Merger of Saga Film Ltd. and Storm Ltd.

The Competition Authority received notification that Saga film hf. had acquired all the shares in Storm ehf. The main business of Saga film and Storm consists of the production of television programmes and advertisements, and the companies also carry out related activities such as the hire of equipment and event management. The merger in question is somewhat related to the acquisition of Saga film by 365 ljósvakamiðla ehf., which was addressed in the Competition Authority's decision no. 12/2005. In that case, the conclusion was that Saga film's position in the market in which it operated was very strong, and it was also considered that 365 ljósvakamiðla's position in the domestic television market was strong, but the company has m.a. to have a significant influence over the acquisition of much of the desirable content for television viewers. This vertical link between these two powerful companies in the markets in which they operate was considered to lead to a weakening of the position of smaller companies in the relevant markets, as well as making it more difficult for new entrants to enter the markets. The merger was therefore subject to detailed conditions, which included, among other things, a full operational and managerial separation between the companies. The Competition Authority, however, considered that although Saga Film would strengthen its position in the markets in which it operates through the acquisition of Storm, this did not constitute sufficient grounds for intervention beyond the conditions imposed on the merger of Saga Film and 365 Media in the aforementioned decision. It was stated that the Competition Authority would have special monitoring to ensure that those conditions were fully complied with.