Heinz UK Faces Extended Acquisition Probe

28 October 2005

The proposed takeover of Britain's HP Foods by H J Heinz has been referred to the nation's Competition Commission.

The decision to extend the probe into the £470 million ($842m; €682m) deal stems from a warning by secondary regulator, the Office of Fair Trading, that the acquisition could result in reduced competition and higher prices for bottled sauces.

The brand range of HP, owned by France-headquartered Groupe Danone, includes eponymous bestseller HP Sauce, Daddies Sauce and Lea & Perrins. Baked beans also feature in its brand portfolio. Heinz manufactures the iconic tomato ketchup and, among other sugary delights, the globe's best-selling baked beans brand.

Says OFT head of competition enforcement Vincent Smith: "This deal brings together two of the largest branded suppliers of sauces in the UK. As a result of the merger, consumers could suffer from less competition in a range of products, including HP Sauce, tomato ketchup and baked beans."

Heinz, which has suspended its £7.8m UK adspend budget pending ingestion of HP, says it is confident it will "meet the criteria for final clearance" and points out that the deal has already met with regulatory approval in Ireland and Germany.

Data sourced from The Times Online (UK); additional content by WARC staff