Edeka has been given permission to acquire Tengelmann's Kaiser's supermarkets, despite several complaints from the German antitrust authority. The German Minister of Economy, Sigmar Gabriel, did give the company some very strict conditions.
One of the conditions is that Edeka has to guarantee to keep 97 % of the 16,000 employees currently working at the 450 Kaiser's supermarkets for at least 5 years, while respecting the wage scales. It will also not be allowed to sell any of the Kaiser's supermarkets to independent entrepreneurs during those five years and for the next 24 months, no one can be fired at Kaiser's. Those restrictions do not seem to bother Edeka, as it has already accepted them all.
Edeka and Tengelmann's plans met resistance last year, from both its competitor Rewe as the German government. Even though the Kaiser's supermarket chain only has a .6 % market share in Germany, the new combination would become too dominant in major cities like Berlin, Bonn and Munich. It is remarkable, to say the least, that the German Minister of Economy has now ignored those complaints and the German press has reacted very critically.
The Tengelmann group, active in DIY, fashion, eCommerce and insurances, wanted to get rid of its onerous supermarkets for a while now, while Edeka sees an opportunity to strengthen its position in a highly concentrated German market. The four largest German chains (Edeka, Rewe, Aldi and Schwarz Gruppe, including Kaufland and Lidl) represent 85 % of the market.