“Vonovia’s acquisition of Deutsche Wohnen gives no grounds for prohibition under competition law”

The Bundeskartellamt has cleared plans by Vonovia SE, Bochum, to acquire all the shares in Deutsche Wohnen AG, Berlin, by way of a public takeover bid. The project affects a large number of local or regional markets for the rental of residential property throughout Germany.

Andreas Mundt, President of the Bundeskartellamt: “The parties’ joint market shares do not justify a prohibition under competition law. The merger will unite Vonovia and Deutsche Wohnen, two heavyweights on the German housing market, and we are naturally also aware just how strained the housing situation is in Berlin and many other cities. We have therefore closely examined the different regional housing markets. Here we focused in particular on 2-3 room apartments with standard fittings and a basic rent excluding ancillary costs of up to seven euros per square metre. Both companies have a relatively large number of apartments in this segment in their portfolios. Their joint market share in this segment is clearly less than 20 percent in Berlin and slightly more than 20 percent in Dresden. In other cities and other market segments their joint market shares are consistently lower.”

The Bundeskartellamt conducted particularly in-depth investigations in the housing markets in Berlin, Dresden, Mainz, Wiesbaden, Puchheim and the Wustermark municipality. Only here can the joint market shares of Vonovia and Deutsche Wohnen be considered to exceed 10 percent on the different rental housing markets.

The provider structure for rental apartments remains very fragmented in spite of the large housing associations. The merger is therefore not expected to significantly impede competition in local and regional markets. Apart from a large number of private landlords, municipal housing companies, housing cooperatives and other commercial providers are well represented in most of the relevant markets, which will continue to limit Vonovia’s scope of action.

Berlin as an example: Of the approx. 1.658 million rental apartments in the city of Berlin (as of 31 December 2019), approx. 322,000 are owned by municipal housing companies, approx. 189,000 by cooperatives and approx. 1.147 million by private housing companies and individual owners, of which Vonovia owns around 41,000 and Deutsche Wohnen around 110,000 apartments (joint market share of rental apartments in Berlin City totalling approx. 10 percent).

Vonovia is the parent company of the Vonovia group. The company has been publicly listed since July 2013 and was added to the DAX in September 2015. Vonovia’s main area of activity is the rental and management of apartments in Germany. In 2020 the group achieved a total turnover of approx. four billion euros. As at 31 March 2021 Vonovia’s real estate portfolio in Germany included approx. 354,000 of its own apartments. Deutsche Wohnen is a publicly listed housing company which is based in Berlin. In 2020 it achieved a total turnover of approx. 2.7 billion euros. Deutsche Wohnen’s real estate portfolio includes approx. 155,000 rental apartments, approx. 70 percent of which are located in Berlin.