BRUSSELS (dpa-AFX) - The European Commission on Friday said it has approved the proposed acquisition of the industrial chocolate business of Archer Daniels Midland ('ADM') by Cargill, subject to conditions under the EU Merger Regulation.
The transaction was notified to the Commission in January 2015 and an in-depth investigation initiated in February 2015. The focus of the investigation was on competition in industrial chocolate markets. The Commission also looked at the effects of the transaction in the markets for cocoa products and chocolate compound.
Both US-based businesses supply industrial chocolate as well as fat-based coatings and fillings. Industrial chocolate, sold in both liquid and solid form, is used by customers in the food processing industry to produce consumer foodstuffs such as biscuits, ice-cream and chocolate confectionery.
The Commission's investigation showed that the transaction as notified would reduce competition in the already concentrated market for industrial chocolate and risked increasing industrial chocolate prices for customers located near the parties' German plants, especially for small and mid-sized customers.
The Commission's approval is therefore conditional upon Cargill divesting ADM's industrial chocolate plant in Mannheim (Germany) to a suitable purchaser so as to address the Commission's concerns.
Commissioner Margrethe Vestager, in charge of competition policy, commented: 'Chocolate is a sweet yet serious business and we want to ensure that consumers will not have to pay more for their favourite chocolate sweets, biscuits and ice cream. With Cargill's divestment of ADM's industrial chocolate plant in Mannheim the Commission is confident effective competition will continue.'
Copyright RTT News/dpa-AFX