Discretion is the better part of valor!

Evaluating competition structures and analyzing a disinvestment
strategy for a retailer

Stern Stewart & CO. GmbH
Salvatorplatz 4
80333 Munich

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Starting situation – acting promptly to combat a distortion of competition

At the time, the cartel authority was investigating a planned takeover by a large, nationwide retailer of a slightly smaller competitor. In order to allay the concerns of the cartel authority, the company had to propose a disinvestment strategy in return for which the authority agreed to waive an antitrust investigation. In order to develop an optimal disinvestment strategy for the company, it was necessary to gain a thorough understanding of the causes of unfair competition, and of the structures of the local markets.

Project approach – a disinvestment strategy based on thorough analysis

The first step in this investigation was to perform a detailed analysis of the local market. The central factors that lead to unfair competition were scrutinized, and the predominant competition structures evaluated. Based on this analysis, a disinvestment strategy was developed that would allay the concerns of the cartel authority. In the end, the authority accepted an arrangement whereby the retailer sold over 120 supermarket outlets, in return for which the cartel authority waived any further antitrust investigation of the takeover. A structured sales process for the extensive disinvestment package was then developed and implemented.

Finding – avoid antitrust investigations with the help of economic structures

The outcome of an antitrust investigation can destroy a company’s promising plans for expansion by banning a proposed takeover. That is why it is important, in order to avoid investigation by the cartel authority, to develop a strategy that keeps economic factors in mind, thereby ensuring that takeover plans are not jeopardized. In addition, this situation presents opportunities if external pressure is exploited in a constructive way to promote internal acceptance of potentially unpopular decisions. For example, it presents the opportunity to sell unprofitable locations as part of the disinvestment strategy, despite resistance from other stakeholders.


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