Edeka's Kaiser's Tengelmann acquisition may fall through

Edeka's Kaiser's Tengelmann acquisition may fall through

The court in Düsseldorf cancelled the approval German Minister for Economic Affairs and Energy Sigmar Gabriel gave for Edeka's acquisition of Kaiser's Tengelmann. The judge feels the Minister had displayed insufficient levels of objectivity.

Keep jobs

The decision means it may take several years before the court comes with its own ruling, making the Kaiser's Tengelmann acquisition highly unlikely. The chain's stores have been onerous for years and according to owner Karl-Erivan Haub the chain is on the brink of a bankruptcy.

 

Minister Gabriel decided to ignore the German Federal Cartel Office's ruling and grant approval for Edeka's acquisition because 16,000 jobs would otherwise be lost. However, the Federal Cartel Office fears Edeka could become too powerful in certain cities, a claim the Minister deemed inferior to keeping 16,000 people employed.

 

Gabriel did demand the chain would keep at least 97 % of staff over the next 7 years, but the court now says it is unclear whether Edeka will or can even adhere to that demand. The judge also says the private talks between the Minister and board members of the two supermarket chains were not entirely acceptable and were in fact detrimental to competitor Rewe.