CIRIO/CENTRALE DEL LATTE DI ROMA (Conclusion of the investigation)
PRESS RELEASE
The Italian Competition Authority authorized the acquisition by Cirio of 75-per-cent stake in Centrale del Latte's equity capital, following the commitments undertaken by the acquirer in the course of the investigation.
The inquiry was aimed at ascertaining the likely anticompetitive effects of the merger by which Cirio will increase its fresh milk Latium market share from 25 to 66 per cent.
In order to overcome the objections made by the Authority on the likely creation of a dominant position affecting competition substantially and on a lasting basis, Cirio undertook to sale, within a predefined date, an important trademark and the relative plant located in Latium. When acquiring, the party should have an adequate business plan ready and a market share percentage so as not to further reduce effective competition.
The Authority deemed that the sale of both a popular and marketed brand and a productive capacity proportioned to the importance of that brand would maintain a degree of effective competition in such a way as to contrast with the dominant position held by Cirio after the merger.
The commitment undertaken by Cirio will be examined in a predefined term, following possible changes in the market structure, which would allow effective competition among operators with fresh milk plants located in different regions.