European Union competition regulators are reviewing whether JD.com’s proposed $2.5 billion acquisition of Ceconomy may have involved foreign state backing.
According to a European Commission document cited by ReutersThe EU watchdog has set May 28 as the deadline for its preliminary examination of the deal.
That initial review will determine whether the transaction should undergo an in-depth investigation under the bloc’s foreign subsidy rules.
If concerns are not resolved during the first phase, the Commission may open a more complete investigation and ask JD.com to offer solutions.
The assessment is carried out under the EU Foreign Subsidies Regulation, which targets distortions of competition arising from support granted by non-EU states.
The deal is not being reviewed under the standard EU merger control system.
JD.com’s planned purchase of Ceconomy would expand the Chinese online retail group’s footprint beyond its domestic market by giving it access to Ceconomy’s consumer electronics businesses, including MediaMarkt and Saturn.
The transaction is also being examined in Austria under foreign direct investment rules.
While the deal has already been approved in several other jurisdictions, approval in Austria is still pending, leaving an important regulatory issue unresolved.
Italy has already approved the takeover bid, although its authorization came with conditions.
In December, the country introduced strict personal data protection measures related to JD.com’s purchase of Ceconomy’s Italian business.
The ruling was issued under the framework of Italy’s “golden power,” which allows state intervention in deals involving assets considered strategically important.
Separately, JD.com expanded its European business last month with the launch of its Joybuy online marketplace in six countries, including the United Kingdom.
The service is already operational in Belgium, France, Germany, Luxembourg, the Netherlands and the United Kingdom and sells categories such as technology, home appliances, beauty products, home goods, groceries and daily necessities.
“EU reviews JD.com’s Ceconomy bid over subsidy concerns: report” was created and originally published by Retail Insight Network, a brand owned by GlobalData.
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