Brussels, 18/02/2002 (Agence Europe) - The European Commission has granted conditional regulatory approval to the proposed acquisition the French petfood company Royal Canin SA by Masterfoods Holding, a French subsidiary of Mars Inc of the United States. As it stood, the merger would have caused significant competition problems so the Commission has made its authorisation conditional. Mars' petfood brands include Pedigree, Advance, Cesar, Whiskas and Sheba (which are sold world-wide, and regional/national brands like Canigou and Brekkies. Royal Canin is leading supplier of dry pared pet food products. The Commission's investigation identified competition concerns in the French dog food market where Royal Canin is the clear market leader with about a third of all sales of dry prepared dog food products in the year 2000. Without corrective measures, the merger would have significantly strengthened this leading position and led to very high market shares in specialist outlets. Mars has undertaken to divest for the whole of Europe of its businesses connected to five of the merged group's petfood brands (Advance, Premium, Royal Chien, Playdog and Brekkies), together with two major manufacturing plants in La Chapelle (Loir-et-Cher) and Moulin in south-east France. In Germany, the merger would also have created competition problems for both dog and cat food, particularly in the fast-growing market for dry food products. For dry dog food, the divestment of the brands Advance, Premium and Playdog will reduce the overall market share to below levels raising competition concerns. For dry cat food, the divestment of Brekkies and the other divested assets will offer the acquirer broad opportunities to compete with the merged entity. Given that the divested businesses offer a critical mass for a purchaser and strict conditions ensure that a sufficiently strong purchase will be able to integrate these assets into its won brand strategy and develop them, the Commission concluded that the measures proposed are appropriate to remove the competition concerns raised during the investigation.