Following an in-depth examination the Bundeskartellamt has cleared the planned acquisition by Mann Mobilia Beteiligungs GmbH, based in Würzburg (part of the Austrian XXXLutz Group) of 50 percent of the shares in tejo Möbel Management Holding GmbH & Co. KG, Goslar, and Roller GmbH & Co. KG, Gelsenkirchen (Tessner group), subject to conditions. Clearance was granted with regard to the sales side of the planned merger (relationship between furniture retailers and end customers).

The project’s effects on competition on the procurement markets, i.e. the relationship between furniture retailers and manufacturers, is being examined by the European Commission. This proceeding is still ongoing.

XXXLutz Group operates more than 200 furniture stores in Germany. The planned merger covers 155 outlets of the Tessner group. According to the Bundeskartellamt's decision 22 of the Tessner outlets cannot be acquired and one XXXLutz outlet must be sold.

Andreas Mundt, President of the Bundeskartellamt: “Our proceeding in this case is only the first part of the examinations to be conducted by the competition authorities. A decision by the European Commission regarding the procurement markets is still pending. The merger will result in the creation of Germany’s largest furniture retailer. We have carried out an in-depth examination of the sales side by analysing the effects the planned merger will have for consumers. We have competition concerns regarding 23 outlets. The merger would significantly impede competition in the respective regional markets. In the discount furniture sector in particular, customers would no longer be able to choose from a sufficient number of different retailers in these markets. For this reason the companies have to sell the 23 outlets to one or several independent third parties before they can be allowed to implement the merger.”

XXXLutz Group is active throughout Europe. In Germany it operates more than 200 outlets and, in terms of turnover, it is the second-largest furniture retailer in the country. The group has several established distribution channels: XXXLutz, dodenhof, Zurbrüggen, Möbelzentrum Pforzheim, POCO, Mömax, Osca and Sparkauf.

With 178 outlets the Tessner group ranks fourth among Germany’s furniture retailers. The group includes the retail chains Roller, tejo’s SB Lagerkauf, Schulenburg, and Meda kitchen studios which are not part of the merger.

The two companies are by far the leading suppliers in the discount sector, in particular with regard to their sales lines POCO, Mömax and Roller. The merger will create Germany’s overall largest furniture retailer (followed by Ikea).

In its second phase proceeding the Bundeskartellamt carried out an in-depth analysis of the local retail markets affected, based in each case on the catchment areas of the 155 Tessner outlets. The investigations took into account all brick-and-mortar furniture retail outlets (furniture stores, discount furniture stores, specialist stores such as e.g. kitchen studios or upholstered furniture stores as well as other retailers such as e.g. DIY stores offering garden/outdoor furniture or kitchens) and also the online retail sector. As this case focuses on discount retail, the discount segment was examined with particular care.

In the vast majority of the market areas affected, in particular in urban areas, a sufficient level of competition will remain after the merger. Apart from XXXLutz and the companies of the Tessner group there is a substantial number of competing furniture retailers in all of these areas.

However, in 25 market areas (some of which overlap) the authority’s investigations have shown that the merger would significantly impede effective competition. These competition concerns can only be dispelled by selling 23 outlets to third parties. Clearance of the remaining transaction is subject to the sale of these outlets.

Examination by the Bundeskartellamt and the European Commission as an exception

As an exception, this merger project is not examined by one single competition authority, but by the Bundeskartellamt in Germany (with regard to its effects on the sales side) and the European Commission as the European competition authority (with regard to the procurement markets).

Due to the turnovers of the participating companies which amount to a total of more than five billion euros, the overall merger project would have to be notified to the European Commission. As the planned concentration will mainly have effects in Germany, the parties to the merger filed an application with the European Commission to have the case examined by the Bundeskartellamt (request for referral). However, since the procurement markets can be expected to cover an area beyond Germany’s borders, as e.g. furniture can also be purchased by the parties outside Germany, the European Commission’s referral of the merger control case to the Bundeskartellamt in late January 2020 only concerned the retail markets affected (relationship between furniture retailers and end customers). The European Commission's proceeding is still ongoing.

For further information see the case summary published by the Bundeskartellamt.