Competition authority to investigate ForFarmers UK and 2 Agriculture merger

The Competition and Markets Authority (CMA) is investigating the proposed merger between feed suppliers ForFarmers UK and 2 Agriculture.

The two companies announced the merger plan is July this year as a non-cash transaction, with the share split at 50.1% for ForFarmers UK and 49.9% for 2Agriculture.

This is based on the current enterprise value of the companies and expectations for 2022 and beyond. 2Agriculture will be will consolidated into ForFarmers’ UK accounts.  

See also: ForFarmers feed business sees 2021 profits rise

ForFarmers UK is a subsidiary of the Dutch-based ForFarmers NV, founded as a farmer co-operative in 1896 and now listed on the Euronext Amsterdam stock exchange.

It bought UK feed compounder BOCM Pauls in 2016.

2Agriculture is a UK company owned by Boparan Private Office, the same holding business as the 2 Sisters Food Group.

From the Boparan side, the merger will be conducted via another group company, Amber REI Holdings.

The CMA will consider initially whether this transaction is covered by the provisions of the Enterprise Act 2002.

If so, it will consider whether the merger would result in a substantial lessening of competition in its UK markets.

Comments on the first stage of the investigation are invited by 9 November 2022. They should be sent to julie.flandrin@cma.gov.uk or gulalay.hammad@cma.gov.uk.

The CMA will announce by 21 December 2022 whether it will take the investigation to a second phase.

Combined sales

Announcing the proposal in July, the companies said that the joint venture would serve a wider customer base, with a balanced feed portfolio across species.

Its annual expected combined sales volume will be more than 3m tonnes of compound feed.

A joint statement said: “The mutual agreement to enter into a joint venture meets the strategic objectives of both partners.

“ForFarmers UK strengthens its position in its home country in the promising poultry sector and at the same time creates possibilities to make the organisation more efficient.

“2Agriculture benefits from shared investment opportunities across a larger volume, an increased geographic spread of manufacturing sites, and exposure to other species markets.”