A Competition Appeal Tribunal (CAT) judgement has upheld the Competition and Markets Authority (CMA) decision to block the merger of Ecolab and Holchem. The two companies are the largest suppliers of cleaning chemicals to food and drink manufacturers in the UK.
The CMA concluded that the only effective way of addressing the significant loss of competition as a result of the merger was to effectively block it by requiring Ecolab to sell off Holchem. Ecolab appealed this decision, but it has been upheld by the CAT.
A CMA spokesperson said: “The CMA is pleased that the CAT upheld the decision to require Ecolab to sell Holchem Laboratories, after the CMA found that the merger raised competition concerns in the cleaning chemicals industry in the UK.
“The Tribunal rejected all of Ecolab’s grounds of challenge and upheld the CMA’s findings in its Final Report. The judgment confirms that the CMA can reject an alternative remedy put forward by the parties where the CMA does not have a high degree of confidence that the remedy will be effective in addressing its competition concerns.
“The judgment means that Ecolab must now continue with the sale of Holchem Laboratories to a purchaser approved by the CMA without any further delay.”
Back in October when the CMA made its decision Holchem’s official statement said: “We strongly disagree with the CMA’s decision and continue to believe that a merger of the two companies would have led both companies to increased availability of innovation and expertise across the food and beverage industry.”
Both businesses have yet to issue comment on the outcome.