The Competition Authority has today annulled the merger of Árvakur hf., Fréttablaðið ehf. and Pósthúsið ehf. This would have resulted in Morgunblaðið, Fréttablaðið ehf., Landsprent ehf. (Árvakur's printing house) and Pósthúsið ehf. (which now handles the distribution of the Fréttablaðið) would have been owned by the same entity, Árvakur. Furthermore, 365 miðlar ehf. would have joined Árvakur's shareholder group as its largest shareholder with a stake of just over a third.
The Competition Authority's conclusion is that the merger would have resulted in very serious restrictions on competition in the markets for newspaper publishing, newspaper advertising, newspaper distribution and newspaper printing. The restrictions on competition would have primarily consisted of the creation of a dominant market position or a monopoly in all of the relevant markets, as the two main competitors in those markets would have merged. As a result, Morgunblaðið and Fréttablaðið would have been owned by the same entity and would have lost their independence from one another. This would have the effect of reducing the diversity of content and approach of each newspaper and would constitute a significant detriment to readers.
The case was argued that the merger was inevitable due to the difficult financial situation of the companies concerned, but the Competition Authority can, under certain conditions, authorise a merger on that basis. Although it was clear that the financial situation of companies in this market was difficult, the merging parties failed to demonstrate that these conditions were met.
The Competition Authority sent a statement of objections to the merger parties on 4 December, which set out the Authority's preliminary assessment and gave them the opportunity to submit their comments. The companies responded by requesting to hold talks on whether the merger could be conditionally approved instead of being annulled. The Competition Authority was prepared to consider whether it was possible to conditionally authorise the merger and cooperation in newspaper printing and distribution. The merger parties' proposals were based on the idea that the Fréttablaðið, along with the Morgunblaðið, would be printed at Landsprent, which would remain the property of Árvakur. However, 365 miðlar ehf. would not acquire a stake in Árvakur. Newspaper distribution would be handled by Pósthúsið ehf., which would be jointly owned by Árvakur and 365 miðlar ehf. Talks on this took place mainly in December. Due to repeated requests from the merging companies to the Competition Authority to postpone the handling of the case, their position on possible conditions was not available until February. Discussions between the companies and the Competition Authority concluded without an agreement being reached on the conditions. One of the companies was not prepared to agree to the conditions necessary to prevent a restriction of competition. The merger is therefore annulled.
See the decision for details No. 6/2009.
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