US: FTC challenges JM Smucker’s planned purchase of Conagra’s Wesson brand

The US Federal Trade Commission (FTC) is challenging Orrville-based J.M. Smucker’s proposed acquisition of the Wesson cooking oil brand from Chicago-based Conagra Brands, arguing that the deal is likely to “substantially lessen competition, or to tend to create a monopoly” in the United States for canola and vegetable oils.

The US$285 million, all-cash deal to buy the Wesson brand was announced in May 2017. Products in the 100-year-old Wesson brand include vegetable, canola, corn and blended oils. When the acquisition was announced, Smucker said it expected the deal to add about US$230 million to its annual sales.

“The complaint alleges that the acquisition is likely to increase Smucker’s negotiating leverage against retailers, especially traditional grocers, by eliminating the vigorous head-to-head competition that exists between the Crisco and Wesson brands today,” the statement said.

Conagra said it opposed the FTC decision and was working with J.M. Smucker to review “all of our options.”

“After working diligently for the last eight months to respond to the FTC’s inquiries about the transaction, we are very disappointed by and disagree with the commission’s decision,” Conagra said in a statement.

J.M. Smucker chief executive Mark Smucker said in a statement the company is working with Conagra to assess its next steps.

Full Content: CNBC

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