Week Ahead (2 November)

Wednesday, 4 November – JD.com-Ceconomy deal faces Phase 2 deadline under FSR review, a clearance widely expected

On Wednesday, the European Commission is expected to approve JD.com’s approximately €2.2 billion acquisition of German electronics retailer Ceconomy under the Foreign Subsidies Regulation (FSR), following revisions to the company’s proposed commitments. The Commission’s provisional decision deadline is 4 November, making the final remedy package the main focus after months of investigation and negotiations.

As a reminder, the Commission opened an in-depth investigation in May, making the transaction the first Chinese acquisition subjected to a Phase II FSR review. Brussels has been examining whether preferential financing, tax advantages and grants may have enabled JD.com to offer favourable acquisition terms and strengthen the combined company’s competitive position after completion.

JD.com’s initial commitments, submitted in August, focused on access to its European logistics and technology infrastructure. Ceconomy would use these services on market based terms, while competing retailers would receive access under fair and non-discriminatory conditions. Following negative market-test feedback, including concerns about competitors becoming dependent on JD.com-controlled infrastructure, the company strengthened its proposals. Reporting now points towards clearance, although the precise revisions and final conditions remain to be confirmed.

Progress is also noteworthy given the parallel dispute over Chinese restrictions on cooperation with the investigation. As discussed in our September reports, Beijing sought to prevent organisations and individuals from assisting certain aspects of the proceedings, potentially complicating the Commission’s access to information concerning alleged subsidies. The movement towards a negotiated clearance suggests that these tensions have not prevented DG COMP from pursuing a substantive solution based on remedies.

Our expectation remains conditional clearance. Beyond the immediate transaction, the decision should provide an important precedent for behavioural remedies under the FSR, particularly obligations governing access to infrastructure and commercial relationships after completion. This week’s key question is therefore how the Commission makes those commitments effective, in particular whether revised access obligations are sufficient, or whether additional pricing, monitoring and enforcement safeguards are required to prevent competitors being placed at a structural disadvantage.

Wednesday, 4 November – Sefcovic to face MEPs as EU launches hybrid-vehicle safeguard investigation

Also on Wednesday, Trade Commissioner Maros Sefcovic will discuss EU trade policy with the European Parliament’s International Trade Committee (INTA), a week after its delegation visited China on 27–29 October. Relations with Beijing are likely to feature prominently following the Commission’s launch of a safeguard investigation into hybrid vehicle imports and signs of a more receptive Chinese stance towards negotiations. The committee’s agenda also includes a report-back on the delegation’s visit. 

The investigation, launched on Friday, covers plug-in and non-plug-in hybrid passenger vehicles and opens a 21-day period for interested parties to submit evidence. The Commission cites a 49% increase in imports between 2023 and the twelve months to July 2026, warning of a threat of serious injury to European manufacturers. Provisional restrictions could be introduced before the investigation concludes.

Per our earlier reports, Sefcovic's visit to Beijing on 8–9 October produced an understanding to limit Chinese-made hybrid exports to approximately 350,000 vehicles annually, substantially below projected 2026 volumes. The Commission has indicated that it aims to introduce restrictions from 1 December. However, the investigation does not itself establish the final quotas or their allocation. Unlike duties targeting subsidised Chinese electric vehicles, safeguards generally operate across supplying countries, raising questions about the treatment of manufacturers exporting from Japan, South Korea, Turkey and the UK. These partners have already raised concerns at the WTO about the anticipated measures.

The parliamentary exchange also follows more encouraging diplomatic signals. After a two-hour discussion with Chinese Commerce Minister Wang Wentao, INTA chair Bernd Lange suggested that Beijing increasingly recognised the importance of preserving access to European customers. Speaking to German media on Thursday, he said “With dialogue we can get something worthwhile done. It is better to negotiate than to escalate.” Nevertheless, Lange cautioned against expecting immediate breakthroughs, pointing instead towards March 2027 as the horizon for more concrete results from the continuing dialogue.

Beyond automotive imports, attention will turn to whether the Commission intends to pursue comparable action in chemicals and industrial machinery. President von der Leyen identified both sectors during October’s European Council discussions, while the emerging Franco-German alignment on stronger trade defence provides political support for further action. Beijing’s willingness to accept restrictions beyond vehicles remains uncertain.

