The European Commission authorized under the EU Merger Regulation the proposed acquisition of the Sara Lee Air Care business by Procter & Gamble, both of them US companies, but opened an in-depth inquiry into the planned acquisition of Sara Lee Household and Body Care International by Unilever NV and Unilever Plc.
Procter & Gamble is a company that specializes in the development, manufacturing, distribution and marketing of household care, beauty care and health care, among other consumer products, while Sara Lee Air Care manufactures and markets various types of air fresheners.
The transaction did not initially qualify for the EU's one-stop-shop review because the merger parties did not meet the turnover threshold of the EU Merger Regulation.
However, the merger had to be notified to several national competition authorities in Belgium, Germany, Spain, Portugal and the UK. As a result, those authorities asked the European Commission to examine the impact of the proposed transaction on their territories in one single proceeding. The case was notified to the Commission for regulatory clearance on 10 May 2010.
The Commission examined the effects of the acquisition on the home air freshener market, in particular as regards electrical air fresheners, where the parties would achieve relatively high combined market share in Belgium and the UK. In addition, the Commission investigated whether the proposed transaction would eliminate a potential competitor in car fresheners or fabric fresheners.
The Commission's investigation found that the combined firm will continue to face several strong, effective competitors that each have significant market share. Consequently, the transaction does not give rise to competition concerns.
Separately, the Commission is also examining the proposed acquisition of the Sara Lee Body Care division by Unilever.
On 21 April 2010, the Commission was notified of a proposed agreement under which Sara Lee would sell Sara Lee Household and Body Care International to Unilever NV and Unilever Plc, an Anglo-Dutch consumer goods group.
The Commission concluded at the end of its initial investigation that the transaction would bring together a number of very important brands that currently compete with each other. In the personal care category, Unilever supplies deodorants, bath and shower products, skincare products, oral care products and hair care products. In home care, Unilever supplies products for fabric and surface cleaning and hygiene. Sara Lee Body Care most notably manufactures and supplies bath and shower products, deodorants, and fabric cleaning and conditioning products.
In some countries, the merger would lead to high combined market share in several Member States and create a clear market leader. In addition, it would remove a strong alternative supplier in a number of deodorant, bath and shower, and fabric care markets.
Thus, the European Commission opened on 30 May 2010 an in-depth investigation under the EU Merger Regulation into the planned acquisition. In the in-depth investigation the Commission will carefully examine whether the proposed transaction would ultimately lead to higher prices for consumers.
The Commission has until 5 October 2010 to take a final decision on whether the concentration would significantly impede effective competition within the European Economic Area (EEA) or a substantial part of it. The parties did not propose any remedies during the first phase review to try and alleviate the Commission's concerns.