The Finnish Competition and Consumer Authority approved egg business acquisition subject to conditions

On 21 October 2014, the Finnish Competition and Consumer Authority (FCCA) approved an acquisition whereby DAVA Foods Holding A/S, a Danish company, acquires control of the Finnish company Muna Foods Oy. Muna Foods Oy is a company yet to be established, to which the producers’ cooperative Munakunta, owned by approximately 150 Finnish egg producers, plans to transfer its entire business in connection with the acquisition. The condition for approval of the acquisition was that Munakunta’s minority holding in the chicken feed manufacturer Rehux is sold to a party independent of the parties to the deal.

DAVA Foods Holding A/S is part of the Danish Agro Group that operates in the agricultural sector. Its egg products division includes the Denmark-based Hedegaard Foods A/S and Sweden-based Svenska Lantägg Ab. Following the ongoing arrangement, Danish Agro would also acquire control of Muna Foods Oy that operates in Finland and Estonia. Hankkija Oy, which produces chicken feed in Finland, is part of the same group and holds a strong position in other agricultural products in Finland as well (see the Finnish Competition and Consumer Authority’s press release 14 December 2012).

If the planned acquisition had been approved as such and not been subject to conditions, according to FCCA’s estimate it would have significantly impeded effective competition in the egg business in Finland. Chicken feed markets are highly concentrated in Finland, and there are currently very few actors within the sector.

The competition problem could be solved in such a manner that Danish Agro pledged to sell its minority holding in the chicken feed manufacturer Rehux to a party independent of the parties to the deal. The pledge ensured that Rehux, almost the only competitor to Danish Agro, maintains its position as an independent alternative in the chicken feed market in Finland.

The FCCA’s decision contains numerous business secrets of the parties involved, and therefore it cannot be made public until these business secrets have been redacted. The public version of the decision will be posted on the FCCA’s website as soon as it has been finalised.