Edeka and Tengelmann join forces to battle Aldi and Lidl

The Tengelmann Group has agreed to sell a 70% stake in its Plus discount grocery unit to Edeka. This deal creates a retail giant with an annual turnover worth €11 billion. Edeka's move is intended to block its Cologne-based competitor Rewe, which had also been considering making a bid for Plus.

The deal also presents a challenge to Aldi and Lidl, Germany's market leaders in the fiercely contested, low-margin discount supermarket business. Edeka is already Germany's biggest food retailer and the plan to combine Plus with its chain of Netto supermarkets depends on regulatory approval. A decision on the deal is expected within six months.

Tengelmann boss Karel-Eriwan Haub and Alfon Frenk of Hamburg-based Edeka also agreed to cooperate on purchasing for their other retain chains.

Related articles:
Edeka could face penalties for selling under cost
Aldi moves in on Tesco and Asda
Lidl: Darwinian discount