UK’s CMA provisionally approves T&L Sugars’ acquisition of Tereos’ UK assets

UK – The UK’s competition watchdog, the Competition and Markets Authority (CMA), has provisionally approved T&L Sugars’ proposed acquisition of Tereos’ UK assets.  

T&L Sugars, which refines and distributes packaged sugar across UK supermarkets, acquired Tereos’ consumer-facing operations and a distribution facility in West Yorkshire in November 2023. 

The CMA launched an in-depth investigation into the deal in March 2024, concerned that the acquisition could lead to higher sugar prices for UK consumers.  

However, the regulator’s provisional findings suggest that without the acquisition by T&L Sugars, Tereos’ UK retail business would likely have closed. This potential closure led the CMA to approve the merger. 

“We have provisionally found that the most likely outcome is that Tereos’ UK retail business would have closed, absent the deal with TLS, and on this basis we have provisionally decided to approve the merger,” the CMA stated. 

The anti-trust body noted that the closure of Tereos’ UK retail business would result in a loss of competition. Hence, the merger was seen as a preferable alternative to maintain market competition, albeit under the ownership of T&L Sugars. 

The acquisition had been subjected to a “Phase 2” investigation by the CMA after the initial “Phase 1” investigation identified potential competition concerns, including the risk of increased sugar prices and a significant reduction in competition. 

Richard Feasey, chair of the independent inquiry group conducting the Phase 2 investigation, remarked, “Based on this evidence, we have provisionally found that the most likely outcome is that Tereos’ UK retail business would have closed, absent the deal with TLS, and on this basis, we have provisionally decided to approve the merger.” 

The CMA’s investigation revealed that Tereos’ UK retail business had been loss-making over a sustained period despite various efforts to improve its financial health.  

The regulator concluded that there was no alternative and less anti-competitive purchaser for the business besides T&L Sugars. 

The CMA is now seeking feedback on its provisional findings before making a final decision on September 5, 2024. 

Tereos’ UK and Ireland unit packs and distributes Whitworths’ branded and private-label sugar from its facility in Normanton, West Yorkshire.  

T&L Sugars was sold by food ingredients maker Tate & Lyle in 2010 to the US-based cane sugar refiner ASR Group. It manufactures a portfolio of sugar and sweetener products under the Tate and Lyle name, as well as own-label goods, from its London headquarters. 

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