Mergers: Commission clears StatoilHydro's proposed acquisition of Jet Scandinavia, subject to conditions
- Norway
- 10/21/2008
The European Commission has approved under the EU Merger Regulation the proposed acquisition of ConocoPhillips’ network of “Jet” fuel stations in Scandinavia by StatoilHydro of Norway following an in-depth investigation opened in May 2008. To gain approval, StatoilHydro has committed to divest all 40 “Jet” fuel stations in Norway and a network of 158 fuel stations in Sweden operating under the “Jet”, “Hydro” and “Uno-X” brands. In the light of this commitment, the Commission has concluded that the proposed transaction would not cause competition concern in the European Economic Area (EEA) or any substantial part of it.
Competition Commissioner Neelie Kroes said: “Consumers are already confronted with very high energy prices. In the absence of the strong remedies required by the Commission, the planned merger would have led to a serious risk that consumers would be even worse off.”
StatoilHydro is an integrated oil and gas company active in the exploration and production of crude oil and natural gas. The company also refines and sells motor fuels and other oil derivatives. StatoilHydro operates fuel station networks in Scandinavia under the “Statoil”, “Hydro” and “Uno-X” brands. Jet Scandinavia operates fuel station networks in Scandinavia under the “Jet” brand.
The Commission found that the proposed transaction – as originally notified – would have raised serious competition concerns in Norway and Sweden. In Norway, the proposed transaction would have reinforced the oligopolistic structure of the Norwegian market. StatoilHydro’s position as the largest provider of motor fuels in Norway would have been strengthened. In Sweden, StatoilHydro is already the market’s largest supplier and by acquiring one of its main competitors, the company would have obtained a market share more than double the share of the second largest competitor. The Commission had further concerns with regard to Jet’s disappearance as the most efficient low-cost operator in both Norway and Sweden with a strong brand and a proven track record of undercutting competitors’ prices in markets with high entry barriers.
To address the Commission’s concerns, StatoilHydro offered to divest the entire “Jet” network in Norway and a 158-station network in Sweden, entirely made up of automated fuel stations. In view of this commitment, the Commission concluded that the transaction would no longer raise serious competition concerns in Norway and Sweden. Independently of the competition assessment, StatoilHydro decided to close a number of less efficient fuel stations in Sweden.
