Vandemoortele has announced its intention to sell one of its facilities in the UK as it moves closer to securing regulatory clearance for its takeover of fellow bakery company Délifrance.
The Belgian bakery enterprise previously committed to divesting two Délifrance locations in France to mitigate concerns from the European Union regarding competition. However, following similar anti-trust anxieties, the UK’s Competition and Markets Authority (CMA) initiated a Phase 2 inquiry in April concerning the acquisition, which was first made public in March of the previous year. This investigation was prompted by Vandemoortele’s inability to locate buyers for the two French facilities.
The CMA is currently conducting a consultation regarding Vandemoortele’s recent commitment to divest its manufacturing site in Worcester. This sale encompasses the plant’s assets, contracts, its team of 73 production employees, and existing customer relationships.
Vandemoortele’s “structural remedy” arises from the CMA’s early assessment that the merger could potentially lead to a “substantial lessening of competition (SLC).”
The regulatory body has highlighted its concerns about “horizontal unilateral effects” in the supply chain of frozen laminated dough products, targeting both retail and foodservice customers.
In December, Vandemoortele had committed to divesting the Délifrance plants located in Avignon and Béthune, a strategic decision that garnered preliminary approval from the European Commission.
The deal, announced in March of last year, aims to establish a bakery entity valued at €2.4 billion (approximately $2.6 billion).
The UK regulatory authority is currently seeking stakeholder feedback regarding the proposed sale of the Worcester facility, with comments due by June 25.
“The CMA may also evaluate alternative forms of the remedy proposal and consider other feasible solutions proposed by the parties or interested third parties that would effectively address the SLC and any negative implications we have preliminarily identified.”
Délifrance operates 14 production plants that serve retail and out-of-home sectors across Europe and Asia, employing over 3,200 individuals.
Meanwhile, Vandemoortele boasts 28 manufacturing plants and a workforce of 3,500. Its range of frozen bakery brands includes Lizzi, Banquet d’Or, and Lanterna, while also catering to private-label clients and markets in both Europe and the US.
