CMA confirms investigation of food cans suppliers merger
The CMA has referred Sonoco Products Company’s completed acquisition of Weidenhammer Packaging Group GmbH for an in-depth phase 2 investigation.
On 13 January 2015 the Competition and Markets Authority (CMA) said that it would refer the merger for a full investigation unless the parties offered acceptable undertakings to address the CMA’s competition concerns regarding the production and supply of composite cans for food products in the UK.
Sonoco has offered undertakings intended to address the concerns identified. After careful consideration the CMA was not confident that these would resolve the concerns in a clear-cut manner (see note below). The CMA has therefore decided to refer the merger for an in-depth phase 2 investigation.
A decision on the merger will be made by a group of independent panel members supported by a case team of CMA staff.
All information relating to the investigation is available on the case page.
In the context of the CMA’s decision on whether to accept undertakings in lieu of a reference, section 73(3) of the Enterprise Act states: “…the CMA shall, in particular, have regard to the need to achieve as comprehensive a solution as is reasonable and practicable to the substantial lessening of competition and any adverse effects resulting from it.”
Mergers: Guidance on the CMA’s jurisdiction and procedure, paragraph 8.3, states that: “the CMA must be confident that the competition concerns identified will be resolved by means of the UILs (undertakings in lieu) offered without the need for further investigation. UILs are therefore appropriate only where the competition concerns raised by the merger and the remedies proposed to address them are clear cut, and those remedies are effective and capable of ready implementation.”