Noble Foods' take-over of Manton's egg processing plants is being investigated by the United Kingdom's competition authorities.
Noble announced earlier this year that it had completed the acquisition of two egg processing factories run by Manton's - one at Harrogate in North Yorkshire and the other at Gainsborough in Lincolnshire. However the Competition Commission has now confirmed to the Ranger that the deal has been called in so that it can decide whether or not the take-over raises competition concerns.
A spokeswoman for the Commission said that Noble had been told not to continue with the further integration of the Manton's factories whilst the case was being considered. "The case has been called in and we have issued an interim order. The acquisition has already been completed but the interim order prevents further integration of the businesses," she said. "This is quite standard because the more integration takes place the more difficult it can be to see where the two businesses are later."
She said that the deal would be subject to a 40-day review period, after which the Commission would either rule that there was no cause for concern or it would decide to investigate further. This 40-day period had not yet started, she said.
News of a possible deal between Noble and Manton's first emerged when the local press in Nottinghamshire reported that Noble intended to close its existing Bilsthorpe plant and transfer production to the Manton factories. Noble was quoted at the time as saying that the acquisitions had been agreed in principle.
We subsequently reported that Noble had written to interested parties to confirm that the deal had since been completed. The company said in the letter that the purchase of the two plants became effective on March 14. It said production would be moved from Bilsthorpe gradually and that the new business would operate under the name Noble Egg Innovations.
The letter, which was signed by the business's managing director David Pearson and chairman Michael Looney, said, "Noble has been reviewing investment options for its egg products business for some time and the acquisition of the Manton facilities is the best solution to its future manufacturing requirements. It is envisaged that Noble's current liquid egg production at Bilsthorpe will be transferred to the acquired factories over time. These changes will provide a long-term, competitive and sustainable route to market for Manton and Noble's liquid egg products, benefiting customers and suppliers alike. The new business will trade as Noble Egg lnnovations."
The letter went on to say, "Invoices for goods and services provided to the Harrogate and Gainsborough sites from 14th March 2014 should be addressed to Noble Egg Innovations at the existing Harrogate address, Springfield Farm, Cold Cotes Road, Kettlesing Head, Harrogate HG3 2LW. We would like to thank you for your continuing custom and look forward to working together in the future. If you do have any questions or queries, please do not hesitate to make contact."
In February the Mansfield and Ashfield Chad reported that the Bilsthorpe workforce had been informed of plans to close the factory later in the year, with the work moving to Harrogate and Gainsborough. The newspaper quoted Noble as saying, “We regret the potential loss of jobs caused by the change and are absolutely committed to supporting affected colleagues.” It said that formal consultations were taking place. The Chad said that the previous year Noble had outlined plans to move the Bilsthorpe factory to Walesby, just 10 miles away.
The Competition Commission previously investigated Noble Foods following its creation through the merger of Stonegate and Deans Food Group. The Commission ruled that the merger of the two largest suppliers of shell eggs
and processed eggs
in the United Kingdom would reduce competition in the market for fresh eggs, leading to higher prices for retailers. It ordered that Clifford Kent Holdings, the parent company of Stonegate Farmers, should be sold.
Asked how the Manton's deal had come to be called in by the Commission, the spokeswoman said that its Mergers Intelligence Unit routinely looked at various sectors to identify deals that could potentially raise concerns.