# C_2009145EN.01001201.xml

| 25.6.2009 | EN | Official Journal of the European Union | C 145/12 |
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25.6.2009

EN

Official Journal of the European Union

C 145/12

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SUMMARY OF COMMISSION DECISION

SUMMARY OF COMMISSION DECISION

of 23 September 2008

declaring a concentration compatible with the common market and the functioning of the EEA Agreement

(Case COMP/M.4980 — ABF/GBI Business)

(notified under document number C(2008) 5273)

(Only the English version is authentic)

(Text with EEA relevance)

2009/C 145/09

On 23 September 2008 the Commission adopted a Decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings, and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case and in the working languages of the Commission on the website of the Directorate-General for Competition, at the following address:

On 23 September 2008 the Commission adopted a Decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings, and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case and in the working languages of the Commission on the website of the Directorate-General for Competition, at the following address:

http://ec.europa.eu/comm/competition/index_en.html

http://ec.europa.eu/comm/competition/index_en.html

This summary only constitutes a simplified outline of some main aspects of the decision; it has no legal force and serves for information purposes only.

This summary only constitutes a simplified outline of some main aspects of the decision; it has no legal force and serves for information purposes only.

I.   THE PARTIES

THE PARTIES

| 1. | ABF is an international food, ingredients and retail group with activities in Europe, North America, Australia and New Zealand. ABF's activities include the production and sale of yeast and are managed through the AB Mauri division, which has production plants worldwide including five plants in the EU (UK, Ireland, Germany, Spain and Portugal). ABF also owns two bakery ingredients plants in the UK (Cereform). |
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1.

ABF is an international food, ingredients and retail group with activities in Europe, North America, Australia and New Zealand. ABF's activities include the production and sale of yeast and are managed through the AB Mauri division, which has production plants worldwide including five plants in the EU (UK, Ireland, Germany, Spain and Portugal). ABF also owns two bakery ingredients plants in the UK (Cereform).

| 2. | GBI Business′ core activity is the production and sale of different types of yeast, including fresh yeast (in liquid and compressed forms) and dry yeast for artisan, industrial and home bakers. (1) The GBI Business does not have any production plants in Spain, Portugal or France, and the total amount of yeast it commercializes in that region comes from GBI Business′ Italian plant (Casteggio) or from a plant in Germany operated by the JV Uniferm GmbH & Co KG (‘Uniferm’), in which it holds a 50 % stake. The GBI Business is being sold by the Dutch private equity house Gilde Buy-Out Partners (‘Gilde’) who ultimately controls it. |
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2.

GBI Business′ core activity is the production and sale of different types of yeast, including fresh yeast (in liquid and compressed forms) and dry yeast for artisan, industrial and home bakers. (1) The GBI Business does not have any production plants in Spain, Portugal or France, and the total amount of yeast it commercializes in that region comes from GBI Business′ Italian plant (Casteggio) or from a plant in Germany operated by the JV Uniferm GmbH & Co KG (‘Uniferm’), in which it holds a 50 % stake. The GBI Business is being sold by the Dutch private equity house Gilde Buy-Out Partners (‘Gilde’) who ultimately controls it.

1

II.   THE CONCENTRATION

THE CONCENTRATION

| 3. | According to the share purchase agreement signed by ABF and Gilde on 2 October 2007, the notified operation consists of the proposed acquisition by ABF of GBI Holding's yeast operations in Belgium, The Netherlands, France, Spain, Portugal, Germany and Italy, as well as a 50 % share in Uniferm and 10 % of the capital of Somadir SA (Morocco). ABF will also acquire some assets from GBI Ingredients and from DSM Bakery, including employees, customer contracts and intellectual property rights in the Netherlands, as well as part of GBI Holding's export business operated by the Bakery Export Group. As a result of the agreement, ABF will acquire sole control over the GBI Business (2) and it therefore constitutes a concentration within the meaning of Article 3 ECMR. |
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3.

