The Norwegian Competition Authority today announced their approval of Coop Norway’s acquisition of ICA Norway, but the acquisition may not be completed until Coop Norway has sold on 93 of their stores.
Coop has entered into agreements with Bunnpris and Norgesgruppen to sell the stores concerned.
”For Bunnpris it means a total turnover increase of 26 percent,” says CEO Christian Lykke.
Coop has undertaken to sell 43 grocery stores to Bunnpris and 50 stores to Norgesgruppen to prevent the acquisition from weakening competition.
Competition Authority has concluded that the acquisition could lead to significantly limited competition in 90 local markets.
The Competition Authority requires the sales of these stores to be made before Coop’s acquisition of Ica Norway may be carried out. The deal between Ica Group and Coop Norway is therefore expected to be completed shortly.
”This solution maintains the national competition and consumer interests. Without sales of stores acquired it would lead to limited competition in a number of local markets, and it would also weaken competition nationally,” says Director General for Konkurransetilsynet, Christine Meyer.
Through the acquisition Coop takes over Ica Norway stores and logistics and support functions.
”We now have access to even more great shops and skilled employees. This gives us a fantastic base to reach our goal to provide our members and customers the best shopping experiences,” says acting CEO of Coop, Geir Inge Stokke.
Stokke emphasizes that Coop and Ica Norway fits very well together.
”Ica Norway has many stores in regions where Coop wants to increase its presence. This applies for example in the central Eastern region and the Bergen region. Similarly Coop has good shops in areas where Ica has not been as well represented. Coop has both supermarkets, discount stores and convenience stores, and this allows the diversity of Ica Norge chains can be continued,” he says.
“It is highly gratifying that the deal with Coop Norway has now been approved by the Norwegian Competition Authority. Above all, this decision is highly positive for the Norwegian ICA organisation, all the employees and stores, which have now finally received a clear decision,” says Per Strömberg, CEO of Ica Gruppen, in an announcement.
The majority of the stores Bunnpris are acquiring are located in western and eastern Norway.
”These are good stores that will fit well into our concept. For Bunnpris it means a total turnover of approximately 1.5 billion, and an increase of 26%,” says CEO Christian Lykke.
”It is agreed that we take the new stores in operation April 13th. Now the focus forward is to create a good dialogue with our new merchants and ensure that they can still drive good business,” says Lykke.
Bunnpris is a welcome comet in the deal, according to Konkurransetilsynet.
”Competition Authority has concluded that Coops choice of buyers do not create new competition problems. Therefore, we have approved the acquisition, says Meyer, adding that when both Bunnpris and Coop strengthens its position in the market it could be positive for competition.
Konkurransetrilsynet says all the affected markets for the 550 stores have been analyzed, since the impact on the local competition has been central to their assessment.
”It has been important for us to avoid both the competition problems that could arise with a merged Coop and Ica, while avoiding the resale of stores creating new competition problems and poorer service for consumers in these markets concentrated, ” says Magnus Gabrielsen.
Coops message about purchasing Ica Norway was received by the Competition Authority on 5 November 2014.