Blog: Hain Celestial ends week with sign of optimism over Orchard House deal in UK
Dean Best | 19 August 2016
After starting the week with a surprise stock exchange announcement that hit its shares and called into questions its accounting practices, Hain Celestial could be set to receive a boost in the UK.
The country's Competition and Markets Authority has said it "proposes to accept" the undertakings Hain Celestial had put forward to ease the regulator's concerns over the impact the US group's acquisition of UK food and beverage group Orchard House Foods will have on the country's fruit juice market.
The deal was completed but since March the Competition and Markets Authority has been looking at the transaction. In May, Hain Celestial was asked to look again at its move to buy Orchard House and put forward "acceptable undertakings" to solve the concerns or see the planned acquisition be subject to an in-depth "phase two" investigation.
At the time, the regulator also said the deal would lead Hain Celestial to hold "a significant share" of the supply of prepared fruit to retailers but insisted there would still be "sufficient competition" from rivals.
Hain Celestial has offered to sell its assets in the manufacture and supply of branded and own-label freshly squeezed fruit juice to retail and foodservice customers, except the Johnson’s Juice brand. It has also offered to offload its own-label carbonated citrus drinks and own-label smoothies business.
The US group has also put forward UK food and beverage firm Multiple Marketing Limited as the buyer of the assets.
Under a proposed agreement between Hain Celestial and Multiple Marketing, the UK business will continue to manufacture the US group's ingredients products, as well as make its Johnson's branded freshly squeezed fruit juice and New Covent Garden branded smoothies.
The Competition and Markets Authority is weighing up the undertakings but said, subject to consultation, the proposals do resolve the concerns.
"The CMA therefore gives notice that it proposes to accept the proposed undertakings in lieu of a reference of the merger for a phase two investigation," the regulator said yesterday.
The Competition and Markets Authority will give its final verdict by 22 September.
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