Edeka and Rewe reach agreement over Kaiser's

Date : 07 December 2016

After nearly two years of negotiations, Edeka and Rewe have reached an agreement on the purchase of Kaiser's Tengelmann.

Edeka to acquire the majority

The agreement that has been reached is that Edeka will purchase Kaiser's, after which the majority of the stores in Berlin will be sold to Rewe. The Kaiser chain has been making a loss for Tengelmann's and it was first announced it would be sold off or closed in 2014. In October 2014, Edeka and Tengelmann reached a purchase agreement and hoped to complete the sale by June 2015. However, there were concerns that the deal would be anti-competitive and objections were raised by the government, competition watchdogs and competitors including Rewe and Norma.

Conditions of the sale

Kaiser is currently owned by Tengelmann and has around 451 stores. Of these, around 60 stores in Berlin will be sold to Rewe. This condition has helped to overcome the main competitive concerns, as Berlin is the main region where Edeka stores would have become highly concentrated, limiting choice for consumers. It has also appeased Rewe who were one of the major objectors to the original deal.

Edeka's strategy

Edeka's strategy is to continually expand, at a rate of around 200 new stores each year. It is expected to convert the Kaiser stores it purchases to Edeka stores, which will help it to achieve its expansion goals and increase its market share in Germany.