Purchase of KHB-Miðbæ ehf by Fóðurblöndunnar hf.

On 29 June 2007, the Competition Authority received a merger notification announcing that Fóðurblandan hf. had acquired goodwill, stock and other assets from KHB-Miðbæ ehf. In the opinion of the Competition Authority, the acquisition constituted a merger within the meaning of Articles 4 and 17 of the Competition Act, and the merger is subject to the merger control provisions of Article 17 of the Act, as the turnover thresholds are met.

The Competition Authority considers that the merger creates the possibility of integrating the sale of the merging parties' products and services, which will strengthen the position of the combined company in the feed and fertiliser markets.

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

1. The merging parties are prohibited from making the purchase of feed products conditional on the buyer also purchasing fertiliser, or the purchase of fertiliser conditional on the buyer also purchasing feed products. Furthermore, the merger parties are prohibited from pricing feed offered with fertiliser, or fertiliser offered with feed, in such a way that the pricing or offer constitutes a condition for the purchase of one product with the other.

2. The merging parties are prohibited from making the purchase of fertiliser or feed conditional on the purchase of any other goods or services sold or provided by them or their affiliated companies. 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 in conjunction with another.

3. If the purchaser's co-operatives resell fertiliser or feed from the merger partners, the company in question shall treat competitors on the fertiliser- and feed markets are also offered the opportunity to sell fertiliser and/or feed in the relevant cooperative on an equal footing with Áburðarverksmiðjuna hf., Fóðurblönduna hf. and/or Bústólpi ehf.

4. If feed is sold together with fertiliser, its price must be stated separately. The same applies if affiliated companies offer their own products or services together with fertiliser or feed.

5. The conditions of this decision apply to the merger parties and to all other undertakings that are or will become part of the group.

6. A breach of these conditions shall be subject to sanctions in accordance with Chapter IX of the Competition Act.“

For the reasons and arguments of the decision, reference is otherwise made to the decision of the Competition Authority No. 58/2007.