Norwegian Competition Authority blocks Eimskip takeover of Nor Lines

23/02/2017

The Norwegian Competition Authority (NCA) has blocked Eimskip’s acquisition of Nor Lines, citing concerns over reduced competition and the potential for shippers being subject to increased rates.

A spokesperson for the NCA told The Coolstar the “preliminary” decision had been reached because the two carriers were close competitors in the transport of fish produce in reefer vessels from Norway’s northern waters.

“The merged company would get a high market share,” said the spokesperson. “We are concerned that the transaction would significantly reduce competition in the market which would result in higher prices.”

However, the NCA said that all parties would be given the opportunity to present their cases, with a final decision will be made in early April.

Eimskip said it was evaluating next steps with its legal advisors and “has 15 business days to present counterarguments”.

The Icelandic logistics group announced in November that it had reached a deal to acquire Nor Lines for €15m, its third acquisition in two years, after Rotterdam-based forwarders Jac Meisner in 2015 and Extraco Internationale Expedite in October.

Eimskip chief executive Gylfi Sigfusson told The Coolstar at the time of announcement that the company’s strategy was to “follow the fish” to Asia and other fast-developing emerging markets, where per capita fish consumption was expected to “sky-rocket”.

“I believe that the intra-Asia business has the biggest potential for growth at the moment, and also the opening of the new markets in Africa and South America. The purchasing power of the fast-growing middle class in these countries is driving the growth,” said Mr Sigfusson.

“We didn‘t have much infrastructure in these countries so we needed to set up our freight forwarding services in Asia if we wanted to follow the fish and our customer needs into new markets.”

Should it be completed, the Nor acquisition would include five out of the seven-shipfleet, comprising four chartered vessels and one owned outright that operate between Norway, the Netherlands and the UK.

The deal would also include Nor Lines’ land operation, described by Eimskip as “extensive, and comprising 60 terminals along the Norwegian coast, connecting the trucking and sea operation, warehouse operations and freight forwarding”.