The Competition Authority has recently been considering the acquisition of Skífan ehf. by Sena ehf., which took place at the end of last year. By decision No. 12/2009 The Competition Authority has set conditions for the merger.
Sen is required to sell Skífan to an unrelated party. During the sale process for the Disc and until the Disc is sold, the merging parties have agreed to comply with certain conditions intended to prevent the anti-competitive effects arising from the merger while the Disc remains in Sena's ownership.
The conditions in question include, inter alia, a clear operational separation between Sena and Skífan, and their aim is, m.a. to ensure that transactions between the merging parties in the markets concerned are conducted as if they were unrelated parties, thereby protecting competition in both the wholesale and retail markets.
Background information:
The merger involves the acquisition by Sena ehf. of 100% shares in Skífan ehf., and notification of the merger was received by the Competition Authority on 21 November 2008. By letter received by the Competition Authority on 16 March 2009, it was announced that changes had occurred in the ownership of Sena with the signing of an agreement between Íslensk afþreying hf. as seller and Garðarshólmi rekstrarfélag ehf. as buyer of the company. With that transaction, ties were severed with another major retailer, Haga hf., which operates, among others, the Hagkaup stores.
The Competition Authority considered that the merger would lead to a strengthening of Senu's dominant market position in the market for music publishing, the wholesale and distribution of music, and the wholesale of computer games. The effects of this strengthening of Senu's position in these markets would also be felt in the markets in which Skífan operates, namely the retail of music and computer games. The Competition Authority also considered that there was reason to believe that competition-reducing problems could arise in the markets covered by the transaction following the merger. For the above reasons, competition would be reduced in the relevant markets, and the Competition Authority concluded that the merger was contrary to the objectives of the competition law. In light of this, the Competition Authority considered that there was cause for intervention in respect of the merger, which would involve its annulment or the imposition of conditions.
Negotiations with the new owners of Sena ehf. subsequently led to the merging parties entering into a settlement in the case on the basis of Article 17(f) of the Competition Act and Article 22 of the Competition Authority's procedural rules. No. 880/2005.
On that basis, a decision has now been taken in the case and the merger has been subject to the conditions described above.
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