Strålfors allowed to buy 21grams – these are the conditions

The Swedish Competition Authority has approved Strålfors’ acquistion of 21grams given that a range of conditions are met.

The deal was announced in July 2024 and was subject to approval by the Swedish Competition Authority, which was granted on May 30 this year along with extensive commitments. The acquisition is now completed and was finalized on June 5.

According to the Competition Authority’s decision, current customer agreements must remain in place for at least two years. After that, Strålfors/21grams may terminate these agreements but must offer new customer contracts “on fair, reasonable, and non-discriminatory terms.”

Financial Management for Small Businesses

In connection with the acquisition, Strålfors and Banqup, as previously announced in July 2024, have also entered into a strategic partnership around financial management services for small businesses.

This includes invoicing and expense management services, where Banqup has not yet succeeded in breaking into the Nordic market. Strålfors will now lead efforts in this area.

Conditions and Commitments

During the review process by the Swedish Competition Authority (Konkurrensverket), two so-called market tests were conducted, in which industry players were asked whether the proposed measures would be sufficient to eliminate anti-competitive effects.

According to the decision, responses from the market were predominantly negative on both occasions. A third market test was never conducted, as the authority believed that “the commitments were deemed to appropriately address the remaining competition concerns, based on the information already obtained from the earlier market tests.”

The final commitments consist of the following five primary obligations:

1. A functional separation within the Postnord Group,
2. An obligation to deliver postage optimization services,
3. An obligation to deliver and develop brokerage services related to postage optimization,
4. An obligation not to discontinue services under the Mailworld and Morgonpost brands
5. Implementation of information barriers within the Postnord Group.

Postnord states in a press release that this means, among other things, that the CEO of Strålfors Group cannot be part of Postnord’s group management, and Postnord representatives on the Strålfors board must be replaced.

Ylva Ekborn will continue as CEO of Strålfors Group and will still report to Annemarie Gardshol, Group CEO of Postnord, according to the press release.

Valid Until 2038 – But May End Early

he commitments are valid from the acquisition date until December 31, 2038. However, starting January 1, 2031, the commitments may be lifted if the combined unit (Strålfors and 21 Grams) has had a total volume of fewer than 70 million printed and enveloped items for distribution in Sweden over the previous twelve months.

If the demand for a postage optimization or brokerage service becomes so low that it is no longer commercially viable to offer it, the service may be discontinued — but only with approval from the Competition Authority and the independent monitoring trustee.

According to the decision, compliance with the commitments will be monitored by an “independent trustee” appointed and paid for by Postnord but approved by the Swedish Competition Authority.

If the commitments are not followed, a fine of SEK 450 million will be imposed on Postnord and SEK 300 million on Strålfors, along with an ongoing penalty of SEK 20 million per month for each party.

The full 92-page decision from the Swedish Competition Authority is available to read here.