CELEX: 31993M0299
Language: en
Date: 1993-02-08 00:00:00
Title: COMMISSION DECISION of 08.02.1993 declaring a concentration to be compatible with the common market (Case No IV/M.299 - SARA LEE / BP FOOD DIVISION) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31993M0299

COMMISSION DECISION of 08.02.1993 declaring a concentration to be compatible with the common market (Case No IV/M.299 - SARA LEE / BP FOOD DIVISION) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 039 , 13/02/1993 P. 0000

 COMMISSION DECISION of 08.02.1993 declaring a concentration to  be compatible with the common market (Case No IV/M.299 - SARA  LEE / BP FOOD DIVISION) according to Council Regulation (EEC)  No 4064/89  (Only the English text is authentic)  The paper version of the decision is available through the  sales offices of the Office of Official Publications of the  European Communities. PUBLIC VERSION MERGER PROCEDURE ARTICLE 6(1)(b) DECISION Registered with advice of delivery To the notifying party Dear Sirs, Subject: <ind> Case No. IV/M299 - Sara Lee/BP Food Division  <ind>  <ind> Notification of 6.1.93 pursuant to Article 4 of  Council Regulation No. 4064/89  1. <ind> On 6 January 1993, Sara Lee Corporation notified an  agreement concerning the acquisition of the Consumer Food  companies forming part of the BP Nutrition division of the  British Petroleum Company plc.  2. <ind> After examination of the notification, the Commission  has concluded that the notified operation falls within the  scope of Council Regulation No. 4064/89 and does not raise  serious doubts as to its compatibility with the common market.  I. <ind> THE PARTIES  3. <ind> Sara Lee Corporation (Sara) is a large US  multinational group active in four main areas: packaged meats  and bakery products, coffee and groceries, textile products  (hosiery, knitwear and underwear) and personal care products  (toiletries, insecticides, cleaning products, etc.).  It  markets its products under major retailing brands such as Douwe  Egberts, Pickwick, Playtex, Abanderado, Hanes, Zwitsal, etc.   4. <ind> The British Petroleum Company plc (BP) is a British  oil producer and refiner with interests in the gas sector,  chemicals, and nutrition.   II. <ind> THE CONCENTRATION  5. <ind> Sara and BP have signed a Sale and Purchase Agreement  by which Sara will acquire the entire issued share capital of  BP's subsidiaries forming the Consumer Food Business Group  (CFBG).  CFBG is active in the processed meat sector and its  main companies are Hendrix, Hesperia, Dacor, Nobre and IFS Ltd.   Together, these companies and their subsidiaries form the  consumer food group, a division of BP Nutrition.  Their  accounts are consolidated within BP Nutrition.  6. <ind> The acquisition will be funded out of Sara's own  resources.  It will be carried out through three subsidiaries  of Sara, namely Sara Lee International Corporation , Sara Lee  Charcuterie S.A. and Sara Lee UK Holdings Limited.  7. <ind> The operation consists therefore of an acquisition of  sole control by Sara of part of a division of BP.  III. COMMUNITY DIMENSION  8. <ind> The enterprises concerned have a combined aggregate  worldwide turnover in excess of 5,000 million ECU.  Both Sara  and CFBG have a Community-wide turnover in excess of 250  million ECU, but do not achieve more than two-thirds of this  turnover in one and the same Member State.  Thus the operation  has a Community dimension.  IV. <ind> COMPATIBILITY WITH THE COMMON MARKET   <ind> Relevant product and geographic markets  9. <ind> In view of the generally small market shares of CFBG  under the narrowest possible market definition (individual  product groups such as ham, frankfurter sausages, etc. at  national level) and the absence of any significant overlap  between Sara and CFBG in the Community, exact market  definitions may be left open, since no dominant position is  created or reinforced (see below).   <ind> Assessment  10. <ind> Sara is not active in the processed meat sector in  the Community with the exception of very low sales in the UK  and Greece.  CFBG has market shares below 1% in these  countries.  Sara is not involved in meat slaughtering,  wholesaling or the distribution of meat products in the EC.  11. <ind> CFBG shares by volume in the different product groups  only attain any significance in the Netherlands and Portugal.  12. <ind> In the Netherlands, CFBG carries out its activities  through Stageman and Boers.  Stageman produces a wide range of  charcuterie products and sells them to supermarkets.  Boers is  primarily engaged in the slicing of delicatessen meat products.   The three largest competitors of CFBG in the Netherlands are  Compaxo, Meester and Unilever.  Meester, a subsidiary of a  large Dutch supermarket chain, accounts for roughly half of the  Dutch sales of sliced pre-packaged meats.  13. <ind> In Portugal, CFBG owns Nobre, a producer of branded  charcuterie products, frankfurter sausages and ready-made  meals.  Its main  competitors are Izidoro, Sicassal, Fricarnes,  Frami, Heinz and William Saurin.  14. <ind> There is clearly no significant horizontal overlap  between Sara and CFBG.  Even in the two Member States where  CFBG's market shares are highest (assuming the narrowest  possible market definitions), CFBG is subject to competition  from financially strong enterprises, which should limit the  possible conglomerate effects of the combination of Sara's  financial resources with CFBG's activities in the common  market.  V. <ind> ANCILLARY RESTRAINTS  15. <ind> The agreement between Sara and BP contains non- competition covenants which are intended to preserve the value  of the CFBG business in the hands of its new owners. These  covenants are valid for two years after completion of the  agreement and provide that BP will not compete with Sara in  products and geographic areas in which CFBG is active as at the  date of completion. The activities of CFBG include bacon  products and processed poultry products, products in which BP  retains interests. BP's retained businesses are exempted from  the non-competition covenants, except that BP undertakes for a  period of two years not to extend the capacity of these  retained interests in the geographic areas where CFBG is  currently active, again for the purposes of preserving the  value of CFBG in the hands of its new owners.  16. <ind> These agreements are directly related to the  concentration and necessary for its implementation, and are  covered by the present decision.  VI. <ind> CONCLUSION  17. <ind> Therefore, the concentration will not create or  strengthen a dominant position as a result of which effective  competition will be significantly impeded in the common market  or in a substantial part of it.  For the above reasons, the Commission has decided not to oppose  the notified concentration and to declare it compatible with  the common market.  This decision is adopted in application of  Article 6(1)(b) of Council Regulation 4064/89.  For the Commission