Following a Phase II investigation initiated in October 2017, the Serbian Competition Commission has cleared the acquisition of a Serbian yeast producer (owned by the American Alltech) by the French giant Lesaffre. The clearance was conditional and includes certain reporting obligations by the merged entity.

The Serbian Competition Commission initiates Phase II investigations only rarely – for instance, during the whole of 2017 it launched only one such probe, concerning the transaction it has just cleared with strings attached. And, looking at a longer period (the first 1,000 merger decisions rendered by the Serbian Commission), Phase II investigations have come just as rare.

During the probe, the Commission found that the implementation of the transaction would lead to the creation of the target’s dominant position in the market for the production and sale of yeast extract. At the same time, the target’s already existing dominance in the market for production and sale of baking yeast would be strengthened. Concerning both markets, the geographic element considered by the Commission was national .

When clearing the transaction, the Commission in particular considered Lesaffre’s statement that the implementation of the transaction would lead to a significant increase in the utilization of the target’s production capacities as well as in the export of yeast extract.

The behavioral measures which were sufficient for the Commission to clear the transaction despite its concerns are reporting obligations in the post-transaction period, which will allow the Commission to monitor how the effects of the takeover are folding out in practice. Specifically, the merged entity will have to deliver to the Commission the following reports:

  1. on the level of utilization of the target’s production capacities,
  2. on the target’s production of yeast extract,
  3. on the target’s production of baking yeast, and
  4. in case the service production of agreement between the target and its customer is terminated prior to the regular expiration of the agreement, reasons for such termination must be presented to the Commission.

With this case closed, the Serbian Competition Commission currently has no pending Phase II merger probes.