Bundeskartellamt prohibits merger between Agrana / Atys (fruit processing)

The Bundeskartellamt in Bonn has prohibited the takeover of the French Financière Atys SA, Neuilly-sur-Seine by Agrana Zucker und Stärke Aktiengesellschaft, Vienna, an affiliate of Südzucker AG, Mannheim/Ochsenfurt.

The companies involved in the merger are active in Germany among others in the manufacture of processed fruit for further industrial reprocessing - in particular in the dairy and bakery industries, and are among the four major producers in this sector.

The merger would have led to a joint dominant position of Agrana / Atys and the market leader Franz Zentis GmbH & Co. KG, Aachen, in the relevant market. Together Agrana / Atys and Zentis would hold a market share of over 70 per cent, fulfilling the conditions for the presumption of an oligopoly under the Act on Restraints of Competition (ARC). This presumption was supported by further considerations: Agrana’s market share, financial power and good access to the procurement market for sugar would clearly strengthen Atys’ position as the second largest producer. As a result Zentis and Agrana / Atys would have little incentive to enter into price competition with one another. The homogeneity of the products in question, high market transparency and stagnating market development were also indications that there would be inadequate internal competition between the two oligopolists. At the same time no significant external competition could be expected after the merger from current or potential competitors due to the remaining market structure and existing barriers to market entry. Agrana and Atys were unable to dispel the competition concerns of the Bundeskartellamt. The planned acquisition was thus to be prohibited.

The companies can file an appeal against the Bundeskartellamt’s decision at the Düsseldorf Higher Regional Court.