The European Commission has insisted Suedzucker’s move to buy a 25% stake in ED&F Man is a de-facto takeover of the UK sugar trader as it moves ahead with an investigation into the impact of the proposed deal.
A Commission spokesperson told just-food its officials were asked to approve the deal as a merger. “Whether a company acquires ‘control’ is not determined only by a majority shareholding, but many other factors.”
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The transfer of control is raising concerns at the Commission and is why it last week launched a detailed competition inquiry, which is likely to lead to significant regulatory conditions being imposed.
Germany’s Suedzucker is Europe’s largest sugar producer, while ED&F Man is the continent’s second-largest sugar trader. The Commission said an effective takeover “might significantly impede effective competition” and choice for European consumers and food manufacturers, raising sugar prices, despite the companies offering mitigating solutions.
Brussels noted the risk of “high combined market shares” for refined sugar, especially in Italy and Greece and the removal of “a strong alternative supplier of molasses” in the EU.
ED&F Man imports raw cane sugar into Europe and Brussels fears supply restrictions to rival white sugar producers. The Commission will decide on conditions by 23 March.
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