The UK’s Competition and Markets Authority (CMA) has instigated an investigation into Ali Group’s prospective acquisition of Welbilt.
The government agency stated: “The CMA is considering whether it is or may be the case that this transaction, if carried into effect, will result in the creation of a relevant merger situation under the merger provisions of the Enterprise Act 2002 and, if so, whether the creation of that situation may be expected to result in a substantial lessening of competition within any market or markets in the UK for goods or services.”
To assist it with this assessment, the CMA is inviting comments on the transaction from any interested party, with a deadline of 24 March 2022.
Catering Insight approached both Welbilt and Ali Group in the wake of this development – Welbilt declined to comment, while Ali Group is yet to respond.
This competition probe follows Welbilt divesting icemaker brand Manitowoc Ice to Pentair in a $1.6bn (£1.2bn) deal, a move which was aimed at allaying monopoly concerns raised recently by the US Department of Justice.
Welbilt had been expecting to receive regulatory approval for its sale to Ali Group from the US, UK, and EU prior to closing the sale of Manitowoc Ice to Pentair.
Ali Group’s Welbilt deal is an all-cash transaction for US$24 per share, or approximately US$3.5bn in aggregate equity value and US$4.8bn in enterprise value.
The acquisition would make the merged group the largest in the world, with Welbilt’s pre-Covid turnover totalling about US$1.6bn and Ali Group’s global revenue of around US$2.4bn combining to reach US$4bn, eclipsing pre-pandemic market leader Hoshizaki’s US2.5bn.