• Approval to be granted based on improved remedy offer
• EC appears to proceed without second round of market testing

JD.com is on track to secure approval from the European Commission (EC) under the EU Foreign Subsidies Regulation (FSR) for its EUR 2.4bn takeover of Ceconomy, according to three sources familiar with the matter.

The approval will be granted based on JD.com’s improved remedy proposal, two of the sources said. The sources did not elaborate on the exact details of those improvements.

This news service reported on 22 September, citing a source familiar with the matter, that JD. com was expected to have submitted an improved package of commitments by that time. The improved offer came after JD.com’s initial remedy offer received primarily negative feedback during EC’s market test and after the Chinese company had tried to include a “no conflict with Chinese law” clause in its initial offer. The story quoted two sources saying such a clause was unlikely to be accepted by the EC.

It appears the EC has not engaged in the same level of third-party outreach as it did after the first remedy offer. A fourth source, who is close to a third party that participated in EC’s first round of market testing, said this party had not been contacted by the EC for feedback on JD.com’s improved remedy offer.

This could be due to the short time window available for the regulator, given that the provisional deadline for its in-depth FSR review is set for 4 November and that the EC’s internal process for handling an approval requires some time.

In addition to the FSR clearance, the deal is also still subject to foreign direct investment (FDI) approval in Austria. All other regulatory approvals have already been obtained, according to an announcement issued by JD.com on 29 July.

The deal has a hard long-stop date on 10 November.

JD.com, Ceconomy and the EC declined to comment.