According to the share purchase agreement signed by ABF and Gilde on 2 October 2007, the notified operation consists of the proposed acquisition by ABF of GBI Holding's yeast operations in Belgium, The Netherlands, France, Spain, Portugal, Germany and Italy, as well as a 50 % share in Uniferm and 10 % of the capital of Somadir SA (Morocco). ABF will also acquire some assets from GBI Ingredients and from DSM Bakery, including employees, customer contracts and intellectual property rights in the Netherlands, as well as part of GBI Holding's export business operated by the Bakery Export Group. As a result of the agreement, ABF will acquire sole control over the GBI Business (2) and it therefore constitutes a concentration within the meaning of Article 3 ECMR.

2

III.   COMMISSION'S JURISDICTION

COMMISSION'S JURISDICTION

| 4. | The concentration does not have a Community dimension within the meaning of Article 1 of the ECMR, according to the information provided by the competent authorities and ABF. However, on 13 December 2007 the Commission decided, pursuant to Article 22(3) of the ECMR, to examine the concentration following the requests of the competition authorities of Spain, France and Portugal. The competent authorities of the Member States and the undertakings concerned were subsequently informed of these decisions. The Commission's jurisdiction therefore has been established by means of these Article 22 decisions. |
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4.

The concentration does not have a Community dimension within the meaning of Article 1 of the ECMR, according to the information provided by the competent authorities and ABF. However, on 13 December 2007 the Commission decided, pursuant to Article 22(3) of the ECMR, to examine the concentration following the requests of the competition authorities of Spain, France and Portugal. The competent authorities of the Member States and the undertakings concerned were subsequently informed of these decisions. The Commission's jurisdiction therefore has been established by means of these Article 22 decisions.

IV.   THE RELEVANT PRODUCT MARKETS

THE RELEVANT PRODUCT MARKETS

| 5. | Yeast, an essential ingredient in the production of bread and other bakery products, is produced in the form of three basic products: |
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5.

Yeast, an essential ingredient in the production of bread and other bakery products, is produced in the form of three basic products:

| 6. | Liquid yeast
  is a form of fresh yeast and is essentially the raw product from the manufacturing process. It generally has yeast solids of approximately 20-25 %. It has a shelf life of around three weeks if refrigerated. |
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6.

Liquid yeast
  is a form of fresh yeast and is essentially the raw product from the manufacturing process. It generally has yeast solids of approximately 20-25 %. It has a shelf life of around three weeks if refrigerated.

Liquid yeast

| 7. | Compressed yeast
  usually has a dry matter content of approximately 30 %-35 %. It is produced by filtering the liquid yeast and extruded into blocks, wrapped in wax paper and refrigerated until distribution. These blocks are distributed in cartons by refrigerated trucks. Customers need a cool room in which the compressed yeast is stored. Compressed yeast has a shelf life of maximum 45 days. |
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7.

Compressed yeast
  usually has a dry matter content of approximately 30 %-35 %. It is produced by filtering the liquid yeast and extruded into blocks, wrapped in wax paper and refrigerated until distribution. These blocks are distributed in cartons by refrigerated trucks. Customers need a cool room in which the compressed yeast is stored. Compressed yeast has a shelf life of maximum 45 days.

Compressed yeast

| 8. | Dry yeast
  is characterised by a dry matter percentage above 95 %. It is produced by drying the compressed yeast and has a shelf life of approximately two years. Producers in less developed countries are more likely to use dry yeast given the need of refrigerated transport and storage as well as less developed distribution system required for fresh yeast, and, correspondingly, only relatively little dry yeast is sold within the EU. |
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8.

Dry yeast
  is characterised by a dry matter percentage above 95 %. It is produced by drying the compressed yeast and has a shelf life of approximately two years. Producers in less developed countries are more likely to use dry yeast given the need of refrigerated transport and storage as well as less developed distribution system required for fresh yeast, and, correspondingly, only relatively little dry yeast is sold within the EU.

