JD.com’s $2.5B Ceconomy Acquisition Faces EU Subsidy and Rival Criticism
By Foo Yun Chee
EU Scrutiny and Industry Response to JD.com’s Ceconomy Deal
BRUSSELS, Sept 10 (Reuters) - JD.com's concessions to ease EU subsidy concerns about the Chinese e-commerce giant's $2.5 billion purchase of German electronics retailer Ceconomy have prompted criticism from competitors, people familiar with the matter told Reuters.
European Commission’s Review Process
They said the European Commission, which acts as the European Union's competition enforcer, informed JD.com earlier this week of the responses to concessions it offered last month.
Timeline and Decision Deadline
The Commission, which will decide on the deal by October 23, and JD.com declined to comment on the negative feedback, which will put pressure on JD.com to improve its concessions.
Concessions and Market Access
Under its proposals, Ceconomy would access JD.com's European logistics capability and technological capability at market rates, one of the people said. Smaller rivals would also get access at fair and non-discriminatory rates.
Foreign Subsidies Regulation
The EU antitrust watchdog is examining JD.com's proposed acquisition of Ceconomy under the Foreign Subsidies Regulation that targets unfair foreign state aid.
Preliminary Findings and Subsidy Concerns
Its preliminary review in May indicated that JD.com may have received foreign subsidies such as preferential financing, tax incentives and grants provided by entities possibly attributable to Beijing.
Commission’s Specific Concerns
The Commission underscored its misgivings by setting out specific concerns in July, which JD.com will have to address in order to gain approval for the deal.
(Reporting by Foo Yun Chee; Editing by Alexander Smith)
