CELEX: 32015M7510
Language: en
Date: 2015-06-10 00:00:00
Title: Commission Decision of 10/06/2015 declaring a concentration to be compatible with the common market (Case No COMP/M.7510 - OLAM / ADM COCOA BUSINESS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 10.6.2015
C(2015) 4088 final

|In the published version of this decision, some information |           |Public version                                                 |
|has been omitted pursuant to Article 17(2) of Council       |           |                                                               |
|Regulation (EC) No 139/2004 concerning non-disclosure of    |           |                                                               |
|business secrets and other confidential information. The    |           |                                                               |
|omissions are shown thus […]. Where possible the information|           |                                                               |
|omitted has been replaced by ranges of figures or a general |           |                                                               |
|description.                                                |           |                                                               |
|                                                            |           |                                                               |
|                                                            |           |MERGER PROCEDURE                                               |

|                                                                       |To the notifying party                                                 |

Dear Sir/Madam,

Subject:    Case M.7510 - Olam/ ADM Cocoa Business
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1] and Article 57 of the Agreement  on  the  European  Economic
Area[2]

    1. On 30 April 2015, the European Commission received a notification of a proposed concentration pursuant to Article 4 of Council  Regulation
       (EC) No 139/2004 by which Olam International Limited ("Olam", Singapore) acquires within the meaning of  Article  3(1)(b)  of  the  Merger
       Regulation sole control of the global cocoa business of Archer Daniels Midland Company ("ADM Cocoa Business") by way of purchase of shares
       and assets.[3] Olam is hereinafter referred to as "the Notifying Party". Olam and the ADM Cocoa Business are collectively referred  to  as
       "the Parties" or "the Merged Entity".

       THE PARTIES

    2. Olam is a global commodity merchant and processing company specialized in cocoa, coffee, edible nuts, rice and cotton. As  regards  cocoa,
       Olam is involved in the origination, production, processing and distribution of cocoa beans worldwide and recently began processing  cocoa
       beans to semi-finished cocoa products.

    3. The ADM Cocoa Business is active globally in the procurement and processing of cocoa beans  and  the  production  of  semi-finished  cocoa
       products. Specifically, the ADM Cocoa Business comprises eight processing facilities (three in Europe, two in West Africa,  two  in  North
       America, one in Asia and one in South America), ten warehouses, the deZaan, Unicao brand and Joanes brands, four innovation centres and  a
       global customer franchise. The ADM Cocoa Business is part of Archer-Daniels Midland Company (“ADM”), based in the United States, which  is
       engaged in procuring, transporting, storing, processing and merchandising agricultural commodities and products.

       THE OPERATION

    4. Pursuant to the terms of a Master Purchase Agreement signed on 15 December 2014, Olam will acquire all the  equity  interests  and  assets
       constituting the ADM Cocoa Business.[4] Olam will therefore acquire sole control over the ADM Cocoa  Business.  The  notified  transaction
       constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

    5. The Parties have a combined aggregate world-wide turnover of more than EUR 5,000 million[5] (Olam: EUR […] million;  ADM  Cocoa  Business:
       EUR […] million). Each of them has an EU-wide turnover in excess  of  EUR  250  million  (Olam:  EUR  […]  million;  ADM  Cocoa  Business:
       EUR […] million), but they do not achieve more than two-thirds of their aggregate EU-wide turnover within one and the same  Member  State.
       The notified transaction therefore has an EU dimension pursuant to Article 1(2) of the Merger Regulation.

       RELEVANT MARKETS

1 Introduction to the cocoa value chain

    6. The cocoa value chain starts with the cultivation of cocoa trees. Each pod from a cocoa tree contains up to 50 beans. Farmers harvest  the
       pods and remove the beans from the pod. The beans then undergo fermentation and drying in the country of origin. The resulting cocoa beans
       are one of the main soft commodities traded worldwide.

