Vandemoortele’s acquisition of bakery peer Délifrance has been approved by the European Commission conditional on the sale of two factories in France.
To address the Commission's initial competition concerns, the parties have agreed to sell a pair of Délifrance's frozen laminated dough facilities - one in Avignon in the south of France and another in Béthune in the north.
It emerged earlier this month that Belgian-based Vandemoortele had offered undisclosed concessions to the Commission to get the deal over the line. The takeover of Délifrance was first announced in March.
"These structural commitments fully address the competition concerns," the Commission said in a statement yesterday (18 December).
"Following positive feedback received after the market test, the Commission has concluded that the transaction, as modified by the commitments, would no longer raise competition concerns."
The EC had previously expressed concerns that the merged entity would “significantly reduce” competition for products such as croissants and pains au chocolat, especially in France and Italy.
The takeover is expected to make Vandemoortele one of the largest producers of frozen bakery products in Europe.
However, the Commission stressed its ruling is conditional upon “full compliance with the commitments”.
Teresa Ribera, the regulator's commissioner for competition, said: “Vandemoortele’s acquisition of Délifrance could have given them a significant market position in certain member states, possibly leaving European consumers facing higher prices for common daily food staples.
“The commitments offered by the two companies will enable them to proceed with their transaction, while preserving the competitive pressure that keep food prices affordable."
Vandemoortele had said in March that the combination with Délifrance would create a €2.4bn ($2.8bn today) bakery group, providing “solutions to retail and foodservice partners”.
Délifrance, a subsidiary of the French grain cooperative Vivescia Group, generated a turnover of around €930m in the year through June, the Belgium business said in a statement at the time.
Délifrance operates 14 production facilities, employs more than 3,200 staff and supplies retail and out-of-home customers across Europe and in Asia.
Vandemoortele itself already has 28 manufacturing plants and 3,500 workers, with its bakery products business generating an estimated turnover of €1.4bn.
The Belgian business has struck two other acquisitions this year: the European margarine and spreads business of Bunge and Lizzi, the Italian producer and distributor of frozen bakery products.
