On November 28, 2024, the French Competition Authority (“FCA”) conditionally cleared the acquisition of 200 former Casino stores by the Intermarché group.[1] The FCA decision is conditional on the divestment of 11 stores to ensure that consumers have access to alternative offerings when purchasing mass-market products.
Background
On February 8, 2024, Intermarché notified the FCA of its intention to acquire 200 former Casino food retail stores. The acquisition takes place in the context of important financial difficulties of the Casino group resulting in the sale of the quasi-totality of its large stores, super and hypermarkets, to competitors.[2] This transaction follows a prior sale by Casino group of 61 Casino stores to Intermarché which was previously cleared by the FCA on January 11, 2024, subject to the divestiture of three stores to the Carrefour group.[3]
The FCA Decision
The FCA found that the transaction was unlikely to significantly strengthen Intermarché’s purchasing power in the upstream markets for the supply of everyday consumer goods. While Intermarché accounts for a significant share of purchases from certain suppliers and is an important customer in the supply of everyday consumer goods, the market share increase resulting from the transaction remained limited to less than 4% at national level.[4] Moreover, the combined purchase share of Intermarché’s and the target’s stores over the past three years remained below 25%.[5]
The FCA considered that it was unlikely that the transaction would put the parties’ suppliers in a situation of economic dependency as most suppliers negotiate through tripartite purchasing alliances. Since both Intermarché and Casino are already part of these alliances, the transfers of stores between them do not alter their bargaining power.[6] The FCA also noted that the new entity will continue to face competition from Leclerc, Carrefour, and Système U.[7]
In the downstream food retail markets, the FCA noted Intermarché’s modest share at the national level,[8] but identified competition concerns in 11 local areas around the target’s stores.[9] According to the FCA, in these areas, the transaction would have resulted in a significant increase of Intermarché’s market power leading to a reduction in the diversity of offering to consumers. To remedy the identified risks, Intermarché offered[10] to divest the target’s stores in each of the specific local areas.[11]
Derogation to the Suspensive Effect of Merger Control
In light of Casino’s financial difficulties, the FCA accepted Intermarché’s request for a derogation from the suspensive effect of merger control. [12] The derogation—which enabled Intermarché to complete the transaction without having to wait for the FCA’s clearance—was granted without prejudice to the FCA’s final decision.[13]
While the FCA typically receives around ten similar derogation requests per year,[14] it grants such derogations only in exceptional cases where target companies are facing severe financial or operational challenges. For example, a derogation was granted in the book retail sector in relation to Gibert Joseph’s acquisition of Gibert Jeune, as the latter was at risk of imminent dissolution.[15] More recently, a derogation was granted in the retail furniture market, in relation to But Group’s acquisition of Conforama, in light of Conforama’s severe financial situation.[16]
[1] FCA Decision No. 24-DCC-255 of November 28, 2024, on the acquisition of sole control of 200 stores formerly operated under the Casino banner by ITM Entreprises (Decision), available here.
[2] See Le Figaro, L’Autorité de la concurrence autorise sous condition le rachat de 200 magasins Casino par Intermarché, November 29, 2024, available here.
[3] FCA Decision No. 24-DCC-02 of January 11, 2024, on the acquisition of sole control of 61 stores formerly operated under the Casino banner by ITM Enterprises, available here.
[4] Decision, para. 51.
[5] Ibid.
[6] Decision, para. 52.
[7] Decision, para. 53.
[8] [10-20]%, behind Leclerc ([20-30]%) ad Carrefour ([10-20]%). See Decision, para. 55.
[9] In line with its decisional practice, the FCA assessed market conditions across two different catchment areas: a first market (“primary zone”) where consumer demand meets the supply of hypermarkets that can be reached within a 30-minute drive, and which consumers view as interchangeable with one another; and a second market (“secondary zone”) where consumer demand meets the supply of supermarkets and equivalent retail formats (hypermarkets, discount stores, and popular stores) located within a 15-minute drive. See Decision, para. 25. On this basis, the FCA identified concerns in the catchment areas of the former Casino group stores in Arc-lès-Gray (70), Bagnères-de-Luchon (17), Blanzac-lès-Matha (17), Boé (82), Charlieu (42), Lambesc (13), Lorgues (83), Revel (31), Solliès-Pont (83), Susville (38), and Valence-d’Agen (82). See Decision, para. 261.
[10] The final version of Intermarché’s commitments, dated November 19, 2024, is available here.
[11] In Lambesc, Intermarché has committed to either divest the target store or another store in its group. See Decision, footnote 73.
[12] FCA press release, Takeover of Casino stores by Intermarché, Auchan and Carrefour: the Autorité de la concurrence grants derogations from the suspensive effect of merger control, March 19, 2024, available here.
[13] Ibid.
[14] Competition Policy in the Post-Covid-19 Economy : What to Do of zombification risks ?, 12th New Frontiers of Antitrust Conference, June 10, 2021, p. 12.
[15] FCA Decision No. 17-DCC-186 of November 10, 2017 on the acquisition of sole control of Gibert Jeune by Gibert Joseph, available here.
[16] FCA Decision No. 22-DCC-78 of April 28, 2022 on the acquisition of sole control of Conforama France assets by the Mobilux group, available here.