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Competition watchdog greenlights dairy merger

The Competition Council has allowed Meridian Capital CIS Fund, a company registered in the Cayman Islands, to indirectly obtain full control of Rigas Piensaimnieks, one of the largest dairy companies in Latvia, Inita Kabanova, a spokeswoman for the Competition Council told LETA newswire on Monday.

As reported, the Competition Council received at the end of May a notice of merger from Food Union and Rigas Piensaimnieks. At the time, Food Union's press secretary Linda Mezgaile told LETA that Meridian Capital - the financial partner of Food Union - plans to acquire Rigas Piensaimnieks in order to merge the companies.

The Competition Council indicates that a decision was taken on September 25 to allow Meridian Capital CIS Fund acquire Rigas Piensaimnieks, as the merger will cause no harm for the competition and allow increasing the export capacity.

The Council also says that following the merger, the companies' total market share on the raw milk market will increase by less than 5 percent, which is why the impact on competition will be insignificant. If the merged companies are able to increase their production volume, procurement of raw milk in Latvia will increase as well, thus benefiting Latvia's dairy cattle breeding industry.

Food Union is a combined firm made up of the Rigas piena kombināts, Valmieras piens and Premia Foods, majority-owned by Russian investor Andrey Beshmelnyitsky’s group. Its unaudited turnover for 2014 was €125 million.

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