The Competition Council has annulled the takeover of Fóðurblöndan hf. by Mjólkurbú Reykjavíkur svf. and Lýsi hf. The Council considers that the merger resulting from the takeover would distort competition and lead to a dominant market position for the Dairy Society on the feed market, as the two companies together have a combined market share of approximately 75%.
On 29 June 2001, Búnaðarbanki Íslands hf. and the bank's holding company, Grænibær ehf., sold all their shares in Fóðurblöndunni to Mjólkurfélag Reykjavíkur and Lýsi. Mjólkurfélagið acquired 75% of the share capital in Fóðurblöndunni, while Lýsi's shareholding was 25%. With this acquisition, Mjólkurfélagið gained control of Fóðurblöndunni.
The main activities of Mjólkurfélagið and Fóðurblöndan are similar. The Competition Council considers that the market concerned in this case, in broad terms, is the market for the import of feedstuffs, the production and sale of poultry, pig and ruminant feed.
In this market, Mjólkurfélagið and Fóðurblandan together had a combined market share of approximately 75% in the year 2000. The Competition Council considers that this significant market share advantage of the merged entity, by itself, provides a very strong indication that the merger has an adverse effect on competition.
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