On 12 September 2006 Praktiker AG (“Praktiker”) notified the Bundeskartellamt of its proposed acquisition of the Max Bahr Gruppe (“Max Bahr”).
Praktiker is a retailer operating 275 large building supplies and do-it-yourself (DIY) stores throughout Germany.
Max Bahr is a retailer of building supplies and DIY products. It operates 80 shops, most of which are located in Northern Germany.
On 10 January 2007 and after main examination proceedings, the merger was cleared by the Bundeskartellamt subject to the divestiture of three Praktiker stores and one Max Bahr store.
The relevant product defined by the Bundeskartellamt and relating to the remedies was the market for building supplies and DIY stores.
The geographic market was generally defined as being regional encompassing a radius of 30 km (or a car journey time of up to 30 minutes) around a city/town as a centre.
Remedy 1 : Divestiture of four stores
The Bundeskartellamt found that the merger would have created a dominant position for Praktiker on four regional markets (Lüneburg, Rostock, Schwerin and Cottbus).
The divestiture of Praktiker stores in Lüneburg, Schwerin, Cottbus and a Max Bahr shop in Rostock would limit the combined market share to a level below the critical threshold presuming dominance in section 19 para. 3 of the Act against Restraints of Competition (GWB). Consumers’ alternatives for supply in these regions would be strengthened by these divestments.
The proposal of Praktiker and Max Bahr (“the parties”) to close down any stores which could not be sold within the divestiture period was rejected by the Bundeskartellamt. The Bundeskartellamt considered that closures would not restore competition in the markets concerned to the same extent that would be achieved by the divestiture of the stores as continuing businesses.
Remedy 2 : Identity of potential purchaser
The purchaser/s of the four stores were required to be completely independent of Praktiker and have the necessary expertise and incentive to be active in the relevant market/s.
The sale and purchase agreements for the divestment of the stores were required to be approved by the Bundeskartellamt.
For a period of ten years Praktiker must not re-establish any links with the divested stores.
Other remedies main provision
The Bundeskartellamt explicitly noted in its decision that it reserved the right to withdraw in full or in part or modify the obligation if the parties were unable to divest any of the named stores despite reasonable attempts.
Standard case law.