The Australian Competition and Consumer Commission will not take any action on the proposed acquisition by Kellogg (Aust) Pty Ltd of Day Dawn Pty Ltd.
Day Dawn, a Queensland-based maker of breakfast cereal biscuits and muesli bars, operates mainly as a supplier to the generic and house-brand markets.
ACCC Chairman Professor Allan Fels said the barriers to entry into the industry were not likely to be high, as shown by the recent history of new entry to the industry.
And even after the acquisition, Kelloggs will be the second-largest player in the nutritious bar market, substantially smaller than Uncle Tobys.
While Kelloggs is still the largest participant in the breakfast cereal market, the share to be acquired in the present acquisition is minimal.
The ACCC considered that the acquisition was unlikely to substantially lessen competition in either the market for breakfast cereal or nutritious bars. It will continue to monitor the industry and would be interested in considering any future acquisitions in these markets.
