Brussels, 22/04/2008 (Agence Europe) - On Monday 21 April, the European Commission cleared the proposed acquisition of the Dutch company Stork Food Systems (SFS) by Marel Food Systems hf of Iceland. Both companies manufacture and sell machinery and equipment for the processing of livestock, in particular poultry, fish and red meat (beef and pork).
The parties have complementary activities and the Commission's market investigation did not indicate any competition concerns regarding horizontal effects of the planned transaction. Limited competition concerns were raised by a few market players regarding potential conglomerate effects in poultry processing. In particular, the Commission examined whether the operation could facilitate the bundling of Marel's weighing and grading products with SFS's slaughtering, cutting and deboning products, and whether there would be a risk of tying the use of Marel's process control software to other products of the merged entity.
After examining the operation, the Commission concluded that the planned transaction would not lead to conglomerate effects. As regards bundling, the market investigation did not confirm a trend towards fully integrated processing lines in the European Economic Area at this stage. Moreover, the investigation indicated that competitors of Marel could offer alternative equipment. As regards tying, the market investigation showed that Marel only had a limited market position and had developed its software products from classical software which was open and accessible to competitors. In addition, a number of alternative suppliers are well established on the market. The Commission therefore came to the conclusion that the merged entity would have neither the ability nor the incentive to block its competitors by way of technical tying. (O.L.)