The European Union (EU) has begun to seriously apply the brakes on Chinese e-commerce company JD.com's plan to acquire Germany's electronics distributor Ceconomy.

The EU has formally notified its concerns, questioning the possibility that JD.com may have presented an acquisition price under more favorable conditions than competitors with support from the Chinese government.

As a result, there are indications that JD.com will need to propose a significant level of remedial measures to gain acquisition approval.

▲ EU Strengthens Review Based on Foreign Subsidies Regulation

According to Reuters on the 22nd (local time), the European Commission launched an in-depth investigation into JD.com's acquisition of Ceconomy in May under the Foreign Subsidies Regulation (FSR).

The Foreign Subsidies Regulation is a system introduced to prevent foreign government subsidies from distorting fair competition in the European market, and is evaluated as a representative regulatory measure targeting Chinese companies.

JD

▲ Chinese Government Support as Key Issue

The Commission is focusing its investigation on whether JD.com has received preferential financial support, tax benefits, and various subsidies from the Chinese government.

The EU is examining the possibility that such government support may have lowered JD.com's funding costs and influenced its ability to present a higher acquisition price than competitors.

The core of this investigation lies in determining whether government support has distorted market competition.

▲ JD.com Emphasizes "Standard Procedure"

JD.com explained that the formal opinion letter sent by the EU is a procedure generally conducted during the corporate merger review process.

The company stated, "This transaction also aligns with the goal of strengthening innovation and industrial competitiveness in Europe," and added, "We anticipate a positive conclusion by the second half of 2026."

The company will have the opportunity to submit remedial measures to address the concerns raised by EU regulators.

▲ Final Decision by October 2

The European Commission is scheduled to make a final decision on whether to approve the corporate merger by October 2.

The level and effectiveness of remedial measures presented by JD.com during the review process are expected to be key variables determining approval.

If the acquisition is successful, JD.com will acquire MediaMarkt and Saturn, Europe's leading electronics retail brands owned by Germany's Ceconomy.

Through this, the company can reduce its dependence on China's domestic market and establish a foothold to expand its global distribution business centered on Europe.

The market views this transaction as one of the most important acquisitions in JD.com's overseas business expansion strategy.

▲ Trend of Strengthened M&A Regulations on Chinese Companies

This review is analyzed as an example of the recent trend in which the EU is strengthening regulations on large-scale mergers and acquisitions (M&A) by Chinese companies.

The EU has determined that corporate acquisitions using foreign government subsidies could undermine fair competition with European companies, and is continuously strengthening related reviews.