A change of M.O. on divestments in merger control

For the first time in Finnish merger control history, parties to a merger committed to an upfront-buyer provision. On 19 April 2021, the Finnish Competition and Consumer Authority (“FCCA”) approved the merger between Altia Oyj (“Altia”) and Arcus ASA (“Arcus”) subject to conditions.

Both Altia and Arcus produce and distribute alcoholic beverages. The FCCA's investigation concluded that the proposed merger could significantly reduce the level of competition in Finland in the sales of both aquavit to hotel, restaurant, and catering customers and berry liqueurs to the national retail monopoly Alko.
To address the competition concerns in the aquavit market, Altia agreed to sell the Skåne Akvavit brand in Finland. Regarding the berry liqueurs market, Arcus agreed to terminate the distribution agreement for Metsmaasikas strawberry liqueur. The parties sign up to an upfront-buyer provision, which means that the merger cannot be implemented until a binding contract has been entered into with a buyer approved by the FCCA. The FCCA indicated that it is likely to start requiring upfront-buyer provisions also in future cases to incentivize the buyers to close the divestiture.

The FCCA has previously been faced with the situation, where the divestment commitments are difficult to implement. The FCCA has even previously accepted to lift some divestment commitments due to a lack of interested and/or suitable buyers. With this in mind, the FCCA announced that it cannot accept commitments which remain uncertain in their implementation. On this basis, it will, in the future, require upfront-buyer provisions in many cases involving divestment commitments.

The merger was also notified to the Swedish and Norwegian competition authorities. In Sweden, the transaction has been approved subject to commitments and in Norway, the investigation is ongoing, although the Norwegian Competition Authority has announced it is considering intervening against the merger.

The press release of the FCCA (in English) can be found here. The press release of the Swedish Competition Authority (in English) here and the press release of the Norwegian Competition Authority (in English) here.

For more information, contact Päivi Tammilehto.

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