La , is studying making a new offer to take over the Carrefour network, after the negotiations for an agreement worth 16,800 million failed last October.
To increase the value of this proposal, Auchan is in talks with private capital firms that can be associated with the new offer, including CVC Capital Partners, the British fund that participates in our country in
In this context, they rose last Wednesday on the Paris Stock Exchange for the eighth consecutive day, in what has become the longest streak in four years. Its shares gained up to 6.6% leaving a company with a market value of about 13.4 billion euros. Integration with Carrefour would help the Mulliez family, founders of Auchan, create France’s largest supermarket and strengthen its position against low-price German rivals Lidl and Aldi. Any deal would need the backing of Carrefour’s main shareholders, the Moulin family and Brazilian retail magnate Abilio Diniz.
previous negotiations
Auchan’s previous negotiations for a sale to Canadian company Alimentation Couche-Tard Inc. failed in early 2021 amid strong opposition from the French government. Already in October, Auchan tried to buy Carrefour at around 21 euros per share (16.6 billion euros), but the talks failed due to their complexity in terms of valuation and structure, according to sources close to the negotiation. Auchan then structured his offer in 70% cash and 30% shares of the resulting company.
A hypothetical agreement could create a retail giant with combined sales of 110 billion euros a year and a market share in France of almost 30%, in an environment dominated until now by Leclerc, with a share of 22.7%. , followed by Carrefour, and where Auchan ranks fifth, with 9.2%.
The agreement between two of the large French supermarkets, which would generate staff cuts due to duplication, would also come at a delicate moment for the politics of the neighboring country, which is facing presidential elections in April. It could also raise competition concerns, as the Moulin family argued in autumn to reject the previous offer.
In addition to its weakening in the French retail sector, Auchan is suffering from the loss of interest among the public in a business model that is facing strong competition from other large hypermarkets in a context of economic crisis.
The challenge of digital transformation
As in Spain, the two French distribution players involved in this negotiation are facing the great challenge of digitization accelerated by the pandemic. In this sense, Carrefour presented an investment plan of 3,000 million euros in November to face the growth of electronic commerce over the next four years and, also last year, it announced its alliance with Uber to be able to offer its customers a food delivery service capable of making deliveries in 15 minutes.
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