The Competition Authority approves the merger of Kvika bank hf. and Gamma Capital Management hf.

In the decision of the Competition Authority no. 5/2019 , published today, is the published outcome of an assessment of the competitive effects of the merger of Kvika banki hf. („Kvika“) and Gamma Capital Management hf. („Gamma“). The assessment is carried out pursuant to Article 17 of the Competition Act.

Kvika holds a banking licence, but the bank's main focus is on asset management and investment banking (i.e. market-making, corporate advisory and lending). Gamma is an investment fund management company within the meaning of the Financial Undertakings Act No. 161/2002. Gamma's operations are primarily focused on asset management, but the company also provides corporate advisory services.

Given the operating activities of the merger parties, this merger concerns almost exclusively asset management, as Gamma's operations in other financial services sectors also offered by Kvika are extremely limited.

Following an investigation, the Competition Authority has concluded that there are no indications that the merger will lead to the creation or strengthening of a dominant position for the merging parties in any market. Furthermore, it is not considered that competition in the markets will otherwise be significantly impaired.

With regard to the market for the management of investment funds (available to the public), m.a. regard has been had to the fact that this concerns the merger of two relatively small players in the market and the resulting increase in market share concentration is relatively small. With regard to the market for the management of funds for professional investors, the merging parties.a. strong competition from the three major commercial banks, the custodial role of general pension funds and other well-capitalised players, and the fact that a considerable number of smaller firms offer fund management for professional investors. Furthermore, it is significant in this context that the three major commercial banks are each significantly larger than the combined entity of the merger parties and therefore enjoy far greater financial strength than the combined company.

The Competition Authority's overall conclusion is that this merger does not warrant intervention.