Merger of Vátryggingarfélag Íslands hf. (VÍS) and Fossar fjárfestingarbanki hf.

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• Case number: 27/2023
• Date: 8/8/2023
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• Summary

  With this decision, a position was taken on the purchase of Vátryggingafélag Íslands hf. ("VÍS") of all the share capital in Fossar fjárfestingarbanki hf. ("Fossar") wich was deemed to be a merger within the meaning of Article 17 of the Competition Act no. 44/2005. The merger was officially notified to the Icelandic Competition Authority (”ICA”) on May 23, 2023. The notification obligation became active on June 14, 2023, and legal deadlines began to run on June 15, 2023.

  The investigation by ICA revealed that the effect of the merger would primarily be on the asset management market. Other markets in the case would not be affected by negative horizontal effects, as was the case in this case, nor that the possible vertical or conglomerate effects of the merger would be detrimental to competition. It was clear that merged company could become a powerful player in the asset management market. It was also clear that there are more powerful competitors in that market, as indicated in the merger register.

  In this regard, it can be pointed out that in the decision of the ICA no. 5/2019 Merger of Kvika bank hf. and Gamma Capital Management hf. the conclusion of the inspection was that four big commercial banks in the market for asset management held a combined 80-90% of the asset management market. There was no evidence that the situation had changed in a significant way. It can also be assumed that clients, especially institutional investors, provide competitive restraint as buyers of the respective services. It was also noted that there were no negative comments about the merger from market participants.

  It was the conclusion of ICA that there were no grounds for intervention regarding the transactions. Thus, there were no evidence to suggest that a dominant position was being created or strengthened in the specified markets of the case, or that competition would be disrupted in other respects in a significant way.