The planned acquisition of meat producer Stegeman by rival company Ter Beke needs further investigation. The Netherlands Authority for Consumers and Markets (ACM) has come to the conclusion that further investigation is needed into the markets for meat products, and for the cutting and packaging thereof. Once that investigation has been concluded, ACM will be able to come to a final decision regarding this acquisition.
What is this case about?
Both companies produce, cut, and package meat products. They primarily cater to supermarkets, but they also target butcher’s shops. The acquisition may result in anticompetitive concerns on those markets. That is because buyers have indicated that they have few alternatives besides Stegeman and Ter Beke for large-scale procurement of meat products, and for having such products cut and packaged. The strong market position after the acquisition may lead to higher prices, reduced quality, and less innovation.
What are the next steps?
If the two meat producers decide to continue with their acquisition plans, they will have to apply for a license with ACM. ACM will then further investigate the effects of this planned acquisition. For example, ACM will look into the different markets for selling meat products, and for cutting and packaging such meat products. In addition, ACM will also seek to get a better overview of what alternatives supermarkets have, and what effects the acquisition will have on supermarkets and consumers.
ACM’s concentration control: mergers, acquisitions, and joint ventures
With any merger, acquisition, or joint venture, there is a question of whether sufficient competition will remain on that market, right after the concentration as well as in the subsequent years. Competition ensures that products are of high quality, and that they are offered on the market at competitive prices. Competition also promotes innovation. That is why ACM decides in advance whether or not companies are allowed to join forces. ACM assesses whether the markets involved will continue to work well for people and businesses after that transaction.