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Unilever/Alberto Culver deal cleared in first phase in the UK, Ireland and South Africa

The acquisition by Unilever of the Alberto Culver personal care brands created overlaps in several jurisdictions, typically in hair care, hair styling and body care. The deal has been cleared unconditionally in first phase, despite material overlaps, both by the Irish Competition Authority and by the Competition Commission in South Africa. In the UK the parties overlapped in the supply of bar soaps, hair styling and hair care products, and the OFT considered whether these overlaps would lead to possible unilateral effects. Both the OFT and CRA developed calculations of price pressure indicators (GUPPIs) for the parties' brands in all affected markets, and debated their interpretation in a merger which did not concern retailers but suppliers of branded consumer goods at a further upstream level of the market. This was the first time that price pressure indicators have been used extensively by the OFT in a wholesale (not retail) merger. In the markets for hair styling and hair care products the OFT concluded the merger would not lead to any SLCs, because the evidence suggested the parties' brands are not particularly close competitors. In bar soaps the OFT concluded for a possible SLC given the parties' combined market share, some evidence suggesting closeness of competition, and concerns from third parties. While the GUPPIs were relatively low, they were not sufficiently low to rule out possible unilateral effects when considered in the round with other evidence. To address the OFT's concerns Unilever has offered to remove the overlap by disposing of the Alberto Culver brands (Cidal, Wright and Simple) in bar soaps, and the deal has been cleared by the OFT subject to the divestment of these brands.

A CRA team including Cristina Caffarra, Serge Moresi, Ian Small and Ugur Akgun assisted Unilever in Ireland, South Africa and the UK.

See OFT press release for further details.

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