The European Commission said in a statement on Tuesday it had cleared the merger between Danish food ingredients and enzymes makers Novozymes (NZYMb.CO) and Chr. Hansen (CHRH.CO), subject to conditions.
Reuters reported on Dec. 6, based on sources, that the companies were expected to get EU antitrust approval for their all-share $22 billion tie-up, based on remedies offered to address competition concerns. read more
Novozymes, which makes enzymes for household products, food and beverages and biofuels, and Chr. Hansen, an enzyme maker for the food sector, last month offered to sell part of the combined company's global lactase enzyme business, saying that a buyer had already been found.
The deal, the largest merger in Denmark, would create a global ingredients giant.
The Commission said its merger approval is conditional upon full compliance with the commitments offered by the parties.
It said that its investigation had showed that the merger, as initially notified, would have reduced competition in the market for the manufacture of one specific enzyme, lactase, using genetic modification technology.
In particular, the Commission found that Chr Hansen had a project to start manufacturing this product and would very likely grow into an effective competitor within a short timeframe. The Commission also found that post-merger there would not be sufficient potential competitors to exert sufficient competitive pressure on the merged entity.
The Commission said that in order to address its concerns, the parties offered to divest Chr. Hansen's project to enter the market for the manufacture of lactase; Chr. Hansen's lactase distribution business; Novozymes' lactase production facility.
"These commitments fully address the competition concerns identified by the Commission, by paving the way for the creation of a divested business with the necessary production assets and research and development capabilities to grow as a viable competitive producer of lactase on a lasting basis," it said.
