The Competition and Markets Authority (CMA) has launched an investigation into the anticipated joint venture between ForFarmers UK and 2 Agriculture.
The CMA is looking at whether the proposal, announced in July, could result in a substantial lessening of competition in the UK for goods or services.
Both companies said the joint venture would have a balanced feed portfolio across species, with an expected combined sales volume of more than 3 million tonnes of compound feed per year.
The merger agreement is a non-cash transaction, with the share split set at 50.1% for ForFarmers UK and 49.9% for 2 Agriculture.
This is based on the current enterprise value of both joint venture partners, and takes into account the respective expectations for 2022 and beyond.
ForFarmers UK, a subsidiary of the Dutch-based ForFarmers N.V., is a feed company selling approximately 2 million tonnes of compound feed volumes annually.
The majority of feed produced by ForFarmers is for ruminants and pigs, with smaller volumes being produced for poultry.
The company has 14 feed mills, and hires approximately 900 employees across these sites.
UK firm 2 Agriculture supplies around 1.2 million tonnes of feed annually to poultry farmers mostly into the integrated market, but also to independent customers.
The company employs 250 employees and operates five mills located in Scotland, East Anglia and North Wales and has an extrusion plant in Cambridgeshire.
Announcing the investigation into the merger, the CMA said: "The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002.
"If so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services."
To assist, the CMA is inviting comments on the transaction from any interested party. These should be sent to julie.flandrin@cma.gov.uk or gulalay.hammad@cma.gov.uk.
