Ecolab (ECL) Releases Response to UK Competition & Markets Authority’s Decision to Oppose Previously Announced Holchem Acquisition

The United Kingdom’s Competition and Markets Authority (CMA) announced the results of its review of the merger of Ecolab (NYSE: ECL) and Holchem, a UK-based cleaning products business Ecolab acquired in late 2018. The CMA concluded that the merger may result in a substantial lessening of competition in the UK and could lead to an increase in prices, as well as a lowering of the quality of products and/or service for customers in the food and beverage industry in the UK. As a result, it has ordered Ecolab to divest Holchem.

Ecolab strongly disagrees with the CMA’s decision and continues to believe that a merger of the two companies would result in the increased availability of innovation, better customer service and stronger expertise across the food and beverage industry, leading to better outcomes for consumers.

Commenting on the decision, Douglas M. Baker, Jr., Ecolab’s chairman and chief executive officer said, “We strongly believe that the UK market would remain highly competitive following the merger and are disappointed with the CMA’s findings. We are reviewing the full report provided by the CMA in detail and will carefully consider our options and next steps. We will continue to do what is right for our customers and associates, and to expand our ability to bring the latest technologies and the highest food safety standards to the food and beverage industry.”

Ecolab announced the acquisition of Holchem Group Limited, a UK-based supplier of hygiene and cleaning products and services for the food and beverage, foodservice and hospitality industries on December 5, 2018. Holchem operates in the UK and Ireland, with sales that were approximately £43 million ($56 million) at the time of the announcement.

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