The Competition Council has made a decision regarding the merger of the retail division of Tæknival hf. with Norðurljós hf. (Skífan ehf.). The Council concluded that the merger, as defined by the merging parties, would result in Baugur Group hf. and Eignarhaldsfélagið Fengur hf./Fons eignarhaldsfélag hf., together with their associated undertakings, acquiring control of Norðurljós. Furthermore, the merger would lead to, or strengthen, a dominant market position for companies under the control of Baugur and Fengur/Fons in the wholesale and retail market for audio CDs, video discs and computer games. The merger would reduce competition in these markets and would therefore be contrary to the objectives of competition law and the interests of consumers. A preliminary investigation by the Competition Authority, which was presented to the parties on 13 May, reached the same conclusion.
If the competition authority considers that a merger hinders effective competition, it can annul the merger or impose conditions on it.
Early this month, the merger parties informed the competition authorities that on 28 May, an unaffiliated third party made a binding offer to acquire all of the shares in Skífan, which had been accepted. Following this, discussions took place between the merging parties, the new purchasers of Skífan and the competition authorities regarding the conditions for the merger of Tæknival's retail division with Skífan. These have led to the conclusion that the Competition Council has imposed conditions on the merger in its decision. Through the sale of Skífan to an unrelated party and upon fulfilment of the aforementioned conditions, the Competition Council believes that the merger's harmful effects on competition will be eliminated.
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