Moves by the Competition and Markets Authority (CMA) to move to a detailed merger investigation into the joint venture plans put forward by ForFarmers and 2Agriculture (a subsidiary of Boparan) have led to the abandonment of the initiative.
The Competition and Markets Authority (CMA) announced in December that the proposed deal could lead to farmers paying higher prices for poultry feed, as well as potentially facing lower quality feed or worse service in 4 local areas, covering East Anglia, north-western England and North Wales.
It said the companies had offered proposals to address these concerns but the CMA considered these were unlikely to be sufficient in addressing its competition concerns and so the deal was referred to an in-depth phase 2 investigation.
Subsequently, the CMA paused its investigation for 3 weeks while the companies decided whether to proceed with the merger: “ForFarmers and Boparan have now decided to abandon the deal so the CMA will be cancelling its investigation.”
In a joint statement, ForFarmers UK and 2Agriculture said they had decided to abandon the proposed joint venture plans. The parties, it said, had taken into consideration, among other things, the current impact on their respective businesses, the duration and costs involved, and the impact the process would have on both employees and farmers.
ForFarmers UK and 2Agriculture announced their intention to merge their businesses into a joint venture last July, in a bid to better serve farmers’ needs through a balanced portfolio across species.
“ForFarmers and 2Agriculture continue to believe that the joint venture would have made for a robust business, with improved expertise and presence across species to successfully meet the changing demands from the entire value chain.
“This included helping farmers realise the transition towards a more sustainable way of farming with enhanced returns. The proposed joint venture would have invested in driving improvements and optimising services in the most efficient manner, with a focus on improving production efficiency and feed quality to the benefit of both farmers and end consumers,” the statement added.
The proposed deal and its abandonment come at a time of massive inflation across the entire food chain, with egg production and poultry seeing large rises in feed and energy costs. 2Sisters Food Group, which is another Boparan subsidiary, recently announced the closure of its Llangefni factory, with around 700 jobs at risk. The company said it was closing the plant due to the continuing cost challenges facing the sector.