Merger of Skýrr Ltd. and EJS Ltd.

On 24 February 2006, the Competition Authority received notification of the acquisition by Skýrr, a subsidiary of Kögun, of all the shares of Dseti, the owner of 58.71% of the share capital in EJS. By letter dated 22 May 2006, the Competition Authority was notified of changes to the merger, whereby, instead of the acquisition covering all shares in Dseta, the acquisition would cover the aforementioned shares in EJS. The merger is classified as a horizontal merger, as the parties operate at the same level of distribution. It is therefore clear that significant synergies will be realised in the main activities of the merged companies, which are the sale of hardware, hosting, system rental and computer operating services. The merging parties will therefore strengthen their position in these business areas through the merger. Observations from the Competition Authority, however, indicate that the merger will have harmful competitive effects and therefore it considered there was no reason to take further action regarding it under Article 17 of the Competition Act.