The Swedish Competition Authority (“SCA”) has decided (September 2013) to take no further action in respect of the proposed acquisition by KPA Pensionsservice AB of SPP Liv Pensionstjänst AB and the proposed acquisition by KPA Pensionsförsäkring AB of a life insurance portfolio for the occupational pensions agreement area KAP-KL from SPP Livförsäkring AB, after an in-depth investigation opened in June 2013.
The SCA’s in-depth investigation showed that an exit of SPP from the relevant market was the most likely scenario in the absence of the proposed transaction.
The SCA examined the effects of the proposed acquisition on competition in the market for procured administration of collectively agreed occupational pensions in the local government sector in Sweden. After the transaction the merged entity would constitute the largest player in the market and face competition from only one other company. Therefore the SCA initially expressed concerns that the proposed transaction could harm competition and opened an in-depth investigation.
However, during the in-depth investigation SPP demonstrated that it would not continue to operate in the market for procured administration of collectively agreed occupational pensions in the local government sector. The in-depth investigation also showed that there were no alternative buyers of SPP. Therefore, the most likely alternative scenario to the proposed transaction would be the exit of SPP from the market. The reduction of the number of competitors in the market would therefore occur anyway and would not be caused by the acquisition itself (the counterfactual scenario). As a result the SCA concluded that the acquisition would not significantly impede effective competition in Sweden or in any substantial part thereof. The acquisition of SPP Liv Pensionstjänst AB by KPA Pensionsservice AB could therefore be completed.