Festi hf.: Settlement with the Icelandic Competition Authority which includes acknowledgement of breach of settlement and payment of fines

Festi hf. and the Icelandic Competition Authority have entered into the attached settlement as a result of an investigation by the Authority in connection with the company's alleged breach of the commitments  in a  settlement concluded on 30 July 2018 regarding the merger of N1 hf. and Festi hf. The investigation period dates back to that time. With the settlement the company acknowledges that certain provisions of the settlement from 30 July 2018 and covers the following in limited periods...

Kopavogi, 28/11/2024 (informazione.it - comunicati stampa - servizi)

Festi hf. and the Icelandic Competition Authority have entered into the attached settlement as a result of an investigation by the Authority in connection with the company's alleged breach of the commitments  in a  settlement concluded on 30 July 2018 regarding the merger of N1 hf. and Festi hf. The investigation period dates back to that time.

With the settlement the company acknowledges that certain provisions of the settlement from 30 July 2018 and covers the following in limited periods of time:

Furthermore, Festi hf. admits that it has violated the provisions of the Competition Act on the duty of disclosure by failing to provide necessary and satisfactory data in a timely manner for the purpose of investigating the merger in question and by not having provided the Competition Authority with a satisfactory account of the company's views when the settlement was concluded in 2018, which covers limited periods within the investigation period.

As a result of the above, an agreement has been reached to conclude the case by Festi hf. paying an administrative fine in the amount of ISK 750 million, which will be expensed in Q4 and will reduce the company's EBITDA for the year 2024.

The financial results for October are available and the forecast for November and December has been updated.  It is the opinion of the management that the results will be better than expected without the effect of the fine imposed by the Competition Authority.  In light of this, the company's EBITDA forecast for the year 2024 is updated and decreases by ISK 550 million and is  now ISK 12,200 – 12,500 million.

With the signing of the settlement, the case is finally closed with respect to Festi hf. and there will be no further investigation or proceedings against the company, employees or other individuals on part of the Competition Authority.

"In connection with the merger of N1 hf. and Festi hf., a settlement was reached with the Icelandic Competition Authority in July 2018, which included various commitments intended to avert competition restrictions due to the merger.  The Competition Authority has been investigating Festi's possible violations of the settlement from December 2020 when the opening of the investigation was announced.

The signing of the settlement between Festi hf. and the Icelandic Competition Authority today constitutes the final conclusion of the case. Festi hf. thereby admits that it has breached certain conditions of the settlement and timely disclosure of information according to the Competition Act and agrees to pay a fine of ISK 750 million, which is approximately 0.54% of the total turnover for the year 2023. It was the opinion of the company that it was appropriate to conclude this matter with a settlement and look ahead.  We will learn from the case and look to the future", says Ásta S. Fjeldsted

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