Dry yeast

Demand side substitutability

Demand side substitutability

| 9. | From a demand side perspective, dry yeast on the one hand and liquid and compressed yeast (together referred to as fresh yeast) on the other hand are not substitutable. European bakers do typically not use dry yeast but rely on fresh yeast. Within fresh yeast, liquid yeast and compressed yeast are not substitutable either, because the use of liquid yeast (normally distributed in bulk tanks) is only an alternative for industrial bakers who can make the necessary investments in the equipment necessary to receive liquid yeast. Once this strategic choice has been made a switch back to compressed yeast is highly unlikely. |
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9.

From a demand side perspective, dry yeast on the one hand and liquid and compressed yeast (together referred to as fresh yeast) on the other hand are not substitutable. European bakers do typically not use dry yeast but rely on fresh yeast. Within fresh yeast, liquid yeast and compressed yeast are not substitutable either, because the use of liquid yeast (normally distributed in bulk tanks) is only an alternative for industrial bakers who can make the necessary investments in the equipment necessary to receive liquid yeast. Once this strategic choice has been made a switch back to compressed yeast is highly unlikely.

Supply side substitutability

Supply side substitutability

| 10. | Whilst it is true that there is degree of supply-side substitutability as the production process of the yeast forms is interlinked, switching production processes also has certain constraints. In the market investigation it was confirmed that a switch from the production of fresh yeast to the production of dry yeast will entail significant additional costs for the drying equipment. A change from liquid yeast to compressed yeast would require special filtration machines, packaging equipment, and cold storage facilities. Another important consideration suppliers must be aware of is the different shipping radius for compressed and liquid yeast. Even if switching at the production level is possible, producers supplying compressed yeast into a region from a further distance would find it difficult if not impossible to supply liquid yeast into the region. |
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10.

Whilst it is true that there is degree of supply-side substitutability as the production process of the yeast forms is interlinked, switching production processes also has certain constraints. In the market investigation it was confirmed that a switch from the production of fresh yeast to the production of dry yeast will entail significant additional costs for the drying equipment. A change from liquid yeast to compressed yeast would require special filtration machines, packaging equipment, and cold storage facilities. Another important consideration suppliers must be aware of is the different shipping radius for compressed and liquid yeast. Even if switching at the production level is possible, producers supplying compressed yeast into a region from a further distance would find it difficult if not impossible to supply liquid yeast into the region.

V.   THE RELEVANT GEOGRAPHIC MARKETS

THE RELEVANT GEOGRAPHIC MARKETS

Compressed yeast

Compressed yeast

| 11. | In the market investigation it was confirmed that the markets for the production and supply of compressed yeast are national in scope. Market shares and positions of suppliers vary considerably in France, Portugal and Spain. Moreover, there are significant differences between the structure of demand and distribution systems (the latter is particularly evident between France on the one hand and Portugal and Spain on the other hand). It is necessary for the suppliers of compressed yeast to have a local sales force and a local distribution network. Brands vary from country to country. Finally, an in-depth analysis of price levels and price movements has shown significant differences between the three countries. The fact that compressed yeast can be transported over distances which cross national borders does not contradict these findings. |
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11.

In the market investigation it was confirmed that the markets for the production and supply of compressed yeast are national in scope. Market shares and positions of suppliers vary considerably in France, Portugal and Spain. Moreover, there are significant differences between the structure of demand and distribution systems (the latter is particularly evident between France on the one hand and Portugal and Spain on the other hand). It is necessary for the suppliers of compressed yeast to have a local sales force and a local distribution network. Brands vary from country to country. Finally, an in-depth analysis of price levels and price movements has shown significant differences between the three countries. The fact that compressed yeast can be transported over distances which cross national borders does not contradict these findings.

Liquid and dry yeast

Liquid and dry yeast

| 12. | Due to the limited shipping distances, the market for liquid yeast seems to be national in scope, whereas the market for dry yeast seems to be at least EEA-wide. However, for the purpose of the decision it is not necessary to draw a final conclusion. |
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12.

Due to the limited shipping distances, the market for liquid yeast seems to be national in scope, whereas the market for dry yeast seems to be at least EEA-wide. However, for the purpose of the decision it is not necessary to draw a final conclusion.

