At its meeting on 2 February, the Competition Council considered the merger of Lyfju hf. and Lyfjabúðir hf. The combined company will be operated under the name Lyfju. The Council concluded that the merger would lead to Lyfja having a dominant market position in the capital region, which would have a detrimental effect on competition and be contrary to the interests of consumers. If the Competition Council considers that a merger hinders effective competition, it may annul the merger or impose conditions on it. On behalf of Lyfju, the competition authorities were asked to impose conditions on the merger that would eliminate the harmful effects on competition in the pharmacy market. They submitted a proposal to this effect. Negotiations between Lyfja and the competition authorities have led to the company agreeing to sell, as a single package, five of its fourteen operating pharmacies in the capital region. Upon fulfilment of the conditions, the competition authority believes that the merger's harmful effects will be eliminated, but the sale means that Lyfju's market share, which would otherwise have been 52-53%, will fall to 37-38%.
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