2Agriculture, a subsidiary company of Boparan, and ForFarmers said they have decided to abandon the proposed joint venture plans.
The announcement follows the decision by competition regulator to launch an in-depth inquiry into the deal.
Both businesses said they have taken into consideration, among other things, “the current impact on their respective businesses, the costs involved, the impact this process has on both employees and farmers.”
The companies have announced plans in July to combine their animal feed milling operations in a joint venture. Between them, the firms operate 19 mills across the UK.
ForFarmers is a European manufacturer and supplier of animal feed, based in the Netherlands. 2Agriculture is one of the UK’s largest suppliers of poultry feed by volume produced and uses its production to supply feed to 2 Sisters, a company affiliated with Boparan, as well as farmers on the open market.
The Competition and Markets Authority (CMA) in December ruled that the anticipated joint venture could lead to farmers paying higher prices to feed their poultry, facing lower quality feed or worse quality of service in four local areas across East Anglia, north-western England and North Wales, following its initial investigation.
The regulator today confirmed that it will be cancelling its Phase 2 merger investigation into the deal as the companies have cancelled the proposed merger.
In a subtle rebuttal of the CMA findings, 2Agriculture and ForFarmers UK said they continue to believe that the joint venture “would have made for a robust business, with improved expertise and presence across species, to successfully meet the changing demands from the entire value chain,” including “helping farmers realise the transition towards a more sustainable way of farming with enhanced returns.”
“The proposed joint venture would have invested in driving improvements and optimising services in the most efficient manner, with a focus on further improving production efficiency and feed quality to the benefit of both farmers and end consumers,” they added.