EC investigation into acquisition of GBI by Associated British Foods

The European Commission has opened a detailed investigation under the EU Merger Regulation into the proposed acquisition of certain parts of GBI of The Netherlands by the UK-based company Associated British Foods (ABF). Both companies produce dry, compressed and liquid baker's yeast.

The Commission's initial market investigation has indicated that the proposed merger raises serious doubts as to its compatibility with the Single Market because of possible competition problems in particular on the market for compressed bakers' yeast in Portugal, Spain and France, the Member States which referred the case to the Commission. A decision to open an in-depth inquiry does not prejudge the final result of the investigation.

ABF (Associated Bristish Foods) is an international food, ingredients and retail group. Its activities include the production and sale of yeast, managed through the AB Mauri division, which has production plants worldwide, including five plants in the EU (UK, Ireland, Germany, Spain and Portugal). ABF also owns two bakery ingredients plants in the UK (Cereform) and distributes yeast from its plants across the EU and elsewhere in the world.

The core activity of the acquired parts of GB Ingredients (GBI) is the production and sale of different types of yeast. The business comprises several European subsidiaries and assets of the GBI Group in Europe, excluding the UK. GBI is ultimately controlled by the Dutch private equity house Gilde Buy-Out Partners.

The Commission now has 90 working days (until 28 August 2008) to take a final decision on whether the proposed transaction would significantly impede effective competition within the European Economic Area (EEA) or a significant part of it.