The German competition watchdog has announced that it is to prevent German retailer Edeka from acquiring Tengelmann's supermarket chain Kaiser's.
The watchdog said in a statement that if it allowed Edeka to buy the 450 Kaiser's stores, it would negatively affect market competition, particularly in Berlin and the states of Bavaria and North Rhine Westphalia.
It said that the takeover would have had a negative impact on producers and suppliers, adding that both would lose a vast amount of buyers and would have been forced to collaborate with parties with whom they would not necessarily want to collaborate under different circumstances.
Even though Edeka and Tengelmann tried to save their endeavour last week with an improved proposal, the competition authority found that the suggested improvements would not have been enough and damaging to the market nonetheless.
In determining whether to allow or reject the proposal, the competition watchdog analysed both urban and rural German markets, including retailers Edeka and Rewe and discounters Aldi and Lidl, in an attempt to get a full overview of all possible consequences.
Andreas Mundt, president of the German competition authority, said, "The takeover would have been possible if the majority of the three regional distribution networks of Kaiser's Tengelmann – at least in the critical regional markets – would have been given to at least one or two third-party competitors. We had a whole list of specific suggestions of alternative buyers that would have been willing to keep all of the stores' employees. However, Edeka and Tengelmann were not prepared to respond to the requests made by the federal competition authority, so the request was denied altogether. "
Edeka and Tengelmann have the option of filing a complaint against this decision at the Düsseldorf court of appeal within a month.
After four weeks pass, the competition watchdog's decision will become legally binding.
© 2015 European Supermarket Magazine – your source for the latest retail news. Written by Jenny Zilligen.
