EDEKA/Kaiser’s Tengelmann German merger review saga comes to an end

• 09/12/2016
• Articles

On 8 December 2016, the German Federal Cartel Office (FCO) cleared the divestment by supermarket chain EDEKA of 65 retail outlets in Germany to REWE.  The FCO also reported that, in a related development, REWE has withdrawn its appeal against the ministerial authorisation of EDEKA’s acquisition of its competitor Kaiser’s Tengelmann.  This brings the long-running saga of the EDEKA/Kaiser’s Tengelmann merger review to an end.

In 2015, EDEKA’s acquisition of Kaiser’s Tengelmann had been prohibited by the FCO, which found that the transaction lessened consumer choice in a number of highly concentrated regional and municipal markets (see VBB on Competition Law, Volume 2015, No. 4). However, in March 2016, the German Minister of Economic Affairs issued a ministerial authorisation conditionally clearing the same EDEKA/Kaiser’s Tengelmann transaction (see VBB on Competition Law, Volume 2016, No. 3). Following the ministerial authorisation, REWE (a competing supermarket chain) and other competitors of EDEKA and Kaiser’s Tenglemann appealed against the ministerial authorisation before the Higher Regional Court of Düsseldorf. The Court found that the ministerial authorisation was unlawful and ordered its preliminary suspension, pending the outcome of a full hearing (see VBB on Competition Law, Volume 2016, No. 7). However, prior to a full hearing, REWE and the other competitors withdrew their appeal, largely because EDEKA agreed to transfer to REWE approximately 65 supermarkets that it acquired from Kaiser’s Tengelmann. This divestment was approved by the FCO on 8 December 2016.  EDEKA is now free to implement its acquisition of Kaiser’s Tengelmann.