The European Commission has granted approval for a joint venture in the chilled dairy sector between Nestlé and Lactalis.
The EC’s announcement comes after the two companies withdrew and modified their initial proposal to meet the requirements of anti-trust authorities.
The deal will see Nestlé and Lactalis transfer chilled dairy activities, including yoghurt, cheese and milked-based desserts, to the joint venture in a number of European countries. The Commission found that this would cause an overlap in France in the milk-based dessert category.
“The Commission concluded from its market investigation that the proposed transaction would not lead to a significant reduction of competition as Lactalis’ products—marketed under the brand Bridélice—are aimed at a different sector of the market (diet products) than Nestlé’s products. Furthermore, the Commission found that private labels— partly supplied by Lactalis—will still be able to exert a constraint on the new entity as retailers can easily source their private labels from other suppliers than Lactalis,” the European competition authorities said.
As the deal would not result in a significant reduction of competition in any European market, the EC has given it the green light.
The proposed joint venture would see Lactalis taking a 60% stake in the new unit, with Nestlé holding the remaining 40%.