On 4 January 2006, the FCA cleared an acquisition whereby SOK Corporation acquired control in Spar Finland Plc. The deal was subject to both structural and behavioural remedies.
Spar Finland has a network of roughly 280 retail outlets, e.g. 14 Eurospar stores. Some of the retail outlets are owned by Spar Finland, some by the Spar retailers and others are outlets rented by the Spar retailers from Spar Finland. The market share of Spar Finland of the Finnish daily consumers goods trade was approximately 6.8 per cent in 2004 and the corresponding market share of the S Group was approximately 35 per cent. In practice, the S Group is interested in attaching less than a 100 stores to its network.
The threshold for intervention in merger control, the creation or strengthening of a market position significantly impeding competition, was exceeded in roughly 30 Finnish localities. The deal was subject to the condition that SOK/the S Group offer the business of roughly 30 Spar stores to actual or potential competitors in the daily consumer goods trade. This alleviates the competition concerns resulting from the deal to the daily consumer goods market. The retailers’ possibilities to disengage themselves from the Spar cooperation agreements has been facilitated by a commitment package.
In the procurement market of daily consumer goods retail trade, the 35 per cent’s ownership of Tuko Logistics Inc (a procurement and logistics company owned e.g. by Wihuri, Stockmann Plc and Heinon Tukku) would have enabled a situation whereby significant market information could have been passed to the S Group on the purchases of competing daily consumer goods chains, specifically on procurement volumes and prices. The FCA ordered that SOK/Spar Finland Plc renounce the ownership of Tuko Logistics Inc shares during a transition period. During that period, representatives of Spar Finland Plc/SOK cannot participate in the meetings of the board of directors of Tuko Logistics Inc.
The FCA has investigated the competition concerns of the deal on the national, regional and local level. The examination which focused on store-specific sales, market shares and the structure of the retail outlet network showed that the S Group is a market leader in several municipalities. In several instances, the pressure of competition caused by other consumer goods stores was so severe however, that the likelihood of competition concerns was minimal despite of the relatively high market shares within specific municipalities. The conditions imposed by the FCA therefore concern municipalities in which or in the vicinity of which the consumers do not have a sufficient number of or alternative purchasing places for daily consumer products.
The decision issued by the FCA yesterday contains several business secrets of the parties concerned and the decision may only be published after these have been removed. The FCA intends to do this in roughly two weeks.
Further information:
Director General Juhani Jokinen, tel. +358 9 7314 3389
Senior Research Officer Antti Ihamäki, tel. +358 9 7314 3387
last modified 1/9/2006