Carrefour shares jump in Couche-Tard merger talks By Reuters

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By Dominique Vidalon PARIS (Reuters) – European retail giant Carrefour (PA 🙂 received a surprise merger approach from Canadian convenience store operator Alimentation Couche-Tard, sending the French company’s shares up 13% on Wednesday. European supermarket groups were expected to seek deals to counter increasing competition from online rivals such as Amazon (NASDAQ :), although Couche-Tard’s announcement that it has started exploratory talks with Carrefour raised questions to analysts about the potential for savings in costs or purchases. Couche-Tard, which focuses primarily on service stations in North America, would enter virgin territory with Carrefour. The largest retailer in continental Europe has operations in Europe and Brazil, including its out-of-town hypermarkets. “Given the nature and location of ATD’s businesses, we see little scope for synergies,” Citi analysts said, adding that fierce competition makes France a particularly difficult market. It was not immediately clear whether Couche-Tard could try to choose between Carrefour’s operations. Couche-Tard has primarily made smaller acquisitions in the past, although it was reported to be a potential suitor for Marathon Petroleum Corp’s (NYSE 🙂 Speedway gas stations last year before another buyer closed a $ 21 billion deal. Dollars. There is no certainty at this stage that these discussions will result in any agreement or transaction, Couche-Tard said. Carrefour, which described the approach as “friendly”, said the talks were preliminary, but the news sent its shares up 13.6% to 17.53 euros at 1113 GMT. Bloomberg reported that Couche-Tard was discussing an offer of about € 20 a share, which would value Carrefour at € 16.2 billion ($ 19.72 billion). REVIEW PLAN The company employs more than 320,000 people worldwide, including 105,000 in France, its largest market. It is also the largest private sector employer in France. The French Presidency declined to comment on the Canadian group’s approach. Carrefour launched a five-year review plan in 2018 to cut costs and boost e-commerce investment to compete with online competitors as well as national rivals like Leclerc. It has also expanded into convenience stores to reduce dependence on the large hypermarkets that still generate most of its sales. “If the potential transaction was only for Carrefour’s convenience store segment, we could better understand the strategic rationale,” analysts at Raymond James said of Couche-Tard’s approach. As food retailers around the world benefit from growing demand as more consumers stay home during the COVID-19 pandemic, Carrefour reported strong third-quarter results in France, as well as other key markets from Brazil and Spain. Chief Executive Officer Alexandre Bompard has repeatedly said that the retail sector was destined to consolidate and that his mission was to ensure that Carrrefour emerges as a winner. In 2018, Carrefour and its French rival Casino became embroiled in a dispute after Casino said it had rejected a tying approach that Carrefour denied ever taking. Carrefour also entered into a purchasing alliance with Britain’s Tesco (OTC 🙂 that year and withdrew from the highly competitive Chinese market, where it sold operations at a loss to electronics retailer Suning.com. ($ 1 = 0.8216 euros)

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