France cuts Carrefour merger short
France insisted yesterday it would not agree to a €16-billion takeover of supermarket giant Carrefour by Canada’s Couche-Tard convenience store chain because it could jeopardise food security, an even more important consideration in the coronavirus pandemic.
“My position is a polite, but clear and definitive ‘No,’” French Economy Minister Bruno Le Maire told BMTV and RMC.
“Food security is a strategic consideration for our country and one does not just hand over one of the large French distributors like that,” Mr Le Maire said.
“Carrefour is the biggest private sector employer in France with nearly 100,000 employees,” he noted, and the group accounts for 20% of the food distribution market in the country.
On Wednesday, Couche-Tard submitted a non-binding offer for Carrefour valuing the group at more than €16 billion ($19.5 billion).
Mr Le Maire made clear immediately that he was not in favour of a deal involving “an essential link in food security for the French, of food sovereignty.”
The government’s reaction caused “surprise” at Carrefour itself, according to sources who said the comments were “premature” given that merger discussions had barely begun.
“We haven’t decided yet whether the interest shown is attractive for us,” one company official said on condition of anonymity.
Carrefour has more than 12,300 stores of various formats in more than 30 countries and in 2019 generated a net profit of €1.3 billion on revenue of €80.7 billion. It employs 320,000 people worldwide. Couche-Tard has a worldwide network of more than 14,200 stores and earned a net profit of $2.4 billion on sales of $54 billion in its last complete year.
In the US and several European countries, as well as in Latin America and southeast Asia, it operates under the Circle K and other brands.