    7. Cocoa beans are then processed and ground to produce cocoa liquor. Cocoa liquor may be further pressed to separate cocoa butter (~45%) and
       cocoa cake (~55%), which is in general pulverized to produce cocoa powder. Cocoa liquor and cocoa butter  together  with  sugar  and  milk
       powder are the raw materials for the production of industrial chocolate used in the production of end-consumer products. Cocoa  powder  is
       primarily used as a food ingredient to add chocolate taste to a product, for example in chocolate drinks and bakery products.

       Figure 1: the cocoa bean value chain

                                                                      [pic]

2 Relevant product markets

    8. Within the cocoa value chain, Olam and the ADM Cocoa Business procure  cocoa  beans  in  the  countries  of  origin  from  farmers,  local
       cooperatives, local traders or state organisations depending on the legal regulations in the country  of  origin.  Cocoa  beans  are  also
       traded internationally, including on the London and New York futures markets. Olam and the ADM Cocoa Business also resell  some  of  these
       cocoa beans to cocoa bean processors as well as to international traders and process some of these beans internally to  manufacture  semi-
       finished cocoa products.

            A. Procurement and supply of cocoa beans

       Distinction between origins of cocoa beans

    9. The major areas for the cultivation of cocoa beans are in West Africa, Latin America  and  Asia,  with  West  Africa  (and  notably,  Côte
       d'Ivoire, Ghana, Nigeria and Cameroon) accounting for 76% of the total production of cocoa beans.

   10. The Notifying Party submits that the relevant product market is the procurement and supply of cocoa beans without any further segmentation
       according to origins given that most customers procure cocoa beans from more than one country and/or region. According  to  the  Notifying
       Party, customers generally require a blend of different varieties of cocoa beans from different origins, and these blends  vary  based  on
       bean characteristics and on prices.

   11. The Commission considered in previous cases that, within the wider markets for the procurement and supply of cocoa beans,  some  customers
       may have a preference for cocoa beans of a particular origin. In particular, EEA customers may have a preference for  West  African  cocoa
       beans due to their perceived quality and taste, as well as geographical proximity. The exact product market definitions were however  left
       open.[6]

   12. A majority of respondents to the market investigation have confirmed that EEA customers have a general preference for a  specific  origin,
       notably West African beans[7]. These respondents submitted that cocoa beans from West Africa have different  characteristics  compared  to
       cocoa beans from other origins, for instance in terms of fermentation level, bean size, colour profile  and  taste  of  the  semi-finished
       cocoa products manufactured with those beans.[8] The  preference  of  European  customers  for  West  African  beans  is  also  linked  to
       geographical proximity and some end-consumers' preference for their flavour. Some respondents also pointed to the specificities  of  cocoa
       beans from Latin America and Asia, notably in terms of quality and price. On the other hand, beans from different origins are  very  often
       blended in order to achieve consistent taste in semi-finished products, which allow for a certain degree of flexibility in sourcing.[9]

   13. Regarding a possible sub-segmentation of West African beans, whilst local regulations differ considerably between origin countries, market
       participants have however reported a degree of substitutability between beans from different West  African  countries.[10]  Switching  was
       indicated by respondent customers to take place for instance between beans originating from Ghana, Côte d'Ivoire and Nigeria[11],  whereas
       a minority of customers deemed Cameroon beans to have a specific red colour profile.

   14.  In the light of these elements, the Commission considers that it is likely that the procurement and  supply  of  cocoa  beans  from  West
       Africa would constitute separate product markets from the procurement and supply of cocoa beans from Asia and/or Latin  America.  However,
       whether the procurement and supply of cocoa beans from individual West African origins constitute separate markets can ultimately be  left
       open, as the notified transaction does not give rise to serious doubts as  to  its  compatibility  with  the  internal  market  under  any
       plausible product market definition.

       Distinction between standard and non-standard cocoa beans

   15. Cocoa beans can either be standard or non-standard (certified and/or traceable). Certified cocoa beans  refer  to  beans  that  have  been
       certified by third-party organizations such as the RainForest Alliance, Fair Trade organization and Utz Certified for  good  agricultural,
       environmental and social practices throughout the whole supply chain. Traceable cocoa beans refer to  beans  whose  supply  chain  can  be
       tracked by customers back to the individual farm(s).

