REWE-ZENTRALFINANZ eG planned the acquisition of all of the shares in Lekkerland AG & Co KG (Frechen, Germany) and Lekkerland AG (Ternitz, Austria) by REWE-ZENTRALFINANZ eG (Cologne, Germany) and REWE-Zentral AG (Cologne, Germany) (BWB reference number: Z-4588).
Notification of the planned merger was sent to the European Commission on 15 July 2019 (case M.9142) and the transaction was cleared by the Commission on 7 August 2019. Following a request for a partial referral by the notifying parties, the European Commission referred the merger affecting the German market to the German Bundeskartellamt and the part relating to the Austrian market to the Austrian Federal Competition Authority (BWB).
After a pre-notification phase, the BWB was officially notified of the merger of REWE-ZENTRALFINANZ eG, REWE-Zentral AG, Lekkerland AG & Co KG and Lekkerland AG on 13 September 2019. The Authority’s Phase 1 investigation was extended by two weeks at the merger parties’ request.
In-depth inquiry plus market testing - focusing on filling station shops in Austria
The BWB held discussions with the notifying parties during the pre-notification phase and began its inquiry into the case when the planned merger was referred to it on 29 May 2019. Since a great deal of feedback from the Austrian market was critical of the acquisition, the BWB and the Federal Cartel Prosecutor approached the merger parties and market participants during the Phase 1 review. The focus was on the Austrian market situation and the supply of filling station shops.
In the course of its market test, the BWB primarily interviewed larger operators of filling station shops, competitors, food producers and associations about the competition situation. The Authority also received numerous comments during its in-depth inquiry from various market levels voicing competition concerns, some of which specifically relating to the Austrian market. Throughout the process, the merger parties were given the opportunity to dispel such concerns.
Result: REWE is not allowed to take over Lekkerland in Austria
Following the concerns voiced by the BWB and the Federal Cartel Prosecutor, REWE removed the Lekkerland operations in Austria from its planned merger. The shares in the company continue to be owned by the original shareholders.
Spinning off the operational part of the target company in Austria dispels, in the BWB’s opinion, the concerns related to competition. The merger parties state that a spin-off is possible since the Austrian business activities have been largely self-sufficient so far and in particular have been operated independently of Lekkerland Germany. In addition, Point IV. of the conditions ensures that any services so far rendered by the Lekkerland group for Lekkerland Austria may be continued for a limited period of time. The entire merger control procedure was completed with conditions in compliance with European law. The merger may only be implemented with the agreed conditions. If, after expiry of the conditions (in five years’ time), an acquisition is carried out, new competition proceedings will have to be initiated.