VI.   COMPETITIVE ASSESSMENT

COMPETITIVE ASSESSMENT

| 13. | The notifying party ABF is a worldwide baker's yeast producer. It namely has plants in Spain (Córdoba) and Portugal (Setúbal). It has been present in the Spanish and Portuguese markets for several decades, whilst it entered the French market relatively more recently. The target GBI currently operates plants in Italy (Casteggio) and Germany through a joint venture Uniferm. It has been present in Portugal for more than 80 years and entered the Spanish market in 1992. The third main player in the yeast markets is Lesaffre, which is also active on a world-wide scale. It has one plant in Spain (Valladolid) and others in France, Belgium and Italy. |
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13.

The notifying party ABF is a worldwide baker's yeast producer. It namely has plants in Spain (Córdoba) and Portugal (Setúbal). It has been present in the Spanish and Portuguese markets for several decades, whilst it entered the French market relatively more recently. The target GBI currently operates plants in Italy (Casteggio) and Germany through a joint venture Uniferm. It has been present in Portugal for more than 80 years and entered the Spanish market in 1992. The third main player in the yeast markets is Lesaffre, which is also active on a world-wide scale. It has one plant in Spain (Valladolid) and others in France, Belgium and Italy.

ABF

GBI

Lesaffre

| 14. | Fringe players in this region are Lallemand, which supplies only small quantities of compressed yeast into South Western Europe, Puratos, a Belgian company, Zeus, based in Italy with small supplies of compressed yeast to France and Spain, and Gebrüder Asmussen in Northern Germany with small supplies of compressed yeast to Spain. There are no other yeast producers which can be considered to be potential entrants on the markets for compressed yeast in Spain and Portugal. |
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14.

Fringe players in this region are Lallemand, which supplies only small quantities of compressed yeast into South Western Europe, Puratos, a Belgian company, Zeus, based in Italy with small supplies of compressed yeast to France and Spain, and Gebrüder Asmussen in Northern Germany with small supplies of compressed yeast to Spain. There are no other yeast producers which can be considered to be potential entrants on the markets for compressed yeast in Spain and Portugal.

Lallemand

Puratos

Zeus

Gebrüder Asmussen

| 15. | The target GBI which held a strong world-wide position on the yeast markets was acquired by the Dutch private equity firm Gilde in 2005. Gilde intended to sell GBI at the earliest opportunity and its internal documents suggest it avoided fierce price competition in Europe. |
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15.

The target GBI which held a strong world-wide position on the yeast markets was acquired by the Dutch private equity firm Gilde in 2005. Gilde intended to sell GBI at the earliest opportunity and its internal documents suggest it avoided fierce price competition in Europe.

General structure of the compressed yeast markets

General structure of the compressed yeast markets

| 16. | The French, the Portuguese, and the Spanish markets for compressed yeast share certain common characteristics. The markets are relatively mature and demand is expected to be rather stable in the coming years. As to the supply side, the market structure is characterized by an increasing degree of concentration. In France, the merged entity would hold about [30-40] % with a market share for Lesaffre of [60-70] %; in Portugal the merged entity would hold a market share of more than [70-80] % (Lesaffre: [20-30] %), and in Spain the merged entity would hold a market share of [40-50] % (Lesaffre: [40-50] %). Distributors play an important role in all the affected markets. However, there is a striking difference of the French markets compared to the Portuguese and Spanish markets: In France, most of the distributors are organized in one of the three large purchasing groups which cover a vest majority of the market whereas in Portugal and Spain such large purchasing groups do not exist. It further should be noted that National Competition Authorities have adopted cartel decision relating to the fresh yeast markets in the past, in particular the French authority found in 1989 that Lesaffre and Gist-Brocades (former GBI) had engaged in a cartel. |
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16.

