The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of GfK by Advent. The approval is conditional upon full compliance with the commitments offered by Advent.
Advent, through its subsidiary NielsenIQ, is the leading provider of retail measurement services for fast moving consumer goods in the European Economic Area (‘EEA’). NielsenIQ also provides consumer panel services. GfK is the leading provider of consumer panel services in the EEA, and it is active in retail measurement services for non-fast moving consumer goods.
The Commission’s investigation
The Commission had concerns that the transaction, as initially notified, would have raised serious competition concerns (i) in the market for retail measurement services for fast moving consumer goods; and (ii) in the market for consumer panel services.
The Commission’s investigation found that:
- The merged entity would have been the sole provider of consumer panel services in Germany and Italy.
- NielsenIQ would likely not have provided consumer panel services to rivals that need such services to compete in the market for retail measurement services for fast moving consumer goods.
- NielsenIQ would likely have bundled (i) its consumer panel services across several EEA countries; and (ii) its consumer panel services and retail measurement services for fast moving consumer goods, thus foreclosing its competitors in the markets for consumer panel and retail measurement services.
The proposed remedies
To address the Commission’s competition concerns, Advent offered to:
- Divest GfK’s global consumer panel services business, with the exclusion of its operations in Russia (in order to facilitate the execution of the divestiture). This will enable any purchaser to run the divested businesses as a viable competitive force in the respective markets on a lasting basis.
- Provide transition services to the purchaser following the divestment, such as rebranding, access to IT services or access to support functions, for a transitional period of up to one year, which may be extended by up to two additional years.
These commitments fully address the competition concerns identified by the Commission. They remove the overlaps existing between NielsenIQ’s and GfK’s activities in the German and Italian markets for consumer panel services as well as the possibility for NielsenIQ to foreclose competitors in the markets for (i) retail measurement services for fast moving consumer goods and (ii) consumer panel services.
Following the positive feedback received in the context of the market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments. Under supervision of the Commission, an independent trustee will monitor their implementation.
Companies and products
Advent, headquartered in the US, is an investment fund. Its wholly owned subsidiary NielsenIQ is active in market research data. It also provides retail and consumer panel services as well as customized market research services.
GfK, headquartered in Germany, is active in market research services. It also provides retail and consumer panel services, as well as customized research services.
Retail measurement services, consumer panel services and customized market research services are types of market research services that focus on understanding purchasing patterns in the retail sector. While retail measurement services show sales trends based on point-of-sale data, consumer panel services provide insights into consumer behaviour, showing which consumers have been buying more or less of a specific product. Customized market research services aim at understanding the underlying causes of a sales trend.
Merger control rules and procedures
The transaction was notified to the Commission on 11 May 2023.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). If commitments are proposed in Phase I, the Commission has 10 additional working days, bringing the total duration of a Phase I case to 35 working days, such as in this case.
More information will be available on the Commission’s competition website, in the public case register under the case number M.10860.