The merger of Reginn hf. and Ósvör ehf. (both commercial real estate leasing company)

The Icelandic Competition Authority (ICA) has reviewed the merger announcement of Reginn hf., Ósvör ehf. and CFV 1 ehf. The companies operate in the market for leasing of commercial real estates.

After the transaction Reginn hf. will have a portfolio consisting of 330.000 square meters of commercial real estates. The company is the second largest in the market for leasing of commercial real estates to parties unrelated to the lessor. Its largest holdings are Smáralind and Egilshöll, in addition it has a diversified portfolio of properties in terms of location and types. The merger is a continuation of the acquisition by the three largest real estate companies of smaller companies in the market. The ownership of the large companies is concentrated; the largest shareholders of them are often the same pension funds, financial companies and other professional investors. Such a concentrated ownership can cause suboptimal incentives, which may harm the outcome of the market. The ownership structure of the market and the exercise of shareholders rights can face further scrutiny by the ICA.

The ICA has defined this market as leasing of commercial real estate to parties unrelated to the lessor in the capital area. After an investigation, it is the ICA's assessment that the merger will not, 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.