The President of UOKiK banned two transactions: the takeover of Koltram by Cogifer Polska, and the takeover of Gellwe from FoodCare by Rieber Foods Polska. This year the Office has already issued 66 decisions on mergers.

Pursuant to the Act on Competition and Consumer Protection, intention of merger is subject to the obligation to notify, if the aggregate turnover of undertakings participating in the merger exceeds EUR 1 billion worldwide or EUR 50 million in the territory of Poland in the financial year preceding the year of the notification. UOKiK is entitled to examine the market consequences of mergers and acquisitions, and even to stop transactions which may permanently disturb competition. Having assessed a given transaction, the President of UOKiK may clear it, make it subject to additional conditions or prohibit it altogether.

The President of UOKiK may prohibit a given merger if, it results in a significant impediment to competition in the market, in particular by the creation or strengthening of a dominant position. This notion refers to the position of the undertaking which allows it to prevent the efficient competition within a relevant market thus enabling it to act in a significant degree independently of competitors, contracting parties and consumers. Significant competition restriction is expressed by factors such as e.g. disproportionately low market power of remaining competitors or recipients, lack of productive capacity available to market participants other than participants of the merger, existing barriers in entering the market (legal restrictions, commonly concluded long-term contracts, specific consumer habits).

The two transactions examined recently by UOKiK are related to significant competition restriction. In the first case, Kolejowe Zakłady Nawierzchniowe Cogifer Polska applied for taking over Koltram. The basic scope of activities of the entrepreneurs is production of track turnouts - devices designed for changing a direction of track vehicles from one track to another.

After carrying out merger proceedings, the President of UOKiK decided that as a result of taking over Koltram by Cogifer competition on the national market of selling track turnouts and railroad sidings, including parts of these turnouts, will be significantly restricted.

The President of UOKiK took into consideration, above all, the market structure. At present three entities operate on the market. After merger, there would be two entities, with a greater advantage of the merged Cogifer and Koltram. Moreover, high cost of entering the market and legal barriers significantly restrict the occurrence of potential competitors.

Competition restriction which would result from the merger, would significantly hinder the possibility of negotiating of conditions of order by recipients of turnouts. Therefore, the President of UOKiK issued a decision prohibiting the takeover of Koltram by Kolejowe Zakłady Nawierzchniowe Cogifer Polska.

The second proceedings carried out by the Office referred to the takeover of FoodCare by Rieber Foods Polska, related to the production of Gellwe products, by Rieber Foods Polska. These entrepreneurs operate in food industry. The first entrepreneur belongs to the Norwegian Rieber&Son group and operates in Poland under the brand of Delecta., whereas FoodCare is the owner of such brands as Gellwe, Tiger and Fitella.

While analyzing the merger the President of UOKiK decided that giving consent for the transaction would lead to a significant competition restriction on national markets of trading powdered whipped cream, instant cakes, dessert topping, baking powder, vanillin sugar, baking soda and cooking essences - each of these products is considered as a separate relevant market. On each of these markets Rieber would gain a dominant position.

While issuing the decision prohibiting the merger, the President of UOKiK took into account existing barriers that restrict entering the market. High costs of entering the market and brand loyalty significantly restrict the occurrence of potential competitors.

Moreover, in September 2009, the President of UOKiK issued six consents to carry out transactions. One of them concerned taking over Cefarm Bialystok by Farmacol. These entrepreneurs operate in pharmaceutical industry. The activities of the taking over company - Farmacol - include retail, wholesale and pre-wholesale of pharmaceutical products. Pharmacies, hospitals and wholesale companies are recipients of medicines. Farmacol owns, directly or indirectly, several subsidiaries. The company which was taken over has its own chain of pharmacies and cooperates with unrelated pharmacies across Poland.

Pursuant to the decision of the President of UOKiK, Farmacol will be able to take over Cefarm Bialystok - a company owned by the State Treasury operating in the same industry.

At the same time we would like to inform you that since May 2009 information concerning all merger proceedings carried out by UOKiK can be found on UOKiK website.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: [SCODE]bWFsZ29yemF0YS5jaWVsb2NoQHVva2lrLmdvdi5wbA==[ECODE]