OFT satisfied with Avana Christmas pudding sale

OFT satisfied with Avana Christmas pudding sale

Boparan Holdings has agreed to sell its Avana christmas pudding unit to Sargents Bakeries to settle competition concerns over its acquisition of Brookes Avana from Premier Foods plc.

In January, the Office of Fair Trading indicated it would investigate the impact that the Avana acquisition would have on competition in the UK's Christmas pudding category.

If the deal went ahead, 2 Sisters Food Group owner Boparan would have controlled two of the UK's largest Christmas pudding makers. In 2011, Boparan also took control of the Christmas pudding company Matthew Walker through its acquisition of Northern Foods.

In a statement released yesterday (25 October), the OFT said it was satisfied the sale of Avana Christmas puddings to Sargents would assuage competition concerns.

The competition watchdog added it will not refer the Brookes Avana acquisition to the Competition Commission.

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OFT accepts Boparan's offer to sell Christmas pudding business to remedy merger concerns
The OFT has today accepted undertakings from Boparan Holdings Ltd (BHL) to sell a Christmas pudding manufacturing business to remedy competition concerns raised by its proposed acquisition of R F Brookes and Avana Bakeries.
As a result, the merger will not be referred to the Competition Commission.
The UK Christmas pudding market is worth between £40m to £50m a year. The OFT's investigation found that the merger would bring together the two largest suppliers of Christmas puddings in the UK, and that the loss of competition arising from the deal could lead to price rises for consumers.
Following its investigation, the OFT announced on 19 March 2012 that it was suspending its duty to refer the merger to the Competition Commission because it was considering whether to accept undertakings in lieu of a reference.
In order to meet the OFT's concerns, BHL offered to sell one of two Christmas pudding manufacturing businesses to a suitable upfront buyer approved by the OFT. The agreed purchaser for the Avana Christmas pudding business is Sargents Bakeries Limited (Sargents), a manufacturer of tarts, pies and mince pies.
The OFT assessed and consulted publicly on the proposed undertakings, including on the suitability of Sargents as the buyer. The OFT did not receive any concerns in response to its public consultation.
Amelia Fletcher, Chief Economist at the OFT and Decision Maker in this case, said:
'Following a consultation, and having carefully assessed the financial position and commitment of the purchaser, Sargents, we are satisfied that this divestment will ensure there continues to be effective competition in this market.'

Original source: UK Office of Fair Trading