The Finnish Competition and Consumer Authority (FCCA) has 14.10.2020 approved the acquisition of Automatia Pankkiautomaatit Oy by Loomis AB. The approval is conditional upon the parties’ commitment to provide access to Automatia’s cash infrastructure for Loomis’ competitors and to continue to purchase cash management services from Loomis’ most relevant competitor for the next five years.
The FCCA was notified on 8 April 2020 of the proposed acquisition whereby Loomis would acquire Automatia from the three major national banking groups – OP, Danske Bank and Nordea. Sweden-based Loomis provides cash management services in Finland, including cash in transit and cash handling services. Automatia offers nationwide cash supply services for bank branches and, among other things, operates the largest ATM network in Finland under the Otto brand. Automatia has outsourced its cash management services to Loomis and its competitor Avarn Cash Solutions Oy.
The FCCA’s in-depth investigation focused on the vertical effects of the transaction as the merging parties operate at different levels of the supply chain. The FCCA concluded that Loomis’ most relevant competitor Avarn would be excluded from the market if the deal would be unconditionally approved. As a result, competition would be further weakened in the already highly concentrated markets for cash in transit and cash handling services.
“Eventually also consumers would be worse off as less competition usually leads to higher prices. If competition for cash management services would be weakened, it is likely that cash would get more expensive and harder to get for consumers too”, describes Mikko Heinonen, Head of Research at the FCCA’s merger unit.
The remedy package eliminates the identified competition concerns
To address the FCCA’s competition concerns, Loomis and Automatia committed to provide access to Automatia’s cash infrastructure, namely to its cash stock and Ottonet ERP system, for existing and new cash management service providers for the next five years.
In addition, Loomis and Automatia committed, among other things, to continue to purchase cash management services from Avarn on current terms for the next two years and for the following three years in accordance with a staggered minimum purchase obligation.
The FCCA concluded that the proposed remedies were sufficient to eliminate the identified competition concerns and the merger could therefore be conditionally approved.
The FCCA’s decision contains business secrets of the parties involved and third parties. The decision cannot therefore be made public until after the business secrets have been removed.
Read more:
- The time limit for processing the merger of Loomis and Automatia has been extended until 14.10.2020, FCCA press release 22 September 2020
- The time limit for processing the merger of Loomis and Automatia has been extended until 23 September 2020, FCCA press release 14 August 2020
- FCCA opens in-depth investigation into the proposed merger of Loomis and Automatia, FCCA press release 14 May 2020
Inquiries:
Head of Research Mikko Heinonen, tel. 029 505 3162
Economist Aapo Aaltio, tel. 029 505 3003
firstname.lastname@kkv.fi
According to the Competition Act, a merger must be reported to the FCCA if the combined turnover of the parties to the concentration exceeds 350 million euros and the turnover of at least two of the parties resulting from Finland exceeds 20 million euros for both. The FCCA approves the merger provided that it will not result in any of the negative impacts mentioned in the Competition Act. The FCCA will intervene in the merger if its investigation indicates that the merger would significantly impede effective competition on the Finnish market or a substantial part thereof, in particular as a result of the creation or strengthening of a dominant position. If required, the processing of the merger notification is carried out in two phases. The first stage lasts a maximum of 23 workdays. If it is clear that the merger will not have any negative effects on competition or if the negative effects can be prevented through the conditions proposed by the parties involved, the merger is approved after this initial processing phase. If this is not the case, the FCCA makes the decision to submit the matter for further investigation in which the merger and its competition effects are comprehensively examined.