OFT closed case: Completed acquisition by Giant Bidco Limited of the Big Food Group plc.
Affected market: Retailing and wholesaling of food products
The OFT’s decision on reference under section 22 given on 10 June 2005. Full text of decision published 22 June 2005.
Giant BidCo Limited (Giant BidCo) is a wholly owned subsidiary of Giant Midco Limited which, in turn, is a wholly-owned subsidiary of Giant TopCo Limited. All three companies were incorporated for the purposes of implementing the transaction. Giant TopCo Limited is owned by the Giant BidCo consortium which includes BG Holding ehf (BG Holding), TBH Trading Limited, Burdaras hf, Talden Holding S.A. (Talden), Kevin Gerald Stanford, Bank of Scotland (through its wholly-owned subsidiary, Uberior Investments plc, and Kaupthing Bank hf.
BG Holding is a subsidiary of Baugur Group hf (Baugur) and has a controlling stake (42 per cent shareholding and the only right of veto) in the Giant BidCo consortium.
Baugur is an international investment company based in Iceland, which focuses on retailing investments and real estate operations in northern Europe. Prior to the transaction, Baugur already had a 22.1 per cent interest in the Big Food Group through its wholly-owned subsidiary, A Holding S.A. Its other interests in the UK food industry include a 5.5 per cent stake in Somerfield plc and a majority stake in Julian Graves, which is a specialist snack and ingredients retailer.
The Big Food Group plc (BFG) is an integrated food provider in the UK, incorporating Booker, Iceland (see note 2), Woodward Foodservice and Expert Group. BFG’s activities include wholesale of food products, retail of (mainly frozen) food products, supply of (mainly frozen) food products to caterers, and delivery and repair of domestic appliances. BFG’s UK turnover for the 53 weeks ending 2 April 2004 was £5,151.6 million.
On 11 February 2005, Giant BidCo acquired the issued share capital of BFG.
As a result of this transaction Giant BidCo and BFG have ceased to be distinct. The UK turnover of BFG exceeds £70 million, so the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. A relevant merger situation has been created.
There is no horizontal overlap between the activities of the parties, nor are there any vertical links between them. Consequently, the OFT does not believe that it is or may be the case that the merger has resulted or may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.
This merger will therefore not be referred to the Competition Commission under section 22(1) of the Act.
- Talden is an investment company based in Luxembourg, ultimately owned by two Icelandic entrepreneurs. Talden has a small stake in Julian Graves but, according to the parties, no other UK investments which are relevant to this transaction.
- Clarification: The Iceland group was divested to another consortium shortly after the acquisition of BFG.