Danish Crown-Tican deal partially referred to competition authority

20-Jul-2015 - Last updated on 21-Jul-2015 at 14:17 GMT

Danish Crown’s merger with Tican has been partially referred by the European Commission to the Danish Competition and Consumer Authority (DCCA) at its request.

Following an investigation by the Commission, it was found that the transaction would threaten to “significantly affect competition in certain markets in Denmark” as they are two of the largest competitors in the country.

The DCCA will now investigate the merger under national law, rather than the European Commission, as it is “well-placed to review the competition effects in Denmark of the proposed transaction given, for instance, its proximity to and specialist knowledge of the markets and experience in handling previous cases related to the same markets”.

The Commission has cleared the transaction outside Denmark under the normal merger review procedure as its investigation did not highlight any competition concerns beyond that market, including Poland, Sweden and the UK.

Globally, Tican has 2,200 employees. In 2013-2014, it had revenues of DKK5.2 billion (US$751m) and slaughtered 1.9 million pigs. Tican operates meat processing subsidiaries in Denmark, Britain and Poland. Danish Crown had revenues of DKK58bn (US$8.37bn) in 2013-2014 and employs 26,000 personnel. The group slaughtered 22 million pigs at plants in Denmark, Germany, Poland, Britain and Sweden in 2013-2014.

Both slaughterhouses had expected investigation by competition authorities when the merger was first announced in February of this year, but were confident it would be approved.

Erik Bredholt, chairman of Danish Crown’s board of directors, said: “We needed to ascertain whether the competition aspects would actually make a merger possible. And we have received a clear indication that it is possible.”

Ove Thejls, chief executive at Tican, said he expected that “it will be months before the competition authorities give their approval”.