Investigation opened over Bernard Matthews purchase

The Competition & Markets Authority (CMA) has opened an initial investigation into the acquisition of Bernard Matthews by Ranjit Boparan. 

In September, it was revealed that Boparan Private Office agreed terms for the procurement of Bernard Matthews in a pre-pack administration deal, with 2,000 jobs being secured. The turkey processor join 2 Sisters Food Group and Giraffe Restaurants as part of the Boparan Holdings family.

The CMA has now revealed that it is considering whether or not a relevant merger situation has been created, and whether such a creation has resulted in, or may result in, a lessening of market competition.

In an Initial Enforcement Order, the CMA claimed it “has reasonable grounds for suspecting that it is or may be the case that enterprises conducted by Ranjit Boparan and Baljinder Boparan and the business formerly carried on by Bernard Matthews Limited have ceased to be distinct”.

The acquisition has been far from smooth. Last week, Meat Trades Journal reported that the deal was “carefully crafted” to extract maximum cash. Professor Prem Sikka of the University of Essex compiled a Commons Work and Pensions Committee report, where he stated that the administration strategy was designed to allow secured creditors and controllers of Bernard Matthews to extract maximum cash from the company and “dump the pension scheme and other liabilities”.

He said: “No attention has been paid to the hardship caused to retired and existing employees.”

CMA's publication is only the start of the initial assessment, with further annoucements due to follow once an investigation get underway more formally.

The CMA has the jurisdiction to examine a merger when two or more businesses cease to be distinct and either the UK turnover of the acquired business is in excess of £70 million or the two enterprises supply or acquire at least 25% of the same good or services suplpies in the UK and the merger increase that share of supply.

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