   16. The Notifying Party submits that there is no separate market for the procurement and supply  of non-standard cocoa beans because the  same
       markets dynamics apply to standard and non-standard products and the price difference between them is not significant (less  than  10%  in
       general). Moreover, customers typically buy both kinds of products.

   17. In the 2014 Ecom Agroindustrial Corporation/Armajaro Trading[12] case, the Commission found that setting up sourcing operations  for  non-
       standard beans entailed significantly higher investment cost and longer time frames. Non-standard beans were also sold at a price  premium
       and appeared to be sourced through long-term supply agreements, as opposed to the widespread spot trading of standard beans. However,  the
       exact product market definition was left open.

   18. A majority of respondents to the market investigation indicated that the  sourcing  of  certified  and/or  traceable  cocoa  products  had
       distinct features which differentiate it from the sourcing of standard  cocoa  products,  such  as  supply  chain  requirements  and  high
       investment in training and education that are  reflected  in  higher  costs.[13]  Similarly,  there  are  premiums  paid  to  farmers  and
       cooperatives for these beans above any training and social programme costs.

   19. However, the Commission considers that it can be left open whether non-standard cocoa beans constitute a separate relevant product market,
       as the competitive assessment would remain the same under any alternative product market definition.

       Overall conclusion on cocoa beans

   20. In the light of the outcome of the market investigation, the Commission considers that for the purposes of the  present  case,  the  exact
       market definition for the procurement and supply of cocoa beans can be left open, as the  notified  transaction  does  not  give  rise  to
       serious doubts under any plausible market definition. In any event, the Commission has assessed potential markets for the procurement  and
       supply of cocoa beans according to the distinction between: (i) different origins and (ii) standard and non-standard beans.

       B. Semi-finished cocoa products

   21. Cocoa liquor is produced by grinding cocoa beans. Cocoa liquor is either used as one of  the  basic  ingredients  for  the  production  of
       industrial chocolate, to which it gives colour and flavour, or for being further processed into cocoa butter and cocoa powder.

   22. Cocoa butter is extracted by pressing cocoa liquor, either through a very fine sieve or by the use of a solvent. It is one of the  primary
       ingredients of industrial chocolate, which is primarily used by manufacturers of end-consumer chocolate products.  The  vast  majority  of
       cocoa butter sold in the EEA (including by Olam and the ADM Cocoa Business) is sold in liquid form.

   23. Cocoa powder is a by-product of the pressing process used to produce cocoa butter. It is produced  from  grinding  and  pulverising  cocoa
       cake, the substance remaining after cocoa butter has been removed from cocoa liquor. It is used in a  variety  of  end  consumer  products
       (e.g. chocolate drinks, cakes and biscuits) to add cocoa flavour.

   24. The Notifying Party submits that the relevant product markets are each of the markets for cocoa liquor,  butter  and  powder  without  any
       further sub-segmentation.

   25. In previous decisions, the Commission concluded that cocoa liquor, cocoa butter  and  cocoa  powder  indeed  constitute  separate  product
       markets.[14] Similarly to the market for the procurement and supply of cocoa beans, the Commission also considered  in  previous  cases  a
       potential differentiation between standard and non-standard cocoa products, but left the question open.[15] A similar  conclusion  can  be
       reached in this case, as the notified transaction would not give rise to serious doubts in these potential markets for non-standard  cocoa
       products.

       Overall conclusion on semi-finished cocoa products

   26. In the light of the market investigation, the Commission considers that for the purposes of the present case, the exact market  definition
       for the procurement and supply of cocoa beans can be left open, as the notified transaction will not give rise to serious doubts under any
       potential market definition. In any event, the Commission has assessed potential markets for the supply of  cocoa  semi-finished  products
       according to the segmentations between: (i) liquor, butter and cake/powder and (ii) standard and non-standard products.

