The marriage (with reservations) between Sammontana and Forno d’Asolo
Sammontana can acquire Forno d'Asolo, but under the conditions of the Antitrust to guarantee competition. The companies are in fact the two most important operators active in the frozen bakery products sector. The article by Emanuela Rossi
The acquisition of joint control of Sammontana SpA and Forno d'Asolo SpA by Frozen Investment S.à.rl and Sammontana Finanziaria Srl has been authorised, with conditions. The Competition and Market Guarantor Authority has therefore given the green light to the the aggregation of the two most important operators active in the frozen bakery products sector in the food service channel (bars, hotels, restaurants and bakery departments within large-scale retail outlets).
The operation was communicated by Frozen and Sammontana Finanziaria on 11 April and Piazza Verdi then started the investigation on 30 April.
THE SUBJECTS INVOLVED
Frozen Investments S.à rl is a company established under Luxembourg law specifically to carry out this concentration operation. The share capital of Frozen is held by the Investindustrial VIII SCSp. fund, managed by BI Invest Endowment Management S.à rl, which has delegated the management of its investment portfolio to Investindustrial Advisors Limited, a company incorporated under English law whose capital is entirely held by Investindustrial SA, at the top of the Investindustrial group. The latter specializes in the acquisition of medium-sized companies active in the consumer goods, leisure, healthcare, services, technology and industrial manufacturing sectors.
Sammontana SpA, on the other hand, is a benefit company active in the production and marketing of fresh and frozen products, including baked goods, industrial ice cream (packaged and loose) and ready meals. Sammontana's share capital is held by Sammontana Finanziaria Srl, the holding company at the head of the group of the same name, in turn controlled by the Bagnoli family.
Forno d'Asolo SpA is a company active, also through its subsidiaries, mostly in the production and marketing of frozen bakery products and, to a lesser extent, industrial ice cream. It is controlled by Piave Investment S.à rl, a company based in Luxembourg, and indirectly by the BC European Capital X Fund and BCEC
Both Sammontana SpA and Forno d'Asolo SpA are active with well-known brands such as Tre Marie, Il Pasticcere, Mongelo the former and Bindi, Lizzi and Forno d'Asolo the latter.
AGCM'S DOUBTS ABOUT THE OPERATION
Thanks to the investigation, the Antitrust ascertained in the national market of frozen breakfast bakery products, in the food service channel, the marriage between Sammontana and Forno d'Asolo would have produced "significant anti-competitive effects" because the restriction would have been eliminated competitive between the two main operators. “Sammontana and Forno d'Asolo in fact have production and distribution characteristics that are far superior to their competitors, which have much smaller dimensions and a limited reaction capacity” we read in the press note released by the Authority. In particular, following the merger, the two companies would have had a very high market share (between 45% and 50%) and leadership in national sales of frozen bakery products (even more than four times greater than that of the first competing company).
The AGCM's analyzes also showed that the operation would have led to "significant incentives to increase the prices of frozen breakfast products in the absence of sufficiently high competitive pressure from other companies". Add to all this that Sammontana and Forno d'Asolo have a distribution capacity at their disposal, in terms of logistics networks and sales agents, "very complex and based on direct branches or exclusive dealers, therefore capable of creating a competitive obstacle after concentration”.
THE MEASURES REQUESTED TO AUTHORIZE THE CONCENTRATION
For the green light on the operation, the Authority led by Roberto Rustichelli has therefore imposed some structural and behavioral measures in order to "overcome the competitive concerns that emerged from the investigation".
It begins with the disposal, in favor of a competing operator, of a company already independently active on the market, which has its own production plants, distribution capacity and established brands, and with the commitment not to purchase companies active in the distribution of bakery products in Italy, nor companies active in the production and marketing of breakfast bakery products in Italy with significant turnover. Furthermore, the two companies will have to cede the current concession contracts between Forno d'Asolo SpA and Froneri Italy Srl / Nestlè Italiana SpA for the distribution of ice cream and baked goods for breakfast in some Italian provinces. The incoming person will be able to use Forno d'Asolo agents for the sale of the products covered by the concession (frozen bakery products and ice cream) without any obstacle.
Furthermore, in Friuli Venezia Giulia, Trentino Alto Adige, Veneto, Tuscany, Sardinia, Sicily, Calabria and Basilicata (i.e. the areas where the gap between the parties' sales network and those of competitors in terms of distribution capacity is greatest), the The Authority has imposed – for five years plus a possible additional five – "measures to eliminate or not provide exclusivity (in law or in fact) for the sale of frozen breakfast bakery products with the parties' agents and logistics operators" . This allows competitors to use this distribution capacity for frozen breakfast products (and other baked goods, if sold together) to counteract the increased market power of the companies involved. It is also planned to free up space at logistics operators for the benefit of competitors.
All these measures, underlines the Antitrust, have "the objective of ensuring that the new entity resulting from the concentration is subject to adequate competitive pressure, through the sale of part of the company and the improvement of distribution outlets for competitors".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/il-matrimonio-con-riserva-tra-sammontana-e-forno-dasolo/ on Fri, 26 Jul 2024 08:58:34 +0000.