In response to enquiries the Bundeskartellamt confirms that on 25.07.2016 it sent the parties concerned in the Rewe/Coop merger control proceedings its draft decision in the matter. In addition to the parties to the planned merger, Rewe and Coop, these include the EDEKA Headquarter (EDEKA Zentrale), the regional wholesaler EDEKA Nord, Tengelmann and the trademark association Markenverband e.V.

Rewe plans to acquire the supermarket business of the north German regional supplier Coop. Coop currently operates around 200 outlets under the brand name Sky in the federal states of Schleswig-Holstein, Mecklenburg-Western Pomerania, Brandenburg and Hamburg.

Andreas Mundt, President of the Bundeskartellamt: "We have come to the preliminary conclusion that without suitable remedies, Rewe's acquisition of Coop and the resulting strengthening of the already highly concentrated market structure would impede competition on the sales side in eight regional markets and two Hamburg districts. However, Rewe and Coop have announced that they will offer commitments to sell outlets to other food retailers, which are likely to eliminate the competition problems. This will have to be assessed in the course of the proceedings."

In the current Rewe/Coop merger case the Bundeskartellamt applies the same examination criteria as in the Edeka/Tengelmann merger case. On the sales side the authority is examining 45 regional market areas which are mainly rural areas. In the case of Hamburg, an analysis will be made based on seven municipal districts. This is in line with the authority's approach in the Edeka/Tengelmann case, where regional market areas and municipal districts in Berlin and Munich were examined.

In the current view of the Bundeskartellamt, Rewe's takeover of Coop will not result in a significant impediment of effective competition on the procurement markets. Coop's own current procurement volume amounts to less than 0.5% of the total procurement volume of the German food retail sector. For almost ten years Rewe and Coop have been members of a purchasing cooperation through which Coop purchases 65-70% of its products. Coop can thus not be considered to have been an independent competitor of Rewe on the procurement side as it did not represent a genuine alternative for suppliers.

The parties to the merger and the companies admitted to the proceedings have the opportunity to comment on the draft decision by 16 August 2016.