The Competition and Markets Authority (CMA) has provisionally approved Tate & Lyle operator, T&L Sugars’ acquisition and merger of Whitworths owner Tereos.
The greenlight follows an investigation into the deal that the CMA was concerned could reduce competition as it would leave only three companies to dominate the UK’s sugar market.
However, the competition watchdog decided that Tereos’ retail business had been both losing money and was at risk of shutting down without the deal, which would have also led to reduced competition.
The CMA added that while it has provisionally cleared the agreement, it was still actively seeking feedback on the decision before making it final.
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Independent inquiry group chair Richard Feasey, who led Phase 2 of the investigation, said: “We have carefully considered a broad range of evidence, including detailed examination of the financial performance of Tereos’ UK retail business, and the steps taken by Tereos to improve its performance.
“Based on this evidence, we have provisionally found that the most likely outcome is that Tereos’ UK retail business would have closed, absent the deal with T&L and on this basis we have provisionally decided to approve the merger.”
TLS and Tereos are also not the only high profile merges in the grocery industry that the CMA has launched an inquiry into recently. Earlier this year, french bakery giant Cérélia refused to sell dough brand Jus-Rol and is instead appealing to the Supreme court over the CMA’s decision that ordered it to sell the brand.
