Bulgaria Commission for Protection of Competition (CPC) said on May 2 that it has approved British American Tobacco’s (BAT) proposed deal with former state tobacco monopoly Bulgartabac to buy three cigarette brands and Bulgartabac’s distribution subsidiary.
Under the agreement, announced last month, BAT would acquire the Victory, Eva Slim and GD brands and full control of Express Logistics and Distribution in a deal estimated to be worth more than 100 million euro. At the time, BAT said that the acquisition would boost its market share in Bulgaria to 40 per cent, up from the 12 per cent it currently holds.
CPC said that the proposed deal would not “limit, impede or infringe on competition”, nor would it give BAT a dominant market position because the company had at least three competitors in all price segments, meaning that it could not “operate independently of its rivals and customers.”
As regards the distribution company, it had two large competitors on the market and any attempts to manipulate the wholesale market in favour of BAT would only likely lead to it losing market share and profitability, without necessarily increasing the market share or margins of BAT’s brands, the regulator said.
BAT, which had previously shown interest in acquiring Bulgartabac in the aborted privatisation tender in 2005 and during the former monopoly’s sale in 2011, aims to close the deal by end-June.