Kesko acquisition given go-ahead

  • 2004-12-01
  • From wire reports
TALLINN - The Estonian Competition Board has said it sees no reason to intervene in the planned acquisition of the Sotka and Asko furniture stores by Finland's Kesko Group.

"A dominant position will not be established that would serve as a basis for us to ban the concentration," Aini Proos, deputy director general of the Estonian Competition Board, said of the planned takeovers.

"If we add a very small market share to a significant market share, we still only have a significant market share - not a large market share or very large market share," Proos explained. In this case, he said, the buyer has a marginal share of the goods market, while the entity being sold has a significant share.

Kesko and the Indoor Group, the owner of the Asko and Sotka furniture chains, at the end of October announced their intention to conclude a deal worth 83 million euros that would bring all Asko and Sotka stores in Finland, Sweden, Estonia and Latvia - along with their financial obligations - into the hands of Kesko's subsidiary, Keswell Ltd.

Estonian furniture makers, however, are attempting to prevent the deal by regulatory measures as they fear a loss of their existing contracts. Manufacturers have argued that Kesko orders could become too big for them to handle, forcing the Finnish company to go to global suppliers.