a farmer-owned cooperative society active in the slaughtering of cattle and ovine animals, meat processing and the collection and processing of animal by-products in Ireland and the UK.

Linden Foods is currently solely controlled by Fane Valley, and is active in the slaughtering and processing of cattle and ovine animals in the UK.

ABP Food Group of Ireland is active in the slaughtering of cattle and ovine animals, the processing of their meat and the collection and processing of associated animal by-products in Ireland, the UK, and other European countries.

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