Switzerland’s biggest food retailer Migros has a green light to take a 70% share in Swiss discounter Denner, subject to some strict conditions.
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Denner’s sales last year were worth CHF 2bn through 450 outlets and its 280 rural ‘satellites’.
The Swiss Competition Commission (Comco) has imposed a number of seven-year terms to the deal, which leaves 30% in the hands of Denner’s CEO Philippe Gaydoul through a holding company. Migros will undertake to preserve Denner’s autonomy in buying and stocking policy, as well as its visual identity.
The board will not have a Migros-nominated majority, nor will Migros be allowed to acquire any other Swiss food retailer. Nor will the co-operative be allowed to open any M-Budget discount stores during the next three years.
There is also a seven-year ban on sharing any buying from Swiss SME suppliers, nor may Denner buy any Migros-made products from the co-operative’s extensive manufacturing arm, even if Migros can supply them more cheaply.
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By GlobalDataOperating exclusively within Swiss market, Gaydoul needed to find a long-term strategy that would give him buying power abroad and stay competitive. The Migros link will give Gaydoul access to international suppliers.