3 Relevant geographic markets

       A. Procurement and supply of cocoa beans

   27. The Notifying Party submits that the relevant geographic markets for the procurement and supply of cocoa beans are worldwide  since  cocoa
       beans are shipped worldwide, market prices are driven by global futures markets, and transport costs are low.

   28. In previous decisions, the Commission examined whether the procurement of cocoa beans (where the Parties  are  present  as  buyers)  would
       appear to be a worldwide market in view of low transport costs and lack of differences between EEA and the rest of the  world  in  use  of
       futures markets to hedge but it left open the exact geographic market definition.[16] In the present case, a wide majority of  respondents
       have confirmed the global dimension of the procurement market.[17]

   29. As regards the supply of cocoa beans (where the Parties are present as sellers), the Commission considered in a  previous  case  that  the
       market is likely to be  EEA-wide in scope because European and US cocoa beans future contracts specify different  product  characteristics
       and delivery points and EEA and US price tend to diverge significantly. However, the Commission ultimately left open the question  whether
       the market was EEA-wide or global in scope.[18]

   30. In the present case, respondents to the market investigation have in general confirmed that  European  customers  tend  to  have  distinct
       preferences from US or Asian customers regarding the specifications of the cocoa  beans  they  source,  notably  as  regards  fermentation
       levels. Each consumption region has its own set of supply and demand factors that have ultimately an impact on the price formation of  the
       cocoa beans.[19]

   31. In any event, the Commission considers that the precise geographic market definition of the supply of cocoa beans can be left open as  the
       competitive assessment would remain the same regardless of whether the geographic market is EEA-wide or worldwide in scope.

      B. Semi-finished cocoa products

   32. The Notifying Party submits that the relevant markets for cocoa products is  EEA-wide,  if  not  worldwide,  in  scope  because  chocolate
       manufacturers tend to have a global sourcing strategy, the semi-finished cocoa products are traded globally and transport costs are low.

   33. While earlier decisions left open the question whether the geographic market for semi-finished cocoa products were EEA-wide or  world-wide
       in scope, in its most recent decision the Commission concluded that such geographic market was to be considered as EEA-wide  in  view  of,
       first, significant differences in customer preferences in the EEA compared to  other  geographic  areas,  and  second,  the  existence  of
       distinct regulatory regimes, import duties, quotas or technical standards, notably with respect to requirements  for  certain  third-party
       certification schemes.[20]

   34. As regards cocoa butter in particular, which is generally delivered in liquid form in the EEA, the Commission has examined  whether  there
       are any factors that limit transportation distance of cocoa butter in the EEA. In this regard, respondents  to  the  market  investigation
       have identified transportation costs and reliability of supply as potentially limiting factors.[21] However,  for  the  purposes  of  this
       decision, the precise geographic market definition for cocoa butter can be left open as it has no impact on the competitive assessment  of
       the transaction.

       COMPETITIVE ASSESMENT

1 Horizontal overlaps

   35. The activities of the Parties overlap in (i) the procurement and supply of cocoa beans and ii) the supply of semi-finished cocoa products.
       However, their business models are significantly different.

   36. On the one hand, Olam is predominantly active as an international trading house in the procurement and supply of cocoa beans worldwide. It
       mainly resells cocoa beans it procures and has only recently invested in its own grinding and pressing  capacity,  in  Côte  d'Ivoire  and
       Nigeria. In the EEA, Olam has no pressing and grinding factories:  it owns processing facilities in the UK  (to  melt  cocoa  butter)  and
       Spain (to pulverize cocoa powder).

   37. On the other hand, the ADM Cocoa Business' core activity is the processing of cocoa beans into semi-finished cocoa products. In  the  EEA,
       the ADM Cocoa Business owns two grinding and pressing facilities in the Netherlands and  one  in  Germany.  Semi-finished  cocoa  products
       manufactured in its plants in Ghana, Côte d'Ivoire and Singapore are also imported in the EEA. The ADM Cocoa Business processes  the  vast
       majority of cocoa beans it purchases and only sells cocoa beans opportunistically.

