Bundeskartellamt issues preliminary assessment of the takeover of Kaiser's Tengelmann by EDEKA

18-Feb-2015 - Germany

In the EDEKA/Tengelmann merger control proceedings the Bundeskartellamt has today informed the parties of its preliminary assessment of the takeover plans.

Andreas Mundt, President of the Bundeskartellamt: "Based on the Bundeskartellamt's investigations so far the merger project would strengthen market structures which are already highly concentrated, in particular in Berlin, Munich and some large towns in North Rhine-Westphalia. The market lead of the top group of retailers, consisting of EDEKA, REWEand the Schwarz group along with Kaufland and Lidl, over their competitors in the procurement of branded products in particular, would increase further because the manufacturers would lose one of their remaining alternative sales outlets outside this group. Today we have informed the parties of our competition concerns. The companies now have the opportunity to comment on these and possibly submit proposals for obligations or commitments."

In many of the regional markets or municipal districts affected, EDEKA and REWE, including their brand-oriented discounters Netto and Penny, would be the only two remaining local providers offering customers an extensive product range with a high share of branded products. At the same time EDEKA’s market share increases gained from the takeover of Kaiser's Tengelmann would be generally well above 10% in the problematic markets, especially in Berlin and Munich.

How do we keep on eating meat if we wish animals no harm?

Read news

Many manufacturers would lose an important alternative sales outlet as a result of a merger between EDEKA andTengelmann. Furthermore, the small and medium-sized retailers which have up to now tried to strengthen their competitiveness in the difficult competitive environment of the food retail trade by entering into a purchasing cooperation with Tengelmann would lose this partner. Therefore, according to the Bundeskartellamt's preliminary assessment, the project would also significantly impede effective competition on several procurement markets in the food retail sector.

Since the takeover plan was notified to the authority in October 2014 the Bundeskartellamt has conducted extensive investigations at a number of retailers and suppliers. Based on the investigations, in particular the competitive closeness of the two parties, the local market structures in Berlin, Munich and several large towns in North Rhine-Westphalia, and the effects of the takeover on different procurement markets were analysed and evaluated. The results of the investigations showed that the importance of Kaiser's Tengelmann as a regionally strong company clearly exceeds its (relatively low) share of the national market.

EDEKA and Tengelmann as well as the companies and associations admitted to the proceedings have the opportunity to comment on today's draft decision by the Bundeskartellamt by 26 February 2015.

At the current moment it is not possible to assess whether a commitment solution would be possible in the case in question. It is at the discretion of the parties to the merger to enter into talks with the Bundeskartellamt.

Based on the current stage of the proceedings, the deadline for a final decision ends on 6 March 2015. However, the parties may apply for an extension of the deadline.

https://www.yumda.com/en/news/1144615/bundeskartellamt-issues-preliminary-assessment-of-the-takeover-of-kaiser-s-tengelmann-by-edeka.html