JD.com’s €2.2bn (£1.9bn) takeover of MediaMarkt and Saturn owner Ceconomy has reportedly encountered another regulatory hurdle after European Union officials formally outlined their objections to the deal.

The European Commission has issued the Chinese ecommerce giant with a “statement of grounds”, formally notifying the business of concerns uncovered during its investigation.

Regulators are examining whether JD.com received Chinese state support, including preferential financing, tax incentives and grants, that may have enabled it to offer a higher price for the German electronics retailer.

The Commission is also assessing whether JD.com could use its technology and logistics capabilities to support Ceconomy’s growth in a way that distorts competition across the European market.

The investigation is being conducted under the EU’s Foreign Subsidies Regulation, which allows officials to address competition distortions caused by financial support from non-EU governments.

JD.com can now propose concessions to address the regulator’s concerns, with the Commission due to decide whether to approve the transaction by 2 October.

The retailer described the statement of grounds as a normal procedural step and said it remained confident the acquisition would receive approval during the second half of the year.

JD.com has denied that the takeover is being financed through foreign subsidies, insisting the deal is funded by private bank debt and cash generated through its ordinary business activities.

The acquisition would give the Chinese ecommerce business a major European retail presence through Ceconomy’s MediaMarkt and Saturn chains.

JD.com secured control of 85.2% of Ceconomy’s shares following the takeover offer, although completion remains subject to regulatory clearance.

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