Blog: Dean BestGerman watchdog rebukes retailers Edeka and Tengelmann

Dean Best | 12 December 2014

Germany's competition watchdog has issued an interim injunction against retailers Edeka and Tengelmann over their planned deal over the Kaiser's supermarket chain.

The Bundeskartellamt is investigating Edeka's proposed acquisition of 451 Kaiser's stores, announced in October.

That probe is still ongoing but this week the anti-trust body intervened in the retailer's alleged moves to integrate parts of their operations.

According to the Bundeskartellamt, Edeka and Tengelmann had already agreed on "concrete measures" in areas such as joint purchasing, warehousing and meat processing.

"It is a key principle of merger control that the effects of a planned merger on competition should not be anticipated. If a merger project has to be examined, the companies have to await the competition authority's decision," Bundeskartellamt president Andreas Mundt said.

"Also, in this case, suppliers, competitors and consumers must be able to rely on the fact that Edeka and Tengelmann will not create any facts whose effects cannot be reversed before the Bundeskartellamt's decision. The interim injunction is a precautionary measure to ensure that the status quo is maintained for the time being and the merger can be examined in an open-ended procedure."

Edeka and Tengelmann officially informed the the Bundeskartellamt about the proposed deal on 4 November and the investigation could take as long as four months.

The Kaiser's chain only accounts for 0.6% of sales in Germany and Edeka has insisted its footprint in Bavaria, Berlin and Nordrhein-Westfalen would not significantly increase.

However, Edeka said the deal would help its co-operative business what is an "extremely tough competitive environment".

Edeka arch-rival Rewe has reportedly indicated it could resort to legal action if the Bundeskartellamt approves the deal.

Officials at Edeka and Tengelmann declined to comment on the investigation. Rewe did not respond to a request for comment.

Sectors: Mergers & acquisitions, Retail

Companies: Rewe, Edeka

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