REWE has to divest four outlets
The concentration was approved under the condition of fulfilling commitments, which were, in the course of proceedings, adopted by the party to the proceeding in order to maintain and promote effective competition. The decision which was published on 22 August 2008 is already in effect. UOHS started dealing with the concentration after it had been submitted to UOHS – as to the better placed authority – by the European Commission, in compliance with EC law.
REWE Zentralfinanz and their subsidiary company REWE International are a part of group of entities belonging to REWE group that is active in several EU member states in the area of retail, wholesale of goods of daily use and in the area of tourist trade. In the Czech Republic, REWE group is active through their net of retail outlets BILLA and Delvita (181 stores in total) and the net of discount outlets Penny (171 stores in total). PLUS, the acquired company that belongs to Tengelmann group before the concentration, operates the net of discount outlets Plus (146 stores in total).
The entity created by the concentration will take place of the second strongest competitor in the national market of retail sale of goods of daily use after Schwarz group and ahead of Ahold and Tesco. Therefore UOHS carried out thorough analysis of local markets. The investigation concluded that the assessed merger lead to high concentration in local retail markets in the area of four regions. This strong position would enable REWE group to behave to a significant extent independently of other undertakings or customers. In order to eliminate fears from restriction of competition, the party to the case submitted proposal of structural remedies. According to the accepted version of the remedies, REWE company is obliged to sell one outlet from their portfolio in each of the problematic markets. In the other local markets, there are no concerns from restriction of competition.
UOHS was able to clear the deal already in the first phase of the proceeding, because of the binding commitments offered by the party to the proceeding. The commitments are sufficient to remove substantial competition concerns. It will be ensured by fulfilling the mentioned remedies that the proposed transaction would not impede effective competition in the relevant local retail markets.
External Relations Department of the Office
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