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Competition Commission provisionally clears Kerry/Headland merger

The Competition Commission has provisionally cleared the completed acquisition of Headland's frozen ready meals (FRM) business by Kerry Foods. Before the merger in January 2011, Kerry and Headland were the two largest suppliers of own-label and contract-packed FRMs to UK customers (typically supermarkets or brand owners). Although the CC considered the merging parties were each other's closest competitors before the merger, it provisionally concluded that the transaction does not result in a substantial lessening of competition. In particular, the CC examined closely how customers responded to price increases sought by Kerry after the merger. It has found that customers have been able to find alternative suppliers, in the UK and overseas, for products covering the whole range of FRM at competitive prices. Based on this evidence, the CC provisionally concluded that Kerry's ability to charge higher prices as a result of the acquisition of Headland is unlikely to persist beyond the short term.

Alan Overd, Vicki Mertzanidou and Andy Parkinson assisted Kerry throughout the OFT and CC investigations.

The CC's provisional findings are available here.

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