On November 25, the Competition Council (the CC) decided to allow UAB "AKROPOLIS GROUP", a company registered in Lithuania, to acquire a decisive influence over Ltd. "DELTA PROPERTY", which manages the shopping centre "Alfa". The CC did not find significant harm to competition, so it decided to allow the transaction.
The current and planned activities of UAB “AKROPOLIS GROUP” are the activities of holding companies, management of shopping centres owned by subsidiaries. The company is an operator of multifunctional shopping centres, which owns four centres and two office buildings in Lithuania and Latvia. One of the centres is in Riga - the multifunctional shopping centre "Akropole".
Ltd. "Delta Property", on the other hand, rents and manages its own or leased real estate, leasing retail premises to various retail and service companies. The company is the owner, operator and developer of the multifunctional shopping centre "Alfa". Thus, the market affected by the merger is the market for multifunctional shopping centres for renting retail space in Riga and its vicinity.
As part of the case, the CC interviewed competing multifunctional shopping centres and tenants to find out their views on the definition of the relevant market and how close the substitutes are to the merging parties. The range of customers for renting premises in multifunctional shopping centres is wide. It is important to note that store owners are not limited to renting premises from only one service provider, as a result, the store owner can provide his services in several centres. Most surveyed tenants and centres indicated that competition in the market has increased in the last four years and the quality of services. This could be explained by the expansion of existing multifunctional shopping centres, such as the reconstruction of "Alfa" and "Origo" and the entry of new centres, the "Akropole" and "Sāga".
The CC found that the entry of the multifunctional shopping centre “Akropole” into the market in 2019 did not significantly impact the operation of the multifunctional shopping centre “Alfa”. The shopping centres and tenants surveyed indicated that the Acropolis and Alfa were not the closest competitors and that their premises were interchangeable with those of other competitors. In the CC's assessment, because of the merger, the merged market participant in the relevant market will not significantly increase the possibility of foreclosing competitors. The CC did not find that UAB “AKROPOLIS GROUP” would be able to use its market power against existing market participants, restricting or hindering the entry or expansion of potential market participants.
Evaluating the information provided by the companies and at the disposal of the CC, the CC concludes that the merger will not significantly change the market structure, reduce competition or create or strengthen a dominant position in the affected market in Latvia where the merging parties operate. The merger is, therefore, allowed.
To prevent a significant reduction of competition because of a merger, merger transactions that comply with the criteria specified in the Competition Law require the permission of the Competition Council. Thus, the Competition Council ensures state control over the concentration of markets so that no structural changes occur that would result in the restriction of consumers' choices in the long run or the purchase of goods and services at uncompetitive prices.