Hagar hf., the retail company behind Icelandic household names including supermarkets Bónus and Hagkaup, has signed a contract to buy the oil company Olís and property company DGV ehf.
The deal has several caveats at this stage—including the need for Competition Authority approval—but the companies hope a binding deal can be finalized before the end of this year.
A statement from Hagar to the Icelandic Stock Exchange explains that Olís has 115 outlets all over the country, under the brands Olís, ÓB and Rekstrarland. DGV ehf. property company has a 3,000 square-meter (32,291 sq. ft.) property on Fiskislóð in Reykjavík and a plot in Hella. The total purchase price of Olís and DGV is around ISK 9.5 billion (EUR 81.6/USD 89 million). Around half that sum will be paid in Hagar shares.
Finnur Árnason, CEO of Hagar, told RÚV that the deal provides his company with opportunities to go on the offensive and improve profitability in a changing competitive environment.
He would not answer whether the move is a direct reaction to the arrival of Costco in Iceland, which will also have a fuel filling station next to its superstore, due to open at the end of May.
Costco aims to undercut the established oil companies, but will be buying fuel from the same domestic suppliers as everybody else.