The proposed merger which would see ABP Food Group take a 50% stake in Slaney Foods has been notified the European Commission competition authorities.
Last December, it was confirmed that the Linden Food Group in which Fane Valley cooperative has a majority shareholding, is set to restructure its Slaney Foods business in the Republic of Ireland, resulting in the creation of a new partnership with ABP.
ABP are set to take a 50% stake in Slaney Foods, which involves the purchase of the Allen family stake in the business.
However, the Commission must be notified of any merger with an EU dimension prior to its implementation and an investigation is now underway.
After notification, the Commission has 25 working days to analyse the deal during a Phase 1 investigation. More than 90% of all cases are resolved in Phase I, generally without remedies. The Commission has said that the provisional deadline for the conclusion of the investigation of this case is October 7.
However, should the Commission decide a Phase 2 investigation is required an in-depth analysis of the merger’s effects on competition is required and this requires more time.
From the opening of a Phase II investigation, the Commission has 90 working days to make a final decision on the compatibility of the planned transaction with the EU Merger Regulation.
The move has sparked serious concern among farm organisations in terms of both competition in the market and the concentration of the kill.
The IFA has said competition in the beef and lamb trade is always a contentious issue between farmers and factories.
It recently commissioned a report into the impact of the proposed merger on the Irish beef industry and it concluded that competition amongst beef processors would be significantly diminished particularly in the South Leinster region. It has submitted the report to the EU competition authorities.
It says farmers are rightly concerned with the over dominance of a number of major players at both processing and retail level.
Slaney Foods is comprised of the Slaney Foods International beef business and the sheepmeat specialist Irish Country Meats (ICM).
It is currently jointly owned by the Allen Family and Linden Foods in Northern Ireland. As part of the planned reorganisation, the Allen Family will retire from the redmeat processing sector after more than 50 years to concentrate on their expanding wider business interests.
The Allen family shareholding will, in the first instance, be purchased by Slaney Foods.
The ABP Group will then invest in Slaney Foods to form a Joint Venture with Linden/Fane Valley. The companies have said that the new partnership will not impact on the day-to-day operations of either Slaney or ICM with business to continue as usual on all sites.