Rewe's acquisition of Esselunga halted

There have been rumours for some time that German food retailer Rewe was on the verge of acquiring Italian peer Esselunga. With the acquisition of Esselunga's 129 stores Rewe's revenues would increase by about €5 billion to €36 billion. New speculation is that the talks have slowed down.

Esselunga, has a market share of 8% in Italy, via its Italian unit Standa. A Rewe AG spokesperson said that Italy is an interesting growth market in which the German group wants to invest, but declined to comment further. Esselunga also declined to comment.

While Esselunga SpA's founder and Chairman Bernardo Caprotti, refrained from stating whether or not Germany's Rewe  might be a buyer, he made it clear that he has no intention of selling to Tesco or Wal-Mart. The 81-year-old veteran of Italy's fragmented supermarket sector, who has no heirs interested in running the family business, said the world's biggest retailer would be "the antithesis of Esselunga" and its reputation as a relatively high-quality supermarket chain.

One retailer that Caprotti most definitely doesn't plan to sell to is Italy's Coop, the country's biggest supermarket company with a share of close to 20% of the country's market. Caprotti has long been at loggerheads with Coop and has even published a book setting out a long list of grievances against Coop that is likely to stir up Italy's supermarket industry.

"There are probably only three or four retailers in the world that could be considered suitable," he said, without identifying them. "It will be difficult to find the right buyer to carry on our tradition of retail excellence." Meanwhile, Rewe rumours continue to circulate.