Renewed deadline: Cartel Office has concerns about the takeover by Kaufland
The Federal Cartel Office has concerns about the registered acquisition of 101 Real locations by Kaufland. This was announced by the competition authorities in a press release on Monday when the preliminary assessment was transmitted to the companies involved. The Cartel Office therefore sees various competition problems, especially on the procurement side in relation to suppliers and other competitors in the food retail sector.
According to the current state of affairs, only the takeover of nine locations is problematic: The Cartel Office sees a “significant impediment to effective competition in nine regional sales markets due to the acquisition of the Real locations there by the Schwarz Group.” This was also confirmed by an SCP spokeswoman for the “Lebensmittelzeitung (LZ)”. At SCP they are “optimistic”, said a spokeswoman for the “LZ”, “that we can come to a good overall solution and complete the process as planned by the end of the year”.
The institution also expressed concerns because the participation of medium-sized competitors such as Globus “is of particular importance […] in the sale of the Real locations. “
In order to dispel the concerns, the Real seller, the SCP investor group, and Kaufland have now submitted proposals for various commitments to the Federal Cartel Office. The competition watchdogs and the companies involved are now negotiating this, which is why the deadline for the decision has been extended to December 30th.
Originally, the negotiation period was set until the end of October. It has already been postponed twice due to the concerns.
Kaufland and the Cartel Office agree to extend the deadline
Kaufland wants to take over 101 of the 279 Real stores for sale and recently pushed for the branches to be integrated quickly. According to the management’s plan, 20 stores should already be operating under the Kaufland brand by October. The retail giant wanted to take away the lucrative Christmas business. Kaufland has already regularly achieved record sales in the past few months.
Nothing comes of that for now: Actually, the deadline for the cartel decision expired last week, Kaufland and the authorities agreed some time ago on an extension of the deadline to November 9th, according to the “Lebensmittelzeitung” newspaper, which is probably also wasted. The Cartel Office will probably need until November 30th for a decision. The Cartel Office did not give the exact reason for the delay.
Code name Goethe: Globus hires first employees for Real takeover
A few weeks ago the Saarland Globus Group already expressed interest in taking over 16 Real stores. Globus has now set up a project team called “Goethe” for the takeover and has already hired its first employees, reports the “Lebensmittelzeitung”. In an interview there, the spokesman for the management of the Globus hypermarkets, Jochen Baab, stated that “all organizational requirements” have been created for the integration of Real stores.
So far, Globus has made a takeover offer for 16 markets with the Russian investor group SCP and intends to move to around 70 branches in Germany in the coming years. However, the deal is not yet dry, so far there is only one offer from Globus, and the Cartel Office would also have to approve a takeover beforehand.
The EU Commission makes it official: Kaufland is allowed to take over real.de
The Schwarz Group (Lidl, Kaufland) can significantly expand its presence in online retail. The retail giant received the green light from the EU Commission on Thursday to take over the online marketplace real.de. The EU Commission announced that there were no competition concerns.
“As a further sales channel, the online marketplace will ideally complement our stationary business”, emphasized the Schwarz Group’s digital director, Rolf Schumann. The discount specialist, which operates more than 12,000 branches worldwide with its Lidl and Kaufland divisions and has a turnover of more than 100 billion euros, has so far been rather cautious in e-commerce. Online food retailing experienced a boom during the Corona crisis. The new acquisition can now help to close this gap. The online platform is to be continued under the name Kaufland. However, the renaming should not take place until next year.
Kaufland is not only interested in Real’s online marketplace, but has also registered with the Federal Cartel Office that it is interested in buying up to 101 branches.
Coca-Cola, Nestlé & Co. veto the takeover of branches by Edeka and Rewe
Will the takeover of the Real branches by Edeka, Rewe and Kaufland be about to close? The brand association – whose members include prominent food manufacturers such as Coca-Cola, Nestlé and Dr. Oetker are – according to the “Lebensmittelzeitung”, calls on the cartel office in a letter of complaint to stop the sale. The takeover would finally create a dominant oligopoly. “There is no other option than to prohibit these takeovers because they significantly impair competition in the procurement markets,” said association head Christian Köhler.
