May 10, 2011
Danish Agro to sell two feed mills in Denmark
Danish Agro has put on sales two feed mills in Roust and Nordenskov, as part of its commitments to the Danish Competition Council for approving its acquisition of Nordjysk Andel and a number of associated companies on February 23, 2011.
The associated companies include Scanfedt A/S, Scanola A/S, Dansk Vilomix A/S, Nordic Seed A/S, Nordic Seed International A/S, Baltic Agro Holding A/S and Dan Aller Holding A/S. Most of them are active in markets upstream of Danish Agro, i.e. with the production and supply of inputs to companies, active in the feeding stuff sector, such as feed ingredients and seed grain.
The Council found that the mergers raised competition concerns in a number of affected markets in the Danish feeding stuff sector. In particular, the Council was concerned that the mergers would lead to an increased risk of coordinated effects between Danish Agro and the only other large player in the retail market, DLG. This concern was mainly based on the high- and increasing- degree of concentration in the market and the increased symmetry between Danish Agro and DLG caused by the mergers.
Also, given the vertical link between Danish Agro and the associated companies, the Council found that the mergers would lead to a risk of input-foreclosure, as a number of the associated companies are active in the supply of inputs to Danish Agro and other companies active in the Danish feeding stuff sector.
In order to address the Council''s concerns, Danish Agroagreed to sell its two feed mills, i.e. a 70,000-tonne poultry and pig feed production facility located in Roust, as well as a facility in Nordenskov capable of producing 90,000 tonnes of cattle pellets and steamrolled grains annually. The sale of the production facilities in Roust and Nordenskov will be monitored by a Trustee.
Danish Agro is the second largest supplier of inputs to farmers in Denmark. The company is active in the feeding stuff sector with the purchase of grain and sale of animal feed, seed grain and fertilisers to farmers.