On November 25, 2020, after an in-depth investigation, the FCO approved the acquisition by Mann Mobilia Beteiligungs GmbH (part of the XXXLutz Group) of 50% of the shares in Möbel Management Holding GmbH & Co. KG and Roller GmbH & Co. KG (part of the Tessner Group), subject to the divestiture of 23 furniture outlets. The FCO’s clearance only relates to the sales side of the transaction, i.e., the relationship between furniture retailers and consumers, whereas on November 30, 2020, the European Commission unconditionally cleared the transaction with respect to the procurement side, i.e., the relationship between furniture retailers and manufacturers.
The XXXLutz Group operates 200 furniture outlets in Germany and is the country’s second- largest furniture retailer in terms of turnover (following IKEA). The Tessner Group is the fourth-largest furniture retailer in Germany and operates 178 outlets, 155 of which would be subject to the transaction. Both companies are Germany’s leading suppliers in the discount sector and will become Germany’s largest furniture retailer post-transaction.
The Parties had requested a referral of the case from the European Commission to the FCO, but only received a partial referral, which led to aspects of the merger being separately reviewed by the two authorities simultaneously. The FCO examined the consumer sales side of the transaction, due to its effects in Germany, while the European Commission analyzed the procurement side, which it found to have a European dimension.
The FCO conducted an in-depth analysis of the local retail markets of the affected Tessner Group outlets, examining all brick-and-mortar furniture retail outlets and the online sector. The FCO found three different market segments in the overall furniture retail market: discount, traditional, and specialty stores. The geographic markets analyzed were defined as a catchment area of 30 km around the affected Tessner Group outlets. Given the nature of the affected outlets, the FCO analysis focused on the discount segment, except in the minority of cases in which traditional furniture stores were implicated.
The FCO concluded that the transaction would significantly impede effective competition in 25 local markets throughout Germany. In more than half of these 25 markets, the merged entity would have had a combined share in the discounter segment of over 80%, while in almost every market there would have been an increase in the market share of over 10%. The FCO approved the merger subject to the divestiture of 23 outlets in the market areas.
EUROPEAN COMMISSION DECISION
The European Commission unconditionally approved the procurement side of the transaction, finding that competition in the low-cost or ready- to-assemble furniture procurements would not be harmed. The European Commission noted that the companies’ combined market share would remain moderate, with only a limited increase in market share, and that suppliers would have alternative customers.
 As some market areas overlapped, the divestiture of 23 outlets would eliminate competition concerns in all relevant 25 market areas.