The Federal Commission of Economic Competition (Cofece) of Mexico approved the merger between Industrias Bachoco, Loto Hermanos, Secba and RYC Alimentos.
As background, on February 12, 2021, Industrias Bachoco (IBSA), SECBA, Loto Hermanos and RYC Alimentos notified Cofece of their intention to hold a concentration, in accordance with the provisions of article 90 of the Federal Economic Competition Law (LFCE).
For the purposes of the LFCE, concentration is understood to be the merger, acquisition of control or any act by virtue of which companies, associations, shares, partnerships, trusts or assets in general are brought together between competitors, suppliers, customers or any other economic agents.
The Commission will not authorize or, as the case may be, will investigate and sanction those concentrations whose purpose or effect is to diminish, damage or impede competition and free concurrence with respect to the same, similar or substantially related goods or services.
Industrias Bachoco reported last January that it concluded the purchase agreement for 100% of the shares of RYC Alimentos, a multi-protein meat processor and distributor with production facilities in Puebla, Mexico.
As a result, the company acquired 2 plants located in Puebla and approximately 21 stores located in four states of the Mexican Republic (Puebla, Oaxaca, Veracruz and Tlaxcala).
Regarding this transaction, Industrias Bachoco reported that the stockholders’ equity of RYC Alimentos is valued at approximately 61 million US dollars.
The transaction includes a non-competition clause.
Among other requirements, the concentration notification is made in writing and must contain and accompany the description of the concentration, type of operation and project of the legal act in question, as well as the project of the clauses by virtue of which they are obliged to not compete if it exists and the reasons why they are stipulated.
Among its powers, Cofece must guarantee free competition and economic competition; prevent, investigate and combat monopolies, monopolistic practices, concentrations and other restrictions on the efficient functioning of the markets, and impose the sanctions derived from such conduct, in the terms of the LFCE.