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NORWEGIAN COMPANY WILL ACQUIRE CONTROL OF COFFEHOUSE CHAIN

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The Lithuanian competition authority Konkurencijos taryba cleared the acquisition of 100 per cent and sole control of UAB Keturi kambariai which manages the coffehouse chain Caffeine by the Norwegian company Reitan Convenience.

On October 30 the Council received merger notification. Reitan Convenience operating in Lithuania through Reitan Convenience Lithuania and Press Express, owns the Narvesen chain of convenience stores and the kiosk network Lietuvos spauda. After acquiring 100 per cent of Keturi Kambariai shares, the Norwegian company would take over the coffehouse chain Caffeine.

When examining the merger notification Konkurencijos taryba applied for and received explanations from the merging parties, as well as from undertakings engaged in the distribution of press, coffee, food, confectionery, soft drinks and tobacco products. One market participant distributing periodicals and books expressed an opinion that if Caffeine became a retail press distributor, the merger could negatively affect the retail and wholesale distribution of publications, as well as the management of convenience shops.

Despite the aforementioned opinion, having evaluated information about the activities of the merging parties, Konkurencijos taryba did not identify any signs that the merger could have a negative impact on the market. The coffeehouse chain Caffeine is currently engaged in the retail distribution of press only to a very limited extent, and there was no evidence that it would be more reasonable to reorganize these cafes into press distribution sites.

Having evaluated the circumstances related to the transaction, Konkurencijos taryba concluded that although Caffeine coffee shops, as well as Narvesen and Lietuvos spauda kiosks sell similar goods (coffee, food and confectionery, tobacco products, soft drinks and press publications), their extent, quality and target groups are essentially different. Therefore, the intended merger will not create or strengthen the dominant position, or significantly restrict competition on the relevant markets.

The intended merger must be notified to Konkurencijos taryba and clearance must be obtained if the combined aggregate income of merging parties in the business year preceding the merger exceeds EUR 20 million and the aggregate income of each of at least two merging parties in the business year preceding the merger exceeds EUR 2 million.