KPPU Says All Clear for Unilever Acquisition

Jakarta Globe | October 14, 2010

Jakarta. The Business Competition Supervisory Commission says it has no objection for Unilever Indonesia Holding BV to acquire Sara Lee Body Care Indonesia after it found no evidence of monopolizing practices.

The commission, also known as the KPPU, began a comprehensive evaluation of the companies’ products on July 9, particularly roll-on deodorants and men’s hair cream, after a preliminary study failed to reach a conclusion.

Under competition regulations, the merged company is not allowed to have more than a 50 percent share of the market for its products.

On Thursday, the KPPU said in an e-mailed statement that its evaluation had found no anticompetitive behavior that would negatively affect consumers because the markets for each product made it difficult to fix prices.

With roll-on deodorants, the proposed merger was found not to impact on other players’ entry into the market.

“Making deodorants does not require highly sophisticated technology, so the barriers to enter the market is relatively low,” the KPPU said.

As for men’s hair cream, the commission said the already saturated market would not allow for one company to dominate the market.

Franky Jamin, general manager at Unilever Indonesia, said the KPPU had never objected to the takeover bid.

In September 2009, Unilever’s parent company announced that it would acquire Sara Lee’s personal care brands in a deal worth $1.9 billion.

The KPPU requires companies to notify it of proposed mergers and acquisitions, or face billions of rupiah in fines.