ABP/Fane Valley Acquisition of Joint Control of Slaney Foods JV

In October 2016, the European Commission unconditionally approved the acquisition of joint control of Slaney Foods JV and Slaney Proteins (Ireland) by meat processor ABP Group (Ireland) and farmer-owned agri-food company Fane Valley (United Kingdom). A Compass Lexecon team consisting of Justin Coombs, Orjan Sandewall and Georg Clemens assisted the merging parties with the merger notification and with subsequent requests from the European Commission during the investigation, leading up to an unconditional clearance in Phase I.

The companies involved (ABP, Fane Valley and Slaney) are active in the purchase and slaughter of live cattle, sheep and lambs, as well as de-boning and processing of meat. Their activities also cover the marketing of fresh beef, lamb and mutton to meat retailers (including supermarkets) and industrial meat processors. The Commission’s investigation focused on the impact of the proposed transaction on competition in these areas, as well as on the collection of animal by-products generated by the slaughtering activities. Compass Lexecon presented econometric evidence that farmers in Ireland tend to sell within a rather broad geographic radius and that they are able to switch slaughterhouses if they can get better prices for their animals. Compass Lexecon also presented analyses of capacity, showing that the parties’ competitors would be able to absorb any increase in supply of cattle that might result from a hypothetical post-merger reduction in the prices offered to farmers by the parties. The European Commission concluded that farmers will continue to have sufficient alternative buyers for their animals after the merger to exclude competition concerns with respect to buyer power in the purchasing of live animals.