The SCA Approves Strålfors’ Acquisition of 21 Grams, Subject to Extensive Commitments
On 30 May 2025, the Swedish Competition Authority (the “SCA”) approved the acquisition of 21 Grams by PostNord Strålfors AB (“Strålfors”), a subsidiary of PostNord Group AB (“Postnord”), subject to extensive commitments by both Postnord and Strålfors. This decision followed an in-depth investigation that identified significant competition concerns, particularly due to the close ties between Strålfors and Postnord’s postal distribution operations. To address these issues, the parties offered far-reaching remedies, including a functional separation of Strålfors from Postnord’s distribution business, alongside other measures aimed at safeguarding competition. The SCA ultimately found these remedies sufficient and cleared the transaction.
The decision in full is available in Swedish here.
Background and the Parties
Both 21 Grams and Strålfors operate as intermediaries for digital and physical customer communications, such as the delivery of invoices. The parties then employ distributors to handle the physical customer communication by post – the largest being Postnord. Additionally, 21 Grams develops software that helps businesses optimise their postal communications and manage the transition from physical to digital mail. The tool assists companies in reducing mailing volumes by identifying the most cost-effective distribution channels.
The Swedish postal market is highly concentrated, partly due to Postnord’s history as a state monopoly. According to the SCA, Postnord holds a market share over 60% in mail distribution and is the only operator with nationwide coverage. By contrast, its largest competitor CityMail reaches only 54% of Swedish households.
The SCA also found that 21 Grams had built a strong market position through its software applications iSort and PostSort, tools that many market participants view as indispensable, with no viable alternatives currently available.
The SCA’s assessment
The SCA defined separate markets for distribution and intermediary services, further distinguishing within distribution between consignment mail and individual mail. For the purposes of this case, however, it treated digital and physical intermediary services as part of the same relevant market. The geographic scope of both markets was found to be national.
The SCA identified a horizontal overlap in the parties’ intermediary services, as well as vertical links between 21 Grams’ postal optimisation software and Strålfors’ intermediary services, and between 21 Grams’ intermediary services and Postnord’s mail distribution operations.
According to the SCA, the merger could allow Strålfors to raise rivals’ costs and redirect volumes toward Postnord, potentially leading to the foreclosure of competitors such as CityMail. This risk was considered particularly significant given that 21 Grams is a key customer of CityMail, and that its software plays a critical role in enabling CityMail to attract and retain business. In this respect, the transaction was seen as potentially reinforcing Postnord’s dominant position in the Swedish market for postal distribution.
The acquisition also risked harming competition in intermediary services. Strålfors, already the largest provider, would acquire 21 Grams, the second largest, thereby significantly increasing its lead over other competitors. Furthermore, the SCA found that 21 Grams plays a key role in promoting competition by making its software solutions available to third parties. Following the transaction, Strålfors could potentially restrict access to these critical programs, limiting rivals’ ability to compete effectively and ultimately weakening competition in the market.
Remedies and Approval
To address the SCA’s concerns, Strålfors offered a set of commitments. These included a functional separation under which Strålfors is organisationally separated from Postnord’s distribution business. In addition, Strålfors agreed to several behavioural remedies, such as an obligation to provide postage optimisation services on fair, reasonable and non-discriminatory terms (“FRAND-terms”), as well as to implement information barriers within the Postnord Group to prevent exploitation of competitors’ sensitive data/information.
The SCA considered the commitments sufficient and proportionate to eliminate the competitive risks arising from the concentration and therefore approved the transaction. The commitments, which apply until 2038, are backed by substantial conditional fines — SEK 300 million and SEK 450 million for Strålfors and Postnord respectively, plus monthly penalties of SEK 20 million each for non-compliance. An independent trustee will monitor their implementation and report to the SCA.
Concluding remarks
The SCA’s decision underscores the SCA’s willingness to clear complex transactions involving dominant players, provided that the parties offer sufficiently far-reaching and enforceable commitments. In this case, the commitments are extensive and are backed by substantial conditional fines and independent monitoring. While some stakeholders have expressed concerns about whether these measures will prove effective in practice, the SCA clearly considered the remedies both proportionate and adequate to address the identified risks. The case therefore illustrates how behavioural commitments can serve as a viable alternative to prohibition or structural remedies — even in markets with entrenched incumbents and high barriers to entry.