The UK’s Competition and Markets Authority (CMA) has provisionally given the green light to T&L Sugars (TLS) for its acquisition of Tereos UK & Ireland's retail sugar business.
The move comes after an in-depth Phase 2 inquiry, initiated due to initial competition concerns.
T&L Sugars announced its intention to purchase the retail sugar business from Tereos SCA in November 2023.
The business is a key supplier for UK supermarkets, wholesalers and foodservice customers.
The CMA's initial investigation, Phase 1, raised concerns that the merger could significantly reduce competition in the UK sugar supply market.
The inquiry group, appointed by the CMA, conducted a thorough review of evidence including feedback from customers and competitors, to assess the potential impact of the merger.
Findings indicated that Tereos' UK retail business has been consistently unprofitable, despite numerous attempts to turn its fortunes around.
Tereos initiated a sales process for its struggling UK retail business in late 2022.
The inquiry revealed that there were no viable alternative buyers for the business other than TLS, which would be less anti-competitive.
The panel has provisionally concluded that, should the deal not proceed, Tereos' UK retail business would likely shut down, leading to a reduction in competition either way.
Independent inquiry group of Phase 2 investigation chair Richard Feasey said: “We have carefully considered a broad range of evidence, including detailed examination of the financial performance of Tereos’ UK retail business, and the steps taken by Tereos to improve its performance.
“Based on this evidence, we have provisionally found that the most likely outcome is that Tereos’ UK retail business would have closed, absent the deal with TLS, and on this basis we have provisionally decided to approve the merger.”
The CMA is inviting comments on its provisional findings until 27 August 2024.
The comments will be reviewed before the CMA publishes its final report, which is expected by 5 September.
