The OFT has launched a merger inquiry into the acquisition of Sussex Mushrooms by Monaghan Mushrooms.
The competition regulator announced on Tuesday (24 August) that it was seeking comment from interested parties on any competition or public interest issues arising from the deal. Comments can be submitted to the OFT until 8 September; a due date for the OFT's decision has not yet been set.
Monaghan Mushrooms, the UK's biggest mushroom grower and a major supplier to the mults, acquired Horsham-based Sussex Mushrooms at the end of July. The deal came after Sussex Mushrooms had appointed liquidators earlier the same month.
As with all its investigations, the OFT will be looking to determine whether the Sussex acquisition constitutes a "relevant merger situation" under the Enterprise Act, and whether it creates a "substantial lessening of competition".
A spokesman for the OFT said the regulator was typically asked to look at M&A deals before they had been completed, but was able to investigate deals up to four months after they had been completed.
When deals have been completed before the OFT begins investigating, companies can agree to 'hold separate' their businesses until the investigation has been concluded but the spokesman said such undertakings had not to date been made by Monaghan and Sussex.
OFT investigations can be triggered by the merging parties themselves, but in this case the OFT had acted on its own initiative, the spokesman added.
There are four possible outcomes to the OFT's investigation: it could decide to clear the deal, decide it does not qualify under the Enterprise Act, request undertakings from the parties, such as divestments, or refer it to the Competition Commission.
Monaghan CEO Ronnie Wilson said the OFT inquiry was to be expected. "This is standard practice for the OFT, and Monaghan continues to cooperate fully," he said.
Monaghan’s mushroom masterclass (7 May 2011)