The Competition Authority annuls the merger of Stjörnugrís hf. with Rekstrarfélagið Braut ehf. and LS2 ehf.

In the decision of the Competition Authority No. 3/2011 Merger of Stjörnugrís hf. with Rekstrarfélagið Braut ehf. and LS2 ehf. The Competition Authority authorised the takeover of certain assets of the companies that have run the Brautarholt and Grísagarður pig farms by Stjörnugrís. The pig farms had come into the ownership of Arion Bank after the companies that ran them went bankrupt. The Competition Authority considered it impossible to intervene in the merger due to competition law rules concerning companies in difficulty.

The decision of the supervisory authority was appealed to the Competition Appeals Tribunal, which delivered its ruling on 9 June 2011 in the case. No. 1/2011 Búvangur et al. v. The Competition Authority. The Committee confirmed the Competition Authority's assessment 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. However, the Commission considered that it had not been proven that the conditions for a company in decline were met. For these reasons, the decision of the Competition Authority was annulled and the case was remitted to the authority for further proceedings and a new decision.

The Competition Authority has now investigated the matter again. Taking into account the data collection and the ruling of the appeals board, the authority's decision, published today, concludes that it has not been proven that the conditions of the rules on a failing firm are met. The Competition Authority cannot see that it is likely that conditions exist which would be compatible with the merger but are also sufficient to remedy the competitive problems it gives rise to. For these reasons, the Competition Authority has annulled the merger. The Competition Authority will obtain information from the merging parties regarding their implementation of the merger's annulment. Based on that information, a decision will be made on whether it is necessary to exercise the power under Article 17(e) of the Competition Act No. 44/2005 and issue a specific decision against the merging parties to restore the conditions for effective competition.