Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC conditionally approves acquisition of Mivisa by Crown, (Mar 17, 2014)

The European Commission (EC) announced on March 14 that it has cleared the proposed acquisition of Mivisa Envases, S.A.U. of Spain by Crown Holdings, Inc. of the United States. Both Crown and Mivisa manufacture metal food cans used for fruit and vegetables, fish and seafood, pet food as well as ready-made meals.

The approval is conditioned upon (1) the divestment of Crown's plants producing metal cans in Spain and (2) the divestment of Mivisa's metal food cans plant in the Netherlands. The EC expressed concern that following the acquisition, the level of competition in markets for metal food cans in the Benelux, France, Spain and Portugal would have been too weak to avoid price increases.

Crown is a multinational company that manufactures various packaging products for consumer goods (including aerosols, beverage packaging, food cans and metal closures). Crown operates production plants worldwide. Mivisa is headquartered in Spain and has production facilities also in Hungary, the Netherlands, Morocco and Peru. It is primarily active in the manufacturing of tinplate food cans, metal closures and stand-alone can ends.

The EC concluded that the proposed transaction, as originally proposed, would have given the merged entity very high market shares in the Benelux, France, Spain and Portugal and would have eliminated an important competitor from the market, Mivisa. In each area, only one sizeable competing supplier would have remained (Ardagh in the Benelux, France and Portugal and Auxiliar in Spain). The Commission considered that this remaining supplier would have had limited incentives to compete with the merged entity. Other players would also have had limited ability to supply customers with large volumes and product ranges. Given this lack of alternatives, customers would have likely faced price increases.

In order to address the EC's concerns, Crown offered to divest its metal cans plants in La Rioja, Murcia, Coruxo-Vigo, Ugao-Miravalles and Montmeló. Crown will also install in the Vigo plant an additional production line, in order to enable this facility to serve Portuguese customers with sufficient capacity for all the sizes of cans which Crown and Mivisa currently sell in Portugal. As a result, the divested plant in Vigo will impose a competitive constraint on the merged entity not only in Spain but also in Portugal. The Commission concluded that the plant in La Rioja can serve clients in southern France, as Mivisa does presently. Mivisa's plant producing metal food cans in Horst (the Netherlands) will also be divested. The facility is also currently used to serve Mivisa's customers in northern France.

In view of the remedies proposed, the Commission concluded that the transaction, as modified, would raise no competition concerns.

Companies:  Mivisa Envases, S.A.U.; Crown Holdings, Inc.

News: Antitrust