UK competition authorities to probe Lakeland/LacPatrick merger
The UK Competition and Markets Authority (CMA) has announced that it is investigating the anticipated acquisition by Lakeland Dairies (N.I.) Limited of LacPatrick Dairies Co-Operative Society Limited.
In October Dairy processors LacPatrick and Lakeland agreed terms on a merger, after LacPatrick put itself up for sale earlier in the year.
The new company will be the second-largest dairy processor on the island of Ireland, behind Glanbia, after terms of the merger were agreed following exclusive discussions between the parties started in June.
However, regulatory approval as well as shareholder approval on both sides will be required and the combined business will have turnover in excess of €1bn.
Now, in its Initial Enforcement Order served on the dairy processors last week, CMA said it has reasonable grounds for suspecting that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in Lakeland Dairies (N.I.) Limited (Lakeland) and LacPatrick Dairies Co-Operative Society Limited (LacPatrick) ceasing to be distinct.
The CMA said the Order does not prohibit the completion of the transaction provided that Lakeland and Lakeland Dairies Co-Operative Society Limited and LacPatrick observe a number of restrictions.
The proposed merger of Lakeland Dairies Co-Operative Society Limited and LacPatrick Co-Operative Society Limited has also been notified to the Competition and Consumer Protection Commission in Ireland.
LacPatrick Dairies, which was formed in 2014 with the merger of Ballyrashane and Town of Monaghan co-ops, recently said it was engaging a cost-saving exercise to ensure the survival of the co-op. Part of that saw it announced it will not be paying bonuses to its 400 employees this Christmas. And it has eliminated the practice of “sick-time” pay.