The Icelandic Competition Authority has approved the merger of Hagar, Olís and the real estate company DGV. Arctica Finance, together with Landslög, acted as advisor to Hagar. The purchase agreements for the transaction were signed in April 2017, subject to due diligence results, approval from the Competition Authority, and approval by a Hagar shareholders’ meeting for a share capital increase. The due diligence condition was waived in July 2017 and the share capital increase was approved at Hagar’s Annual General Meeting in June 2017.
In September 2018, a settlement was signed between Hagar and the Competition Authority regarding Hagar’s acquisition of all shares in Olíuverzlun Íslands hf. and DGV ehf. After signing the settlement, an assessment took place regarding the buyers of the assets that Hagar was required to sell under the settlement, and all purchase agreements were already in place. In October 2018, it was announced that the buyers had been deemed eligible and that they fulfilled all conditions of the settlement. The Competition Authority has now additionally assessed the buyers and also concluded that they fulfill all settlement conditions and are eligible. With this, all conditions have been lifted and the merger will therefore be implemented.
The outcome is a positive one. The merger creates numerous opportunities to improve services to the customers of the combined company. The operations of Olís align very well with those of Hagar and create a strong foundation for growth and increased efficiency in a changing competitive environment. Advisors to Hagar have estimated that the merger synergies amount to approximately ISK 600 million annually.
The purchase price for Olís and DGV is ISK 10,668 million. A total of ISK 5,396 million is paid in cash and, additionally, 111 million Hagar shares are delivered, valued at ISK 5,272 million. Olís’ EBITDA for 2017 was around ISK 2,300 million and net interest‑bearing debt just over ISK 5,000 million. Net interest bearing debt for the combined group is expected to be around ISK 12,000 million after the merger.
