This week, the European Commission has approved the takeover of Ceconomy, the owner of MediaMarkt and Saturn. Chinese ecommerce giant JD.com is acquiring the company. The Commission has added conditions to the deal. For example, JD.com needs to provide warehousing and logistics services to third-party retailers.
In 2023, JD.com and Ceconomy were already in talks about an acquisition. In February this year, it seemed that the Chinese ecommerce giant was closer to finalizing a deal with Ceconomy. The owner of MediaMarkt and Saturn generated a revenue of 22.4 billion euros in the past fiscal year.
JD.com wants to expand internationally, as the Chinese domestic market is cooling down. With the Ceconomy takeover, it gains access to a retail network in Europe, including physical stores.
JD.com has received subsidies
During the review of the acquisition, the European Commission found that JD.com has received subsidies in the form of preferential financing, tax incentives and grants from the People’s Republic of China. These contributed to the development of the logistical and technical capacities that would be made available to Ceconomy after a merger. This could distort the European internal market, as the merged companies might finance activities in the EU internal market and implement aggressive pricing policies.
JD.com needs to open warehousing, logistics and technological services to third-party retailers
To alleviate these concerns, JD.com offered to provide its warehousing, logistics and technological services to third-party retailers, under the same conditions as Ceconomy. According to the Commission, this eliminates competitive advantage of the merged company. The merger is now approved. Ceconomy and JD.com need to adhere to these conditions for ten years. The implementation will be monitored by the Commission.