The French, the Portuguese, and the Spanish markets for compressed yeast share certain common characteristics. The markets are relatively mature and demand is expected to be rather stable in the coming years. As to the supply side, the market structure is characterized by an increasing degree of concentration. In France, the merged entity would hold about [30-40] % with a market share for Lesaffre of [60-70] %; in Portugal the merged entity would hold a market share of more than [70-80] % (Lesaffre: [20-30] %), and in Spain the merged entity would hold a market share of [40-50] % (Lesaffre: [40-50] %). Distributors play an important role in all the affected markets. However, there is a striking difference of the French markets compared to the Portuguese and Spanish markets: In France, most of the distributors are organized in one of the three large purchasing groups which cover a vest majority of the market whereas in Portugal and Spain such large purchasing groups do not exist. It further should be noted that National Competition Authorities have adopted cartel decision relating to the fresh yeast markets in the past, in particular the French authority found in 1989 that Lesaffre and Gist-Brocades (former GBI) had engaged in a cartel.

Coordinated effects on the Spanish and Portuguese compressed yeast markets

Coordinated effects on the Spanish and Portuguese compressed yeast markets

| 17. | The Portuguese and the Spanish market for compressed yeast share some structural conditions which facilitate tacit coordination. In all three affected markets the number of players is relatively small and players frequently interact as they supply on a regular basis to direct customers and distributors. The elasticity of demand for compressed yeast is rather low, meaning that coordination is profitable whereas barriers to entry are high and the creation of new production facilities is highly unlikely. From an in-depth analysis of the capacities available, it follows that at least for the Portuguese and Spanish markets the competitors′ spare capacities are so limited that they would not exercise a competitive constraint on the main players after the merger. Other factors like the high degree of product homogeneity, market transparency at least in Portugal and Spain and the fact that the market is not innovation-driven also facilitate tacit coordination. |
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17.

The Portuguese and the Spanish market for compressed yeast share some structural conditions which facilitate tacit coordination. In all three affected markets the number of players is relatively small and players frequently interact as they supply on a regular basis to direct customers and distributors. The elasticity of demand for compressed yeast is rather low, meaning that coordination is profitable whereas barriers to entry are high and the creation of new production facilities is highly unlikely. From an in-depth analysis of the capacities available, it follows that at least for the Portuguese and Spanish markets the competitors′ spare capacities are so limited that they would not exercise a competitive constraint on the main players after the merger. Other factors like the high degree of product homogeneity, market transparency at least in Portugal and Spain and the fact that the market is not innovation-driven also facilitate tacit coordination.

| 18. | Both in the Spanish and the Portuguese market, the market investigation has revealed that prices act as the relevant economic variable for the market participants to focus their coordinated behaviour on. Exclusive supply arrangements with the distributors help to sustain a high price level and to align price developments. The distribution network makes it also easy to monitor deviations from the terms of coordination. The threat to return to competitive pricing is a sufficient deterrent mechanism. The need to have a local distribution system with local sales persons and recognised brands as well as the need to have reputation for supply security leads to high barriers to entry and/or expansion. The buying power of distributors and artisan bakers is relatively low and does not countervail the market position of the suppliers of compressed yeast in Spain and Portugal after the transaction. |
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18.

Both in the Spanish and the Portuguese market, the market investigation has revealed that prices act as the relevant economic variable for the market participants to focus their coordinated behaviour on. Exclusive supply arrangements with the distributors help to sustain a high price level and to align price developments. The distribution network makes it also easy to monitor deviations from the terms of coordination. The threat to return to competitive pricing is a sufficient deterrent mechanism. The need to have a local distribution system with local sales persons and recognised brands as well as the need to have reputation for supply security leads to high barriers to entry and/or expansion. The buying power of distributors and artisan bakers is relatively low and does not countervail the market position of the suppliers of compressed yeast in Spain and Portugal after the transaction.

| 19. | The merger would be highly likely to significantly increase the degree of tacit coordination both in Spain and Portugal. First of all, it would further reduce number of players and increase market transparency and facilitate the ability to detect deviant conduct and to retaliate effectively. Furthermore, with GBI, a player is eliminated which is in some way different from ABF and Lesaffre, because it has a large scale production plant outside the Iberian Peninsula and it has no direct industrial clients. Finally, the transaction would also increase the number of contacts between ABF and Lesaffre on markets besides the markets for compressed yeast. |
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19.

