Edeka's planned Tegut supermarket takeover faces antitrust hurdles

German food retailer Edeka's plan to acquire around 200 supermarkets from the Tegut chain is facing significant challenges from the Federal Cartel Office. The competition authority has expressed preliminary concerns that the acquisition could unduly harm competition, particularly in regions where Edeka already holds a substantial market share.

The Bundeskartellamt, Germany's Federal Cartel Office, indicated that it cannot approve the takeover in its current form due to potential market dominance issues. Specifically, the authority has reservations about 38 of the Tegut stores, where Edeka's market share would become too high post-acquisition. This preliminary assessment was communicated to Edeka, which had announced its intention to buy Tegut after the chain's owner, Swiss retailer Migros, decided to sell.

In an effort to salvage the deal, Edeka has reportedly offered to withdraw its bid for 9 of the 38 contested locations. This concession has led the cartel office to extend its review period for the main examination by one month, now setting a deadline of September 23. If the 38 stores are ultimately excluded from the deal, an estimated 1,100 jobs could be at risk, according to company sources. Most of these affected stores are located in the German states of Hesse and Bavaria.

The proposed acquisition package also includes Tegut's logistics center, the Herzberger bakery, and approximately 40 "Teo" minimarkets. Other German retail chains are also interested in parts of Tegut; Rewe Group aims to acquire up to 40 stores, and the smart-store chain Tante Enso received approval in June for 36 supermarkets. Tegut, founded in 1947, has been part of the Migros Group since 2013 and operates primarily in Hesse and five other federal states.

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Please understand that we cannot comment as this is an ongoing procedure.