EUROPEAN Union regulators yesterday extended their probe of Unilever’s bid for Sara Lee Corp’s body care business after the Anglo-Dutch company refused to offer concessions to address competition concerns.
European Union watchdogs have said they will need to carefully scrutinise the deal to buy Sara Lee’s personal care business as they fear it could give the enlarged company too much power in some markets.
The European Commission, the EU competition watchdog, yesterday extended its regulatory approval deadline to 5 October when it will decide whether or not to approve the $1.3bn (£889m) deal. Its previous deadline was 31 May.
Unilever said last week it expected regulators to take a closer look at the deal, delaying the asset purchase to the fourth quarter of 2010 from a previous third-quarter target.
Sara Lee, whose bodycare range includes Brylcreem and Radox, said an extended investigation would delay some of its planned share buybacks.
The Commis?sion said its initial investigation showed potential competition concerns on several product markets such as deodorants, skin cleansing and ?fabric care products.
“This merger creates significant overlaps in a number of products used by consumers on an everyday basis,” Competition com?missioner Joaquin Almunia said in a statement.
An in-depth investigation does not necessarily mean bad news for Unilever, said antitrust lawyer Bertold Bar-Bouyssiere at DLA Piper.
“There have been several cases where investigations have been terminated, sometimes even without a statement of objections. When there are overlaps, competition concerns could be fixed with divestments, which can be done in phase two,” he said.
The deal would be the largest purchase by Unilever since its $2.6bn acquisition of Ben & Jerry’s in 2000, and the first acquisition under new chief executive Paul Polman.
Sara Lee is selling the businesses to concentrate on food and beverages.
City A.M. Reporter