Competition Commission Approves Norwegian Firm's Bid for Gas Stations by J Hardy

The European Commission approved the proposed acquisition of ConocoPhillips' network of 274 Jet fuel stations in Scandinavia by StatoilHydro of Norway.

StatoilHydro is an integrated oil and gas company that is active in the exploration and production of natural gas and crude oil. StatoilHydro also refines and sells gas and other oil derivatives. The company operates networks of gas stations in Scandinavia under the Statoil, Hydro, and Uno-X brands. Jet Scandinavia, the company being acquired, operates stations under the Jet brand.

In March, StatoilHydro notified the Commission of the purchase of Jet Denmark, Jet Sweden and Jet Norway, all part of Jet Scandinavia. Although Norway is not part of the EU, the entire transaction was subject to approval by the Commission under the European Economic Area agreement. Norway is a part of the European Economic Area, which includes the 27 members of the EU, plus Iceland, Norway and Liechtenstein.

The Commission began an in-depth review of the proposed acquisition in May 2008. The Commission noted concerns that the two companies overlapped in the market for retail motor fuels, and that competition might be affected.

The Commission also had concerns about Jet's disappearance from the market, since Jet was the most efficient low-cost operator in both Norway and Sweden. In addition, Jet had a strong brand and a track record of undercutting competitors' prices.

Following an investigation, the Commission recently released its findings that the proposed transaction as originally planned would raise serious competition concerns in Norway and Sweden, and would reinforce the oligopolistic structure of the Norwegian market. StatoilHydro's position as the largest provider of motor fuels in Norway would be strengthened. In addition, in Sweden StatoilHydro is already the market's largest supplier of motor fuels. By obtaining one of its largest competitors, Jet, the combined company's market share would have been almost double the share of the next largest competitor.

In order to gain approval for the transaction, StatoilHydro agreed to sell 40 stations operating under the Jet brand in Norway, and 158 stations in Sweden operating under the Jet, Hydro, or Uno-X brands. Following this agreement, the Commission found that the transaction would not affect competition in the European Economic Area or any substantial part of it.

About the Author
About the author: Jason Hardy is an avid writer on legal issues, including international writing about many subjects including european antitrust. Eu competition law interests Jason particularly. He resides in Seattle, Washington.