1 Procurement and supply of cocoa beans

   38. Market shares of the Parties as regards procurement and supply of cocoa beans are shown in the table below.

       Table 1: Shares in volume for the procurement and supply of cocoa beans 2014

|Origin              |Commercial activity            |Olam              |ADM Cocoa Business|Combined          |
|Total               |Total procurement (WW)         |[10-20]%          |[10-20]%          |[20-30]%          |
|                    |Procurement for export         |[10-20]%          |[10-20]%          |[20-30]%          |
|                    |Sales WW[22]                   |[10-20]%          |[0-5]%            |[10-20]%          |
|                    |Sales EEA                      |[10-20]%          |[0-5]%            |[10-20]%          |
|West Africa         |Total procurement              |[below 30]%       |[below 30]%       |[below 30]%       |
|                    |Procurement for export         |[below 30]%       |[below 30]%       |[below 30]%       |
|                    |Sales WW[23]                   |[below 30]%       |[below 30]%       |[below 30]%       |
|                    |Sales EEA                      |[below 30]%       |[below 30]%       |[below 30]%       |

   39. The Merged Entity would become the second largest competitor in the procurement of cocoa beans at the global level (second only  to  Barry
       Callebaut). The combined entity would, however, continue to face strong competition from  Barry  Callebaut  and  Cargill  with  additional
       competitive constraints imposed by a number of smaller competitors such as international soft commodities trade houses (Ecom, Touton,  and
       Sucden).

   40. As regards further potential sub-segments of those cocoa beans markets:

      a. Non-standard cocoa beans: the Notifying party estimates that combined market shares are generally similar to or lower than their  market
         shares in all or standard beans, as the ADM Cocoa Business has  quite a limited presence in this field.

      b. Cocoa beans from Asia and Latin America: None of the estimated market shares for the procurement and supply of cocoa beans from Asia and
         Latin America exceeds 20%. .

      c. Cocoa beans from different West African countries: Although the estimated combined market shares for the procurement of cocoa beans from
         Cameroon (around [below 40]%) and Nigeria (around [below 60]%). are higher than shares for beans from Côte  d’Ivoire  ([below  30]%)  or
         Ghana ([below 20]%), the combined sales shares, however, remain moderate even for Cameroon ([below 20]%) and Nigeria ([below 30]%). This
         is due to the fact that the ADM Cocoa Business […].

   41. The majority of market participants did not raise concerns relative to the impact of the transaction on the market for bean procurement in
       the EEA.[24] Customers submitted that only Olam is significantly active in the supply of cocoa beans, and hence the transaction  does  not
       have significant effects. Although the general trend towards consolidation in the cocoa business was mentioned by market participants, the
       vast majority of respondents submitted that there are a sufficient number of alternative suppliers sourcing beans from  the  West  African
       region.[25] Moreover, market participants do not consider Olam and the ADM Cocoa Business as  close  competitors  as  they  run  different
       business models. As explained by one competitor "ADM is a producer of cocoa products, OLAM is mainly a cocoa bean supplier with  a  little
       cocoa product business”.[26]

   42. In the light of the above, the Commission concludes that the Transaction does not raise serious doubts as to its  compatibility  with  the
       internal market with respect to the market for procurement and supply of cocoa beans.

2 Supply of semi-finished cocoa products

   43. Market shares of the Parties as regards supply of semi-finished cocoa products at EEA level are shown in the table below.[27]

          Table 1: Shares in volume for sales of cocoa products in the EEA 2014

|                      |Cocoa liquor        |Cocoa butter        |Cocoa powder          |
|Olam                  |[0-5]%              |[5-10]%             |[0-5]%                |
|The ADM Cocoa Business|[10-20]%            |[10-20]%            |[10-20]%              |
|Combined              |[10-20]%            |[20-30]%            |[10-20]%              |
|Cargill               |N/A                 |[20-30]%            |[20-30]%              |
|ECOM                  |N/A                 |20-30%              |[0-5]%                |
|Barry Callebaut       |N/A                 |[10-20]%            |[10-20]%              |
|Indcresa              |N/A                 |--                  |[5-10]%               |
|Natra                 |N/A                 |[0-5]%              |[0-5]%                |
|Euromar               |N/A                 |[5-10]%             |[0-5]%                |
|Nederland             |N/A                 |[0-5]%              |[0-5]%                |
|BT Cocoa              |N/A                 |[0-5]%              |N/A                   |
|Guan Chong            |N/A                 |[0-5]%              |[5-10]%               |
|Others                |N/A                 |--                  |[10-20]%              |

