The European Commission approves proposed acquisition of Gerber by Neste

The European Commission has cleared under the EU Merger Regulation the proposed acquisition of Novartis's Gerber business by Nestle of Switzerland. The Commission concluded that the operation would not significantly impede effective competition in the European Economic Area (EEA) or any substantial part of it.

Nestle is a Swiss company mainly active in the production, marketing and sale of a large variety of food and beverage products, including products for infants such as formula, cereals and meals.

In the EEA, Gerber mainly manufactures and sells baby food such as baby meals in jars, baby drinks and cereals. Gerber is wholly owned by Novartis.

The activities of the parties overlap in several segments of manufactured baby food in Poland, Cyprus, Iceland and Portugal. In all the countries concerned, baby food markets are characterised by rapid growth. In Poland the Commission concluded that, given the limited overlap and the competitive pressure exerted by existing competitors and potential entrants, the proposed merger would not significantly impede effective competition.

In Cyprus, Iceland and Portugal, the Commission concluded that market entry is relatively easy as all the manufacturers sell via distributors and a number of new entrants had been able to grow their market shares quickly in recent years. Moreover those markets are characterised by the presence of many competitors.

Although the transaction would enhance the portfolio of Nestle's products, the Commission did not identify any vertical and conglomerate competition concerns arising from the transaction.