The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of NTS by SalMar. The approval is conditional on full compliance with commitments offered by SalMar.
SalMar is one of the world’s largest producers of farmed salmon, with operations in Norway, Iceland and Scotland. NTS, which owns SalmoNor, Norway Royal Salmon and Frøy, is also a leading salmon farmer active in Norway and Iceland.
The Commission’s investigation
Given that the merger combines two leading farmers of salmon, the Commission investigated concerns raised by market players that the transaction, as originally notified, could have reduced competition for the supply of Icelandic salmon in the European Economic Area (‘EEA’), which the investigation confirmed to be a distinct market with respect to salmon of a different origin, based notably on product characteristics (quality, price, availability) and customer preferences.
Following its investigation, the Commission found that the transaction would have reduced the number of active farmers of Icelandic salmon from three to two. As a result, the merged entity would have become by far the largest supplier of Icelandic salmon. This could have led to higher prices and less choice for Icelandic salmon in the EEA.
The proposed remedies
To address the Commission’s competition concerns, SalMar offered to divest NTS’ Icelandic subsidiary Arctic Fish.
Arctic Fish constitutes all of NTS’ operations in Iceland and its divestiture fully removes the overlap for the supply of Icelandic salmon. Arctic Fish operates as a viable stand-alone business and will be able to continue to supply Icelandic salmon following the divestment.
Following the market test, the Commission concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. The decision is conditional upon full compliance with the commitments.
SalMar ASA is a salmon farming company headquartered in Norway. Its activities cover all aspects of the supply chain for the production of salmon, i.e. farming, harvesting, primary and secondary processing and supply of equipment to the aquaculture industry. SalMar has farming operations in Norway, Iceland and Scotland.
NTS ASA is headquartered in Norway and via its subsidiaries SalmoNor, Norway Royal Salmon and Frøy, is active in farming and primary processing of salmon in Norway and Iceland, as well as the supply of service boats, sea transport vessels and wellboats used to transport fish from the farm to the harvesting facilities.
Merger control rules
The transaction was notified to the Commission on 12 September 2022.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II). If commitments are proposed in Phase I, the Commission has 10 additional working days, bringing the total duration of a Phase I case to 35 working days, such as in this case.
Throughout its investigation, the Commission had exchanges and cooperated with the Icelandic Competition Authority and the Norwegian Competition Authority.
More information will be available on the Commission’s competition website, in the public case register under the case number M.10699.