Tieto and Evry must reduce overlap before merging

The Norwegian Competition Authority approves the merger between Tieto and Evry on condition that Evry divests its case management and archiving systems business to a suitable buyer.

The two companies are prohibited from completing the merger until the buyer is approved by the Competition Authority.

– Tieto and Evry are large providers of software and IT-services. They are the two largest suppliers of case management and archiving systems to the public sector in Norway and often compete in the same tenders. The Authority has decided to clear the merger as Evry has committed to divest its business in this market, says Director General Lars Sørgard.

The Competition Authority is tasked with assessing whether mergers and acquisitions will lead to restrictions of competition. The merger between Tieto and Evry was notified to the Authority on 15 September 2019, and the Authority gathered market information from competitors, customers and third parties during its investigation. It also reviewed data from tenders.

The Authority’s investigation revealed that the merger would weaken competition in the market for case management and archiving solutions to public sector customers. After informing the parties about its preliminary findings, the parties proposed commitments to accommodate the Authority’s competition concerns.

– The Authority made clear in its dialogue with the parties that the merger would restrict competition in the market for case management and archiving systems to the public sector, and therefore would harm municipalities, health institutions and other customers by way of higher prices and reduced service quality, says project manager Magnus Reitan.

The commitments

The remedies proposed by the parties center on a commitment to divest Evry’s case management and archiving systems business.

The main divestment commitment is supported by a number of ancillary conditions, in order to ensure that the business continues as usual until it is sold, and that the buyer will be in a position to replace the competitive pressure that Evry previously has exerted in this market.

– Before the parties can merge their businesses, they will have to find a suitable buyer that the Authority approves. This will ensure that competition is not weakened as a result of the transaction, says project manager Magnus Reitan.

Swift clearance

This is the first time the Authority has cleared a merger with commitments at this early stage of its review process. In total 35 working days has passed since the merger was notified.