Merger of N1 hf. and Festi hf.

The Competition Authority has published decision no. 8/2019, Merger of N1 hf. and Festi hf. The decision
is based on the settlement between the regulator and the merger parties, dated 30 July 2018. N1 is
the largest fuel retailer in Iceland. Festi (today Hlekkur ehf.) is the second largest
The country's grocery retailer, which operates, among others, the Krónan stores.

The investigation of the case revealed that the merger, without conditions,
would be liable to significantly distort competition. Specifically
It was the assessment of the supervisory authority that the merger would lead to the disappearance of the Króna which
a potential competitor in the fuel market, lead to localised disruption of
competition in certain geographical areas, have a detrimental effect on wholesale and
inventory levels and lead to increased and harmful ownership ties between
competitors in both the fuel and grocery markets.

The investigation into the matter concluded with the signing of a settlement between
The Competition Authority and N1, dated 30 July 2018. With the settlement, N1 committed to actions which
to promote and protect effective competition in the markets for fuel and groceries
and remedy the above-mentioned distortion of competition which the merger would otherwise
led to.

The terms of the settlement included, among other things, the sale of assets on
the fuel market to a new player, with Krónan considered a likely competitor to N1
on the market. Following a sales process and an inspection by an independent expert, which
was appointed in August 2018 to oversee the implementation of the settlement,
The Competition Authority approved the buyers of the sold assets in February and March.
2019.

Summary of the case's outcome and the conditions that were set
regarding the merger can be found in section V.4 of the decision.

The decision is based on the aforementioned agreement and purpose.
of hers is to provide merger parties, their competitors, other companies that
consider themselves to have an interest and others who are interested in the merger,
Information and explanations on the purpose of the measures set out in the agreement.