TRALEE-BASED food group Kerry has decided to appeal the Competition Authority's decision to block its proposed €165 million acquisition of rival Irish company Breeo Foods.

Kerry informed the stock market yesterday that it had filed a notice of appeal in the High Court against the Competition Authority's decision to reject the deal on August 29th.

The competition body blocked the merger on the grounds that it would "substantially lessen com-petition" in the consumer foods market, in particular in rashers, processed cheese and non-poultry cooked foods.

This was only the third time that the Competition Authority had blocked a merger. Kerry's decision to appeal is the first time that a ruling from the authority to block a merger has been challenged in the courts.

The case is expected to be heard by the High Court within two months. Kerry is being advised by Dublin-based law firm Mason Hayes Curran.

A spokesman for Kerry said the company believed it had "good grounds for appeal", but declined to elaborate further.

Established in 2006, Breeo is the consumer foods division of Reox Holdings, which was spun out of the Dairygold Co-operative Society and also holds property and DIY assets. Breeo's brands include Shaws, Dairygold, Galtee and Mitchelstown.

Kerry announced its intention to acquire Breeo on March 13th, subject to regulatory approval.

The company paid a €20 million non-refundable deposit to Reox at that time.

Breeo and Reox declined to comment on Kerry's decision to appeal the competition ruling. Breeo has been listed as a notice party in the proceedings.

Kerry's share price was down 0.39 per cent in Dublin yesterday at €19.72.