US-based food giant H.J. Heinz Co. was blocked by Australia's competition regulator for its attempt to takeover Rafferty's Garden. The halt was with the government's concern over the deal to have reduced significant competition.
According to the Australian Competition and Consumer Commission, the proposed deal will remove tough rival for Heinz. Chairman Rod Sims of the said commission stated that the supposed acquisition would combine the two biggest suppliers of dry and wet baby food in Australia. This will further result to increased concentrated markets. Barriers to entry and expansion are also expected to be higher in the industry.
Heinz itself is the subject of a US$23.2 billion bid from Berkshire Hathaway Inc. and 3G Capital.
With the deal prevented, the regulator has assisted a setback for Anacacia Capital. This private equity firm invested through a management buyout in fast-growing Rafferty's in 2010.
Further financial details were left undisclosed for said proposed acquisition.
Join the Conversation