On 12 April 2024, the Belgian Competition Authority authorised the sale of 54 of 57 Louis Delhaize supermarkets under the brand Smatch, Match and Louis Delhaize to the Colruyt Group under merger control. The transaction was approved in the first phase after modification of the project by the parties.
The prenotification of the project, which took place in October 2023, initially concerned the Colruyt Group’s acquisition of 57 Smatch, Match and Louis Delhaize supermarkets that belonged to the Louis Delhaize Group. The project was formally notified on 2 February 2024.
The Investigation Service of the Belgian Competition Authority assessed the transaction’s potential impact on competition for the sale of daily consumer goods through supermarkets since both the acquirer and the targets are active in the market. In line with previous decisions, the Authority defined the geographic market for the supply of daily good at the national level although some suppliers indicated in the market study that a broader geographic market could be retained given the existence of purchasing centres at the European level.
As for the sale of daily consumer goods, the Belgian Competition Authority took into consideration the surface size of the supermarkets (i.e. bigger or smaller than 400 m²) and defined the local catchment area of each as stated in previous cases. These catchment areas correspond to the areas from which the shops acquire their regular customers, which are mapped individually for each shop and based on data from customer loyalty cards.
On the basis of the catchment area, the Belgian Competition Authority maps the competing supermarkets and identifies the relevant market shares and alternative choices for consumers. For most concerned supermarkets, the transaction would lead to market share of below 25%. Therefore, the Belgian Competition Authority concluded that the transaction would not lead to a competition concern for the majority of the concerned supermarkets.
In three specific cases, however, the relevant market share of the Colruyt Group were projected to be significantly over 25% in the concerned identified areas. According to the Authority, such market power could lead to higher prices, reduced quality, a dilution of product range and service in the area concerned. Due to these high market shares, phase II of the procedure would have been inevitable since the Investigation Service considered that an additional investigation was needed to verify possible anticompetitive effects of the transaction.
In order to avoid delays in the procedure, the Colruyt Group and the Louis Delhaize Group decided to abandon the cession of the three supermarkets in question. The scope of the formal notification was therefore limited to 54 supermarkets.
As a result, on 12 April 2024 the Competition College of the Authority, which is the decision-making body for the non-simplified merger procedure, approved the transaction in a detailed decision of more than 100 pages within the statutory deadline, which is a period of 40 working days from notification, extended by 15 working days by the modification of the transaction.
Annabelle Lepièce
