Tulip, part of the Danish Crown group, agreed to buy Easey Holdings last week (September 8), after witnessing a rising demand for ‘high-welfare’ pork products.
An initial enforcement order regarding the deal, which detailed the grounds for an investigation, has been issued by the CMA. It warned the combination of the two companies could result in a substantial lessening of competition.
‘Cease to be distinct’
“The CMA has reasonable grounds for suspecting that it is or may be the case that Tulip Ltd and Easey Holdings Ltd [will cease] to be distinct,” said the watchdog.
“The CMA is considering whether it is, or may be, the case that a relevant merger situation has been created and whether the creation of that situation has resulted, or may be expected to result in, a substantial lessening of competition in any market or markets in the UK.”
The watchdog has yet to announce when it would deliver a decision on the planned acquisition.
Commenting on the CMA’s actions, Tulip said: “[We have] sought regulatory approval from the CMA. While we do not anticipate there being any competition concerns, we are making a submission for the sake of completeness.”
‘Brexit-proof’ the company
The acquisition of Easey was part of Tulip’s plan to “Brexit-proof” the company, according to owner Danish Crown.
Easey Holdings will continue to operate independently, and all workers will continue their roles at the pig producer, Tulip confirmed this week. All outstanding customer and supplier contracts and commitments would be honoured, it added.
The deal came after Tulip’s chief executive, Steve Francis, exclusively told FoodManufacture.co.uk it would invest “up to £70M” in acquisitions, equipment and product innovation next year.
Francis and Danish Crown chief executive Jais Valeur discussed in detail their plans for turning Tulip’s fortunes around in an exclusive interview with our sister title Food Manufacture.
Meanwhile, earlier this year, the CMA cleared Boparan Private Office’s acquisition of turkey processor Bernard Matthews.