   44. As regards the three semi-finished cocoa products, the only affected market is cocoa butter. There is almost no overlap as  regards  cocoa
       liquor. With respect to the market of cocoa powder, the combined share of the Parties is [10-20]% in volume and [15-25]% in value. Several
       significant alternative players, some of bigger or equal size,  will  remain  available  on  the  market,  e.g.Cargill  ([20-30]%),  Barry
       Callebaut ([10-20]%) and Indcresa ([5-10]%).

   45. As regards the market for cocoa butter, the combined entity would continue to face strong competition from Barry Callebaut, Cargill,  Ecom
       and Euromar. The Parties have a combined market share in standard cocoa butter of [20-30]% in the EEA (Olam: [5-10]%; ADM:  [15-25]%)  and
       of [20-30]% worldwide (Olam: [5-10]%; the ADM Cocoa Business: [15-25]%). The Parties have a combined market share  in  non-standard  cocoa
       butter of [15-25]% in the EEA (Olam: [0-5]%; the ADM Cocoa Business: [10-20]%) and of [10-20]-[20-30]% worldwide (Olam:  [0-5]%;  the  ADM
       Cocoa Business: [10-20]%).

   46. Moreover, a large majority of customers of cocoa butter does not expect the Transaction to have an effect on their business.[28]  A  large
       majority of customers of cocoa-butter submitted that it was easy for them to switch suppliers of cocoa  butter.[29]  They  indicated  that
       they are able to switch suppliers of cocoa butter in a relatively short time frame (at most 6 months) and at no significant  cost  as  the
       product is more standardised than cocoa powder.

   47. With respect to non-standard cocoa products, Olam has […] sales of non-standard cocoa liquor in the EEA over the last three years and  […]
       sales of non-standard cocoa powder in the EEA over the last three years ([…] in 2014; […] in 2013 and 2012).

   48. A majority of respondents to the market investigation explained that the merger will have no or very limited  impact  on  the  market  for
       cocoa products, both certified/traceable cocoa products and standard cocoa products.[30] These respondents put  forward  that  there  will
       remain enough alternatives in these markets in the EEA. Different business models of both companies have also been  identified  by  market
       participants as one of the reason why the transaction is expected to have limited effect on semi-finished cocoa products in  the  EEA,  as
       well as the fact that Olam has no grinding or pressing facility in the  EEA.   The  complementarity  of  both  business  models  has  been
       highlighted by some market participants as well as the ability of the Merged Entity to compete against Barry  Callebaut  and  Cargill.  As
       explained by one customer "Olam will bring their expertise of origin sourcing to ADM so they have a wider capability of cocoa grinding  to
       supply cocoa derivatives (liquor, butter powder)"[31].

   49. Some customers expressed limited concerns which were rather of a general nature and related to  current  consolidation  in  the  chocolate
       market and not to the notified transaction.[32] One competitor of the Parties active in procurement of supply and cocoa beans claimed that
       Olam and the ADM Cocoa Business compete for butter in the UK market and that the concentration could lead to some adverse effects in  this
       area. However, only Olam has a processing facility in the UK (melting butter facility). The ADM Cocoa Business supplies cocoa butter  from
       the Netherlands where other competitors (Cargill, Ecom/Theobroma) are settled.

   50. In light of the above, the Commission concludes that, as regards horizontal overlaps, the Transaction does not raise serious doubts as  to
       its compatibility with the internal market with respect to the markets for sales of cocoa liquor,  cocoa  butter  and  cocoa  powder  both
       standard and non-standard.

