Brussels: European Union regulators extended their probe of Unilever’s bid for Sara Lee Corp’s body care business after the Anglo-Dutch company declined to offer concessions to address competition concerns.
The European Commission, the EU competition watchdog, said on Tuesday that it would decide by 5 October whether to clear or block the $1.3 billion deal. Its previous deadline was31 May.
Unilever shares were down 1.5% to 1,840 pence by 0918 GMT versus a 1% fall in the Stoxx Europe 600 food and beverage index.
Unilever said last week it expected regulators to take a closer look that will delay the asset purchase to the fourth quarter of 2010 from a previous third-quarter target.
Sara Lee said an extended investigation would delay some share buybacks.
The Commission said an initial investigation showed potential competition concerns on several product markets such as deodorants, skin cleansing and fabric care products.
“This merger creates significant overlaps in a number of products used by consumers on an everyday basis. We need to make sure that if there are competition concerns these are duly addressed,” Competition Commissioner Joaquin Almunia said in a statement.
An in-depth investigation does not necessarily mean bad news for Unilever, said antitrust lawyer Bertold Bar-Bouyssiere at DLA Piper.
“There have been several cases where investigations have been terminated, sometimes even without a statement of objections. When there are overlaps, competition concerns could be fixed with divestments, which can be done in phase two,” he said.
The EU executive unconditionally cleared Oracle Corp’s $7 billion takeover of Sun Microsystems in January after an in-depth investigation.