German Media: EU Launches In-Depth Investigation into JD.com's Acquisition of German Electronics Retailer
The European Union said on Thursday that it has launched an in-depth investigation into the deal in which Chinese e-commerce giant JD.com is acquiring Ceconomy, a major German electronics retail group. The EU suspects the transaction was facilitated by state subsidies from China.
This marks the latest round of investigations initiated by the EU against Chinese companies. At the same time, Brussels is engaged in a debate over adopting a tougher stance toward Beijing, aiming to protect European domestic firms from what it perceives as "unfair foreign competition."
The European Commission stated that preliminary findings indicate that "JD.com may have received foreign subsidies distorting the EU internal market."
Brussels explained that this investigation will assess whether such subsidies enabled the Chinese company to offer a high price for Ceconomy, thereby distorting the outcome of the acquisition process. The probe will also examine whether the subsidy enhanced the competitive position of the merged entity post-acquisition and whether it could affect competition within the EU internal market.
JD.com stated that the acquisition would not be financed through subsidies and denied receiving any assistance during the transaction that could lead to market distortions in EU competition.
Three Possible Outcomes: Approval, Prohibition, or Remedial Measures
Last July, Reuters reported that JD.com would launch a voluntary public tender offer to Ceconomy’s ordinary shareholders, offering €4.60 per share in cash. The total valuation of the deal would exceed €2.2 billion.
Ceconomy owns MediaMarkt and Saturn—Europe’s largest electronics retail chains—with approximately 1,000 stores across several European countries and operates one of Europe’s largest online electronics retailers. During the 2023–24 financial year, Ceconomy employed around 50,000 people and achieved annual revenue of €22.4 billion, with €5.1 billion coming from online sales.
JD.com CEO Sandy Xu said the goal of this acquisition is to "build Europe’s leading next-generation consumer electronics platform," combining JD.com’s e-commerce strengths with Ceconomy’s physical store network and brand recognition. JD.com already operates logistics hubs in the UK, France, and Germany.
Chinese companies’ attempts to invest in Europe are increasingly facing resistance. Domestic European businesses have voiced concerns about unfair competition from rivals backed by massive subsidies.
This announcement comes ahead of a special meeting of European Commission officials scheduled for Friday. The meeting will focus on how the 27-member EU should adjust its strategy toward China to create a level playing field.
The European Commission has 90 working days (until October 2, 2024) to conclude its investigation into JD.com’s acquisition.
At that time, Brussels can choose to accept remedial measures proposed by JD.com, prohibit the acquisition, or approve it. Officials emphasized that launching an in-depth investigation does not imply any pre-judgment of the final outcome.
Source: DW
Original article: toutiao.com/article/1866453478619140/
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