Most recently there was a dispute between Kaufland and its suppliers over high demands on terms and conditions. The manufacturers are supposed to deduct 0.02 percent of the respective gross sales from each Real branch taken over to Kaufland – an unacceptable demand for the association and proof of the “competitive superiority of the retail trade”.
After the Plus takeover in 2009, it became clear that the Markenverband can definitely make a difference. After the purchase, Edeka had implemented better purchasing conditions with dealers. Following a complaint from the trademark association to the Cartel Office, the Federal Court of Justice ruled that the conditions were illegal.
17th of September
Globus gets involved in the branch poker
After the supermarket chains Edeka and Kaufland have already expressed their interest in the Real stores to be sold, the Saarland retail company Globus has now also spoken out. As the “Wirtschaftswoche” reports, the chain wants to take over up to 16 stores.
Globus hopes that the project will be supported by the Federal Cartel Office, which is currently examining Edeka and Kaufland’s purchase intentions. A Globus spokeswoman: “The Federal Cartel Office has been following developments in the food retail sector for many years with great attention and a high level of expertise,” she said. “We have great confidence in the work of the Federal Cartel Office that in this case too it will make a decision that will strengthen competition.”
Edeka registers 72 Real branches for takeover
As the “Lebensmittelzeitung” reports, Edeka has now officially registered with the Federal Cartel Office to take over 72 Real branches. A spokesman for the competition authorities confirmed this to the industry medium. The application was submitted on Friday.
Previously, the application had been delayed again and again, actually Edeka wanted to have announced the takeover at the beginning of July. Originally, the market leader had agreed with the new Real owner SCP in the spring to take over 53 stores. But then it became known that further locations were being negotiated, which is why the official registration had been postponed.
Kaufland, the biggest competitor in poker for the Real locations, had already announced the takeover of up to 101 houses at the beginning of June.
Real wants to save costs in terms of personnel and product range
Before the still existing Real stores are finally transferred from the new owner, the Russian investor group SCP, to the new buyers Kaufland and Edeka, significant savings are to be made. SCP wants to pursue a tough austerity course in all business areas, costs should fall by up to 350 million euros within two years, reports the “Lebensmittelzeitung”. The austerity program should start in the transition period before the sale of presumably 119 of the total of 279 Real stores.
Although Real recorded like-for-like growth of 3.9 percent in the first half of the year due to the corona pandemic, the full-range market has been economically poor for years. “Real has been posting losses in the three-digit million range for several years. The temporarily higher sales from the Corona period will not change anything in the 2019/20 financial year, ”the company confirms to the“ Lebensmittelzeitung ”. Real must now try to keep the liquid funds and reduce the losses in the operational business.
The greatest savings can be made in the cash register and in the case of temporary employees. There is potential for savings of 200 million euros here, reports the “Lebensmittelzeitung” newspaper. This means that probably many employees with fixed-term contracts will not be renewed after their employment relationship has expired, and the hiring freeze has been extended. In addition, it is currently being examined whether further personnel and costs can be saved by closing the cheese and meat counters.
And the variety of products could also hit it: Ten percent of the entire range, which includes between 40,000 and 80,000 articles depending on the size of the market, is to be shortened, according to the media report. In addition, less money should be spent on outdoor advertising.
Update August 7th
Which markets will probably go to Kaufland and Edeka
In an unofficial list, the names of successors for 119 Real stores should already be read, as reported by the “Lebensmittelzeitung”.
However, all sides are currently covered, because a decision by the Federal Cartel Office is still being awaited. Which markets are going to Kaufland and which are going to Edeka is said to have leaked to some Edeka merchants. They take this as an opportunity to look for locations behind the scenes, so the “LZ” continues.
