KAUPTHING HOLDINGS UK LTD / SINGER AND FRIEDLANDER GROUP PLC OFT closed case: Anticipated acquisition by Kaupthing Holdings UK Limited of Singer and Friedlander Group plc. CONTENTS * PARTIES

* TRANSACTION * JURISDICTION * RELEVANT MARKET * Product scope * Geographic scope * HORIZONTAL ISSUES * Barriers to entry and expansion * VERTICAL ISSUES * THIRD PARTY VIEWS * ASSESSMENT *

DECISION * NOTES Affected market: Banking and financial services No. ME/1705/05 The OFT’s decision on reference under section 33 given on 2 June 2005. Full text of decision published 8 June

2005. PARTIES Kaupthing Holdings UK Limited (Kaupthing UK) – is a wholly-owned subsidiary of Kaupthing Bank hf (Kaupthing Bank), an investment bank based in Iceland. Its UK operations focus

turnover for 2004 was approximately £. Singer and Friedlander Group plc (S&F) – is a specialist banking and investment management group, providing a range of services to private clients,

their corporate vehicles and other institutions. S&F’s UK turnover in 2004 was approximately £220 million. TRANSACTION Kaupthing UK proposes to acquire the entire issued and to be

issued share capital of S&F not already owned by Kaupthing Bank or by a subsidiary of Kaupthing Bank. The transaction is to be effected by way of a recommended cash offer by Deutsche

Bank AG London on behalf of Kaupthing UK. The final consideration is not expected to exceed £440 million. The parties submitted a merger notice on 5 May 2005 and the 20-working day statutory

deadline expires on 3 June 2005. JURISDICTION As a result of this transaction Kaupthing UK and S&F will cease to be distinct. The UK turnover of S&F exceeds £70 million, so the

turnover test in section 23(1) (b) of the Enterprise Act 2002 (the Act) is satisfied. Arrangements are in progress or in contemplation which, if carried into effect, will result in the

creation of a relevant merger situation. RELEVANT MARKET Kaupthing Bank is an investment bank and S&F is a specialist banking and investment management group. The parties overlap in the

provision of corporate banking services. PRODUCT SCOPE Under the broad umbrella of corporate banking services, the parties overlap in the provision of acquisition and leveraged finance.

Kaupthing Bank’s corporate banking activities in the UK are limited to the provision of acquisition and leveraged finance in respect of merger and acquisition projects. S&F supply a

wider range of corporate banking services in the UK which also includes leveraged finance. Customers have a requirement for a particular banking service depending on the transaction. Other

types of banking services do not appear to be close substitutes for acquisition and leveraged finance and corporate banking. Demand- side substitution therefore appears limited. As to

supply-side substitution, evidence from third parties suggests that it would be possible for existing UK suppliers of other banking services to enter the corporate banking segment.

Conclusion Evidence of limited demand-side substitution may suggest that a narrow frame of reference of acquisition and leveraged finance services would be appropriate. However, given that

the OFT concludes that no competition concerns arise on any definition (see below), it is not necessary to reach a firm conclusion on the relevant product frame of reference. GEOGRAPHIC

SCOPE The geographic scope for corporate banking services and acquisition and leveraged financing may be as wide as the European Union or even global. Some third party evidence suggests that

a foreign bank would only be considered if it has a UK presence. Given that no competition concerns arise it is not necessary to reach a firm conclusion on this issue. HORIZONTAL ISSUES The

parties overlap in the broad area of corporate banking services which has a number of niche segments. Kaupthing Bank’s UK corporate banking activity is limited to the provision of

acquisition and leveraged finance and it is in this particular segment of corporate banking services the parties directly overlap. To the extent that acquisition and leveraged finance were

taken as the relevant frame of reference (contrary to certain indications discussed above), even with this narrow frame of reference the parties’ combined share of supply will be minimal.

The parties estimate their post-merger combined share in the supply of acquisition and leveraged finance to be significantly less than 5 per cent (increment 0.3 per cent)(see [note 2]).

Moreover, this segment is characterised by numerous suppliers, which the OFT believes will exert a constraint on the parties post-merger. BARRIERS TO ENTRY AND EXPANSION Given that there are

no competition concerns that arise from this transaction, it is not necessary to conclude on barriers to entry. VERTICAL ISSUES The OFT has found no evidence that this transaction raises

any vertical competition concerns. THIRD PARTY VIEWS No third party expressed any concern about this transaction. ASSESSMENT This transaction does not appear to raise significant concerns on

any reasonable frame of reference. Kaupthing Bank has limited UK activities and the parties tend to focus on different facets of investment banking. In those segments where the parties’

activities do overlap, even on a narrow frame of reference the parties’ combined share of supply will be minimal. The segment of overlap has numerous active suppliers. 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 UK. DECISION This merger

will therefore not be referred to the Competition Commission under section 33(1) of the Act. NOTES * The turnover figure was excised from text at Kaupthing Bank’s request. * The parties’

estimate was sourced from Thomson Financial. UPDATES TO THIS PAGE Published 1 June 2005 Contents