Does the deal break because of the cartel office?

Kaufland actually wants to take over up to 101 stores from the Real department store chain. But the Cartel Office is now raising concerns: Kaufland’s power could become too great.

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The plans of the large-scale discounter Kaufland to take over up to 101 branches of its competitor Real have raised concerns with the Federal Cartel Office. After a detailed analysis, the takeover is expected to significantly impede regional competition in nine Real stores, the supervisory authority announced on Monday. The competition authorities also expressed concern about the retail giant’s growing purchasing power vis-à-vis food manufacturers and suppliers.

The Federal Cartel Office is in negotiations with Kaufland and the Real owner SCP about possible solutions, it said in Bonn. Kaufland and SCP have already made initial proposals to the competition authority in order to dispel the concerns of the cartel office.

The deadline for a final decision has therefore been extended to December 30th. In the opinion of the competition authority, the participation of medium-sized retailers in the sale of the Real locations is of particular importance.

Real should be smashed

Kaufland is part of the Schwarz Group, which also includes the discounter Lidl. The Schwarz Group in Neckarsulm is already by far the largest food retailer in Europe with a turnover of more than 113 billion euros.

The Russian Real owner SCP had acquired the ailing hypermarket chain from Metro in order to break up and sell it on. Despite the concerns of the Cartel Office, SCP was optimistic that it would be able to complete the proceedings as planned by the end of the year. “We welcome the fact that the Federal Cartel Office sees no sales concerns for 92 of the 101 locations registered by Kaufland,” said an SCP spokeswoman. Constructive talks are already taking place with the Federal Cartel Office.

In addition to Kaufland, Germany’s largest grocer Edeka is also interested in up to 72 Real locations. The Federal Cartel Office has until December 21st to examine the takeover plans.

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