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By Foo Yun Chee
BRUSSELS, June 12 (Reuters) - Private equity fund Nordic Capital gained EU antitrust approval on Monday to buy Sweden’s Intrum Justitia after pledging to sell overlapping debt-collection and debt-purchase businesses in five neighbouring countries.
The concession came after the European Commission voiced concerns about the strong market position of both Intrum Justitia and Nordic Capital-owned Lindorff, both of which have the scale to serve large customers in the banking, utilities and telecoms sectors.
Under a deal first announced last year, Intrum Justitia will merge with Lindorff, leaving Nordic Capital as the combined group’s biggest stakeholder with control of 45 percent of the equity through its direct and indirect investments.
“To address the competition concerns identified by the Commission, Nordic Capital offered to divest the whole of the debt-collection and debt-purchasing businesses of Lindorff in Denmark, Estonia, Finland and Sweden, and the whole of the debt-collection and debt-purchasing business of Intrum Justitia in Norway,” the EU competition watchdog said.
Debt purchasing typically involves the transfer of creditors’ debt portfolios to buyers that in most cases collect the debts themselves.
Intrum Justitia proposed the package of spin-offs in mid-May as it sought to salvage the deal for its Norwegian rival. It now has six months to carry out the divestments demanded by the EU.
“We are confident we will be able to carry this out in a good way and we already see a lot of interest,” CEO Mikael Ericson told Reuters.
The businesses being put up for sale have about 850 employees in total and were estimated in May to account for 30 percent of the cost benefits stemming from the original merger plan. (Additional reporting by Niklas Pollard; Editing by Philip Blenkinsop and David Goodman)