Overall, the main watchpoints for this week are potential clarifications around the December implementation timetable, the treatment of non-Chinese suppliers and any indications of further sectoral investigations.

Thursday, 5 November – Bank of England expected to raise rates following Autumn Budget

On Thursday, the Bank of England’s Monetary Policy Committee (MPC) will announce its interest rate decision alongside updated quarterly forecasts, following Chancellor John Healey’s Autumn Budget on 28 October. A 25-basis-point increase to 4% is the leading expectation, with attention also focused on whether Governor Andrew Bailey signals further tightening. The meeting follows the ECB’s decision to leave rates unchanged last Thursday.

The MPC held Bank Rate at 3.75% by a 6–3 majority in September, with three members already favouring an increase. Although policymakers saw little evidence of material second-round effects in wages and price-setting, they warned that a prolonged energy shock increased the risk of inflation becoming more persistent.

Subsequent data have strengthened the case for action. Annual CPI inflation accelerated from 3.1% in August to 3.5% in September, above expectations, driven partly by higher petrol and diesel prices. The central question is whether these pressures remain concentrated in energy or increasingly feed through to broader prices, wage demands and inflation expectations.

Expectations had already shifted substantially before those figures and the Budget. In Reuters’ 12–14 October survey, 54 of 63 economists forecast a November increase to 4%, whereas approximately 90% had expected unchanged rates through year-end in the previous survey. However, there was no majority for another increase thereafter with 30 of 61 respondents expecting a further rise in early 2027. At the time, markets priced four quarter-point increases by end-2027, highlighting a substantial gap between economists’ forecasts and market expectations.

The recently-unveiled Budget adds a further consideration. Energy bill measures could temporarily reduce measured inflation, while household payments cushion the impact on spending. However, the OBR’s reduction in its 2027 growth forecast to 1%, from 1.6% in March, highlights the risks of tightening into a weakening outlook. The MPC will need to assess the package’s overall effects on demand and inflation rather than individual measures in isolation.

Overall, the likelier scenario for Thursday is a quarter point increase, accompanied by cautious guidance rather than a commitment to successive hikes. Chief Economist Huw Pill’s recent warning earlier in October that an increase need not begin a lengthy tightening cycle is particularly relevant. For market participants, the vote split, revised inflation projections and Bailey’s assessment of the Budget will therefore matter alongside the decision itself, particularly for sterling, gilt yields and expectations for borrowing costs in 2027.

Friday, 6 November – EU merger decision due for Amplifon's €2.3 billion acquisition of GN Hearing

The European Commission faces a 6 November provisional deadline to decide on Italian hearing care group Amplifon’s approximately €2.3 billion ($2.6 billion) acquisition of GN Hearing. The transaction, formally notified on 1 October, would combine Amplifon’s international retail and hearing care network with the Danish company’s hearing aid manufacturing and wholesale operations.

Announced in March, the agreement provides for GN Store Nord to receive €1.69 billion in cash and 56 million newly issued Amplifon shares. GN would hold approximately 17.1% of the enlarged group’s share capital, while completion remains expected by the end of 2026, subject to outstanding conditions.

The strategic rationale is vertical integration by bringing GN Hearing’s product development and manufacturing capabilities together with Amplifon’s distribution, fitting and patient care services. The companies envisage a combined business with approximately €3.3 billion in annual revenues and a presence in more than 100 countries. Italian-headquartered Amplifon targets €60–80 million in annual net EBITDA synergies by the end of 2029, predominantly through sourcing more hearing aids internally rather than purchasing them from third-party manufacturers.

From a competition perspective, the principal potential issues concern the relationship between manufacturing and retail distribution. DG COMP could examine whether Amplifon would have the ability and incentive to favour GN products across its retail network, reducing rival manufacturers’ access to customers. Conversely, it could consider whether independent hearing care providers competing with Amplifon might face less favourable access to GN products. These are potential theories of harm rather than publicly confirmed Commission objections.

At this point, a Phase I clearance is the more likely outcome, given the businesses’ largely complementary activities, although limited horizontal overlap alone does not settle the vertical assessment. This week’s decision should clarify whether DG COMP considers existing competitive constraints sufficient or requires safeguards around supply and distribution. A clearance would remove an important regulatory condition supporting the parties’ year end completion target.