Antitrust authority forbids take-over
The German Bundeskartellamt, the local antitrust authority, has apparently given its permission for this fruit and vegetable deal, but it has not actually said anything when Lebensmittelzeitung asked for confirmation. The purchase agreement is a jump start for Edeka to reignite its wishes to acquire Kaiser’s.
Normally, that deal should have been finalized by 30 June, a mere formality, were it not that the Bundelskartellamt prohibited the move in April. Otherwise, Edeka would have acquired Kaiser’s Tengelmann’s supermarkets in Berlin, Munich and Rhein-Ruhr.
According to the German antitrust authority, the deal would have creative a hugely unfavourable competitive environment for all regional supermarkets and stores in Berlin, Oberbayern and North Rhine-Westphalia. “Kaiser’s Tengelman is Edeka’s largest competitor in these regions and in many suburbs in Berlin, Munich and Düsseldorf”, Bundeskartellamt’s president, Andreas Mundt, said on its rejection of the deal.
Ministry approval requested
Kaiser’s Tengelmann and Edeka tried to get the Federal Ministry for Economic Affairs and Energy (Bundesministerium für Wirtschaft und Energie) to allow the merger, despite the Bundeskartellamt’s decision. Particularly Kaiser’s Tengelmann is in favour of the deal: Aldi, Lidl and even Edeka and Rewe have proven to be too formidable as competitors. It may have a 1.8 billion euro yearly turnover, buts losses are also significant.
While Edeka and Tengelmann still hope the Ministry will approve the deal, Rewe and Migros have also entered the acquisition battle, according to Lebensmittelzeitung, Der Spiegel and Wirtschaftswoche.
Rewe: take-over bid last year
Competitor Rewe wanted to buy Kaiser’s last year and while there won’t be a decision until September, it wants to get a headstart on what may come: “Edeka’s take-over will not be beneficial to the competitive environment”, Rewe’s chairman of the board Alain Caparros told Wirtschaftswoche recently. “Edeka will not save Kaiser’s Tengelmann’s 16,000 jobs, while Rewe will”, he emphasizes.
Last week, Der Spiegel revealed that the Cologne-based supermarket company has long since considered Kaiser’s. One of its board members, Lionel Souque, said the company would be willing to acquire Kaiser’s Tengelmann fully and that it had bid 450 million euro already.
Migros is also interested
Swiss Migros is also interested in a take-over, according to its director Jörg Blunschi in an interview with “Schweiz am Sonntag”. The company has been active in the German supermarket branch since 2012 when it acquired some 290 supermarkets from Tegut. “We want to expand our position in southern Germany, starting from our Tegut base in Hessia, Thuringia and Nordbayern. The 130 Bavarian Tengelmann stores would fit that need perfectly”, Blunschi explained.
Tengelmann itself is still focused on an Edeka sale, as both companies have entertained bonds for quite a while. Tengelmann already sold the majority of its Plus supermarkets to Edeka in 2008 and only if the Ministry does not approve the take-over will its supermarkets probably go to other competitors.
Edeka is one of the four largest German supermarket groups, alongside Rewe, Aldi and Schwarz-Gruppe (Lidl, Kaufland). It has been acquiring Kaiser’s Tengelmann’s stores in Berlin, Munich and Rhein-Ruhr for several years, in total 451 stores with 16,000 employees.
