The European Commission has opened an in-depth investigation into the planned acquisition of the parent company of MediaMarkt and Saturn by Chinese retailer JD.com under the EU's foreign subsidies regulation.
MediaMarkt and Saturn are Germany’s best-known consumer electronics retailers, selling household appliances, computers and smartphones. The joint company forms Europe’s largest specialist electronics retailer.
The probe follows "preliminary concerns" that JD.com may have benefited from Chinese subsidies that could distort the European Union's market, a press release published on Thursday said.
These subsidies, which include preferential financing, tax incentives and grants, may have influenced the negotiations that led to the planned acquisition of Germany-based CECONOMY, the commission said.
In addition, the commission aims to assess whether the take-over could impact competition in the EU's internal market.
Under EU law, the commission has until October 2 to conclude its investigation.
The EU's foreign subsidies regulation aims "to address distortions caused by foreign subsidies, and thereby ensures a level playing field for all companies operating in the internal market while remaining open to trade and investment," a press release said.
Scrutiny applies to large companies that have received at least €50 million ($58 million) in subsidies in the three years leading up to a merger.