Commission opens formal investigation into possible gun jumping in XXXLutz's acquisition of Porta

Commission opens formal investigation into possible gun jumping in XXXLutz's acquisition of Porta

The European Commission has opened a formal investigation to assess whether, in the context of the proposed acquisition by XXXLutz of Porta, the parties may have engaged in gun jumping, which would be in breach of the EU Merger Regulation.

EU merger rules require that companies notify planned mergers of Union dimension for review by the Commission prior to their implementation, and do not implement them until cleared by the Commission ('the standstill obligation'). These requirements safeguard the Commission's ability to investigate mergers and prevent a potential detrimental impact of a transaction, pending the outcome of the Commission's investigation.

Practically, this implies that, prior to a formal clearance by the Commission, parties are not allowed to take any actions which contribute to the change of control of the acquired company. This can include coordination of operations, influence on the company's day-to-day operations or exchange of commercially sensitive information.

The proposed transaction between XXXLutz and Porta was publicly announced on 7 January 2025, and has not been formally notified to the Commission. The Commission's preliminary view is that this transaction has an EU dimension and would be notifiable to the Commission.

The Commission became aware of conduct that calls into question XXXLutz and Porta's compliance with the standstill obligation. It has informed XXXLutz and Porta of the opening of a formal procedure and will now carry out its investigation. The opening of a formal investigation does not prejudge its outcome.

This investigation is separate from a review by the Commission of the proposed transaction's impact on competition, under EU merger rules, and would not prejudge its outcome.

Background

XXXLutz KG, headquartered in Austria, is active in several European countries in the retail sale and procurement of furniture, furnishings and household goods and, to a more limited extent, electronics and appliances. The retail brands under which it operates include 'XXXLutz', 'Mömax', 'Roller', 'Braun', 'Home24' and 'Möbelix'. XXXLutz' shareholders also hold controlling shareholdings in the furniture groups 'POCO', 'But', 'Conforama France', 'Conforama Iberia' and 'Conforama Switzerland'.

Porta, headquartered in Germany, operates under the brands 'porta Möbel', 'SB Möbel Boss' and 'Möbel LETZ' in Germany, as well as 'ASKO' in Czechia and Slovakia. It is active in the retail sale and procurement of furniture, furnishings and household goods as well as electronics and appliances.

Under the EU Merger Regulation, a concentration with an EU dimension must be notified to the Commission (Article 4 of the EUMR) and must not be implemented until it has been approved by the Commission ('standstill obligation' - Article 7(1) EUMR).

The Commission can impose fines on companies that, either intentionally or negligently, breached the standstill obligation, which may reach up to 10% of the companies' aggregated worldwide turnover, pursuant to Article 14(2) of the EUMR.

For more information

More information will be available on the Commission's competition website, in the public case register under the case number M.11895.AP.