OFT backs Grainfarmers and Centaur merger
THE Office of Fair Trading (OFT) has decided not to refer the merger of Wetherby-based Grainfarmers and Centaur Grain to the competition commission.
The merger is set to create a major new grain marketing and input supply business that will be controlled by British farmers.
Branded Openfield the new business will work with more than 7,000 farmers and is expected to handle around four million tonnes of grain – 20% of the UK market .
It will also be a major supplier of seed, fertiliser and agrochemicals.
The OFT said it had received responses from a number of customers, farmers and competitors and sought the views of DEFRA – with farmers uniformly supportive of the merger with the majority of competitors “not concerned.”
One competitor argued that the merged entity’s move to a committed model would lead to a reduction in the total amount of grain which is traded on spot markets. However, post-merger farmers will retain the choice of which option and which co-operative or merchant to use to market their grain.
DEFRA said that the merger was unlikely to lead to a substantial lessening of competition, either with respect to the impact on farmers or customers.
Announcing the initiative, the proposed Chairman of the merged business, Richard Beldam said: “Openfield will have the flexibility, scale and high level of service which we believe is needed in today’s marketplace to capture improved value across the supply chain. Increasingly we believe this can only be achieved by companies that combine a national presence with a scale and structure that ensures efficient continuity of supply to its customers, managed through a network of regional offices. As our major customers continue to grow in size and influence, we have to do the same.”
Founded in 1907 as the Southern Counties Agricultural Trading Society (SCATS), Grainfarmers has grown to become one of the largest arable input and grain marketing businesses in the UK.
The merger is now subject only to the approval of the High Court, which it is expected will be received in mid-November.
