News, 14 December 2012
The FCA today approved a deal whereby DLA International Holding A/S ("DLA") part of the Danish Agro group acquires control in Hankkija-Maatalous Oy. Following the merger, Suomen Osuuskauppojen Keskuskunta (SOK) remains a minority shareholder in Hankkija-Maatalous Oy and owns 40 per cent of its shares.
DLA previously owns Yrittäjien Maatalous Oy and Melica Oy in Finland, which are both active in the market of agricultural trade. Hankkija-Maatalous operates under the Agrimarket chain in the agricultural trade and produces feed under the trademark Suomen Rehu. The three retail cooperatives part of the S Group – Etelä-Pohjanmaan Osuuskauppa, Suur-Seudun Osuuskauppa and Kymenlaakson Agrimarket – are not part of the deal.
According to the FCA’s assessment, the acquisition does not significantly impede competition in the agricultural trade market. Even if the market share of the concentration is rather high in some markets following the deal, according to the FCA’s investigations there remain a sufficient number of actors (e.g. K-maatalous and Raisio) both nationally and regionally to create competitive pressure for the concentration.
In the opinions submitted to the FCA by the farmers, who are the client, they maintained that they acquire products from several retail and wholesale suppliers when necessary and that they are prepared to look for suitable affordable products from outside their own location as well. In addition to brick and mortar retail outlets, the farmers are nowadays also able to acquire agricultural products from the Internet stores of different actors on a national scale.
According to the FCA’s estimate, the retailing of Hankkija-Maatalous may become more effective after the acquisition, because in the future the company is able to benefit from the bigger procurement volumes of the Danish Agro Group. This, and the strengthening bargaining power of the concentration may ultimately show as more affordable sales prices to the end-customer.
Phase II proceedings had begun on the deal on 18 October 2012. It was approved without conditions, since the threshold for intervention prescribed in the law was not exceeded. A public version of the decision will be published on the FCA’s web pages in roughly two weeks.
Research Officer Kaisa Kokko
Head of Research Maarit Taurula