Approval granted for the union of two woodworking companies
In a recent decision, the Competition Council (KP) of Latvia has concluded that the merger of the Norupe sawmill, a municipal company's asset, will not result in significant harm to competition or a significant change in the structure of the market.
The sawmill, which operates in the logging industry, as well as in the manufacture of veneer sheets and plywood, was under review for potential risks to competition in 2018. Both the KP and the State Audit had conducted a thorough evaluation of these potential risks.
The concerns revolved around the status of Norupe as a municipal company's asset and the potential negative impact it could have on the market. However, the KP found no significant harm to competition in the transaction.
Riga Forests, the entity responsible for the sawmill, selected SIA "Stiga RM" as the most appropriate investor for the purchase of the sawmill. The identity of SIA "Stiga RM" and any potential significant changes in Latvia's wood resource extraction, processing, and trade markets due to this merger remain undisclosed in the search results.
The Competition Supervisor has also decided to allow the transaction, indicating that it is permissible according to the KP's evaluation. This decision means that the dominant position will not develop or strengthen in the markets of wood resource extraction, processing, and trade sector in Latvia due to the merger.
Furthermore, the KP's evaluation is based on the information provided by companies, and it concludes that the merger will not lead to a decrease in competition. This decision brings clarity and certainty to the involved parties and the market as a whole.
The KP's decision is a significant step forward for the Latvian wood industry, ensuring continued competition and neutrality in the market. The permissibility of the transaction paves the way for the Norupe sawmill to move forward under new ownership, contributing to the growth and development of the industry.
