Partial merger of Samhentir Kassagerð hf. and Kassagerð Reykjavíkur ehf.

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• Case number: 36/2020
• Date: 26/10/2020
• Company:
  • Kassagerð Reykjavíkur hf
  • Samhentir Kassagerð ehf.
• Sectors:
  • Consumer goods, supplies and etc.
• Policy Area:
  • Mergers
• Summary

  The Icelandic Competition Authority (ICA) has reviewed a merger between Kassagerð Reykjavíkur hf. (“KR”) and Samhentir Kassagerð ehf. (“SK”) where the latter company agreed to purchase the business of the former. Both parties are engaged in the wholesale of packaging products, including corrugated boxes, waxed and non-waxed cartons, and plastic packaging.

  This case concerned a horizontal merger. Following the ICA’s preliminary conclusions during the case procedure, the parties deciding to alter the underlying purchasing agreement and exclude KR’s business operations for corrugated boxes and waxed cartons from the merger. The ICA had previously concluded that competition would be harmed in those specific areas.

  The ICA granted the parties an exemption to carry out the merger during the investigation and prior to its conclusions, due to the financial difficulties of KR and external market conditions, i.a. COVID-19. The exemption to execute the merger deal was granted with several conditions to protect competition on the markets and to facilitate the potential unwinding of the deal in case the ICA would have to prohibit the merger. Due to these conditions, a part of KR’s business which was originally purchased but eventually excluded from the merger during the investigation and following the parties’ changes, was therefore transferred back from SK the purchaser and to KR as the original owner and seller.

  The final product markets in the case were therefore the market for non-waxed cartons, and the market for plastic packaging (where a further definition of potential product markets for specific plastic packaging types was left open).

  After its investigation it was the ICA's assessment that the merger would neither create nor strengthen a dominant position in any of the defined markets. Additionally, the merger was not considered liable to cause appreciable harm to competition in other ways. Therefore, there was no reason to intervene in the matter on the basis of Article 17 c of the Icelandic Competition Act no. 44/2005.