Iceland Observer: EU Vote Looms as Corporate Deals and Energy Investment Advance

MarketVector™ Iceland Global Index (MVISLG) Returns:

1W: (0.04)% 1M: (0.57)% 1Y: 12.54% Inception 12/31/20: 46.81%

Policy & Central Bank

Iceland Looks to Join the EU

Iceland’s government is preparing to hold a national referendum on whether to restart talks to join the European Union, with a vote that could come as soon as August. Lawmakers are expected to set a date in the coming weeks as geopolitical tensions intensify. New U.S. tariffs on Icelandic exports and renewed security concerns tied to Greenland have accelerated a decision that had previously been expected closer to 2027.

M&A/PE/VC

Nova to Acquire Ofar

Nova agreed to acquire Ofar in a deal valued at roughly $32 million, expanding the telecom operator’s push into business IT services. Ofar serves about 10,000 corporate clients and provides hardware and technology support solutions. Nova plans to run the business separately while using the acquisition to deepen relationships with enterprise customers.

Bank Merger Talks Terminated

Merger negotiations between Íslandsbanki and Skagi were called off after the two sides failed to reach agreement on valuation. Executives had previously highlighted potential cost savings and strategic benefits, but differences over ownership terms proved insurmountable. Both companies will now continue as standalone institutions.

Corporate & Market News

Reitir Posts Double Digit Growth

Real estate firm Reitir reported operating profit of about $88 million for 2025, with rental income rising more than 10%. The company continues to invest in hotel and residential developments, positioning its portfolio for steady cash flow growth.

Síminn Shares Fall

Telecom operator Síminn reported stable annual results but issued a more cautious outlook for 2026, citing rising supplier costs and competitive pressure. Shares fell following the announcement as investors reassessed margin expectations.

Renewable Energy & Industry

Landsvirkjun Reports Strong Profit

State power company Landsvirkjun posted profit of roughly $260 million for 2025 and plans to pay about $145 million in dividends to the government. The utility is moving ahead with major hydro and wind projects aimed at expanding renewable generation capacity.

Fishing Volumes Slightly Lower

Iceland’s January fish catch totaled just under 75,000 tons, down about 5% from a year earlier, reflecting lower groundfish volumes. On a rolling 12 month basis, overall catches remain slightly higher than the prior year.

Economic Indicators

Tourism Moderates

Foreign visitor arrivals declined 1.8% year over year in January, signaling a modest slowdown following the strong post pandemic rebound. Activity remains elevated relative to historical norms, though winter demand appears softer.