The UK Competition Commission has cleared Greif, the industrial packaging manufacturer's acquisition of Blagden Group's large steel drum business.Greif bought the Blagden operation in a £142m deal last November.
In a provisional report earlier this year, the Commission said the merger of Greif and Blagden may lead to a substantial lack of competition in the market for new large steel drums in the UK, however it has now concluded this is not the case and has allowed the purchase to proceed.
Inquiry group chairman Diana Guy says since the provisional report was published work on a new steel drum plant has begun in the Netherlands, which will limit Grief's domination of the UK market.
"We did not find this an easy decision," Guys says.
"The merger has resulted in the loss of Greif's strongest current competitor and the merged company will account for between 50% and 60% of the market for large steel drums.
"However, the evidence we obtained late in the inquiry about a new production facility being built in the Netherlands led us to change our view of the future competitive situation.
"As a result, we could no longer reach and expectation that the merger would result in a substantial lessening of competition in the market for large steel drums in Great Britain."
Source: packaging-technology
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