Merger control in the food retail sector: Gleiss Lutz secures clearances for SCP Retail Investments for the sale of the Real supermarkets to Edeka, Kaufland and other food retailers
In the by far largest and most complex food retail sector transaction of recent years, Gleiss Lutz and Skadden, Arps, Slate, Meagher & Flom are advising SCP Retail Investments on all the merger control aspects of its successful resale of the Real branches in two parallel Phase II proceedings. After various other failed attempts, mid-2020 METRO AG succeeded in finding a buyer, in the form of the SCP Group, for the 276 Real supermarkets, with a workforce of 34,000. The Federal Cartel Office today cleared the resale of 51 Real branches to Edeka, five of them subject to the condition that SCP surrender certain parts of the respective premises to competitors. In another location, Edeka has committed to closing an already existing location. Previously, shortly before Christmas, the Federal Cartel Office already cleared the purchase of a total of 92 Real branches by Kaufland and 24 by Globus. To dispel Federal Cartel Office concerns as to the impacts on competition at the level of food procurement, in the Edeka and Kaufland proceedings SCP agreed to sell to small and medium-sized food retailers Real sites with a food procurement volume totalling EUR 200 million, corresponding sales-wise to a volume of around EUR 430 million. The clearances were obtained following intense negotiations with the Federal Cartel Office. For some years now, the Federal Cartel Office has been taking an especially hard and critical look at mergers in the food retail sector on account of the structures in place in this market. One aspect that added another level of complexity to the resale by SCP was the fact that multiple sales transactions were being negotiated with multiple potential buyers in parallel and the transactions had to be cleared with the Federal Cartel Office. Thanks to the sale to Kaufland and Edeka, a large part of the Real workforce can now be sure that their jobs are safe.
The following Gleiss Lutz team assisted with the merger control aspects of the sale by the SCP Group: Dr. Ulrich Denzel (partner), Dr. Moritz Holm-Hadulla (partner, both lead), Dr. Andreas Schüssel, Martin Göbel (all Competition/Antitrust, Stuttgart).