The Finnish Competition and Consumer Authority (FCCA) has initiated further proceedings regarding the proposed merger in which Kesko Oyj would purchase Heinon Tukku Oy.
Kesko is a Finnish listed trading sector company which includes the Kespro business unit that operates in the daily consumer goods sector providing wholesale services to the foodservice industry in Finland. Heinon Tukku is a daily consumer goods wholesale business which operates in Finland and whose main customers are operators from the foodservice sector. Foodservice customers include restaurants, hotels, catering businesses, service stations, and kiosks as well as public sector customers such as schools, kindergartens and healthcare units.
Based on the FCCA’s initial investigation, the merger may have a negative impact on competition for foodservice customers within the daily consumer goods wholesale sector. The merged entity’s market share would be very high, especially when assessing services provided by broadline wholesalers with a wide range of products such as the parties. The FCCA has carried out a preliminary examination of market shares both in the national delivered wholesale market and in local markets involving both delivered wholesale and cash-and-carry wholesale of daily consumer goods. During its initial investigation, the FCCA has also examined how closely the parties are competing with each other by conducting a customer survey, and consulting competitors, customers and goods suppliers through requests for information.
The FCCA considers it important to continue investigating the competition impact of the merger. In its in-depth investigation the FCCA will examine whether the merger may significantly impede effective competition in the Finnish market or a substantial part thereof. As a result, the FCCA may approve the merger as such, approve it conditionally, or propose that the Market Court prohibit the deal. An in-depth investigation for mergers which were notified before the amendments to the Competition Act came into force may last up to three months.
The decision to open the in-depth investigation contains business secrets and will be made public after the business secrets have been removed.
Further information:
Senior Specialist Pontus Ranta, tel. +358 (0)29 505 3747
Director Sanna Syrjälä, tel. +358 (0)29 505 3385
firstname.lastname@kkv.fi
According to the Competition Act, a merger must be reported to the FCCA if the combined turnover of the parties to the merger exceeds €350 million and if the turnover from operations within Finland exceeds €20 million for at least two of the parties to the merger. The FCCA approves the merger provided that it will not result in any of the negative impacts mentioned in the Competition Act. The FCCA will intervene in the merger if its investigation indicates that the merger would significantly impede effective competition on the Finnish market or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant position. If required, the processing of the merger notification is carried out in two stages. The first stage lasts a maximum of 23 workdays. If it is clear that the merger will not have negative effects on competition or if the negative effects can be prevented through the conditions proposed by the parties involved, the merger is approved after this first stage. If this is not the case, the FCCA makes the decision to submit the matter for further investigation in which the merger and its competition effects are comprehensively examined.
Further information about merger control.