EU Probes Cargill, Degussa Deal

BRUSSELS - Dec 14/05 - SNS -- The proposed sale of Germany's Degussa AG's food ingredients business to U.S.-based Cargill will be the subject of an in-depth investigation by the European Commission.

In announcing the probe, the Commission said its "initial market investigation has found that the proposed acquisition may create competition problems in the markets for lecithin, a natural emulsifier primarily used in food production."

The decision to open an in-depth inquiry does not prejudge the final result of the investigation. The Commission now has 90 working days – until 3 May 2006 - to take a final decision on whether the concentration would significantly impede effective competition within the European Economic Area (EEA) or a substantial part of it.

"This takeover involves two companies that are at the forefront of the production of natural emulsifiers used in particular in food products such as chocolate, bread, and margarine," commented Competition Commissioner Neelie Kroes. "The Commission must ensure that this operation will not detrimentally affect customers like food manufacturers and, consequently, European consumers"

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