Carrefour considers sale of stake in China business

A Carrefour logo seen on display at a Carrefour SA supermarket in Paris, France. Photographer: ANTOINE ANTONIOL/Bloomberg

Carrefour, Europe largest retailer, is exploring the sale of a minority stake in its loss-making business in China and has started sounding out potential buyers, people familiar with the matter said.

Carrefour‘s China business is valued at around $1 billion and the retailer is working with BNP Paribas on the deal, the sources said.

They also said the French company is waiting to see the outcome of an auction for German retail group Metro’s China operations to assess the level of interest.

A Carrefour spokeswoman said on Friday: “There is nothing particularly new to say about the matter”, when asked about China.

Last week, a Carrefour spokeswoman had said a sale of the business in China was not on the agenda, in answer to market rumors that had sent the shares higher.

BNP Paribas had no immediate comment.

Carrefour, which has been in China since 1995, has spent years trying to fix a business where 2018 sales fell 5.9% on like-for-like basis to 4.1 billion euros ($4.58 billion), amid fierce competition from local players and a buoyant online market.

In January 2018, Carrefour announced a partnership with Tencent, which led to the opening of a high-tech store in Shanghai.

Carrefour also said at the time that Tencent and Yonghui, a retailer specialized in fresh food and small formats, could take a stake in Carrefour China.

This investment has yet to be finalised.

The Tencent partnership was the latest step in Carrefour‘s attempts to stem a decline in sales in China where its main focus is large hypermarkets.

Carrefour has been expanding into e-commerce and convenience stores in China and has modernized its hypermarket ranges with more fresh products and opened logistics centers to cut costs.

Recently Carrefour reallocated space in its Chinese hypermarkets through a partnership with Chinese electronics retailer Gome for 11 shop-in-shops.

Carrefour‘s rivals in China have also faced problems with their businesses there.

In 2013, Britain’s Tesco gave up on going it alone in China, folding its business there into a state run company as a minority partner.

In 2016, Wal-Mart sold its Chinese online grocery store in return for a stake in JD.com, China’s No. 2 e-commerce firm.

Last year, Alibaba bought a stake in Sun Art, China’s top hypermarket operator, in which French retailer Auchan is the main shareholder.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.