Britain's trade ministry asked the European Commission last week to allow it to study the impact of Cargill Inc's proposed acquisition of French starch maker Cerestar , because of UK competition worries.
Competition and Consumer Affairs Minister Melanie Johnson said the Director General of Fair Trading believed the takeover raised concerns about the market for glucose syrups in the UK, which needed further investigation.
"I agree and am therefore requesting the European Commission to refer this aspect of the case to the UK," she said in a statement. She said the European Commission might decide it could deal with the UK concerns and not to refer the matter to the British authorities.
"I wish, however, to provide them with the possibility of referring the case to the UK if they conclude that this would be appropriate," she added.
A Trade and Industry spokeswoman said that before the proposed merger, four companies dominated the UK market for glucose syrups -- Tate & Lyle through the Amylum Group, France's Roquette and Cargill and Cerestar.
"The merger will mean the actual merged company will have a significant share of the UK market and the supply of glucose syrups and blends. It will have about 49 percent," the spokeswoman said.
The proposed acquisition was referred to the European Commission last month.
Cargill announced its plans in October to buy a 56 percent stake in Cerestar for 474 million euros ($427 million) plus 460 million euros in debt, to boost its presence in the value-added food products sector.
Minneapolis-based Cargill, the largest privately held company in the United States, agreed to buy the stake from Italian agro-energy conglomerate Montedison .
If the deal is approved, Cargill will launch a tender offer for the remaining 44 percent of the firm, at the same price of 33 euros per share.
Cerestar is a leading European maker of starch products such as glucose, high fructose syrups, and animal feed ingredients. Cargill is a leading starch maker in the United States, where Cerestar ranks fifth