Czech Republic: EC to Decide on Proposed Merger of Delvita and Billa

The European Commission will be the last-instance authority to decide on the proposed merger of retail chains Delvita and Billa in the Czech Republic, Czech antitrust body UOHS spokesman Filip Vrana said.

The reason for the case to be sent to Brussels is that the two companies have huge turnover and this could affect the market, he added.

There are two scenarios for the deal. The first one is for Brussels to determine itself whether the merger is justifiable or else return the case to the Czech authorities.

Under the terms of the deal, Germanys REWE Group will acquire 96 Delvita outlets in Czech Republic paying EUR 100 million. Thus, REWE Group, which operates the Billa retail network in the country, will raise the number of its outlets to more than 330.

In 2006, the combined turnover of the two companies stood at some CZK 34.5 billion.

The fierce competition forced Austrias Julius Meinl retail chain to leave the country in 2005. Last year, two other retailers, Frances Carrefour and Germanys Edeka, also left the country.

Delvita also surrendered in the fight for clients and decided to sell its business in the country.