Festi hf: Festi and the Icelandic Competition Authority reach a settlement regarding the acquisition of Lyfja

Festi and the Icelandic Competition Authority (the “ICA”) have signed a settlement regarding Festi’s acquisition of all shares in Lyfja hf. Thus, the merger has been approved by the ICA. The settlement provides for remedies that will effectively preserve and promote active competition in the markets affected by the merger and remove the competitive obstacles that the merger would otherwise have caused according to the ICA’s preliminary conclusions. Thereby, the ICA’s has concluded its investigation of the merger.

Festi’s settlement with the ICA includes the following provisions:

• Festi undertakes to ensure that the employment contracts between Lyfja and the company’s pharmacists do not contain non-compete provisions or other restrictions on competition.
• Festi undertakes to ensure operational separation for the activities of Heilsa ehf. (“Heilsa”). This includes that Heilsa shall continue to operate as an independent legal entity and that all of the company’s activities, commercial decision making and day-to-day management will be separated from the activities of Festi’s other subsidiaries. The settlement also includes that Heilsa’s operations take place on premises that are separate from the activities of certain Festi’s subsidiaries and that separation is also ensured by access control to Heilsa’s computer and information systems. Festi will be allowed to provide Heilsa with defined support services as long as the provision of such services aligns with the goals of the settlement. Furthermore, there are specified conditions in the settlement regarding the appointment of Heilsa’s board of directors.
• Festi undertakes to ensure that other retailers have access to Heilsa‘s wholesale on a commercial basis. Heilsa will be obliged to observe fair and non-discriminatory terms in such businesses. Heilsa will also be obliged to preserve the confidentiality of information concerning its customers and to ensure that sensitive information does not pass to other companies in the Festi group or to competitors of Heilsa’s customers.
• Remedies regarding Heilsa, cf. points 2 and 3 above, will expire five years after the signing of the settlement, which occurred on 14 June 2024.

As a result of the settlement, the merger can now come into effect, thus, Festi will now be authorized to take over the operation of Lyfja hf. and subsidiaries. The next few weeks will be used by Festi, as buyer, and SID ehf., as seller, to prepare the delivery of Lyfja hf. and subsidiaries and the payment of the purchase price, which is anticipated to take place early in July 2024.

Further information about the progress of the acquisition will be provided when applicable.

Ásta S. Fjeldsted, CEO of Festi:

“We are very pleased to have reached this important milestone of reaching a settlement with the Icelandic Competition Authority regarding Festi’s acquisition of Lyfja. There are great opportunities for the integration of services across companies within Festi as well as the availability of a wider range of products at affordable prices for our customers all over the country. There is also a clear consensus among the companies on factors such as increased convenience in services, e.g. online shopping and home deliveries, competitive prices and preventive health care.

We are extremely excited to finally get to know the powerful group of employees behind Lyfja and discuss the opportunities ahead.”

For further information, please contact Ásta S. Fjeldsted, CEO of Festi (asta@festi.is).