COMPETITION COUNCIL: RIMI FAILED TO IMPLEMENT MERGER REMEDIES
The Competition Council reported that UAB Rimi Lietuva (RIMI) failed to implement merger remedies which the authority approved as a condition when clearing the acquisition by RIMI of 100 per cent shareholding and sole control of UAB Palink (PALINK).
According to the Council‘s decision of 18 October 2017, RIMI undertook to divest part of its retail business to prevent this merger from restricting competition in certain local retail markets.
Having evaluated information related to the implementation of the remedies, on 17 April 2018 the Council decided that the proposed buyers of retail business did not meet the set requirements of the remedies.
The Council decided that the proposed buyers would not ensure sustainable and effective competition in the specified stores in the relevant retail markets, as compared to the pre-merger situation. When conducting the assessment, the Council took into account financial and other resources of potential buyers; their experience in managing retail business of adequate size; supply conditions; interest and ability of buyers to maintain and (or) develop retail business of consumer goods in non-specialised stores in all of the specified stores, which would in turn effectively compete with RIMI and its competitors.
The Council‘s Chairman Šarūnas Keserauskas noted that last year the merger was cleared subject to condition that RIMI will implement the remedies approved by the Council.
When the Council clears the merger subject to such conditions, it means that the transaction cannot be completed until the merging parties have successfully implemented merger remedies and eliminated competition concerns identified by the authority. Implementing merger remedies is important in order to prevent harm to consumers.
Šarūnas Keserauskas, the Council's Chairman
On 18 October 2017 the Council cleared the acquisition by RIMI of 100 per cent shareholding and sole control of PALINK on condition that RIMI will sell part of its retail business.
Having established that the intended merger would create or strengthen a dominant position or significantly restrict competition in the retail markets in Vilnius, Kaunas, Klaipėda and Panevėžys counties, RIMI committed to sell 17 stores in the aforementioned counties to a buyer or buyers that could safeguard effective competition.