ABP ‘confident’ of Slaney deal being approved in the coming months
ABP Food Group is “confident” that the proposed deal with Slaney Foods, which will see ABP take a 50% stake in the company, will be approved in the coming months, an ABP spokesperson has said.
The comment from ABP comes as an IFA-commissioned report found that the proposed deal poses a risk of a substantial lessening of competition (SLC) in the State.
“ABP Food Group is in a regulatory process with the EU Commission regarding the proposed 50:50 joint venture with Fane Valley Co-Op in relation to Slaney Foods.
“The company is aware of the IFA report and is confident that the transaction will be approved in the coming months. It is not appropriate to comment further while this process is ongoing,” the spokesperson said.
The report, which was prepared by Dr Pat McCloghan of PMCA Economic Consulting, has already been submitted to DG Competition in Brussels, which is to investigate the proposed deal.
The overall conclusion of the PMCA report, which was presented in Buswells Hotel this morning, is that the “relevant market affected by the proposed transaction is characterised by weak competition and that the proposed deal poses a risk of an SLC in the State or an SIEC at EU level”.
An SIEC, a significant impediment to effective competition, is the merger control test applied by the European Commission, the equivalent of the SLC test applied in Ireland and the UK.
Combined, ABP and Slaney currently account for 25.8% of all cattle slaughterings in Ireland, however, he said that when the market is narrowed down to premium cattle (steers and heifers) meeting the MII grade and weight specifications, this figure rises to 36.2% of cattle.
Dr. McCloughan said that Slaney/ICM has the around 40% of the sheep kill (which ABP would control should the deal go ahead).
While this report has been submitted to DG Competition, it has yet to be officially notified of the proposed deal.
It is understood that once the transaction has been notified, it will take 25 working days to assess the deal following which it will either be approved with low conditions, subject to conditions or a detailed investigation will be launched.
A detailed investigation is understood to last 90 working days, after which the proposed transaction will be approved, conditionally approved or blocked.