The merger would be highly likely to significantly increase the degree of tacit coordination both in Spain and Portugal. First of all, it would further reduce number of players and increase market transparency and facilitate the ability to detect deviant conduct and to retaliate effectively. Furthermore, with GBI, a player is eliminated which is in some way different from ABF and Lesaffre, because it has a large scale production plant outside the Iberian Peninsula and it has no direct industrial clients. Finally, the transaction would also increase the number of contacts between ABF and Lesaffre on markets besides the markets for compressed yeast.

| 20. | The decision therefore concludes that the proposed transaction raises serious doubts in the compressed yeast markets in Spain and Portugal. |
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20.

The decision therefore concludes that the proposed transaction raises serious doubts in the compressed yeast markets in Spain and Portugal.

The effects of the transaction in the French market for compressed yeast

The effects of the transaction in the French market for compressed yeast

| 21. | Although the French market for compressed yeast shares some characteristics with the Spanish and the Portuguese markets, it nevertheless shows clear differences. The market leader is by far Lesaffre, followed by ABF and GBI. Industrial bakers and large distribution groups play a major role in the French market and enjoy a greater degree of buying power. The large distribution groups have also facilitated the entry of new brands in the low price segment. The more complex distribution system in France decreases transparency in comparison with Spain and Portugal and makes a retaliation system more difficult. The transaction would not change the balance of powers in France. After the merger, Lesaffre would continue to be the market leader and be able to compete on the full range of brands. For those reasons, the decision concludes that the proposed transaction does not raise competition concerns in the French compressed yeast market. |
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21.

Although the French market for compressed yeast shares some characteristics with the Spanish and the Portuguese markets, it nevertheless shows clear differences. The market leader is by far Lesaffre, followed by ABF and GBI. Industrial bakers and large distribution groups play a major role in the French market and enjoy a greater degree of buying power. The large distribution groups have also facilitated the entry of new brands in the low price segment. The more complex distribution system in France decreases transparency in comparison with Spain and Portugal and makes a retaliation system more difficult. The transaction would not change the balance of powers in France. After the merger, Lesaffre would continue to be the market leader and be able to compete on the full range of brands. For those reasons, the decision concludes that the proposed transaction does not raise competition concerns in the French compressed yeast market.

Liquid and dry yeast markets

Liquid and dry yeast markets

| 22. | In Portugal, ABF is the market leader on the market for liquid yeast. GBI's role is only marginal, given that it has only succeeded in supplying 1.5 l Tetrapaks with liquid yeast. It can be excluded that the transaction will further strengthen GBI's position on the market for liquid yeast in Portugal. In Spain and France, the parties′ activities in the production and supply of liquid yeast overlap only marginally. Concerning the dry yeast market, which is at least EEA wide, neither non-coordinated nor coordinated effects can be expected as a result of the transaction, due to the presence of a sufficient number of alternative suppliers. The decision therefore concludes that the proposed transaction does not raise competition concerns in the markets for liquid and dry yeast. |
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22.

In Portugal, ABF is the market leader on the market for liquid yeast. GBI's role is only marginal, given that it has only succeeded in supplying 1.5 l Tetrapaks with liquid yeast. It can be excluded that the transaction will further strengthen GBI's position on the market for liquid yeast in Portugal. In Spain and France, the parties′ activities in the production and supply of liquid yeast overlap only marginally. Concerning the dry yeast market, which is at least EEA wide, neither non-coordinated nor coordinated effects can be expected as a result of the transaction, due to the presence of a sufficient number of alternative suppliers. The decision therefore concludes that the proposed transaction does not raise competition concerns in the markets for liquid and dry yeast.

VII.   COMMITMENTS

COMMITMENTS

| 23. | Already in phase I the notifying party submitted commitments to render the transaction compatible with the common market. It proposed to divest GBI's current activities in relation to the sale and distribution of yeast products in Spain and Portugal were divested. The remedy proposal did not include a production plant, but a supply toll-manufacturing agreement. The first phased market test concluded that a divestment of the distribution alone would not be viable without production capacities. In phase II, the parties submitted new commitments which included a link to a production capacity in order to render the concentration compatible with the common market. |
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23.

