US Department of Justice OKs Kraft Heinz cheese acquisition

The United States Department of Justice has given a thumbs-up to Lactalis Group acquiring Kraft Heinz’s Natural Cheese Business, with some fairly important qualifiers.

The Lactalis Group announced in September 2020 that it would be acquiring Kraft Heinz’s Natural Cheese Division. This would see the former company acquire three production facilities in the United States and a portfolio of iconic American cheese brands such as Cracker Barrel and Breakstone’s for around $3.2 billion.

Now as part of regulatory proceedings, which have involved an antitrust investigation, the US Department of Justice has announced that it will allow for the acquisition to occur only under the condition that Kraft Heinz divests its Athenos and Polly-O businesses. These businesses will need to be sold to approved companies.

The Department of Justice notes that the sale as originally announced would lead to potential anticompetitive actions by the two companies at hand. As the largest producers of feta and ricotta cheeses in the US, the companies would have undue control over the market of these cheeses, potentially leading to increased costs and decreased quality. The divestitures are therefore intended to prevent this anticompetitive behaviour and to ensure consumers benefit from the acquisition.

The antitrust investigation will await comments for a further 60 days before the judgment of the investigation and thus the status of the acquisition is announced.

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