A round-table conference organized by ver.di (United Services Trade Union) with EDEKA, Markant, Norma, Rewe and Tengelmann has failed. Initially the parties agreed to the objective of making the ministerial merger permission possible by withdrawing their objections and wanted to reach an agreement by 17 October 2016. However during the discussions it became clear that Rewes favored solution couldn’t provide legal security.
“We regret that the complaining parties aren’t prepared to constructively work on a solution and withdraw their objections,” states Karl-Erivan W. Haub, managing director and partner of the company group, Tengelmann. “This is a very disappointing message to our 16,000 employees at Kaiser's Tengelmann," states Haub.
Photo: Tengelmann
However, to divide the different stores or the distribution regions, as requested by the other parties is not possible within the current ministerial permission. A division of the branches would result in a completely new procedure, which has to be checked by the Bundeskartellamt (the German monopoly authority). “A new check by the monopoly authority means another delay of six months. Time that Kaiser’s Tengelmann doesn’t have. This means that we have to consider an alternative scenario and start preparing for the sale of individual parts of the company," continues Haub.
Tengelmann group will start to investigate the market in North Rhine-Westphalia, as well as candidates for the meat processing plants in Viersen, Donauwörth and Perwenitz. The same process for the distribution regions in Munich and Berlin will start later. “Unfortunately we have to assume that not all supermarkets will be sold. As a result, a large number of employees will have to face job losses. Therefore the management of Kaiser's Tengelmann also started the negotiations for a comprehensive social agreement," Haub continues to explain the course of action.
Karl-Erivan W. Haub warned from the start that if the takeover by EDEKA failed, the only alternative would be the sale of the company in parts. The conclusion of the round-table is very bitter; “We shared the same vision with EDEKA, we wanted to secure the 16,000 jobs in the long term, despite our withdrawal from the business. We fought for this with every means possible, however, unfortunately, in vain. The next few weeks we will continue to prepare for all the scenarios while at the same time we continue to try to fulfill the conditions for the ministerial merger permission.” Rewes new attempt to takeover is legally just as unusual as the suggestion to divide Kaiser's Tengelmann, within the framework of the ministerial permission.
The Tengelmann and EDEKA submitted their plans to merge for approval to the Bundeskartellamt in October 2014. In March 2015 the Bundeskartellamt prohibited the merger, and the companies jointly requested ministerial permission of the Federal Ministry of Economics. The permission was granted, with additional conditions, in March 2016. Although the requirements have been met, as confirmed by the Federal Ministry of Economics, a court decision of the Oberlandesgericht Düsseldorf now prevents further implementation of the takeover plans. The competitors, Rewe and Markant, brought the case to the court. So two years after the first takeover plans, Kaiser’s Tengelmann and the subsidiaries, Birkenhof and Ligneus, the delivery company Bringmeister Logistik, and the Tengelmann online store, are still not a part of EDEKA.
For more information:
www.tengelmann.de