The Commerce Commission has granted clearance for Heinz Wattie's to purchase food and coffee business Cerebos Gregg's - subject to divestment undertaking.

The divestment will include licenses for the supply of tomato sauce and ketchup, barbecue and steak sauce, as well as the F. Whitlock & Sons brand for the supply of Worcestershire sauce in New Zealand.

In November, the US company applied to takeover the company when the brand's manufacturer put it on the market in April.

The Commerce Commission said its ruling was based on competition issues in the national markets for the manufacture, importation and wholesale supply of a number of table sauces to supermarkets and the food service industry.


"We believe the merger of the number one and two wholesale suppliers to supermarkets of red sauce, barbecue sauce, steak sauce and Worcestershire sauce would be likely to result in a substantial lessening of competition in each of these markets," Commission chair Dr Mark Berry said.

"However, we consider the divestment offered by Heinz Wattie's is sufficient to remedy the competitive harm the merger would cause and we have given clearance to the merger subject to the divestment undertaking."

Cerebos Gregg's is owned by Japanese food and beverage company Suntory Beverage & Food, which operates throughout Australasia.

It put its New Zealand food and instant coffee division on the market in April last year and announced it had reached a deal with Heinz Wattie's in October.

The Commission said it was satisfied there were no competition concerns in the market for Asian sauces, condiments, gravies, powered beverages and soy sauce.