Merger of Sena ehf. and Skífan ehf.

The Competition Authority has today approved the merger of Sena ehf. and Skífan ehf., subject to certain conditions. The merger involves the acquisition by Sena ehf. of 100% shares in Skífan ehf., and the merger was notified to the Competition Authority on 21 November 2008.


The Competition Authority considered that the merger would lead to a strengthening of Senu's dominant market position in the market for music publishing, the wholesale and distribution of music, and the wholesale of computer games. The effects of this strengthening of Senu's position in these markets would also be felt in the markets in which Skífan operates, namely the retail of music and computer games. The Competition Authority also considered that there was reason to believe that competition-reducing problems could arise in the markets covered by the transaction following the merger. For the above reasons, competition would be reduced in the relevant markets, and it was the Competition Authority's conclusion that the merger was contrary to the objectives of the competition law. In light of this, the Competition Authority considered that there were grounds to intervene in the merger by annulling it or imposing conditions.


A letter received by the Competition Authority on 16 March 2009 notified that changes had been made to the ownership of Sena with the signing of an agreement between Íslensk afþreying hf. as seller and Garðarshólmi rekstrarfélag ehf. as buyer of the company. Subsequent discussions with the new owners of Seni ehf. led to the merging parties entering into a settlement in the matter, pursuant to Article 17(f) of the Competition Act and Article 22 of the Rules of Procedure of the Competition Authority No. 880/2005.


The Competition Authority considered that Gardarshólmi's acquisition of Sena had resulted in significant and positive changes to the merger's conditions as they were originally notified to the Authority. That those acquisitions, in addition to the conditions imposed on the merger, would be sufficient to create the conditions for more effective competition in the relevant markets and eliminate the harmful competitive effects that the merger would otherwise have entailed.


The conditions primarily consist of an obligation for Sena to sell Skífan to an unrelated party. The Competition Authority considers that this prevents the vertical foreclosure resulting from the merger, and thus prevents the competitively harmful effects that would follow from it. During the sale process for Skífan and until it is sold, the merging parties have agreed to comply with certain behavioural conditions intended to prevent the competitively harmful effects arising from the merger while Skífan is still owned by Sena. These conditions include, amongst other things, a clear operational separation between Sena and Skífan, and their aim is m.a. to ensure that transactions between the merging parties in the relevant markets are conducted as if they were unrelated parties, thereby protecting competition in both the wholesale and retail markets.