BREAKING – Whitby Seafoods drops scampi merger move
Whitby Seafoods Ltd, the UK’s largest scampi producer, has dropped plans to acquire Kilhorne Bay Seafoods of Northern Ireland following intervention by the Competition and Markets Authority (CMA).
The authority intervened last week expressing concerns that such a move could be anti-competitive, leading to higher prices, particularly in the food service sector and lower quality products.
While Kilhorne Bay is much smaller than Whitby, the two together would clearly dominate the UK market. Whitby is a big supplier to both the retail and food service sectors.
Whitby Seafoods agreed to buy Kilhorne Bay Seafoods in May this year and voluntarily notified the deal to the Competition and Markets Authority which launched a merger review into the deal in early August.
Last week it gave the Yorkshire coast business five working days to show why the move would not lead to higher prices.
The CMA then referred the deal for an in-depth Phase 2 merger investigation unless both companies could show remedies which would fully resolve these concerns.
Although rejecting the CMA’s concerns, Whitby said in a statement today it was notifying the consumer watchdog that it was no longer proceeding with the merger.
It added: “Sadly the resources required to engage in a CMA phase 2 investigation are out of all proportion to any potential benefit from the deal, and we have therefore withdrawn our offer for Kilhorne and will not be proceeding with the acquisition.
It also said half of Kilhorne’s sales went to Europe which would have given them a “unique opportunity” to build a new market.