Iceland Observer: Pension Mergers, Data Centers, and Rising Prices

Iceland Observer
Jun 30
2 min read

Alt text:
Watercolor editorial illustration of two pension funds merging into one larger financial institution, with Icelandic scenery in the background.

MarketVector™ Iceland Global Index (MVISLG) Returns:

1W: (0.90)% 1M: (10.55)% 1Y: (6.90)% Inception 12/31/20: 25.22%

M&A / PE / VC

Laxey Raises ISK 6.7B

Laxey, a Westman Islands based land salmon farming company, completed a share offering totaling ISK 6.7 billion, or roughly $53 million. The company plans to use the funding for the next phase of its development. The raise adds another financing milestone for Iceland’s land based aquaculture sector.

Pension Merger Approved

Members of Lífeyrissjóður bænda, Iceland’s Farmers’ Pension Fund, approved a merger with Frjálsi lífeyrissjóðurinn, a much larger open pension fund. The vote was unanimous at LSB’s annual meeting on June 19. The combined fund is expected to have roughly ISK 672 billion, or about $5.3 billion, in assets and more than 85,000 members. Frjálsi accounts for about ISK 626 billion, or $5.0 billion, of the combined asset base, while LSB contributes about ISK 46 billion, or $364 million.

Renewable Energy & Industry

Borealis Adds 12 MW of Power

Landsvirkjun, Iceland’s national power company, and Borealis Data Center agreed to increase power supply for Borealis’ data center in Blönduós. The long term agreement covers 12 MW of additional priority power on top of the company’s existing contract.

Producer Prices Rise

Statistics Iceland said producer prices rose 2.0% in May. Prices for power intensive industries rose 6.7%, while marine product prices fell 0.2% and food production prices rose 0.9%.

Corporate & Market News

Samherji Reports Profit

Samherji, one of Iceland’s largest seafood companies, reported group revenue of ISK 78.4 billion, or roughly $621 million, for 2025. EBITDA was ISK 10.7 billion, or roughly $85 million, up ISK 1.8 billion, or roughly $14 million, from the year before. Vísir reported profit of about ISK 8.5 billion, or roughly $67 million.

Policy & Central Bank

Tourism Marketing Funded

The Icelandic government signed a one year ISK 630 million, or roughly $5 million, agreement to market Iceland as a tourism destination. The project involves the Ministry of Industries, Íslandsstofa, the Icelandic Travel Industry Association and regional destination agencies. The government is also reviewing how public destination marketing is organized and funded.

Economic Indicators

Inflation Rises to 5.2%

The CPI rose 0.94% in June and was 5.2% higher than a year earlier. The CPI excluding housing rose 1.08% month over month and 4.8% year over year. International airfares rose 20.1% during the month, accommodation services rose 17.5% and owner occupied housing rose 0.6%.

Unemployment at 5.6%

Seasonally adjusted unemployment was 5.6% in May. Statistics Iceland counted 13,100 unemployed people aged 16 to 74. The employment rate was 76.5% and labor force participation was 81.1%. Unadjusted unemployment was 8.3%, up 3.8 percentage points from a year earlier.

Purchasing Power Rises

Purchasing power of household disposable income per capita rose 1.1% in the first quarter. Household gross disposable income rose 7.8% year over year. Total household expenditure rose 4.9%.