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Austrian firm buys German retailer for €1

The retail giant's German owners are throwing in the towel on their attempt to pull the department store chain out of the red.

Austrian firm buys German retailer for €1
Photo: DPA

Austrian real estate group Signa, owned by businessman René Benko, announced on Friday it will take full control of the ailing German department store Karstadt from US-German investor Nicolas Berggruen.

"At the beginning of next week, Signa Retail will acquire the whole of Karstadt Warenhaus GmbH from Berggruen Holdings," the group said in a statement. "In addition, Berggruen Holdings will withdraw completely from Karstadt Premium and its luxury flagship stores KaDeWe in Berlin, Oberpollinger in Munich and Alsterhaus in Hamburg."

Similarly, Berggruen would offload his stake in Karstadt Sports, the statement added.

Signa had already acquired 75.1-percent stakes in Karstadt Premium and Karstadt Sports in 2010 for €300 million.

The €1 price was a symbolic price tag as the Austrian group said it would not pay any additional purchase price for the outstanding 24.9-percent stakes or the 100-percent stake in the group's
core department stores.

Karstadt employs more 17,000 people in its 83 stores. Under Berggruen's stewardship, more than 2,000 employees have been laid off. Stefanie Nutzenberger, a director at German trade union ver.di said that those remaining have high hopes for their new boss.

"The employees have been bitterly disappointed by the alleged social investor Berggruen," she said in a statement on Friday.

The deal has to be approved by the relevant anti-trust authorities, Signa said.

Berggruen took over Karstadt in 2010 when the tourism and retail group Arcandor went bust. At the time, Berggruen also paid only €1 for the chain. Recently, new CEO Eva-Lotta Sjöstedt, who was expected to be the chain's saviour, left her position after only five months on the job.

Signa's real estate holdings are estimated to be valued at more than €4 billion. 

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BUSINESS

Where are Austria’s big international companies located?

Austria's most prominent international companies are involved in banking, insurance, and construction projects worldwide, many but are they all found in Vienna?

Where are Austria's big international companies located?

Here’s where each of the ten largest companies in Austria, by revenue generated last year, are located, both within Vienna and outside of the capital.

One of Central and Eastern Europe’s biggest insurance firms, the Vienna Insurance Group is headquartered in the capital. Their main offices are directly north of the Innere Stadt on Schottenring, close to the Rossau district.

A fellow insurance firm, the Uniqa Group, is located close by. Owning over fifteen significant insurance providers across Europe, they are market leaders alongside Vienna Insurance Group. Their headquarters can be found in the eponymous Uniqa Tower, on Ferdinandstraße close to the Karmeliterviertel.

Erste Group, one of the continent’s biggest providers of financial services, was founded just over two hundred years ago in Leopoldstadt, a suburb adjoining Vienna’s centre to the east. Today, the group is headquartered in the Erste Campus, less than a five-minute walk from Vienna’s central train station.

Founded in the fifties, OMV is the country’s largest oil and gas company. The company owns three European refineries, including one at Schwechat in Lower Austria, near the capital. The company is based in the Hoch Zwei building in the Second District, near the banks of the Danube.

Construction company Strabag, responsible for massive infrastructure projects across Europe and South East Asia, is located across the Danube from OMW, near the Austria Centre and the expansive Donaupark.

Banking giant Raiffeisen International is headquartered in the Weissgerberviertel, north of Vienna’s city centre. Other divisions, including their software development teams, are based throughout the city centre.

Construction company Porr Group, which has many subsidiaries in Austria and involvement in significant railway building projects throughout Europe, has headquarters in Vienna’s south, five kilometres away, in the Favoriten district.

Verbund AG, Austria’s largest energy provider, can also be found outside Vienna’s centre. It is based to the south-west, close to the Mariahilf district and the city’s Westbahnhof, or western train station.

Steel and technology group Voestalpine is located away from Vienna in Linz, Upper Austria, roughly equidistant between Salzburg and Vienna. The company’s headquarters can be found between the Spallerhof district and the Industriegebeit, or industrial area.

Finally, international metals and technology firm Andritz AG is also based outside Vienna, in Graz in Styria. Their headquarters is some distance from the city centre, in the district which gave the company its name: Graz-Andritz.

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