Dagsbrún hf / Wyndeham Press Group plc

OFT closed case: Anticipated acquisition by Dagsbrún hf of Wyndeham Press Group plc.

Affected market: Printing services

No. ME/2348/06

The OFT’s decision on reference under section 33(1) given on 25 April 2006. Full text of decision published 4 May 2006.


Dagsbrún hf (Dagsbrún) is an Icelandic investment company with investments in a number of subsidiaries that are active in telecommunications, media and entertainment in Iceland and the Faeroe Islands and is active in the printing sector through its subsidiary Isafoldarprentsmidja (Isafoldar). Isafoldar offers a full range of printing services, including pre-press, printing and finishing.

Baugur Group hf (Baugur), Dagsbrún's largest shareholder (31.8 per cent, see [Note 1]), is an Icelandic investment company that is active in a number of countries including the UK. Its UK activities comprise a number of investments in retail, property development and services sectors.

Wyndeham Press group plc (Wyndeham) is a UK public limited company active in the printing sector, predominantly in the UK (see [Note 2]).  It offers a full range of printing services, including pre-press, printing, and finishing. Wyndeham’s UK turnover for the year ending 31 March 2005 was £140.5 million.


On 24 March 2006, Dagsbrún, through its wholly owned subsidiary Daybreak Acquisitions Limited, announced a cash offer of approximately £80.6 million to acquire the entire shareholdings of Wyndeham. The offer has been recommended by Wyndeham’s Board of Directors.

On 28 March 2006 the parties notified the transaction to the OFT by way of a Merger Notice. The 20 working day statutory deadline therefore expires on 26 April 2006.


As a result of this transaction Dagsbrún and Wyndeham will cease to be distinct. The UK turnover of Wyndeham exceeds £70 million, so the turnover test in section 23(1)(b) of the Enterprise Act 2002 (the Act) is satisfied. The OFT therefore believes that it is or may be the case that arrangements are in progress or in contemplation which, if carried into effect, will result in the creation of a relevant merger situation.


Product market

The parties overlap in two types of printing – web offset and sheetfed – which are used to print magazines. Sheetfed printing is at the lower end of magazine printing technology and is used for short print runs (less than 30,000). Web offset is at the mid-high end of magazine printing technology and is used for print runs up to 400,000. Web offset is the dominant printing technology used for printing magazines in the UK.

Previously the European Commission has distinguished between different types of printing by print run capacity, specifically rotogravure printing was considered distinct from web offset printing as it could reach higher capacities than offset machines and was generally more efficient for high volume printing (see [Note 3]). Therefore, the different capacities of web offset and sheetfed printing (discussed above) may mean that it is appropriate to consider these types of printing separately. Alternatively, the overlap could be considered in respect of the end product – magazine printing.

However, it is not necessary to reach a definite conclusion on the relevant product frame of reference, given that, whichever way the frame of reference is defined, the merger does not give rise to competition concerns (discussed further below).

Geographic market

Magazines can be a time sensitive product, and this may limit the geographic scope over which customers can source their printing requirements. Isafoldar only sell their products in Iceland. Isafoldar submitted that the time sensitive nature of the product and costs of transport from Iceland meant its products did not appeal to customers outside Iceland and the Faeroe Islands. This was supported by customer views, with competitors similarly viewing Iceland as a separate market.

Wyndeham, on the other hand, predominately sell their products in the UK, making only a small number of sales in Europe (Germany) and the rest of the world. The majority of UK customers indicated that they do not currently purchase printing products outside of the UK due to the associated costs, schedule implications, transport and manufacturing resources. Similarly, UK competitors stated that they generally do not consider that they face competition from abroad for their products. It was also submitted that web offset magazine printing is generally UK based.

Based on this evidence, the OFT considers that the appropriate geographic frame of reference may be UK wide. Furthermore, given the location of Iceland in relation to the UK and the rest of Europe and the limited export of printing products to and from Iceland, even if the geographic frame of reference was expanded to that of Europe, Iceland may still be considered separate from the rest of Europe.

Nonetheless, a cautious approach has been taken and the impact of the merger has been examined both on a European wide (including Iceland) and a UK wide basis.


Isafoldar is not active in the UK. On a European wide (including Iceland) basis, the parties combined shares of supply are less than five percent regardless of the product frame(s) of reference chosen and sufficient competitive constraints exist post-merger. Furthermore, both customers and competitors indicated that Isafolder and Wyndeham do not currently compete with one another, primarily due to the geographic distance between the two. As a result, no competition concerns are considered to arise at either the UK or European level.


The parties submitted that vertical links may exist between Wyndeham and Baugur’s retail investments. Wyndeham produces catalogues and Baugur's retail investments in the UK purchase catalogues for marketing their products and services.

These vertical links are not considered to lead to any substantial lessening of competition in the supply of printing services for catalogues because Wyndeham’s share of supply of printing services for catalogues is less than 15 per cent. Similarly, Baugur’s share of sales for the purchase of catalogue printing services in the UK is considerably less than 15 per cent. Therefore, sufficient competitive constraints exist post-merger.


Third parties did not raise any competition concerns regarding the merger. In general they indicated that Iceland was a separate market and Isafoldar did not currently provide a competitive constraint on Wyndeham.


The parties are both active in the supply of web offset and sheetfed magazine printing services for printing magazines. At a UK level, there is no overlap between the parties’ activities as Isafoldar is not active outside of Iceland and the Faeroe Islands. At a European level, the parties’ shares of supply are below five percent irrespective of the product frame of reference chosen and sufficient competitive constraints exist post-merger. In addition, third parties have indicated that the parties do not currently compete with one another due to the geographic distance between the two. The merger may also give rise to vertical links between Wyndeham, a catalogue printer, and Bauger's retail investments which purchase catalogues. However, this is not considered to lead to any substantial lessening of competition given both Wyndeham’s sales and Bauger’s purchases of catalogues are relatively small and sufficient competitive constraints remain post-merger.

Consequently, the OFT does not believe that it is or may be the case that the merger may be expected to result in a substantial lessening of competition within a market or markets in the United Kingdom.


This merger will therefore not be referred to the Competition Commission under section 33(1) of the Act.


  1. As at 24 March 2006, this shareholding is partly held through an intermediate company in which Bauger has a significant shareholding.
  2. In addition to generating the majority of its turnover in the UK, Wyndeham also generated a very small proportion of its turnover in Germany.
  3. COMP/M.3178 – Bertelsmann/Springer/JV.
Published 24 April 2006