Already in phase I the notifying party submitted commitments to render the transaction compatible with the common market. It proposed to divest GBI's current activities in relation to the sale and distribution of yeast products in Spain and Portugal were divested. The remedy proposal did not include a production plant, but a supply toll-manufacturing agreement. The first phased market test concluded that a divestment of the distribution alone would not be viable without production capacities. In phase II, the parties submitted new commitments which included a link to a production capacity in order to render the concentration compatible with the common market.

| 24. | ABF essentially committed to either (1) sell the current GBI distribution businesses in Spain and Portugal to a suitable purchaser who will have acquired a yeast production plant in Felixstowe (UK) for supplying GBI businesses in Spain and Portugal or, (2) as an alternative remedy, to sell the distribution businesses in Spain and Portugal together with GBI's production facility in Setúbal (3). The Felixstowe plant is, at the time of the decision, being divested as a result of the authorization by the Commission of the acquisition by Lesaffre of GBI UK (4). |
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24.

ABF essentially committed to either (1) sell the current GBI distribution businesses in Spain and Portugal to a suitable purchaser who will have acquired a yeast production plant in Felixstowe (UK) for supplying GBI businesses in Spain and Portugal or, (2) as an alternative remedy, to sell the distribution businesses in Spain and Portugal together with GBI's production facility in Setúbal (3). The Felixstowe plant is, at the time of the decision, being divested as a result of the authorization by the Commission of the acquisition by Lesaffre of GBI UK (4).

distribution

or

3

4

| 25. | The divestiture of GBI's Spanish and Portuguese subsidiaries to a suitable purchaser with sufficient own production capacities guaranteed by ownership of either Felixstowe or Setubal will entirely eliminate the overlap brought about by the present transaction with respect to the Spanish and Portuguese compressed yeast market and guarantee an independent supply of yeast. The market test of the remedy package offered in phase II was generally positive as it combines distribution and production. The decision therefore concludes that the submitted commitments eliminate the serious doubts indentified on the compressed yeast markets in Portugal and Spain. |
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25.

The divestiture of GBI's Spanish and Portuguese subsidiaries to a suitable purchaser with sufficient own production capacities guaranteed by ownership of either Felixstowe or Setubal will entirely eliminate the overlap brought about by the present transaction with respect to the Spanish and Portuguese compressed yeast market and guarantee an independent supply of yeast. The market test of the remedy package offered in phase II was generally positive as it combines distribution and production. The decision therefore concludes that the submitted commitments eliminate the serious doubts indentified on the compressed yeast markets in Portugal and Spain.

VIII.   CONCLUSION

CONCLUSION

| 26. | The notified operation, as modified by the commitments, should be declared compatible with the common market and with the EEA Agreement, subject to compliance with the Commitments which are annexed to the Decision. |
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26.

The notified operation, as modified by the commitments, should be declared compatible with the common market and with the EEA Agreement, subject to compliance with the Commitments which are annexed to the Decision.

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(1)  GBI Holding B.V. divested on 1 August 2006 all of its bakery ingredients business to Werhahn Muehlen KG except for some activities through Uniferm and has since then only been active in the production and supply of bakery yeast.

1

(2)  The remainder of GBI's European yeast business, essentially its UK activities, has been acquired by Lesaffre. That transaction has been examined by the Commission following a referral from the British Office of Fair Trading (OFT), and has been cleared subject to commitments on 11 July 2008; cf. case COMP/M.5020 — Lesaffre/GBI UK.

2

(3)  For the possibility of such alternative remedies see Commission Notice on Remedies Acceptable under Council Regulation (EEC) No 4064/89 and under Commission Regulation (EC) No 447/98 OJ C 68, 2.3.2001, p.3. paragraphs 22, 23. See also Draft Revised Commission Notice on Remedies Acceptable under the Merger Regulation, published on http://ec.europa.eu/competition/mergers/legislation/merger_remedies.html paragraphs 44-46.

3

(4)  Case COMP/M.5020 — Lesaffre/GBI UK, decision of 11 July 2008.

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