Shell aiming to surpass BP in Germany

Each of the service stations in question are located at Edeka's Marktkauf supermarkets and if acquired would be re-branded and operated by Shell. Customers purchasing goods at Edeka stores with a Shell service station would be able to receive a discount of 2% per liter on fuel. The proposed acquisition would leave Edeka with 56 service stations, and increase the number of Shell branded sites in Germany to 2,240. However, this still wouldn't be enough to overtake Aral which has over 2,300 branded sites. Despite Aral having the largest network, both Shell and Aral are neck and neck in terms of fuel market share, with both retailers each accounting for 23% of fuel sales in the country.

For Edeka, the proposed sale comes as no great surprise. Edeka is increasingly focusing on its discount stores as it attempts to challenge Aldi and Lidl with its own discount grocery chains, Netto and Plus. For Shell, the deal could move the fuel retailer above Aral in Germany, in terms of fuel market share - something which is unlikely to happen simply through organic growth. The acquisition would also be positive for Shell (and other oil company branded fuel retailers in the country) as it would reduce the threat, however small, of supermarket fuel retailers in the country.

On the other hand, the deal may be a blow for forecourt competition in Germany. Less than 1% of fuel sold in Germany is through supermarket sites, although 15% of German motorists in a recent Datamonitor survey reported they have been increasingly using supermarkets, believing them to be cheaper. It is partly for these reasons that the deal could still be blocked by competition authorities based on concerns that Shell and Aral are too powerful. Indeed, in 2009 French oil company Total was refused permission to acquire 59 sites in East Germany from Austrian oil company OMV, as the deal threatened to strengthen its position as well as market leaders Shell and Aral.