European Commission approves Novozymes and Christian Hansen merger with conditions

In Belgium, the European Commission has approved, under the EU Merger Regulation, the proposed merger between Novozymes A/S and Christian Hansen A/S. The approval is conditional upon full compliance with the commitments offered by the parties.

The Commission’s investigation showed that the merger, as initially notified, would have reduced competition in the market for the manufacture of one specific enzyme, lactase, using genetic modification technology.

In particular, the Commission found that Chr Hansen had a project to start manufacturing this product and would very likely grow into an effective competitor within a short timeframe. The Commission also found that post-merger there would not be sufficient potential competitors to exert sufficient competitive pressure on the merged entity.

The proposed remedies

To address the Commission’s competition concerns, the parties offered to divest:

•   Chr. Hansen’s project to enter the market for the manufacture of lactase;

•   Chr. Hansen’s lactase distribution business; and

•   Novozymes’ lactase production facility.

These commitments fully address the competition concerns identified by the Commission, by paving the way for the creation of a divested business with the necessary production assets and research and development capabilities to grow as a viable competitive producer of lactase on a lasting basis. 

Following the positive feedback received in the context of the commitments’ market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns.