August 25, 2010

Vion eyes veal processing expansion with Weyl buyout

Vion said it plans to expand its veal processing operations after being given the go-ahead by the European Commission to acquire Weyl.

The Netherlands-based meat producer was granted approval for the takeover of the Dutch meat processing outfit after the Commission said the deal would not "significantly impede effective competition in the European Economic Area (EEA)."

Brussels said it focused its probe on the potential competitive effects of the horizontal overlaps for the proposed merger in the area of purchase of live cattle and calves for slaughtering, sale of fresh beef and veal and abattoir by-products.

The Commission also examined the possible effects on the vertical markets - from the abattoir by-products to the sale of fresh beef and veal.

The transaction was approved as not hindering competition in all the product markets mentioned above, the Commission said.

Prior to going into bankruptcy on May 20, the international beef and calf processing company owned one plant in Germany and two in Netherlands - including its headquarters in Enschede.

"The main reason we have signed this agreement to acquire Weyl is to get greater access to the veal market," a company spokesman said.

Vion is currently undertaking a strategic scoping exercise to map out how it wants to develop operations at its new acquisition.

"We have to start up the operations again - including the whole supply chain," added the spokesman. "We are studying the market very carefully to understand exactly what the sector needs."