Jeronimo Martins Dystrybucja may acquire the chain of Plus supermarkets - decided the President of the Office of Competition and Consumer Protection. However, the owner of the Biedronka stores must sell 38 outlets and rent part of the retail space in three other

In January 2008 Jeronimo Martins Dystrybucja, a member of a Portuguese capital group Jeronimo Martins, submitted an application for UOKiK’s clearance to take over Plus Discount. The acquirer runs a chain of 1045 Biedronka supermarkets across Poland. The target entity, a member of the Tengelmann concern, is the owner of 210 Plus retail outlets.

During the instituted proceedings the President of UOKiK checked how the planned transaction would influence the retail market of everyday use articles.

The analysis carried out by the Office showed that the acquisition would have a negative influence on the competition in some local markets, namely that it would lead to a significant lessening of competition, including by creating or strengthening a dominant position of an enterprise. For this reason the President of the Office gave her conditional clearance - the transaction may be effected, however, only on conditions determined by UOKiK. By the end of 2009, Jeronimo Martins Dystrybucja must dispose of all its rights - including property rights, the right of perpetual usufruct and rental rights - to 13 Biedronka stores and 25 Plus stores in favour of investors independent of itself. What is more, Jeronimo Martins Dystrybucja needs to reduce the usable floor space by renting it for another retailing or service activity - no later than by 31 March 2009 - in three Plus outlets. The detailed list of the stores involved is contained in the schedule hereunder.

In addition to the above, the President of UOKiK obliged the enterprise to provide her with information on the method of fulfilling the conditions imposed within a time limit specified by the Office, i.e. by 30 April 2009 as regards the rental and by 31 January 2010 as regards the sale.

From January 2007 until the end of June 2008 UOKiK gave 289 merger clearances, of which three were conditional. For example, in June last year the Office issued a decision concerning a Dutch company being a member of the French group Carrefour. The enterprise obtained clearance to acquire the control over Ahold Polska on the condition that by the end of 2008 it would sell nine supermarkets to independent investors. The company was also obliged to inform the Office on the fulfilment of the obligation by 31 January 2009.

Under the existing regulations, a transaction has to be notified to UOKiK if it involves enterprises whose total turnover in the preceding year exceeded EUR 1 billion in the world or EUR 50 million in Poland. The President of UOKiK may give unconditional or conditional clearance to the transaction or prohibit it.

Unconditional clearance is always given when the planned transaction will not significantly lessen competition on the relevant market and in particular when the transaction does not result in creating or strengthening of an enterprise’s dominant position.

Conditional clearance is given when, as a result of the transaction, competition will not be significantly lessened if the enterprise involved fulfils certain conditions. They can include disposing of the assets or their part or giving up the control over a certain enterprise - for example by selling its shares. UOKiK sets a time limit for the enterprise involved to meet the conditions and obliges it to inform UOKiK on the progress made. If the enterprise fails to do the above, the President of UOKiK may repeal her decision and as a consequence consider the clearance invalid. What is more, if the acquisition takes place without the conditions having been fulfilled, the Office may order:

• division of the enterprise established as a result of the acquisition according to conditions specified in the decision,
• disposal of all the assets or their part,
• disposal of a stock of shares guaranteeing the control over or the power to dissolve the company.

UOKiK prohibits a transaction when it is found that it would significantly lessen competition on the relevant market, in particular by creating or strengthening a dominant position. Since 2004 the Office used this option three times.

Additional information:
Małgorzata Cieloch, Spokesperson for UOKiK
Pl. Powstańców Warszawy 1, 00-950 Warsaw, Poland
Tel. (+48 22) 827 28 92, 55 60 106, 55 60 430
faks (+48 22) 826 11 86
E-mail: [SCODE]bWNpZWxvY2hAdW9raWsuZ292LnBs[ECODE]