Bundeskartellamt clears acquisition of "bäderwelt" by Cordes & Graefe

The Bundeskartellamt has cleared the acquisition of "bäderwelt" of Praetner GmbH & Co. Handels KG by Cordes & Graefe KG. The business division "bäderwelt" in Freising is active in the wholesale of sanitary, heating and air conditioning installations. Cordes & Graefe is the leading wholesaler in Germany in this product area.

Andreas Mundt, President of the Bundeskartellamt: "Cordes & Graefe already has a strong position on all the wholesale markets for sanitary, heating and air conditioning installations examined in this particular case as well as on the procurement markets and is pursuing an expansion strategy. We have therefore examined the acquisition project very carefully. There are no problems locally on the retail side because there are enough competitors. On the procurement side we have German-wide markets. Here we had to take into account that with "bäderwelt" only a very small competitor is to be acquired, so we decided not to issue a prohibition decision."

Cordes & Graefe, together with its purchasing cooperation GC Großhandels Contor GmbH ("GC-Gruppe"), is the only wholesaler for sanitary, heating and air conditioning installations active in the whole of Germany with over 800 locations and around 180 exhibitions for bathroom solutions. In size it has a clear lead over the number two company in this sector, Richter + Frenzel, which is primarily active in south Germany.

The sales markets in the sanitary product range are regional markets. The authority examined several markets within a 30 km to 100 km radius of "bäderwelt". In spite of the high market shares in all the variants examined, the acquisition project raises no competition concerns because around 20 other wholesalers and, in particular, Richter + Frenzel are strong competitors on these markets.

There are indications that Cordes & Graefe is also the market leader on the German-wide procurement side. However, its acquisition of "bäderwelt" will not significantly increase Cordes & Graefe's relative bargaining power vis-a-vis manufacturers in this product area. The increase in purchase volumes gained by the acquisition can be estimated as being in the lowest single digit percentage range only. Distribution within this sector mainly takes place at three different levels (manufacturer - wholesale - installer). Although building supply stores and internet dealers have as yet only had an indirect influence on competition, they represent alternative sales channels for manufacturers.

In the investigations carried out by the authority, manufacturers, wholesalers and installers of sanitary, heating and air conditioning installations as well as building supply stores and internet dealers were questioned in detail about their comments on the acquisition. Many market participants expressed concern not so much about the merger project as Cordes & Graefe's general growth strategy.