Mergers in the farm supply
Bonnesen Advokater assists Danish Agro A.m.b.A. and DLG
A.m.b.A. in taking over the farm supply businesses S.A.B. A.m.b.A.
and Aarhusegnens Andel A.m.b.A.
S.A.B. A.m.b.A. Landbrugets Andel
In the autumn of 2009, Bonnesen Advokater assisted the farm supply
company Danish Agro A.m.b.A., which has an annual turnover of more
than DKK 4.2 billion, in taking over its competitor S.A.B. A.m.b.A.
Landbrugets Andel, when the latter was faced with financial
In that connection, Bonnesen Advokater handled the drafting of all
necessary agreements involved in the takeover and reconstruction of
S.A.B. A.m.b.A. Landbrugets Andel. It was a basic condition in
connection with the takeover that the necessary financing
agreements were entered into with the lending institutions that had
granted S.A.B. A.m.b.A. Landbrugets Andel substantial credit lines,
and the firm's attorneys also assisted Danish Agro A.m.b.A. in this
After obtaining the necessary financing commitments and the
approval of the members of S.A.B. A.m.b.A. Landbrugets Andel of the
takeover/reconstruction, which meant that no member would suffer a
loss, Bonnesen Advokater assisted in preparing the notification to
the competition authorities with a view to obtaining the
Competition Council's approval of the takeover in accordance with
the competition act's provisions on merger control.
Aarhusegnens Andel A.m.b.A.
Due to some very turbulent market conditions in the farm supply
business, which were the cause of S.A.B. A.m.b.A. Landbrugets
Andel's financial difficulties, Aarhusegnens Andel A.m.b.A. also
had to realise at the beginning of January 2010 that the company
was facing a financial collapse. This led the board of directors of
Aarhusegnens Andel A.m.b.A. to seek a solution involving the two
largest farm supply companies in Denmark, DLG A.m.b.A. and Danish
Bonnesen Advokater assisted DLG A.m.b.A. and Danish Agro A.m.b.A.
with the rescue operation for Aarhusegnens Andel A.m.b.A. The
aggregate annual group turnover of DLG A.m.b.A. and Danish Agro
A.m.b.A. amounts to app. DKK 38 billion, whereas Aarhusegnens Andel
A.m.b.A. had an annual turnover of app. DKK 3.5 billion. A
consortium consisting of DLG A.m.b.A. and Danish Agro A.m.b.A. was
set up for the purpose. Bonnesen Advokater drafted the necessary
documents in connection with the transaction. This transaction also
needed to be approved by the Competition Council.
Because of Danish Agro A.m.b.A.'s takeover of S.A.B. A.m.b.A.
Landbrugets Andel and the fact that Aarhusegnens Andel A.m.b.A.
until its collapse was the second largest farm supply business in
the country, the takeover of Aarhusegnens Andel A.m.b.A. gave the
Competition Authority cause for concern with regard to the market
situation after a possible takeover that could lead to a weakening
of the effective competition.
Consequently, the Competition Council approved the takeover of
Aarhusegnens Andel A.m.b.A. on 26 February 2010 on the condition
that the consortium had to offer feed factories with appurtenant
facilities at the Port of Aarhus for sale to interested competitors
through a trustee and in accordance with detailed guidelines to
ensure a transparent auction process. The purpose of this condition
was an attempt to create a competition situation which - in the
opinion of the Competition Council - would mean that the
consortium's takeover of Aarhusegnens Andel A.m.b.A. would not
materially impair the effective competition.
Concurrently with the approval of the takeover of Aarhusegnens
Andel A.m.b.A., the Competition Council finally approved Danish
Agro A.m.b.A.'s takeover of S.A.B. A.m.b.A. Landbrugets Andel. This
approval was issued unconditionally.