The acquisition of Radison Blu 1919 Hotle by Eik fasteignafélag hf. (a property developer)

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• Case number: 13/2016
• Date: 28/4/2016
• Company:
  • Radison Blue 1919 Hotel
• Sectors:
  • Constructions
• Policy Area:
  • Mergers
• Summary

  The Icelandic Competition Authority (ICA) has reviewed the merger announcement of Eik fasteignafélag hf. and Radison Blu 1919 Hotel. The transaction entails an acquisition of a large real estate company of a hotel, Eik's operation has been limited to the investment and leasing of a commercial real estate. This acquisition will lead to Eik's sole control of a hotel, as defined by the Icelandic competition act, as such the transaction is a vertical integration. Eik is one of three large commercial real estate companies in Iceland, its largest holdings are Smáratorg 3 in Kópavogur and Borgartún 26 in Reykjavík, in addition it has a diversified portfolio of properties in terms of location and types.

  The merger is a continuation of the acquisitions by the three largest real estate companies of smaller companies in the market. A further concentration in the market is likely to face the ICA's further scrutiny, the concentration level has increased significantly in the past couple of years. Eik fasteignafélag is not considered dominant in the market and the merger will not give rise to a dominant position.

  After  investigation, it is the ICA's assessment that the merger will no, in any way, result in a significant distortion of competition in the market. Therefore, there is no reason to intervene in this merger based on Article 17 c of the Icelandic Competition Act no. 44/2005.