Carrefour to exit China by selling 80% stake in Chinese ops to Suning.com

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

Carrefour , Europe’s largest retailer, took a decisive step on Sunday toward a full exit of the Chinese market by selling a majority stake of its activities in the country to Suning.com

Carrefour, which has been in China since 1995, has spent years trying to fix a business where 2018 sales fell 5.9% to 4.1 billion euros ($4.66 billion) amid fierce competition from local players and a buoyant online market.

The French retailer said in a statement it had agreed to sell 80% of its Chinese operations to Chinese group Suning.com for 620 million euros in cash.

The agreement also includes several windows of opportunity to sell the remaining 20% stake it holds in the Chinese subsidiary, further indicating its intention to leave the market entirely.

“The stake acquisition will allow Suning.com to strengthen its brand, as well as boosting its marketing capabilities, food quality control and supply chain management in the fast-moving sector,” Suning.com Co Ltd said in a Chinese-language filing to the Shenzhen stock exchange on Sunday.

The deal with Suning.com also puts an end to preliminary talks Carrefour has held with Chinese tech giant Tencent over a potential sale of a minority stake in its local business.

“The talks that have started since January 2018 for the sale of a minority stake (in Carrefour China) to Tencent are over,” a spokeswoman for Carrefour said. “However, the strategic business partnership with Tencent remains in place.”

Carrefour announced a partnership last year with Tencent , which led to the opening of a store in Shanghai.

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

Tencent declined to comment.

The deal values Carrefour China at 1.4 billion euros ($1.59 billion), debt included, and is expected to close by the end of 2019, pending regulatory approvals, the French retailer said in a statement.

Carrefour China operates 210 hypermarkets and 24 convenience stores. It generated net sales of 3.6 billion euros and earnings before interest, tax, depreciation and amortisation (EBITDA) of 66 million euros in 2018. ($1 = 0.8798 euros)

Reuters

Singapore Reporter/s

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).

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

  • 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.

Singapore Reporter/s

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).

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

  • 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.