In July 2011 Invalid The Competition Authority approved a merger involving Stjörnugrís's takeover of the assets of the companies that operated the Brautarholt and Grísagarður pig farms. The pig farms had come into the ownership of Arion Bank after the companies that ran them went bankrupt. It was considered that with Stjörnugrís's purchase of the pig farms, the company had acquired a dominant position in the pig farming market and strengthened its dominant position in the pig slaughter market. This, together with the group's strong position in the egg market, also strengthened its position vis-à-vis feed suppliers, meat processors and grocery stores. The Competition Authority did not consider it proven that the conditions for the 'company in difficulty' rules were met. These rules allow a merger to be authorised on the grounds of a company's serious financial difficulties.
Stjörnugrís and Arion Bank appealed the decision of the Competition Authority to the Appeal Board on Competition Matters and made various observations on the authority's procedure and conclusion. With ruling However, the appeal board's decision from November 2011 upheld the decision of the Competition Authority.
Arion banki and Stjörnugrís appealed the decision of the appeal board to the Reykjavík District Court, which delivered its judgment last April. The district court agreed with the competition authorities that the merger in question distorted competition and that it was therefore right to annul it. Furthermore, the competition authorities' proceedings were lawful. As a result, the Competition Board was acquitted of the claim to annul the aforementioned appeal board ruling. Arion banki and Stjörnugrís appealed to the Supreme Court, which today upheld the district court's judgment, referring to its reasoning.
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