Merger Control in Serbia: Phase II Probe in Phytopharmacy Sector

Serbia

Merger Control in Serbia: Phase II Probe in Phytopharmacy Sector

Even in the middle of the COVID-19 outbreak, the Serbian national competition authority (NCA) is continuing with its regular merger control operations – it has announced it has started a Phase II probe of a planned takeover in the phytopharmacy sector.

Who are the parties to the concentration?

The target in the transaction is Galenika-Fitofarmacija, а Serbian company active as a manufacturer of plant protection products based on generic active substances for agricultural production. Until 1990s, it was part of a wider Galenika group of companies, active in the pharmaceuticals sector.

The acquirer in the transaction, and the party which notified the merger, is Serbian company Agromarket. Agromarket is a manufacturer and distributor of a wide range of products related to agricultural production, such as fertilizers, pesticides, garden program, and irrigation systems. The company is active in the Western Balkan region and, apart from Serbia, has subsidiaries in Montenegro, Bosnia and Herzegovina, and Slovenia.

What are the affected markets?

Based on the NCA’s preliminary assessment, the affected market is that of  production and supply of pesticides in the Republic of Serbia. According to what the parties notified to the NCA, the value of that market in 2019 was around EUR 150 million. Both parties are important players in the supply of pesticides in Serbia, the acquirer with a 30% and the target with a 16% market share.

Why did the NCA open a Phase II?

According to Serbian merger control rules, the NCA can open a Phase II merger probe in particular where the combined market share of the parties exceeds 40%. This is precisely the case with the transaction at hand, since the joint market share of the parties post-transaction would be 46%.

Based on which information will the NCA decide on the transaction?

The NCA announced that, during the Phase II probe, it will turn to the parties’ competitors and other undertakings who could be affected by the planned merger. The watchdog will also gather information from various state bodies and business associations who could have data useful for the assessment of the planned combination.

You Might Also Like