The European Commission has formally approved Crown Holdings acquisition of Mivisa, a Spanish manufacturer of two-and three-piece food cans.
The Commission previously granted approval of the acquisition subject to certain conditions and commitments, which have now been satisfied.
Spain's largest food can producer
The transaction is expected to close on April 23, 2014.
Primarily serving the vegetable, fruit, fish and meat segments, Mivisa, based in Murcia, Spain, is the largest food can producer in both the Iberian Peninsula and Morocco.
FoodProductionDaily reported in March this year the conditions set out for the deal to proceed.
To address competitor concerns, Crown, which is based in the US, had to divest its plants producing metal cans in Spain and divest Mivisa's metal food cans factory in the Netherlands.
Crown offered to divest its metal cans plants in La Rioja, Murcia, Coruxo-Vigo, Ugao-Miravalles and Montmeló.
It will also install an additional production line in the Vigo plant, to let this facility serve Portuguese customers with sufficient capacity for all the sizes of cans which Crown and Mivisa currently sell in Portugal.
The divested plant in Vigo will impose a competitive constraint on the merged entity in Spain and Portugal.
Competition concerns saw delay
The Commission agreed the plant in La Rioja can serve clients in southern France, as Mivisa does presently.
In addition, Mivisa's plant producing metal food cans in Horst (the Netherlands) will be divested. This facility currently serves Mivisa's customers in northern France.
The delay in approving the acquisition arose due to the level of competition in markets for metal food cans in the Benelux, France, Spain and Portugal, which was too weak to avoid price increases. The commitments offered by Crown address these concerns.
The Commission said the original transaction would have given the merged companies high market shares in the Benelux, France, Spain and Portugal and eliminated an important and aggressive competitor from the market, Mivisa.
In each area, only one sizeable competing supplier would have remained (Ardagh in the Benelux, France and Portugal and Auxiliar in Spain). The Commission considered this remaining supplier would have had limited incentives to compete with the merged entity.
Other players would also have had limited ability to supply customers with large volumes and product ranges. Given this lack of alternatives, customers would have likely faced price increases.
The Commission did not identify competition concerns with respect to the production and supply of food metal cans in Germany and in Hungary, because of the presence of significant alternative suppliers in addition to Ardagh (such as: Silgan, CanPack and PikoPack in Hungary and its adjacent areas and Silgan, G&M and CanPack in Germany and its adjacent areas).