RAUTAKIRJA OY AUTHORISED TO IMPLEMENT THE CONCENTRATION SUBJECT TO CONDITIONS AND OBLIGATIONS

The Competition Council of the Republic of Lithuania, having examined the notification of 17 October 2007 filed by Rautakirja Oy on concentration by acquiring 100 percent of the shares of UAB Impress Teva authorised the concentration deal subject to the specific obligations and the conditions of the implementation of the concentration deal.

Rautakirja Oy currently manages 51 percent of shares of UAB Impress Teva therefore the acquisition of the outstanding block of shares of the Company was assessed by the Competition Council as the replacement of the joint control by the single control. The purpose of the concentration as indicated in the concentration notification is to start providing a larger number and scope of logistics and other services related to the press distribution to the publishers, publishing houses and distributors.

With the view of the thorough assessment of the intended concentration upon competition in the publication distribution market of Lithuania the Competition Council conducted an inquiry among publishers, press distributors on the conditions in the market and analysed the arguments related submitted to the possible consequences of this concentration.  The competition authority also examined and assessed the package of the obligations offered by Rautakirja Oy and the activity of the related undertaking – the Vilnius agency of UAB Lietuvos spauda. Based on the findings certain conditions were established designed to ensure the operation of the market without infringing the competition rules.

The decision of the Competition Council concerning the authorisation to implement the concentration by acquiring by Rautakirja Oy  100 percent of the shares of UAB Impress Teva provides for a number of specific conditions and obligations. One of the most important of them stipulates that the Vilnius agency of UAB Lietuvos spauda must be open to all providers of publications (publishers, distributors and publishing houses) irrespective of method of supply used thereby (whether directly or via UAB Impress Teva). UAB Impress Teva and the Vilnius agency of UAB Lietuvos spauda cannot be reorganised by way of a merger or consolidation with each other without a prior permission of the Competition Council; the accounting of the companies shall be segregated with the clearly defined structure of all proceeds and expenses for the wholesale and retail distribution of press trade services. Besides, Rautakirja Oy shall ensure that the Vilnius agency of UAB Lietuvos spauda publishes the requirements of the access to the news stands and the service rendition (individually specifying the requirements to the dailies). Also Rautakirja Oy is obligated to ensure that the Vilnius agency of UAB Lietuvos spaudos while establishing the requirements for the access to the kiosks and the quality of the provision of the services follows the principles established in the resolution of the Competition Council.

The resolution of the Competition Council provides for a number of other conditions and obligations related to the fairness and transparency of the commission compensation system, the principles of the contract conclusion, designed to ensure that the contracts with the suppliers of publications and the press distribution retailers contain no clauses concerning any exclusive press distribution terms, that the distribution network is open to all publishers, publishing house and the retailers. Rautakirja Oy is obligated to ensure that both UAB Impress Teva an the Vilnius agency of UAB Lietuvos spauda refrain from any actions in contradiction to the competition rules seeking to exclude the competitors from the Lithuanian market.

The responsibility for the monitoring of the fulfilment of the established conditions and obligations shall be vested in an independent observer whose candidacy as well as the draft agreement with such shall be submitted by Rautakirja Oy to the Competition Council. The duties of the independent observer include the resolution of the disputes between the market participants and reporting on the fulfilment of the obligations and the adherence to the conditions.