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Merger of N1 hf. and Festi hf.

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  • Case number: 8/2019
  • Date: 3/4/2019
  • Company:
    • N1 hf.
    • Festi hf.
  • Sectors:
    • Consumer goods, supplies and etc.
  • Policy Area:
    • Mergers
  • Summary

    The Icelandic Competition Authority has published Decision no. 8/2019, the Merger of N1 hf. and Festi hf. The decision is based on a Settlement between the ICA and the merging parties, dated July 30, 2018. N1 is the largest fuel retailer in Iceland. Festi (today Hlekkur ehf.) is the second largest retailer of groceries in Iceland and operates the grocery stores Krónan.

    The investigation of the case revealed that the merger, without conditions, would be likely to harm competition significantly. It was the assessment of the ICA that the merger would lead to the elimination of Krónan as a potential competitor in the fuel market, lead to local disruption of competition in certain geographical areas, have detrimental vertical effects in the fuel market, and entail increased common ownership between competitors in both the fuel and grocery markets.

    The investigation concluded with the signing of the aformentioned Settlement. According to the conditions of the Settlement, N1 undertook to take action aimed at strengthening and protecting active competition in the fuel and grocery markets and responding to the above-mentioned distortion of competition that would otherwise have been caused by the merger.

    The conditions of the Settlement include the sale of assets in the fuel market to a new competitor, since Krónan was considered likely to have entered the market in the absence of the merger. Following the sale process and examination by an independent trustee appointed in August 2018 to supervise the implementation of the Settlement, the ICA approved the buyers of the sold assets in February and March 2019.

    The decision is based on the aforementioned Settlement and its purpose is to provide merging parties, their competitors, and other interested parties, with information and explanations on the purpose of the measures presented in the Settlement.