The Competition Authority has received a merger notification regarding the acquisition by Festi
Fasteigna ehf. has acquired the grocery shop of Ísborgar verslanir ehf. at Hallveigarstíg 1.
Reykjavik. The business has been operated under the name Super1. Festi real estate
is a subsidiary of Festi hf., which owns and operates, among other things, the Krónan and N1 stores. Intends
Establish a shop under the Krónan brand in the premises. At the same time
In the merger notification, Festi has requested an exemption from the provision.
competition law which prohibits the implementation of mergers while the regulator is reviewing them.
The request is justified, inter alia, by reference to the fact that the wait for a final decision
would probably lead to disruption of the shop's operations due to poor
the seller's financial position.
Based on the evidence presented, the Competition Authority's assessment is that it is clear that
the financial position of Ísborgar verslanir ehf. is poor and it is foreseeable that
the company cannot maintain the operation of the shop at Hallveigarstíg 1 to
longer term. For that reason, there is a risk that competition in the grocery market in the near future
the vicinity of the shop will not suffer at least temporary damage if not
granted an exemption to carry out the merger. In order to ensure
The Competition Authority considers it important that it is ensured that
the operation of the shop is maintained in a satisfactory manner at the time when
for the regulator's investigation of the merger. It is therefore a condition and a prerequisite.
the exception, that it is ensured the business is in operation during the period and that
competition and consumers will not be harmed by the implementation of the merger. That
It is also a condition of the exemption that the merger parties guarantee that there will not be
take action to make it impossible to unwind the merger should it come to
so that it does not need to be annulled.
The Competition Authority therefore considers that the grounds are met for granting the exemption with
the above-mentioned conditions.
Those who wish to make comments regarding the merger are advised to
Send such comments to the email address samkeppni@samkeppni.is for 23rd June.
Background information
The background to this case can be traced to a settlement with Haga hf., dated 11.
In September 2018, the Competition Authority approved the company's merger with
Olíuverzlun Íslands hf. and DGV ehf., pursuant to the decision No. 9/2019. One of the conditions of the settlement was that Hagar would
sell certain Bonus stores in the capital region. Their buyer
The parent company of the stores was Ísborg ehf. The parent company of Ísborg verslanir ehf. In the spring of 2019, the company began
the operation of three stores under the Super1 brand which were previously
Bonus stores, i.e. on Smiðjuveg in Kópavogur and at Faxafen and Hallveigarstíg in
Reykjavík. Their operation did not go as planned and Ísborg has already closed.
the shops on Smiðjuveg and Faxafeni.
In connection with the takeover of the Haga stores, Ísborg submitted to a condition with
settlement with the Competition Authority, dated 29 November 2018, which was intended to
to ensure the operation of discount stores at the locations for a specified period
minimum period. The agreement also stipulated that if the assets were
sold to a third party during this period, the buyer would need to fulfil
the same duties as under the settlement with Haga of 11 September 2018.
For that reason, Festi's purchase of the Ísborgar shop on Hallveigarstíg is not
subject only to merger control pursuant to Article 17 of the Competition Act, but also
because an independent expert and the Competition Authority assess Festi as suitable
to the buyer in accordance with the terms of the aforementioned settlement. It provides, inter alia, for
The buyer shall be considered independent of Haga and operate a discount store.
An independent expert and the Competition Authority assessed and considered Festi
a qualified purchaser within the meaning of the settlement of 29 November 2020.
From the above, the entry of a new player into the grocery market is clear, on the basis of
The conditions set with the aforementioned settlement with Haga have not been met.
as should be. The Competition Authority will take a closer look at what lessons can be
draw conclusions from this. Furthermore, the supervision will promote the fulfilment of the aforementioned conditions.
notwithstanding this, for the purpose of promoting and protecting the said competition.
Related documents
Consolidated register
Derogation for the implementation of mergers
Assessment of Festi's suitability as a purchaser
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