Poultry deal abandoned after CMA investigation
The proposed merger of poultry giants ForFarmers and Boparan has been abandoned following an investigation by the Competition and Markets Authority (CMA).
ForFarmers and Boparan (owner of Birmingham-based 2 Sisters Food Group), through its subsidiary 2Agriculture, both manufacture and supply chicken and other types of poultry feed in the UK.
The firms were planning to combine their animal feed milling operations in a joint venture. Between them, the companies operate 19 mills across the UK.
In a statement from the pair, it said it had taken into consideration the current impact on their respective businesses, the duration and costs involved and the impact this process has on both employees and farmers.
It said: “ForFarmers and 2Agriculture continue to believe that the joint venture would have made for a robust business, with improved expertise and presence across species, to successfully meet the changing demands from the entire value chain.
“This included helping farmers release the transition towards a more sustainable way of farming with enhanced returns.
“The proposed joint venture would have invested in driving improvements and optimising services in the most efficient manner, with a focus on further improving production efficiency and feed quality to the benefit of both farmers and end consumers.”
In December, the CMA decided that it was or may be the case that the merger raises competition concerns in areas across East Anglia, north-western England and North Wales where it could lead to higher prices for poultry feed, lower quality feed or worse quality of service.
The CMA said it was concerned that the combined business would not face sufficient competition after the merger and that the JV could unfairly favour Boparan’s chicken farming and processing businesses, resulting in less choice for smaller chicken farmers and processors, who might rely on ForFarmers and Boparan for chicken feed.
It has now cancelled its phase 2 investigation under Enterprise and Regulatory Reform Act 2013 into the merger.