The European Commission has approved the €2.2 billion acquisition of Ceconomy, the parent company of MediaMarkt and Saturn, by Chinese online commerce platform JD.com. MediaMarkt and Saturn operate more than 1,000 stores across 11 countries. Germany-based Ceconomy has been present in the Turkish market since 2007, where MediaMarkt has 89 stores.
Competition authorities in Brussels examined whether JD.com had financed the transaction through subsidies from the People’s Republic of China and imposed commitments on the company in that regard. All required approvals have therefore been secured. The acquisition is scheduled to be completed in the coming days, while Ceconomy shareholders who accepted JD.com’s offer are expected to receive payment around November 12.
Ceconomy CEO Remko Rjinders said, “Our partnership with JD.com is becoming reality and a new chapter is opening.” Rjinders added: “Together, we will accelerate our successful strategy towards a multichannel retail platform.” JD.com CEO Sandy Xu said the company wanted to support Ceconomy in sustainably accelerating growth, further strengthening its competitiveness in Europe and maintaining its innovativeness in a changing retail market.
The deal will give JD.com access to more than 1,000 physical stores and major online stores. The company could thereby expand its European operations while competing with Alibaba and Amazon. Ceconomy employs 48,000 people, including about 17,000 in Germany. JD.com had previously said it planned to delist the company.
The Commission’s preliminary investigation in May found that JD.com may have gained an unfair advantage through preferential financing, tax incentives and grants from China, potentially enabling it to submit a higher offer. To address the concerns, the company proposed, among other measures, to supply products and provide financing to Ceconomy on market terms. Smaller competitors are also expected to be able to access JD.com’s European logistics and technology infrastructure on fair and non-discriminatory terms. The European Commission said the measures would prevent cross-subsidisation of JD.com’s European arm.
