Merger of Hagar hf., Olíuverzlun Ísland hf. and DGV ehf.

The Icelandic Competition Authority has published decision no. 8/2019, the Merger of Hagar hf., Olíuverzlun Íslands hf. (Olís) and DGV ehf. The decision is based on two Settlements between the ICA and the merging parties, dated September 8 and 11, 2018. Hagar are the largest retailer of groceries in Iceland. Hagar operate the discount store Bónus and the supermarket Hagkaup. Olís is one of the largest retailers of fuel in Iceland. DGV is a real-estate company.

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 strengthening of Hagar’s dominant position in the market for retail of groceries, 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 aforementioned Settlements. According to the conditions of the Settlements, Hagar 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 market for retail of groceries and retail of fuel. The main focus of the asset sale is to prevent that the merger would strengthen Hagar’s dominant position in the retail of groceries. Following the sale process and examination by an independent trustee appointed in October 2018 to supervise the implementation of the Settlement, the ICA approved the buyers of the sold assets in November 2018. From that time Hagar were permitted to implement the merger.

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