Altia and Arcus must reduce overlap before mergingThe Norwegian Competition Authority has approved the merger between Altia Plc. and Arcus ASA on condition that the parties divest brands in several markets for the sale of spirits.The two companies are prohibited from completing the merger before a binding agreement has been made for the sale of the brands in question to one or more buyers that can sustain the competition in the market.– Altia and Arcus are the two largest suppliers in several markets for the sale of spirits to Vinmonopolet, the Norwegian State alcohol retail monopoly. The two companies are each other’s closest competitors. This concerns the markets for the sale of aquavit, vodka and spirits with less than 22% alcohol. The Authority has been concerned that reduced competition in these markets could lead to higher prices for these products, says Director General Lars Sørgard.New and improved remedies proposed The Competition Authority is tasked with assessing whether mergers and acquisitions will lead to restrictions of competition.On 11 March 2021, the Authority informed the parties in a statement of objections that it intended to intervene against the notified transaction, as the merger would significantly impede effective competition in several markets for the sale of spirits to Vinmonopolet. Following the statement of objections, the companies chose to propose new and improved remedies in order to accommodate the Authority’s competition concerns.– In its dialogue with the parties, the Authority has pointed out that the merging companies are close competitors in the affected markets. It has therefore been important to ensure that the divested businesses are sold to one or more suitable buyers. A buyer should have both the ability and the incentives to develop the divested businesses into an efficient competitor to the merged entity and other market players, says Senior Advisor Jan Kristoffer Høiland.Divestment of brands As part of the proposed remedies, the merging parties have undertaken to divest businesses connected to several brands in the affected markets. The Authority has approved the merger on the following conditions:Altia commits to divest the brands and other assets connected to the products Skåne Akvavit to one or more suitable buyers.Arcus commits to divest the brands and other assets connected to the products Akevitt Spesial, Dworek Vodka and Kalinka S.P.R.T (with exception of the brand name “Kalinka”) to one or more suitable buyers.The merged entity commits to offer necessary transitional services to the buyer(s) for a specific period after the adoption of the Authority’s decision, including services related to purchasing, production and distribution.The merged entity has undertaken not to acquire any of the divested brands for a specific period of time after the adoption of the Authority’s decision.The brands may be divested to one or more buyers. Altia and Arcus can only complete the merger after binding sale and purchase agreements have been concluded and the Authority has approved the buyer(s).For more information call+ 47 47 66 77 77 Director general Lars Sørgard. Jan Kristoffer Høiland, Project Manager.