In February 2013 the Competition Authority cleared the takeover of Hellenic Sugar Industry SA by Sunoko doo, subject to structural and behavioural measures. Hellenic Sugar is the only producer of sugar in Greece which also owns two sugar production plants in Serbia. Sunoko, on the other hand, is a producer of sugar in Serbia, part of MK Group, a vertically integrated producer of agricultural products and also has various other activities related to agricultural production. The authority prohibited the takeover at first, but clearance was issued on a second attempt.
Prior to the takeover, sugar production in Serbia was carried out by three undertakings - Hellenic Sugar, Sunoko and SFIR (Italy) - with Hellenic Sugar and Sunoko being the largest producers with a joint market share of almost 80%. Hellenic Sugar was under liquidation prior to the takeover and offered its shares (82.33%) - held by the Agricultural Bank of Greece SA - for sale for the second time via an international tender. In the course of the first tender, Sunoko sought clearance from the Competition Authority, but the takeover was prohibited in January 2012 after a Phase II investigation even though significant structural and behavioural remedies were offered (the authority's decision was later annulled by the Administrative Court). Sunoko again sought clearance in the second tender, which was granted by the authority subject to the following structural and behavioural measures:
- Sunoko must undertake all reasonable efforts to divest one of the two Hellenic Sugar production plants (Sajkaska in Zabalj, comprising 15% of the market) via an international tender, within (approximately) one year from acquiring control, to an unrelated undertaking with sufficient resources to further develop the plant and ensure its competitiveness.
- Sunoko must submit semi-annual reports on various market trends and parameters (eg, volumes and prices of sugar sold in Serbian and international markets and achieved efficiencies and positive effects of the takeover), as well as various other documents substituting claims in the reports.
The Competition Authority claimed that its shift in view regarding the takeover was due to a change in market conditions. The prohibition was based on conditions prevailing in 2011, while the conditional clearance was based on 2012 conditions, with the main difference pertaining apparently to a different pricing structure utilised by Sunoko (only the operative part of the decision is published). The decision represents the authority's most detailed attempt to conditionally approve a takeover which raises serious competition concerns. It is a welcome and useful step forward for future takeovers where remedies may be required.
Originally published on International Law Office
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