ACM clears acquisition of cold-storage firm Kloosterboer by rival firm Lineage
The Netherlands Authority for Consumers and Markets (ACM) has cleared the acquisition of cold-storage firm Kloosterboer Groep by refrigerated-transport company Lineage Logistics. After the acquisition, sufficient competition will remain in the market for refrigerated transport, processing, and storage of food.
Lineage is a global competitor in the markets for refrigerated transport, processing, and storage of food. In the Netherlands, Lineage operates several cold-storage facilities (freezing rooms, no cold stores). These facilities are located in the Dutch hinterland, and are used, for example, for the storage of potato products, vegetables, ice cream, and bakery products. De Kloosterboer Groep operates freezing rooms and cold stores, mostly in or near Dutch harbors, and primarily for fish, fruit juices, and potato products.
Both market participants are active in the market for storage of potato products. At first glance, Lineage will, following the acquisition, gain a strong position in this market segment with a lot of storage capacity. However, the acquisition will have little effect on the competitive positions in this segment. The majority of the capacity in this segment is fixed in long-term contracts. ACM’s investigation has also shown that potato processors will continue to have sufficient alternatives after the acquisition.
It is not likely that, as a result of the acquisition, Lineage will be able to raise prices, reduce quality, or invest in innovation less. That is why ACM has cleared this acquisition.
How does ACM assess mergers and acquisitions?
With any merger or acquisition, there is a question of whether sufficient competition will remain on that market directly after the concentration, and in the future. Competition ensures that products are of high quality, that they are offered on the market at competitive prices, and that innovation is stimulated. That is why ACM decides in advance whether or not companies are allowed to merge or acquire other companies. ACM assesses whether the markets involved will continue to work well for people and businesses, now as well as in the future.