EU: Sell-offs ahead as Campina, Friesland deal gets EU ok
By: just-food.com | 17 December 2008
The EU today (17 December) cleared the merger between dairy companies Campina and Friesland Foods - provided the Dutch firms sell off a slew of businesses.
After months of scrutiny, the European Commission gave the green light to the deal, which was first struck in April and is set to create one of the world's largest dairy processors.
The Commission, concerned that the merger would reduce competition in certain dairy sectors in the Netherlands, Belgium and Germany, said the companies had offered to sell a clutch of businesses to get the deal through.
Friesland's fresh dairy product business, a part of Campina's cheese business and two Campina long-life dairy brands will be sold.
The two dairy processors also offered to ensure access to raw milk in the Netherlands, the Commission said.
Under these plans, Friesland and Campina said the businesses up for sale would be able to source raw milk from the merged company under a transitional supply deal.
Subsequently, the Commission said, a "Dutch Milk Fund" would be set up to ensure access to a maximum of 1.2bn kg of raw milk a year. The fund, the Commission said, would remain in place "until more structural changes in the market for raw milk were achieved".
The Commission added that Friesland and Campina had agreed to reduce the "exit barriers" for farmers wishing to leave the merged co-operative, to be renamed FrieslandCampina.
"This third measure would aim at creating a source of Dutch raw milk which was independent from FrieslandCampina and would thus provide a long-term structural solution," the Commission said.
Competition Commissioner Neelie Kroes added: "We have been able to approve this significant concentration in the Dutch dairy sector because the parties offered substantial remedies, designed to keep these markets competitive and to ensure that consumers will not be harmed by the merger."
Sectors: Dairy
Companies: FrieslandCampina
View next/previous articles
17 Dec 2008 -
Currently reading -
EU: Sell-offs ahead as Campina, Friesland deal gets EU ok
17 Dec 2008 -
17 Dec 2008 -
Related research
Royal Friesland Foods N.V. - SWOT Analysis
Datamonitor's Royal Friesland Foods N.V. - SWOT Analysis company profile is the essential source for top-level company data and information. Royal Friesland Foods N.V. - SWOT Analysis examines the company’s key business structure and operations, hist...
Related articles
Read more on this hot issue
Having gained EU approval to merge, the Netherlands-based dairy groups Campina and Friesland will hope that their combined strength will better prepare the business to withstand the tough economic times facing the European dairy industry and the liberalisation of the sector. With the deal rubber stamped, FrieslandCampina is now likely to turn its attention to exploiting the opportunity presented by the emerging markets of eastern Europe and Asia. Dean Best reports.
There are currently no comments on this article
Be the first to comment on this article