French government toughens stance against Carrefour acquisition By Reuters

3/3 © Reuters. Carrefour hypermarket in France 2/3

By Leigh Thomas, Gwénaëlle Barzic and Dominique Vidalon PARIS (Reuters) – France on Thursday took a hard line against any takeover of retailer Carrefour (PA 🙂 by a foreign company, dealing a severe blow to a nearby offering proposal to the 20,000 million dollars of the Canadian Couche. -Tard. French Finance Minister Bruno Le Maire told Reuters the government wanted to preserve the country’s food security and sovereignty. “Having Carrefour bought by a foreign company would be a great hardship for all of us,” Le Maire said in an interview at the Reuters Next conference. “Food security is at the center of the strategic challenges of all developed nations,” he said. Along with other retailers, Carrefour, with about a fifth of France’s grocery market, played an important role in ensuring a smooth food supply when the COVID-19 pandemic hit. But convenience store operator Alimentation Couche-Tard’s offering by Carrefour, the largest retailer in continental Europe, also raises other political considerations, as the group is one of France’s largest employers. Carrefour’s shares fell on Thursday when the French government underscored its opposition to a deal, and Labor Minister Elisabeth Borne also said she was against it. The shares fell 1.7% as of 1429 GMT after a 17% jump on Wednesday. Morningstar analyst Ioannis Pontikis said the market was probably assessing the low probability of the deal going through. Couche-Tard’s approach also caught the attention of analysts in part because they saw little potential for cost savings: The group, focused on service stations in North America, has little geographic overlap with Carrefour. But this could be an advantage in terms of job preservation, while an acquisition could be interesting for Carrefour if it provides financial power for investments in areas such as e-commerce. Traditional retailers, including Carrefour, are trying to reinvent themselves to fight growing competition from companies like Amazon (NASDAQ :). A source close to Carrefour said the group had been surprised by Le Maire’s immediate and vocal opposition to the deal. “We are surprised by this reaction as we are at a very preliminary stage,” the source told Reuters. Another source with knowledge of the matter said it was too early to say the deal would not go through. The French government spoke in 2005 to protect large French companies amid rumors that Danone could receive a takeover bid from PepsiCo (NASDAQ 🙂 Inc. Since then, the country has tightened procurement rules to protect companies. French companies considered strategic, even under the presidency of Emmanuel Macron. , which will face presidential elections in 2022. During the pandemic, Macron has stepped up calls to protect French sovereignty in areas such as healthcare and industry, although the former investment banker has tried to strike a balance with a pro-business approach. Business. Couche-Tard made a non-binding offer of € 20 a share to the French grocery group on Wednesday, mostly in cash. A source familiar with the discussions told Reuters that € 20 per share was not enough, but was a starting point for the discussions. Initial contact between the two companies came late last year, and Couche-Tard sent its first letter in early January, the source said. In a statement Wednesday, Carrefour acknowledged Couche-Tard’s approach to discussing a combination.