The European Union Commission has given the go ahead for US-based Bunge to buy a 55 per cent stake in French competitor Cereol , in a move that gives the company key production facilities in Europe and creates the world's largest oilseed processor.
In an official statement the EU Commission said the two companies activities are "largely complementary, with only limited overlaps," adding that Bunge would still face " sufficient competition."The purchase had already cleared the renowned tough anti competition laws in the US at the beginning of August.
In a deal estimated to be worth €450 million, Bunge is buying Cereol to expand in Europe, where it previously had no production facilities.Bunge now plans to gradually buy up the remaining 45 per cent stake that is publicly traded. It will also assume Cereol's debt, making the total acquisition price €820 million.
Bunge may also have to pay an additional amount of €77 million with regards an arbitration against Cereol. The arbitration concerns a sale that the French company made before Bunge became involved with the company.
"Although the matter hasn't been resolved, it should have no implication on the deal's ability to move forward," said Bunge spokesman Stewart Lindsay.
Cereol is a unit of Italian energy company Edison, which is selling the unit to focus on its core energy business.
Bunge and Cereol process soybeans, oilseeds and other grains such as wheat and corn used to make margarine, flour, cooking oils and animal feed.