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A warehouse of the German department store chain Karstadt is seen beside a Kaufhof warehouse in Duesseldorf on Sept. 8, 2014.

Ina Fassbender/Reuters

The head of Germany’s anti-trust office said he would have to review any plans to merge department store groups Kaufhof, owned by Canada’s Hudson’s Bay Company, and competitor Karstadt.

Kaufhof and Karstadt, controlled by Austrian investor Rene Benko, are in advanced talks on a deal to join forces as shoppers retreat from the high street and increasingly make purchases online.

“This is a big deal that we would have to take a look at,” Andreas Mundt, president of the Federal Cartel Office, told a news conference on Monday.

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Any merger review would require an investigation of the two chains’ position in German regional markets, as well as their competitive position in relation to online retailers.

“This doesn’t mean that this deal is close to being blocked, it means we must get the numbers,” Mundt said in response to a reporter’s question, adding that the examination of the deal would be “data heavy”.

Typically, mergers above a certain size go before the European Union’s competition authority for review but the fact that both companies do most of their business in Germany meant this deal should be reviewed at the national level, Mundt said.

How long a merger review might take was not clear, but the cartel office would have up to four months to reach a decision after the two parties notify it of their intention to merge.

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