The proposed sale of ethnic flour business Elephant Atta to Associated British Foods (ABF) has come under the watchful gaze of the Office of Fair Trading (OFT).
This week, the OFT issued an ‘invitation to comment’ on the move, which would see Premier Food’s Elephant Atta business sold to rival ABF’s Westmill Foods subsidiary for a cash consideration of £34m.
It is considering whether the acquisition has resulted in the creation of a relevant merger situation, under the merger provisions of the Enterprise Act 2002, which could potentially result in a less competitive marketplace, in the area of the ‘supply of chapatti flour’.
Earlier this month, British Baker reported that Premier Foods had entered into a co-packing agreement with ABF, under which the firm will continue to manufacture the Elephant Atta brands, as well as entering into “transitional service arrangements to facilitate the smooth transfer of the business”.
Comments will be accepted until 30 July, with a decision expected to be reached by 12 September, said the OFT.