The European Commission has started an in-depth investigation into Cargill's planned acquisition of Archer Daniels Midland's (ADM) chocolate business, as the $440m deal could lead to higher prices of chocolates.
During a preliminary investigation, the deal has shown potential competition concerns in the supply of industrial chocolate to customers in Germany and the UK markets where Cargill, ADM and Barry Callebaut supply industrial chocolate to customers.
On 19 January 2015, the transaction was notified to the commission, which will decide on it by 8 July.
ADM had initially planned to close the deal by 1 July. It, however, plans to close the deal in mid-2015 due to the delay that could be caused by the review.
The deal, if closed, is expected to increase the chocolate and cocoa facilities of Cargill by one-third.
European Commission said that the deal may reduce the choice of suitable suppliers in already concentrated markets, which may result in price increases.
Earlier in September 2014, Cargill has agreed to acquire ADM's global chocolate business.
The transaction covers the acquisition of ADM's three chocolate plants in Wisconsin, Pennsylvania, and Ontario, as well as three in the UK, Belgium and Germany.
ADM's Ambrosia, Merckens and Schokinag brands will also be added to Cargill's existing product portfolio.
Cargill will gain close to 700 new employees, following the completion of the acquisition.
