Jakarta, 13/02/2018 – KPPU concluded that the acquisition of ADM Cocoa Business (ADM) by Olam International Limited (Olam) does not lead to allegations of monopolistic practices or unfair competition. The Opinion is made by KPPU on February 13, 2018 based on the Merger Assessment of the said case.

The assessment was conducted on the share acquisition of ADM Cocoa Business by Olam International Ltd through the purchase of shares in 2 (two) major companies, namely ADM Singapore Pte Ltd shares placed in ADM Cocoa Pte Ltd, and ADM Eupoort BV shares placed in ADM Cocoa International BV.

Both companies are operating in the chocolate production sector. Olam is a Singapore-based company that trades commodities such as peanut, cacao, spices and vegetables, coffee and cotton to various countries. While ADM is a company engaged in various fields such as agriculture, logistics, and food manufacturing. Its chocolate business is implemented through two subsidiaries, namely ADM Cocoa Pte Ltd and ADM International BV. The product produced by ADM Cocoa Business includes cocoa powder, cocoa powder, cocoa liquor, and cocoa butter.

KPPU in its Assessment found that ADM Cocoa Business’s activities have advanced product characteristics (in a series of production) on the production of Olam International Ltd (advanced cocoa bean processed products). Therefore, KPPU concludes that the acquisition is located in different markets, but has the potential of vertical integration (forward integration) for Cocoa seed products and its derivative products, namely cocoa liquor, cocoa powder and cocoa.

In the Assessment process, KPPU measures the impact of acquisition through analysis of market share in Cocoa seed industry and its derivative products (i.e., cocoa liquor, cocoa powder, and cocoa) to determine whether the parties are dominant enterprises in each industry. In the analysis, KPPU found that Olam International and ADM Cocoa Business are not dominant enterprises for each industry (since the market share of the business group is only about 10%).

Based on the Guideline on Merger Acquisition, it is explained that if the parties are not dominant enterprises in each industry, there is no fear of monopolistic practices and or unfair competition. Therefore, KPPU believes that the acquisition of ADM Cocoa Business by Olam International Ltd does not result in monopolistic practices and or unfair business competition.