BRUSSELS, Belgium (AP) — The European Union on Friday approved Kraft Foods Inc.'s acquisition of French food Groupe Danone SA's cookie and cereal snack division on condition some units in Spain and Hungary are sold off.
EU Competition Commissioner Neelie Kroes said she was satisfied that competition ''will remain vigorous'' despite the deal, which will give Kraft a greater market share in the 27-nation bloc.
The euro5.3 billion (US$7.8 billion) deal in July aims to give the U.S. food and beverage maker a bigger international foothold.
EU regulators said their approval was given after Kraft agreed to sell off ''a range'' of Spanish cookie and biscuit brands as well as a plant in Spain and a Hungarian chocolate bar brand.
They said the combination of the two in the Spain ''could have significantly reduced competition'' in the Spanish market. A similar concern existed in Hungary.
The deal had been opposed by the French government. In 2005, then French Prime Minister Dominique de Villepin vowed to defend Danone against any takeover of its businesses by foreign companies.
Shedding the cookie division would allow Danone to concentrate on its dairy products and water unit, company officials have said.
The deal gives Kraft brands that are famous in Europe, such as LU, Petit Dejeuner, Tuc and Mikado. The Northfield, Ill.-based company already owns such famous chocolate bar brands like Milka, Cote d'Or and Toblerone.
The Danone cookie division would continue to be based in France and Kraft agreed to keep it in operation for at least three years after the transaction is signed.
The deal is expected to be completed in the final quarter of 2007.
