Germany: Rewe Group swallows up Lekkerland

Rewe Group, one of the leading trade and tourism groups in Europe has announced to buy 100 percent of Lekkerland, a German wholesale company for food, beverages, tobacco products, telecommunications and non-food. The small-scale logistics of the takeover target is particularly attractive for Rewe. In addition to filling stations, Lekkerland supplies system catering, kiosks, bakeries, retailers and impulse business.

The company is so far 25 percent owned by Japan Tobacco, the rest by five owner families. It had a turnover of 12.4 billion in 2018 and employed around 4,900 people across Europe.

The transaction which is said to cost Rewe EUR 800 million is subject to clearance by the anti-trust authorities and is likely to face major competition hurdles. "The takeover of Lekkerland does not affect the retail trade but the wholesale trade, but it would strengthen Rewe's buyer power vis-à-vis the manufacturers," Jens Steger, antitrust lawyer at the international commercial law firm Simmons & Simmons was quoted by Handelsblatt.

The Rewe Group is currently the number three in the German food trade after Edeka and the Schwarz Group (Lidl, Kaufland). The company generated a total external turnover of around 61 billion euros in 2018 and employed 360,000 employees in 22 European countries.

Both companies want to create “a new strategic business unit Convenience within Rewe Group through a merger of the two companies,” Rewe said in a press release last Tuesday. Lekkerland currently has 14 warehouse locations which are to remain in existence as well as the headoffice in Frechen, Germany. A Rewe spokesman confirmed that no job cuts are planned.

Lionel Souque, CEO of REWE Group, explained: “On-the-go and out-of-home consumption are among the strongest trends in our sector, and their importance is set to grow further. And it is not just young people who increasingly buy and consume meals and snacks on-the-go. For this reason, we have steadily expanded our convenience ranges in recent years and improved their quality. The combination of this and Lekkerland’s specialised logistics and extensive wholesale and convenience expertise is a convincing recipe for future success in an important segment of the food retail market. This applies here in Germany just as much as in other European countries where Lekkerland does business. We are very much looking forward to the future cooperation with our new colleagues and extend a cordial welcome to them.”

Patrick Steppe, CEO of Lekkerland AG & Co. KG, stated: “The activities and skill sets of REWE and Lekkerland are highly complementary and open up new perspectives for both partners. We as a wholesaler and REWE with its goods and retail expertise have over 150 years of experience combined. Not least because of our respective corporate values, we think and do business similarly, even though at different levels of the selling process. Our customers and the end consumers stand to benefit from attractive shopping experiences and services in on-the-go consumption.”

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