Ceconomy : Positive credit profile implications from JD.com offer

Ceconomy announced that it has entered into an Investment Agreement with JD.com. The latter will launch a voluntary public takeover offer at a price of EUR 4.60 per Ceconomy share in cash (representing a premium of 43% to the three-month volume weighted average share price as of 23 July 2025). The anchor shareholders Haniel Finance Deutschland GmbH, Beisheim Holding GmbH, BC Equities GmbH & Co. KG and freenet AG – together comprising 28.2% of the share capital – signed binding commitments to accept the offer. Ceconomy’s founder family shareholder Convergenta will tender 18.5m shares (3.81%) into the offer and maintain a 25.4% shareholding following the public takeover offer. Ceconomy’s Management Board and Supervisory Board intend to recommend to shareholders the acceptance of the offer. The Investment Agreement includes binding commitments for Ceconomy’s existing growth strategy, its employees, headquarters and stores, as well as for the company’s brands.
Ceconomy’s operational independence will be preserved as JD.com has committed to not enter into a domination and/or profit and loss transfer agreement. Ceconomy’s credit profile would benefit from JD.com’s stronger credit profile (A3 and A-) and global reach. This will trigger positive ratings actions by S&P (BB-/Stable) and Fitch (BB/Stable) at one point. JD.com is one of the largest global e-commerce platforms with USD 160bn revenue providing services across retail, technology, logistics and healthcare sectors. It has strong free cash flow generation capacity and had a more conservative capital structure subject to a net cash position at FYE 24.
The yields of the two outstanding 2026 and 2029 Ceconomy bonds before the launch of the takeover offer were quite low and tightened a bit until now. As we outlined before, there are change of control clauses applicable (2026 bond: CoC plus rating event; 2029 bond: CoC-only but subject to a currently high screen price of 105.8% - as such the put option should be declined). We note that there won’t be any credit support, but there is a strategic logic for JD.com to support Ceconomy (if the transaction closes) in case of need. Hence, we would not see an immediate uplift of the Ceconomy ratings to the level of JD.com, but intuitively, Ceconomy’s risk profile is clearly benefiting and subject to an implicit IG shadow rating in our view. We do not see much cartel office objections. Closing is expected for June 2026.
The 2026 bond (EUR 144m outstanding) will mature anyway soon. The 2029 bond (EUR 500m) is subject to a make-whole option and can anyway be called mid-2026 (at 103.125%). We believe that the Ceconomy cap structure will be relatively short-lived, but that the 2029 bond will likely remain outstanding for at least 9-12 months. Make-whole would result in a call price of 106.4% currently. YTW is currently 3.2% (call at 103.125% on 15 July 2026). Hence, particular the 2029 bond will be something for investors that seek low-return-and-low-risk profiles in the sense of proxy cash.
We change our Credit Opinion to Positive (vs. Stable) and change our recommendation to Neutral on both instruments (vs. Reduce on the 2026 and Neutral on the 2029).