The Finnish Competition and Consumer Authority (FCCA) has on 12.10.2018 approved, subject to conditions, the acquisition of Prevent 360 Holding Oy by Avarn Security Holding AS. The approval is conditional upon Avarn Security selling a part of the merging entity’s manned guarding and security services related business. In addition, Avarn Security shall subcontract manned guarding and security services to competitors for the duration of three years.
Avarn Security and Prevent 360 both offer, among others, manned guarding and security services to the public sector and corporate clients. Avarn Security is part of the Norwegian Sector Alarm Group. The FCCA initiated further proceedings concerning the acquisition on 12.7.2018.
The FCCA has gathered extensive turnover data from companies offering manned guarding and security services in order to be able to assess the competition effects of the merger. In addition, the FCCA has gathered information through various surveys directed at companies active in the market for manned guarding and security services, as well as their clients. Based on the collected information, the FCCA has reviewed the market shares of both the parties and their competitors. The FCCA has also used several different methods to investigate the closeness of competition between the parties.
According to the FCCA’s assessment, the acquisition has adverse effects on the market segment of large clients that purchase manned guarding and security services. As a result of the merger, the already concentrated market dominated by three players; Avarn Security, Prevent 360 and Securitas, would concentrate even further as only two of the main players would remain. The FCCA is of the view that without conditions being imposed on the merger, the acquisition cannot be approved.
Commitments ensure the continued functioning of competition
In order to eliminate the impediment to competition caused by the merger, Avarn Security commits to divesting a part of the merging entity’s manned guarding and security services business to a single buyer on sales terms approved by the FCCA. It is crucial that the divested business enables the growth of the buyer into a credible competitor in the market segment of large clients. The commitments have been constructed in a way, which allows for a flexible definition of the part of the business to be divested, whereby the existing locations, clientele and business of the buyer may be taken into account. In the view of the FCCA, the commitments enable the creation of competitive conditions similar to those that currently exist on the market segment of large clients that buy manned guarding and security services.
In addition, Avarn Security commits to subcontracting manned patrol guarding services and alarm response services, as well as alarm receiving center services to its competitors or potential competitors for the duration of three years. The possibility to subcontract services from the concentration improves the possibilities of competitors to offer services to large clients.
The decision of the FCCA includes business secrets of the parties. The decision can only be published once business secrets have been removed.
Assistant Director Sanna Syrjälä, tel. +358 29 505 3385