LONDON (dpa-AFX) - The Competition and Markets Authority or CMA announced Friday that Liqui-Box's proposed takeover of the rigid and flexible packaging business of DS Smith plc (SMDS.L) raises competition concerns.
The CMA has been investigating on the deal. As part of its initial, Phase 1, investigation, the CMA found that Liqui-Box and DS Smith are among the 4 main companies in the UK, which offers a specialist type of packaging called Bag-in Box to food, wine, dairy and drink suppliers.
The CMA has found food and drink suppliers could get a worse deal on their packaging if these two specialist firms merge.
If the deal proceeds as planned, the agency is concerned that it could create insufficient competition in the supply of these products. Due to this, the customers potentially will have less choice and pay higher prices.
The CMA is also concerned that the weak competition could lead to lower quality products and/or a poorer service.
According to the agency, if the merging businesses are unable to address these concerns, the deal will be referred for an in-depth Phase 2 investigation, which will be conducted by a group of independent CMA panel members.
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