PRESS RELEASE

Food industry: conditional go-ahead to purchase Simmenthal (Kraft group) by the Bolton group

(Manzotin brand)

Bolton will have to sell the Manzotin brand of the company and, for a set period, maintain a separate sales division for the Simmenthal products.

Conditional go-ahead from the Antitrust Authority to the purchase of the Simmenthal (Kraft Group) business unit by the Bolton Group (owner of the Manzotin brand).

In its meeting on 05^th December, the Autorità Garante della Concorrenza e del Mercato authorised the transaction, provided that Bolton sells the Manzotin business unit to a third party having suitable independent production capacity for sales. The assets to be sold will be comprised of the intellectual property rights of the brand, the production contract currently existing with INALCA (Montana brand), any stock and all the other trade information relating to the brand. Bolton must also, for a period, conduct a separate negotiation of the Simmenthal brand with respect to the other brands of Bolton in contiguous sectors (tuna), so as to reduce the bargaining power for mass distribution.

According to the Antitrust Authority, these measures, presented by Bolton and made binding by a Board resolution, can eliminate the injurious effects against competition that might otherwise derive from the transaction. In particular, the market for canned beef, as it is highly concentrated and asymmetrical, could be hurt by the presence of a historically leading brand, Simmenthal, perceived by consumers as a product of superior quality, and by the weak current competition and significant barriers to entry of an economic nature.

The original transaction would have created an entity which, by its market share (with the Simmenthal and Manzotin brands it would hold a market share of between 60 and 80%, depending on the distribution channels) and its difference vis-à-vis its competitors, could have engaged in pricing policies independent of the latter, for customers and ultimately for end consumers in the presence of weak constraints for exercising market power.

The most likely scenario, as a result of the transaction, would have been that of increasing polarisation in the positions of the market operators, with the leader in the high end of the market and the others in the low end.

Rome, 13^th December 2012