BRUSSELS, May 28 - JD.com said on Thursday that its proposed acquisition of German retailer Ceconomy will not be financed by subsidies from China or any other non-EU country, a declaration made after EU antitrust authorities initiated a full-scale inquiry under the bloc's subsidy rules.
In a formal statement, JD.com said:
"The proposed acquisition of CECONOMY AG by JD.COM will not be financed by any foreign subsidies granted by China or any other non-EU Member State, but instead is funded by external private bank debt and available cash from ordinary course business activities."
The company added:
"JD.COM has not received any foreign subsidies in relation to the transaction that might give rise to a distortion of competition in the EU."
The announcement came as EU regulators opened a full investigation under the bloc's rules on foreign subsidies, focusing on whether government support from outside the EU could affect competition within the single market. The inquiry is aimed at assessing whether any non-EU public funding linked to the deal could create distortions.
JD.com's statement stresses that the financial backing for the takeover rests on private-sector financing and the group's own cash generated through routine business activities, rather than on any form of foreign public subsidy. The firm framed its financing approach as standard corporate funding - external private bank debt combined with available operational cash.
The matter has drawn regulatory attention because the EU process examines cross-border financial support and its potential to skew competitive conditions for businesses operating in the single market. The initiation of the full probe is the immediate regulatory development prompting JD.com's public clarification on funding sources.
Market indicators referenced in the public material show moves in the involved tickers, with CECG and JD cited alongside percentage movements. The company statement and the regulator's procedural step are the central facts disclosed so far.
Summary
- JD.com confirms no foreign subsidies from China or any other non-EU state are financing its Ceconomy acquisition.
- The transaction is said to be financed by external private bank debt and available cash from ordinary course business activities.
- The European Commission has opened a full investigation under the EU's foreign subsidies framework.
Key points
- Regulatory - The EU's full investigation targets potential distortion from foreign subsidies, putting the deal under formal scrutiny.
- Financing - JD.com states funding will come from private bank debt plus ordinary-course cash, not public subsidies.
- Market - The development is relevant to the retail and e-commerce sectors and to cross-border M&A activity, with potential implications for banks providing acquisition financing.
Risks and uncertainties
- Outcome of the EU probe - The full-scale investigation introduces uncertainty about whether the transaction will face remedial measures or restrictions under the EU's subsidy rules.
- Regulatory interpretation - How authorities interpret links between financing sources and potential competitive distortions remains an open question.
- Market reaction - Share-price movements for the companies involved could remain volatile while the investigation is ongoing.