Carrefour in the viewfinder: the Canadian group Couche-Tard unveiled Wednesday an offer “with a view to a friendly rapprochement”. While the proposal assesses the offer at 16 billion euros, the French distributor has indicated that it wants to “examine” it. But that was without counting the intervention of the French Minister of the Economy Bruno Le Maire who said he was “not in favor” of such an operation.
He also recalled that a recent decree made it possible to block this merger of distribution giants.
Carrefour represents an “essential link in the food security of the French, in food sovereignty”, hammered Bruno Le Maire on the air of France 5 television. Especially since its status as “first private employer” in France, recalled Wednesday evening by the minister, gives the file a very political tone in France.
Here is a group, Couche-Tard, with 44.5 billion euros in turnover over the last annual financial year (2019-20), specializing in the sale of gasoline and small-format stores, interested in a giant food distribution, historically strong in very large supermarkets and which achieved nearly 81 billion euros in sales in 2019.
“Couche-Tard is used to growing through acquisitions but it has never been mergers of this size,” observes Clément Genelot, specialist in the distribution sector at Bryan, Garnier & Co.
The group, which has more than 130,000 employees worldwide (against 320,000 for Carrefour), created in Quebec in 1980, indeed established itself in the United States in the early 2000s, in Northern Europe in 2012 and then in the United States. Asian market at the end of 2020 via multiple external acquisitions.
On Wednesday, he announced that he had “recently submitted to Carrefour a non-binding letter of intent with a view to a friendly rapprochement”. This, by proposing a price of 20 euros per share which would value the French distributor at more than 16 billion euros excluding a debt of several billion euros that should also take over the Canadian group.
“The terms of the transaction are still under discussion (…) but the proposed compensation should largely be in cash,” said Couche-Tard, warning however that “there is no certainty” as to the fact that these discussions “will lead to an agreement or an operation”.
Prior to that Carrefour, in an internal communication . was able to consult on Wednesday, said it would “examine the project” to see if it was in its best interests.
For his part, the national CFDT Carrefour hypermarkets delegate Thierry Babot expressed his mistrust of the Couche-Tard initiative.
“We will remain vigilant. What does this company want to do? A real long-term project or just a financial transaction?”, He asked himself.
“We do not see synergies on the supply chain or logistics” in the case of a merger, said Yves Marin, an expert in the distribution sector within the firm Bartle.
For Couche-Tard, however, the operation could have the advantage of being based on a more complete geographic network, since only in Poland are the two brands present. It would also make it possible to diversify its sources of income, while the rise of the electric car ultimately threatens its fuel sales.
In addition, another specialist in the sector believes that “against Amazon and others”, the volumes of investments to be made by distributors “are colossal”. “There is therefore an obligation to find some form of alliance”.
Carrefour, still internally, says it sees this approach as proof of the “merits of the transformation launched three years ago” by its CEO Alexandre Bompard, aimed at making it “the world leader in the food transition for all”.
Having “found a profitable growth path”, he now says “he can consider participating in consolidation operations if market conditions are met”, it is further indicated. But the CAC 40 group, whose action jumped 13.4% Wednesday on the session, is also cautious.