The European Commission on Friday cleared the proposed acquisition of French-based food company Cereol by US company Bunge. The move shoots Bunge ahead of US agribusiness giant Cargill into the top slot as the world's largest oilseed refiner.
The European approval follows clearance given earlier this year in August from the US. Cereol, active in oilseeds processing, specialty food ingredients and edible oils, will provide Bunge with production facilities in Europe.
In July 2002 Bunge signed a definitive agreement to acquire a 55 per cent controlling stake in Cereol from Italian energy company Edison. Cereol was formerly part of the now disbanded Eridania Beghin-Say group of companies, controlled by Italy's Edison. As required by French law, Bunge intends to make an offer to purchase, at the same price per share, the remaining 45 per cent of Cereol shares that are publicly held after the closing of the purchase of the Edison shares.
According to a statement from the European Commission the acquisition would not "lead to the creation or strengthening of a dominant position under all alternative market definitions" because the activities of Bunge and Cereol are largely complementary, with only limited overlaps. The Commission added that the market is characterised by "the existence of alternative current or potential suppliers and a considerable degree of demand substitutability between various types of oilseeds which will effectively counter any anti-competitive behaviour by Bunge. "
The Bunge purchase is a further indication of the American giants moving into the European food ingredients arena. Earlier this year Cargill received the green light to acquire French starch company Cerestar.