France: Authority gives green light for the takeover of Leader Price by Aldi
Updated: Dec 1, 2020
Discount Retail Chain Aldi Nord (privately owned) recently notified the French Competition Authority of the proposed acquisition of assets belonging to the French retailer Casino group (EURONEXT: CO). These assets include 545 stores under the Leader Price brand (out of a portfolio of nearly 640 stores in France) and 2 stores under the Casino brand.
Aldi and Leader Price are two maxi-discount (or hard-discount) food distribution chains. Aldi has at the moment 883 stores in France.
No (serious) competition problem
Given Aldi's and Leader Price's cumulative low market shares on the national grocery retail market, the Authority considered that the transaction was not likely to significantly strengthen Aldi's purchasing power vis-à-vis suppliers. After having consulted the suppliers of Aldi and Leader Price as part of a market test, the Autorité also noted that the transaction did not place them in a situation of economic dependence on the new entity.
At the end of its analysis, however, the Autorité raised competitive risks in the areas for the Leader Price stores located in l'Argentière-la-Bessée (05), Bar-sur- Seine (10), Bort-les-Orgues (19), Brassac-les-Mines (63), Lanton (33), Marle (02), Rambervillers (88), Saint-Félix (74) and Sézanne (51).
In these areas, the operation was likely to reduce competition, and risked causing price increases or impoverishing the diversity to the consumer, given the cumulative market share of both parties (greater than 40%) and/or the creation of a duopoly in the area.
9 stores will be sold
In order to remedy these competition concerns, Aldi has undertaken to sell 9 Aldi and/or Leader Price stores located in these areas to one or more competitors. These commitments will ensure that sufficient competition is maintained and the interests of consumers in the markets concerned will be protected.
And Casino's press release: