Chinese e-commerce giant JD.com is on course to secure European Union approval for its $2.5 billion acquisition of German electronics retailer Ceconomy after revising proposals aimed at addressing regulatory concerns, according to a person familiar with the matter.
The proposed takeover has been under scrutiny by the European Commission, the EU’s competition regulator, over concerns that JD.com may have benefited from Chinese government support that could give it an unfair advantage in the European market.
The investigation is being conducted under the EU’s Foreign Subsidies Regulation, which allows the bloc to examine whether financial support from non-EU governments distorts competition within the European market.
Regulators have been examining whether JD.com received preferential financing, tax incentives or government grants that could have helped the company offer a higher price for Ceconomy.
JD.com has sought to address the concerns by offering commitments linked to its European logistics and technology infrastructure.
In August, the Chinese company proposed giving Ceconomy access to its European logistics and technological capabilities at market rates. It also offered to provide smaller competitors with access on fair and non-discriminatory terms.
The latest proposal was revised after feedback from customers and rival companies, the person familiar with the matter said.
The European Commission is expected to decide on the transaction by November 4. The Commission, JD.com and Ceconomy declined to comment on the latest development.
The deal would give JD.com a major foothold in the European retail market and expand its operations beyond China through Ceconomy’s electronics chains, MediaMarkt and Saturn.
Ceconomy operates the two retail brands across several European markets, giving JD.com access to an established physical retail network as it seeks to expand its international presence.
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The takeover has attracted regulatory attention because it is among the major cross-border acquisitions being examined under the EU’s foreign subsidies rules. The European Commission launched an in-depth investigation into the transaction in May after identifying concerns that potential Chinese subsidies could have affected competition.
JD.com has previously disputed concerns that its acquisition is being financed through foreign subsidies, saying the transaction would instead be funded through external private bank debt and cash generated through its ordinary business activities.
If cleared, the acquisition would mark a significant expansion by one of China’s largest retailers into Europe, combining JD.com’s technology and logistics capabilities with Ceconomy’s established consumer electronics retail operations.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