2 Vertical links

1 Introduction

   51. The transaction leads to stronger vertical links between the activities of Olam and the ADM Cocoa Business in procurement  and  supply  of
       cocoa beans and the Parties‘activities in the markets for the supply of semi-finished cocoa products.

   52. As explained in section 5-1, Olam is primarily a trading house with no bean grinding  and  pressing  facilities  in  Europe.  Through  the
       transaction, Olam will acquire a network of cocoa processing facilities in EEA, which will provide an outlet for beans sourced by Olam and
       may reduce availabilities of these beans for non-integrated processors in the bean merchant market.

2 Assessment of these stronger vertical links

   53. Based on the information submitted by the Parties, there are a limited number of vertically affected markets. If the upstream markets  for
       the procurement of cocoa beans are sub-segmented by origin, the Parties' combined market  shares  exceed  [more  than  30]%  only  in  the
       procurement of beans from Cameroon and Nigeria.

   54. During the market investigation, the Commission has sought to verify whether the Parties' joint position in the procurement of cocoa beans
       from these origins could lead to potential foreclosure by making access to those cocoa beans more costly or more difficult for  downstream
       customers. Market respondents do not expect such an outcome. A large majority of customers who buy cocoa beans considers that there is  no
       risk that Olam's stronger vertical integration will make access cocoa beans more difficult/costly.[33] They consider that Olam's  stronger
       vertical integration will not change the dynamics of the cocoa beans market and the flow of the cocoa beans  to  users,  especially  given
       that the Parties' sales shares for cocoa beans from all origin countries are limited ([below 30]% for cocoa beans  from  Cameroon,  [below
       30]%, for cocoa beans from Nigeria).[34]

   55. Furthermore, due to the need to blend beans from different origins in order to achieve a consistent taste, notably for cocoa  powder,  the
       market shares of the Parties as regards bean procurement in Cameroon and Nigeria do not create a significant bargaining advantage.

   56. In light of the above, the Commission concludes that, as regards stronger vertical links between that Parties’  activities,  the  notified
       transaction does not raise serious doubts as to its compatibility with the internal market.

       CONCLUSION

   57. For the above reasons, the European Commission has decided not to oppose the notified operation and to  declare  it  compatible  with  the
       internal market and with the EEA Agreement. This decision is adopted in application of  Article  6(1)(b)  of  the  Merger  Regulation  and
       Article 57 of the EEA Agreement.

For the Commission
(Signed)
Margrethe VESTAGER
Member of the Commission

-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 ('the Merger Regulation'). With effect from 1 December 2009, the Treaty on the Functioning of the  European  Union
('TFEU') has introduced certain changes, such as the replacement of 'Community'  by  'Union'  and  'common  market'  by  'internal  market'.  The
terminology of the TFEU will be used throughout this decision.

[2]   OJ L 1, 3.1.1994, p. 3 ("the EEA Agreement").

[3]   Publication in OJ C 154 of 9.5.2015, p. 25.

[4]   The proposed concentration does not involve the industrial chocolate and compound business of ADM which Cargill  has  decided  to  acquire.
The Cargill/ADM transaction is currently reviewed by the Commission in the context of a phase II investigation (M.7408 Cargill/ADM).

[5]   Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission Consolidated Jurisdictional Notice (OJ  C  95,
16.4.2008, p. 1).

[6]   M.7120 – Ecom Agoindustrial Corporation/Armajaro Trading, paragraph 19; M.6872 – Barry Callebaut/Petra Foods - Cocoa Ingredients  Division,
paragraphs 12-15; M.6132 – Cargill/KVB, paragraphs 12–14; and COMP/M.5431 – ADM/Schokinag, paragraphs 19–20.

[7]   See replies to question 7.1 - Questionnaire addressed to customers of semi-finished cocoa products (Q2) and  to  question  8  Questionnaire
      addressed to competitors in cocoa beans procurement and products manufacturing (Q1) as well as minutes of a call with Mars on 21 May 2015.

[8]   See replies to question 9 Questionnaire addressed to competitors in cocoa beans procurement and products manufacturing (Q1).

