OFT to decide on merger of 3663 and Brake Bros

The Office of Fair Trading (OFT), which is looking into the proposed merger of food suppliers Brake Bros and 3663, said last week it would reach a decision by mid-June.

The OFT automatically looks at mergers when they would mean one company holding more than 25% of its market.

Together, 3663 and Brake Bros would own nearly 50% of the UK wholesale frozen food market, making it the biggest supplier to UK restaurants, and giving rise to competition concerns.

The South African service and investment group Bidvest, which owns 3663, sought consent from the OFT to merge with Brake Bros in March after Brake Bros chairman Frank Brake announced his intention to retire.

The Brake family owns 58% of the business and wishes to diversify its investment. Credit Suisse First Boston was brought in to conduct a strategic review, including a likely sale of the company.

Last week Bidvest issued new shares equivalent to 4.2% of its issued share capital in a move to facilitate future takeovers.

Brake Bros, which was founded by brothers Peter, Frank and William in 1958, is valued at £386m.