The European Commission has cleared the proposed joint venture between France's Lactalis and Switzerland's Nestle.
The merger was cleared under the EU Merger Regulation, after the commission concluded that the transaction would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.
Lactalis produces and markets dairy products; Nestle is active in the food industry with four main fields of activities: beverages, ready-to-eat products, chocolate and confectionery, and dairy products.
Under the proposed transaction, the parties would transfer their chilled dairy desserts activities, which comprise products such as yoghurts, fresh cheeses and milky desserts, to the joint venture in a number of European countries. The operation would give rise to an overlap in France on the market for milky desserts.
The commission concluded from its market investigation that the proposed transaction would not lead to a significant reduction of competition as Lactalis’ products, which are marketed under the brand Bridelice brand, are aimed the diet and weight control sector of the market, and this is specifically different to Nestle’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 the company.