[9]   See non-confidential minutes of a call with Friesland Campina on 18 May 2015. Also see non-confidential minutes of a call with Burton's  on
18 May 2015.

[10]  See replies to question 10 - Questionnaire addressed to competitors in cocoa beans procurement and products manufacturing (Q1).

[11]  See non-confidential minutes of a call with Fazer on 18 May 2015.

[12]  M.7120 – Ecom Agoindustrial Corporation/Armajaro Trading, paragraphs 20-23.

[13]  See replies to question 12 - Questionnaire addressed to competitors in cocoa beans procurement and products manufacturing (Q1).

[14]  M.7120 – Ecom Agoindustrial Corporation/Armajaro Trading, paragraphs 30-36; M.6872  –  Barry  Callebaut/Petra  Foods  -  Cocoa  Ingredients
Division, paragraphs 16-22; M.6132 – Cargill/KVB, paragraphs 15-24; and COMP/M.5431 – ADM/Schokinag, paragraphs 21-31.

[15]  M.7120 – Ecom Agoindustrial Corporation/Armajaro Trading, paragraphs 37-40.

[16]  M.7120 – Ecom Agoindustrial Corporation/Armajaro Trading, paragraphs 53-55; M.6872  –  Barry  Callebaut/Petra  Foods  -  Cocoa  Ingredients
Division, paragraphs 26-29; M.6132 – Cargill / KVB, paragraph 27; and M.5431 – ADM/Schokinag, paragraph 33.

[17]  See replies to question 9 - Questionnaire addressed to competitors in cocoa beans procurement and products manufacturing (Q1).

[18]  M.7120 – Ecom Agoindustrial Corporation/Armajaro Trading, paragraphs 56-57.

[19]  See replies to question 15 - Questionnaire addressed to competitors in cocoa beans procurement and products manufacturing (Q1).

[20]  M.6872 – Barry Callebaut /Petra Foods - Cocoa Ingredients Division, paragraphs 32-33, M.6132 – Cargill / KVB, paragraphs 30-32  and  M.5431
– ADM / Schokinag, paragraphs 35-38.

[21]  See replies to question 15 - Questionnaire addressed to customers of semi-finished cocoa products (Q2).

[22]  These are figures referring to standard cocoa beans only (as opposed to all cocoa beans). As the ADM  Cocoa  business  has  sold  only  […]
tonnes of non-standard cocoa beans (out of a total market of non-standard cocoa beans of […] tonnes), combined market shares would  be  lower  as
regards all cocoa beans in general.

[23]  Figures referring to standard cocoa beans only.

[24]  See replies to question 15 - Questionnaire addressed to competitors in cocoa beans procurement and products manufacturing (Q1).

[25]  See replies to question 40 – Questionnaire addressed to competitors in cocoa beans procurement and products manufacturing (Q1).

[26]  See reply by one competitor to Question 20-. Questionnaire addressed to competitors in cocoa beans procurement and  products  manufacturing
(Q1).

[27]  Combined market shares at worldwide level are slightly lower: [5-10]% in liquor, [10-20]% in butter, [10-20]% in powder.

[28]  See replies to question 29.2 – Questionnaire addressed to customers of cocoa semi-finished products (Q2).

[29]        See replies to question 23.2 – Questionnaire addressed to customers of cocoa semi-finished products (Q2).

[30]  See replies to question 29 – Questionnaire addressed to customers of cocoa semi-finished products (Q2).

[31]  See reply to question 28.1 – Questionnaire addressed to customers of cocoa semi-finished products (Q2).

[32]  See replies to question 30 -- Questionnaire addressed to customers of cocoa semi-finished products (Q2).

[33]  See reply to question 31 – Questionnaire addressed to customers of cocoa semi-finished products (Q2).

[34]  See replies to question 30 of the Commission's request for information addressed to customers of  semi-finished  cocoa  products  (Q2)  and
replies to Question 41 of  the  Commission's  request  for  information  addressed  to  competitors  in  cocoa  beans  procurement  and  products
manufacturing (Q1).