The competition watchdog may block France’s Cerelia from taking over rival pastry maker Jus-Rol after the companies refused to allay its fears.
The Competition and Markets Authority (CMA) had already found that the deal could reduce competition in the UK. In turn, this would push up prices or reduce the quality of the goods or services that customers are sold.
So it gave Cerelia a chance to figure out a way to allay these concerns. As a result, the CMA has decided to open a phase two investigation. Ultimately, if it continues to be concerned by the deal, the CMA can force the companies not to merge.
The tie-up was announced last year, as the firms agreed to merge for an undisclosed account. Cerelia is the largest producer of bake-at-home products in the UK, and together with Jus-Rol it represents two thirds of the market in this country. The companies’ two brands often compete with each other on supermarket shelves.
If the deal is allowed to go through, it could leave retailers with fewer opportunities, the CMA said last month.
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