Danish Crown Cleared to Buy Flagship

BRUSSELS - Jun 21/04 - SNS -- The European Commission will allow the farmer's cooperative, Danish Crown AmbA, to purchase Flagship Foods in the United Kingdom.

Danish Crown has contracted to buy the UK company Flagship Foods. The deal was notified to the European Commission on 13 May 2004 under the European Union’s Merger Regulation for regulatory approval in Europe. This is the first transaction to have been notified and reviewed under the new Merger Regulation 139/2004.

Danish Crown is the largest Danish co-operative slaughterhouse and has in total 20,525 members who supply live animals to the co-operative. It is active in the slaughter of pigs and cattle, meat trading and meat processing.

Flagship Foods is a private company based in the UK whose subsidiaries include: Dalehead Foods Limited which is active in the slaughtering of pigs in the UK, in the supply of meat for direct human consumption as well as for further processing. It also has interests in the breeding and finishing of live pigs; Flagship Fresh Meats Limited produces fresh meat products for direct human consumption and meat for further processing in the UK; and Roach Foods Limited produces a wide range of processed meat products in the UK.

The Commission found that the main effects of the proposed transaction would be in the market for fresh pork for processing as well as in the market for processed pork products. This latter market would include the sale of raw cured pork (bacon and raw sausages) and processed pork for cold consumption.

The Commission’s investigation however showed that although the transaction would give Danish Crown an important position in some of these markets within the UK nevertheless the new entity would continue to face strong competition from other players in these markets such as Grampian, Kerry Foods and Cranswick. The European Commission therefore concluded that the acquisition would not bring significant changes to the competitive framework of these various markets and decided to clear the transaction on 17 June 2004.