On 29 April 2022, the Finnish Competition and Consumer Authority (FCCA) approved the acquisition whereby Lantmännen ek för is to acquire Sponmill Oy and the Myllyn Paras Group it owns.
Lantmännen is a Swedish agricultural cooperative that operates in the food industry and grain trade. Lantmännen sells products under, for example, the Vaasan brand. Sponmill owns Myllyn Paras Finland Oy, which manufactures frozen bakery products and grain mill products.
Based on the FCCA’s investigation, the acquisition does not have adverse effects on competition in Finland. In particular, the FCCA looked into competitive effects in the sale of frozen bakery products to retailers and foodservice customers.
The matter was referred to phase two investigation after the phase one investigation where the FCCA found that the parties’ market shares would become substantial within certain frozen bakery product categories. A survey conducted by the FCCA revealed, however, that consumers consider different bakery products, such as Danish pastries, buns and doughnuts, as substitutes, which justified considering wider markets than single product groups. Considering these findings, the parties’ market shares remain moderate. In its decision, the FCCA also took into account that some of the parties’ competitors in the retail sector have the option to begin to supply frozen bakery products to foodservice customers in addition to the retail sector.
The FCCA’s decision contains confidential business secrets of the parties. The decision will be made public after the business secrets have been removed.
According to the Competition Act, a merger must be reported to the FCCA if the combined turnover of the parties to the concentration exceeds 350 million euros and the turnover of at least two of the parties resulting from Finland exceeds 20 million euros for both. The FCCA approves the merger provided that it will not result in any of the negative impacts mentioned in the Competition Act. The FCCA will intervene in the merger if its investigation indicates that the merger would significantly impede effective competition on the Finnish market or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant position. If required, the processing of the merger notification is carried out in two phases. The first stage lasts a maximum of 23 workdays. If the processing of the first stage reveals that the merger may have adverse effects on competition, the Authority will make a decision on transferring the matter for further processing, during which the merger and its competitive effects will be thoroughly investigated. The second stage may take at most 69 business days. The Market Court may extend the deadline for the second phase by a maximum of 46 working days. After the second stage has been completed, the FCCA may approve the merger as such if it will not cause harmful competitive effects. The FCCA intervenes in a merger if it finds that the merger would significantly prevent effective competition in the Finnish market. The primary method for preventing any anticompetitive effects is to impose conditions, such as the obligation to sell some part of the business. If the imposition of conditions does not result in a satisfactory result, the Market Court may, on the basis of a proposal submitted by the FCCA, prohibit the merger in its entirety.