Kaufland would receive 79 branches according to the lists, but had previously signaled interest in 88. According to the list, the distribution of the markets looks like this:
- Bavaria: 6 branches go to Edeka, 11 shops go to Kaufland. 3 locations will be closed, what will happen to the remaining 14 branches is unclear.
- Baden-Wuerttemberg: 8 branches go to Edeka, 10 branches to Kaufland. What will happen to the remaining 18 branches is still unclear.
- Berlin: 2 branches go to Kaufland, one will probably be closed. There are currently no takeover candidates for the remaining 2 Real stores.
- Brandenburg: 3 branches go to Edeka, 2 branches to Kaufland. One branch will be closed; there are no takeover candidates for the remaining 6.
- Bremen: Edeka will probably get 2 branches, Kaufland one. Another Real branch has no buyer yet.
- Hamburg: 2 branches go to Kaufland, 2 more are still looking for a buyer.
- Hesse: 2 branches should go to Edeka, three to Kaufland. The future is still uncertain for the remaining 6 branches.
- Mecklenburg-Western Pomerania: Kaufland probably wants to take over 5 Real stores, the future is open for 3 more.
- Lower Saxony: 2 branches could go to Edeka, 13 to Kaufland. 15 other branches apparently have no buyer yet.
- Rhineland-Palatinate: 3 locations go to Edeka, one to Kaufland. 2 branches are apparently about to be closed, and a buyer is being sought for 7 more.
- Saarland: One branch goes to Edeka, what happens to the other 4 locations is still unclear.
- Saxony: 2 branches are to go to Edeka, another is probably about to end.
- Saxony-Anhalt: 2 branches go to Edeka, 2 more will probably be closed. Unclear what will happen to the remaining 7 locations.
- Schleswig-Holstein: 2 Real stores become Edeka, 4 more are still without buyers.
- Thuringia: What will happen to the branches in Thuringia is still unclear.
According to the “Lebensmittelzeitung” newspaper, the lists are said to have been distributed to works councils by the new Real owner SCP. However, SCP does not want to comment on the whole thing.
Update July 3rd
Edeka wants to take over 18 more Real houses
Similar to Kaufland, Edeka will now also take over other Real locations. As the “Lebensmittelzeitung” reports, Edeka will now even register with the Cartel Office to take over around 70 Real locations. In the spring, the buyer of Real, the Russian investor group SCP, had reached an agreement with Edeka in which 52 locations were mentioned. Now the individual Edeka regional companies are apparently also interested in other Real branches.
As the “Lebensmittelzeitung” (LZ) also reports, SCP is planning to hand over the Real locations to the new operators in the fourth quarter of this year. In addition to Kaufland and Edeka, Rewe and Globus are also in talks with SCP to take over additional locations. According to the “LZ” information, however, the negotiations are not yet further advanced.
Update June 29th
Eight Real branches will be closed
The hypermarket chain Real announced the closure of eight of the currently 276 branches just a few days after the change of ownership. The markets in Berlin-Spandau, Duisburg-Süd, Herten-Westerholt, Leißling-Weißenfels, Mönchengladbach-Rheydt, Bitterfeld-Wolfen, Frankenthal and Goslar are to cease operations in the coming year, as Real announced on Monday. Almost 700 employees are affected. The “Lebensmittel Zeitung” had previously reported on it.
The Russian financial investor SCP had only taken control of Real from Metro last Thursday. SCP wants to break up the group and has already agreed to sell a total of 141 Real branches to Kaufland and Edeka.
Continuing to operate the eight selected locations is no longer economical, Real said. “The background for this decision was the difficult economic situation in all cases due to very high losses in the past few years,” emphasized a Real spokesman. From the beginning, however, SCP had also made it clear that a total of around 30 Real branches would probably have to be closed due to a lack of prospects. Despite intensive efforts, no interested party could be found for the eight locations that have now been announced, the retail chain reported to the German press agency.