The European Commission this week cleared the proposed acquisition of the French starch business Cerestar by US company Cargill Inc, with one exception. Concerns about the deal's impact in the UK market for sweeteners means that is has been referred to the UK competition authorities.
Cerestar, recently de-merged from Eridania Beghin-Say, the agribusiness subsidiary of Montedison SpA of Italy, is a leading producer of starch and starch derivatives.
The Commission's review of the case, notified for regulatory clearance in Europe on November 27, revealed overlaps only in the manufacture and supply of starch and sweeteners produced from maize, wheat and potatoes.
On December 20, the United Kingdom, concerned about the impact on the UK market for glucose syrups and blends, requested referral of the proposed purchase.
The Commission reports that its assessment of Cargill's buy of Cerestar showed that there would remain effective competition in the markets for starch and vital wheat gluten. In the starch market, the Commission believes that Cargill will continue to face strong competition from smaller but dynamic rivals, which have been increasing capacity in a growing market. Such players include Roquette of France, Tate & Lyle of the UK and Agrana of Italy. Cargill has a limited presence in vital wheat gluten.