The Market Court has extended the processing time for the acquisition between Scandic Hotels Oy and Restel Hotellit Oy, under the investigation of the Finnish Competition and Consumer Authority (FCCA), until 5 December 2017. The extension is required in order to complete the acquisition investigation.
Scandic and Restel are engaged in the hotel accommodation business in Finland. There are a total of 24 Scandic hotels in Finland in 17 cities. Scandic also operates three Hilton hotels in Finland under a franchising contract.
Restel operates a total of 43 hotels: in addition to the company’s own hotel chain, Cumulus City & Resort, the company operates the Holiday Inn hotels in Finland as well as Helsinki’s Crowne Plaza, Indigo Helsinki Boulevard and Hotelli Seurahuone hotels.
The FCCA began further proceedings on the acquisition on 24 August 2017, because on the basis of the FCCA’s preliminary investigations, the acquisition may have adverse impacts on competition in the accommodation service market. There are 12 cities in Finland in which both Scandic and Restel are involved in hotel operations.
Without the extension, FCCA’s time limit for investigating the acquisition would have expired on 24 November 2017. According to the Competition Act, the FCCA may approve the acquisition as such, attach conditions to the approval or request that the Finnish Market Court prohibit the acquisition.
According to the Competition Act, the FCCA must be notified of the transaction if the combined turnover of the parties to the corporate transaction exceeds 350 million euros and the turnover from Finland of at least two of the parties exceeds a combined total of 20 million euros. The FCCA will approve a corporate transaction if it has none of the harmful impacts referred to in the Competition Act. The FCCA will intervene in corporate transactions if its investigations suggest that the acquisition substantially impedes effective competition on Finnish markets or a substantial part of the markets, particularly through the creation or reinforcement of a dominant market position. Where necessary, notifications of acquisitions are considered in two stages. The so-called first stage takes a month at most. If the acquisition is clearly not harmful to competition, or if the harmful effects can be prevented by means proposed by the parties to the acquisition, the acquisition is approved during the first stage. If not, the FCCA decides to conduct a further investigation of the matter, during which the acquisition and its competition effects are investigated in further detail.