Linergy acquisition of Ulster Farm By-Products approved
Linergy’s completed acquisition of Ulster Farm By-Products has been cleared by the Competition and Markets Authority (CMA).
The acquisition had been given provisional clearance in November. The merger was referred for an in-depth phase 2 investigation last July.
Linergy and Ulster Farm By-Products Limited (UFBP) process animal by-products and fallen stock through rendering plants located in Northern Ireland. Customers include slaughterhouses, deboning plants, other food processors, retailers such as butchers’ shops and purchasers of outputs from the rendering process (tallow and meat and bone meal).
According to the CMA, the companies own different categories of rendering plant, operating in different markets, so the inquiry group of members looking at the merger concluded in its final report that it had not resulted, and may not be expected to result, in a substantial lessening of competition.
CMA also looked at whether Linergy’s part-ownership by meat processing companies could lead it to use its acquisition of the UFBP plant to disadvantage competing meat processing customers – by raising prices for rendering services or refusing to process their material at all. The group found that customers would still have alternative renderers to go to, that there would also be options other than rendering for customers, and, in any case, that Linergy’s shareholders would not benefit significantly from such a tactic, making them unlikely to attempt it.
The group also considered whether a memorandum of understanding (MoU) previously signed between the companies in 2012 had influenced their subsequent strategic decisions. The group has concluded that the economic and commercial incentives around these decisions would have led to the same outcome in each case, irrespective of the MoU.
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