The UK’s competition watchdog has provisionally approved T&L Sugars’ proposed acquisition of Tereos‘ UK assets.
Today (6 August), the Competition and Markets Authority (CMA) provisionally found that, without the deal going ahead, the “most likely outcome is that Tereos’ UK retail business would close”, according to a statement.
It added: “Since closure would also result in a loss of competition absent the merger, the panel has provisionally decided to clear the deal.”
The transaction had been under a “Phase 2” investigation by the CMA after identifying competition concerns during its “Phase 1” investigation.
Following the first phase, the anti-trust body found that the deal showed risks of inflated sugar prices for UK consumers, and “a substantial lessening of competition”.
Richard Feasey, chair of the independent inquiry group carrying out the second phase investigation, said today: “We have carefully considered a broad range of evidence, including detailed examination of the financial performance of Tereos’ UK retail business, and the steps taken by Tereos to improve its performance.
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“Based on this evidence, we have provisionally found that the most likely outcome is that Tereos’ UK retail business would have closed, absent the deal with TLS and on this basis we have provisionally decided to approve the merger.”
The anti-trust body said it found that Tereos’ UK retail business has been loss making over a sustained period of time, despite a “wide range of efforts” by Tereos to improve its financial performance.
It concluded there “was no other alternative and less anti-competitive purchaser for the business, besides TLS”.
Feasey added that the CMA is welcoming feedback on its provisional findings before making a final decision on 5 September.
Tereos’ UK and Ireland unit packs and distributes Whitworths’ branded and private-label sugar in Normanton, West Yorkshire.
T&L Sugars, owned by ASR Group International, manufactures a portfolio of sugar and sweetener products under the Tate and Lyle name as well as own-label goods at its London headquarters. It sells to UK supermarkets, grocery wholesalers and foodservice operators.
