BRUSSELS, May 28 (Reuters) – Chinese e-commerce giant JD.com’s $2.5 billion bid for German electronics retailer Ceconomy may involve Chinese subsidies, EU competition regulators warned on Thursday as they opened a full-scale investigation into the deal.
The acquisition will allow one of China’s largest retailers to expand outside its home market with the acquisition of Ceconomy-owned electronic products retailers MediaMarkt and Saturn.
The decision by the European Commission marks its first in-depth probe of a Chinese deal under its Foreign Subsidies Regulation which targets unfair foreign state aid.
“The preliminary investigation indicates that JD.com may have received foreign subsidies distorting the EU internal market. These include preferential financing, tax incentives and grants provided by entities possibly attributable to the PRC,” the EU executive said.
It said the merged entity may adopt investment and business strategies that could impact competition in Europe.
(Reporting by Foo Yun Chee)
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