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Acquisition of Nordjysk Andels Grovvareforening A.m.b.a and a number of associated companies by Danish Agro A.m.b.a. approved, subject to commitments

23. februar 2011

n 23 February 2011, the Danish Competition Council (“the Council”) approved Danish Agro’s acquisition of Nordjysk Andel and acquisition of sole control of a number of associated companies, Scanfedt A/S, Scanola A/S, Dansk Vilomix A/S, Nordic Seed A/S, Nordic Seed International A/S, Baltic Agro Holding A/S and Dan Aller Holding A/S (“the mergers”). The approval is conditional upon a set of commitments ensuring competition between Danish Agro and the company’s competitors in a number of agricultural input markets.

Danish Agro is the second largest supplier of inputs to farmers in Denmark. The company is active in the feeding stuff sector with the purchase of grain and sale of animal feed, seed grain, fertilizers etc. to farmers.

Nordjysk Andel is also active in the supply of inputs to farmers in Denmark. The company is active in the feeding stuff sector with the purchase of grain and sale of animal feed, seed grain, fertilizers etc. to farmers.

Most of the associated companies are active in markets upstream of Danish Agro, i.e. with the production and supply of inputs to companies, active in the feeding stuff sector, such as feed ingredients and seed grain.

The Council found that the mergers raised competition concerns in a number of affected markets in the Danish feeding stuff sector. In particular, the Council was concerned that the mergers would lead to an increased risk of coordinated effects between Danish Agro and the only other large player in the retail market, DLG. This concern was mainly based on the high – and increasing – degree of concentration in the market and the increased symmetry between Danish Agro and DLG caused by the mergers.

Also, given the vertical link between Danish Agro and the associated companies, the Council found that the mergers would lead to a risk of input-foreclosure, as a number of the associated companies are active in the supply of inputs to Danish Agro and other companies active in the Danish feeding stuff sector.

In order to address the Council’s concerns, Danish Agro submitted three commitments. The commitments consist in:

1. The sale of a production facility located in Roust.
2. The sale of a production facility located in Nordenskov.
3. An obligation for the associated companies to supply other feeding stuff companies and other present types of customers on similar conditions as they supply Danish Agro and the members of the purchasing society DLA Agro.

The Council concluded that the commitments were suitable to remove the competition concerns identified. The sale of the production facilities in Roust and Nordenskov will be monitored by a Trustee.