The acquisition of Áburðarverksmiðjan hf. by Kaupfélag Skagfirðinga svf., the acquisition by Kaupfélag Skagfirðinga Ltd., Kaupfélag Borgfirðinga Ltd. and Kaupfélag Héraðsbúa Ltd., etc. of Áburðarverksmiðjan hf., and the merger of the feed department of Kaupfélag Skagfirðinga Ltd. and Áburðarverksmiðjan hf. with Fóðurblöndan hf. and Bústólpi ehf.

In November 2005, the Competition Authority received notification of the merger of Kaupfélag Skagfirðinga and Áburðarverksmiðjan with Fóðurblöndan and Bústólpi, which took place in June and July 2005. During the Competition Authority's investigation of the merger, it was revealed that at the end of 2004, a share transaction in the Fertiliser Factory had taken place which was never notified to the Competition Authority. This involved share transactions in the Fertiliser Factory in which, among others, the Kaupfélag Skagfirðinga, Kaupfélag Borgfirðinga and Kaupfélag Héraðsbúa were involved. This constitutes a merger of the aforementioned cooperatives with the Fertiliser Factory within the meaning of competition law. In light of the Competition Authority's comments, the merging parties decided to withdraw the merger notification from November 2005 and submit a new notification covering all asset transfers during the period in question. In May 2006, the Competition Authority finally received a satisfactory notification of the aforementioned mergers.

The Competition Authority believes that the mergers create the possibility of integrating the sale of the merger parties' products and services, which will strengthen the position of the combined companies in the feed and fertiliser markets.

The Competition Authority's conclusion is that the mergers could, if nothing is done, restrict existing competition and also the ability of new entrants to enter the feed and fertiliser markets. The Competition Authority also considers that the mergers could lead to the interconnection of products and/or services from different product and service markets, with a consequent restriction of competition. For these reasons, the following conditions are imposed on the mergers, to which the merging parties have agreed to be bound:

1. Fóðurblandan hf. shall cease all cooperation with the company's competitors, e.g. in connection with the procurement and import of feed and feedstuffs […] from the date of this decision.
2. Fóðurblandan hf. shall take measures to terminate the joint ownership of the company and others in Kornhlöðunni ehf. […] from the date of this decision. Fóðurblandan hf. shall […] inform the Competition Authority of the results of those measures.
3. The merging parties are prohibited from making the purchase of fertiliser conditional on the buyer also purchasing feed, and the purchase of feed conditional on the buyer also purchasing fertiliser. Furthermore, the merger parties are prohibited from pricing fertiliser offered with feed products, or feed products offered with fertiliser, in such a way that the pricing or offer constitutes a condition for the purchase of one type of product with the other.
4. The merging parties are prohibited from making the purchase of any other product or service sold or provided by them or their affiliated companies a condition of the purchase of fertiliser or feed. Furthermore, the merger parties are prohibited from pricing fertiliser and feed products together with other products or services of affiliated companies in such a way that the pricing of the offers amounts to a condition that one type of product or service is purchased together with another.
5. If co-operatives of the merger partners resell fertiliser or feed, the company concerned shall treat competitors in the fertiliser- and feed markets, the opportunity is also to be offered to competitors to sell fertiliser and/or feed in the relevant cooperative on an equal footing with Áburðarverksmiðjan hf., Fóðurblöndan hf. and/or Bústólpi ehf.
6. If fertiliser is sold together with feed products, their prices must be distinguished. The same applies if affiliated companies offer their own products or services together with fertiliser or feed products.
7. The conditions of this decision apply to the merger parties and all other undertakings that are and will become part of the group.
8. Breach of these conditions is subject to sanctions under Chapter IX of the Competition Act.