The European Commission has granted approval for a joint venture in the chilled dairy sector between Nestlé and Lactalis.
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The EC’s announcement comes after the two companies withdrew and modified their initial proposal to meet the requirements of anti-trust authorities.
The deal will see Nestlé and Lactalis transfer chilled dairy activities, including yoghurt, cheese and milked-based desserts, to the joint venture in a number of European countries. The Commission found that this would cause an overlap in France in the milk-based dessert category.
“The Commission concluded from its market investigation that the proposed transaction would not lead to a significant reduction of competition as Lactalis’ products—marketed under the brand Bridélice—are aimed at a different sector of the market (diet products) than Nestlé’s products. Furthermore, the Commission found that private labels— partly supplied by Lactalis—will still be able to exert a constraint on the new entity as retailers can easily source their private labels from other suppliers than Lactalis,” the European competition authorities said.
As the deal would not result in a significant reduction of competition in any European market, the EC has given it the green light.
The proposed joint venture would see Lactalis taking a 60% stake in the new unit, with Nestlé holding the remaining 40%.
