Competition authorities halt Origin Enterprises takeover of Scottish fertiliser company
The UK's competition authorities has found that Origin Enterprises proposed acquisition of Scottish fertiliser company Bunn could reduce competition to supply fertilisers in Scotland.
Under the proposed deal Origin would pay an initial £14.2m to Bunn, but the final value of the transaction is expected to rise to £18.2m.
Bunn is a provider of prescription fertiliser blends and nutrition management systems servicing arable, grassland and horticultural sectors. Origin said at the time that it expected the purchase would yield a return within the first full year of ownership.
The companies must now offer proposals to address these concerns by 21 July or face an in-depth investigation.
Both companies are national blenders and distributors of fertilisers for use in agriculture.
Through its initial investigation, the Competition and Markets Authority (CMA) has found that Origin and Bunn are two of the three main suppliers of fertilisers in the central/eastern region of Scotland, supplying farmers and farmers’ merchants from their sites in Montrose.
The CMA is concerned that bringing the two firms together could see prices rise for customers or result in a reduction in the choice of fertilisers available.
The CMA found that there were sufficient alternative suppliers in other areas of Great Britain. The merger will be referred for an in-depth investigation by an independent group of CMA panel members unless Origin can offer undertakings by 21 July which sufficiently address the CMA’s competition concerns.