The Federal Cartel Office has approved the merger of Karstadt and Kaufhof. The contest guardians do not have any doubts. With the new joint department stores, this could be very fast now.
The merger of the last two department stores in Germany, Karstadt and Kaufhof, is no longer the way. The Bundeskartellamt has approved the proposed merger and will be suspended from any detailed requirements or review. For its examination, the agency had interviewed around 100 trading companies and suppliers, including the largest online retailers and brick and mortar retailers in Germany.
The Office does not have competition concerns in the combination, said Andreas Mundt, President of the Office of the Federal Cartel, not on behalf of consumers or makers. He noted as justification, for example, the online trade, that consumers would have a wider range of alternatives in the market.
So, this merger could be completed this month, in time for Christmas business.
Roller coaster trip to the merger
Lange had fought for joining the two houses. Already in 2015, Austria owner Karstadt, René Benko, has announced plans to take over the competitors. And then discussions with the Canadian parent company of Kaufhof, Hudson's Bay Company (HBC) for the joint venture designed by Kaufhof, Karstadt and Karstadt Sport have once again blocked.
Once this year, both companies had announced in the beginning of July that they had agreed and finalized and set the key points for the merger. Only the details that would have to be explained – and only the authorities that agree.
But then the step back: Bank syndicate threatened to reverse all plans. The reason was an old loan, with HBC financed about 40 Kaufhof real estate years ago. The consortium was now threatening to call for the outstanding claims to pay around 1.3 billion euros. Yet, only the business balance that was tired of both department stores had caused the idea of the first merger. Finally, Kaufhof and Karstadt were able to breathe doubt in September: there was a compromise with the banks, and so the combination was back on his feet.
A new group should operate more than 230 locations
In 2015, the Kaufhof was transferred by HBC, but after that, the sale continued to drummer. Currently, Kaufhof advises the ver.di union on how the group could be restructured. For a long time, Karstadt did not look happy either. For years, the chain wrote red numbers.
Kaufhof operates 96 branches in Germany, and Karstadt, under the owner of Austria René Benko, has 82 department stores. The new retail giant will have 243 locations across Europe and employ a total of around 32,000 people. Most shares in the new company will be held in the future by the Signa owner of the Karstadt owner: 50.01 per cent and HBC 49.99 per cent.