Under pressure from the Federal Trade Commission, J.M. Smucker Co. has decided to drop its proposed acquisition of Wesson cooking oil from Conagra Brands.

Earlier in the week, the FTC voted 2-0 to file an administrative complaint and authorize staff to seek a temporary restraining order and preliminary injunction in federal court to stop the proposed $285 million acquisition. The Commission charged that the proposed merger would likely reduce competition in the U.S. market for branded canola and vegetable oils sold to grocery stores and other retailers.

The FTC issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest.

The J. M. Smucker/Conagra agreement was previously announced on May 30, 2017.

“While we disagree with the FTC's conclusion, we have mutually determined with Conagra that it is not in the best interest of either party to expend the anticipated significant additional time and resources to challenge the FTC's administrative complaint,” Mark Smucker, chief executive officer, said in a statement.  “We believe the FTC underestimated the significant role that private label brands play in the oils category, which account for approximately 50 percent of all cooking oil sales and hold significantly higher market share at some retailers. This transaction was expected to provide significant cost synergies to ensure that branded oil products would remain competitive in the market.”

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