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Shares of a major Chinese e-commerce company declined today following the announcement of its intention to purchase Germany’s Ceconomy, the parent company of well-known electronics retailers MediaMarkt and Saturn, in a deal valued at approximately EUR2.2 billion (around USD2.5 billion).
The company’s stock closed at HKD122.90 (about USD15.66), marking a 3.2% decrease, while its U.S. listing dropped by 1.5% to USD31.75 yesterday. Conversely, Ceconomy’s shares were up 1.1% at EUR4.40 (roughly USD5) as of 6 p.m. Beijing time. Over the past month, Ceconomy has seen its market value increase by more than 20%, fueled by speculation about the takeover.
A fully owned subsidiary of the Chinese firm, Jingdong Holding Germany, intends to make a voluntary public tender offer to purchase all of Ceconomy’s outstanding shares for EUR4.60 (about USD5.30) per share, the company announced today. The deal is expected to close in the first half of next year.
Under the agreement, the Chinese company will buy a 31.7% stake in Ceconomy from its largest shareholders, which include Convergenta Invest. After the acquisition, Convergenta Invest will retain a 25.4% stake and act as a strategic partner to support the company’s management, according to the announcement.
“This partnership will establish Europe’s leading next-generation electronics platform,” said the CEO of the Chinese company. “Ceconomy’s impressive market position, strong customer relationships, and growth potential are truly promising. We are committed to investing in its people and distinct corporate culture to continue building on this success. We plan to collaborate closely with the team to enhance capabilities and leverage our technological expertise to accelerate Ceconomy’s ongoing transformation.”
The Chinese firm said it will support Ceconomy’s growth as an independent entity and accelerate its evolution into Europe’s premier omni-channel consumer electronics platform. The company also stated that there will be no immediate changes to employment, employee agreements, or physical locations following the acquisition.
Ceconomy was spun off from a German retail giant in 2017. Its flagship brands, MediaMarkt and Saturn, operate a blend of robust online shopping platforms and more than 1,000 physical stores across 11 countries.
In its latest earnings report, Ceconomy reported a first-quarter adjusted EBIT increase of 81% from the previous year to EUR10 million (around USD11.4 million), though sales slightly declined by 1.6% to EUR5.2 billion (approximately USD5.9 billion).
Since the start of this year, the company has been actively expanding into European markets. Notably, in March, it became the official e-commerce partner of the UEFA Champions League. By April, it had begun pilot operations of its international retail brand Joybuy in London and was inviting additional brands across various categories, from baby products to toys, to join the platform.
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