British regulators are investigating General Mills' proposed sale of its European dough business over concern the move could significantly lessen market competition in the U.K.
The Competition and Markets Authority (CMA) issued an initial enforcement order last week as it explores whether the buyer, Cerelia, would have too much control over the refrigerated and frozen dough market in the United Kingdom once the deal closes.
Golden Valley-based General Mills in November announced plans to sell its dough brands sold in Germany, the U.K. and Ireland to Cerelia. Jus-Rol and Knack & Back are two of its better-known European brand names.
But the CMA is now investigating whether Cerelia's takeover, specifically of the Jus-Rol brand, "has resulted or may be expected to result in a substantial lessening of competition in any market or markets in the United Kingdom," the order said.
The investigation is focused on Cerelia's potential market power after the acquisition rather than General Mills' actions in the matter.
The enforcement order requires Cerelia to keep its business separate from the Jus-Rol fresh and frozen dough brand and forbids the two brands from sharing industry knowledge.
The regulatory agency said such an order is "used to ensure companies remain independent while our work is ongoing."
France-based Cerelia owns a number of fresh and frozen dough brands that are sold in dozens of countries. Cerelia did not respond to a request for comment.
The CMA has not set a timeline for deciding whether it will launch a full investigation. Under British law, "mergers that could substantially lessen competition can be prohibited or have certain conditions imposed," according to the CMA.
General Mills initially targeted midyear to complete the sale. A spokeswoman said Wednesday the company expects the sale to proceed as planned.
The sale is part of a broader effort by General Mills to focus on its largest market, North America. The food giant sold its European Yoplait yogurt business last year in exchange for full control of the Yoplait brand in Canada.
