The EU today (15 December) began investigations into the legality of US food ingredients company Cargill’s proposed acquisition of German Degussa AG under the EU Merger Regulation.
Cargill and Degussa are two of the four leading suppliers of lecithin, a natural emulsifier made from soybeans, which is primarily used in food production. It is feared that the proposed merger may create competition problems in the markets for lecithin, as Cargill would become particularly strong in the field of non-genetically modified lecithin reducing further the choice of supplier for food manufacturers.

“This takeover involves two companies that are at the forefront of the production of natural emulsifiers used in particular in food products such as chocolate, bread, and margarine”, commented competition commissioner Neelie Kroes. “The Commission must ensure that this operation will not detrimentally affect customers like food manufacturers and, consequently, European consumers.”

The Commission will make a decision within 30 working days (by 3 May 2006) regarding the legitimacy of the proposed merger.