Auchan could give the shot! He would have resumed the steps for a possible takeover of Carrefour
Two sources close to the case said on Wednesday, January 5, that Bloomberg that Auchan has resumed steps for a possible transaction with Carrefour, after previous negotiations failed last autumn. In this regard, Auchan has been in talks with several private equity firms about a possible alliance for a bid. However, sources said that talks are ongoing and there is no certainty that an offer will be launched.
Recall that Carrefour shares rose on Wednesday for the eighth consecutive session, the longest period of growth in Carrefour shares in four years. On Wednesday, Carrefour’s shares appreciated by up to 6.6%, giving the company a market value of about 13.5 billion euros.
The largest distribution group in France could be born
Also a possible combination with Carrefour would allow the Mulliez family, which founded Auchan, to form the largest distribution group in France and to strengthen its position in the face of low-cost rivals in Germany. But any transaction will need the support of Carrefour’s main shareholders, the Moulin family and Brazilian tycoon Abilio Diniz.
In addition to competition from low-cost rivals, French food distributors are also facing the need to expand their e-commerce operations. Carrefour CEO Alexandre Bompard unveiled a three-billion-euro investment plan in digital operations over the next four years in November.
At the same time, Auchan is suffering from its exposure to large hypermarkets, large stores that sell all kinds of products and in most cases are located on the outskirts of cities in northern France, a region facing economic difficulties, according to Clement Genelot, analyst the firm Bryan Garnier. He believes that hypermarket stores have lost their appeal to consumers.
“The Mulliez family cannot restructure Auchan on its own. That’s why he has no choice but to merge and merge with Carrefour, “said Genelot.
However, a deal involving two of France’s largest distribution groups would come at a delicate time, given that there are only four months until the presidential election. A combination of Auchan and Carrefour could lead to headcount restructuring and would require the approval of competition regulators.
On the local market, Auchan Romania has in its portfolio 33 Auchan hypermarkets, a network of 106 MyAuchan convenience stores, of which 92 in Petrom stations, and five supermarkets Auchan. With more than 280,000 square meters of net sales, a turnover of more than 1.2 billion euros in taxes, Auchan offers a modern and quality trade to the approximately 5 million inhabitants of the cities where its stores are present.
In turn, Carrefour opened two hypermarkets in December and ended 2021 with 43 stores in this format on the Romanian market. Carrefour had a turnover of 78.609 billion euros in 2020, an increase of 7.8% in terms comparable to 2019. At the end of last year, the Carrefour group had a total of 13,048 stores, of which 369 in Romania.
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