Breaking News
0
Ad-Free Version. Subscribe now to follow markets, faster and distraction-free. More details

Carrefour shares leap on Couche-Tard $19.7 billion takeover talks

Stock MarketsJan 13, 2021 10:30
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. Carrefour hypermarket store in France 2/2

By Dominique Vidalon

PARIS (Reuters) - European retail giant Carrefour (PA:CARR) has received a surprise 16.2 billion euros ($19.72 billion) takeover approach from Canadian convenience-store operator Alimentation Couche-Tard, sending its shares soaring on Wednesday.

Couche-Tard said it had submitted a non-binding offer for the French grocery group at 20 euros per share, largely in cash, though it gave no further detail on its vision for the combined companies.

Facing growing competition from online rivals such as Amazon (NASDAQ:AMZN), European supermarket operators are viewed as ripe for tie-ups, though Couche-Tard's approach raised analyst questions over the the potential for cost cuts or purchasing savings.

Couche-Tard, which is mainly focused on gas stations in North America, would be entering virgin territory. Carrefour, continental Europe's biggest retailer, has operations across Europe and Brazil, including 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 tough market.

It was not immediately clear whether Couche-Tard might seek to cherry-pick from Carrefour's operations.

Couche-Tard has mainly made smaller acquisitions in the past, though it was reported to be a potential suitor for Marathon Petroleum Corp (NYSE:MPC)'s Speedway gas stations last year before another buyer sealed a $21 billion deal.

There is no certainty at this stage that the discussions with Carrefour will result in any agreement or transaction, Couche-Tard said.

Shares in Carrefour soared 15.3% to 17.83 euros by 1504 GMT while Couche-Tard dropped about 9% to C$37.54.

OVERHAUL PLAN

Carrefour employs more than 320,000 people worldwide, including 105,000 in France, its largest market. It is also France's largest private sector employer. The French Presidency declined to comment on the Canadian group's approach.

The company launched a five-year overhaul plan in 2018 to cut costs and boost e-commerce investment to contend with online competitors as well as domestic rivals such as Leclerc. It has also expanded into convenience stores to reduce reliance on the big hypermarkets that still account for the bulk of its sales.

"If the potential transaction was for Carrefour's convenience stores segment only, we could better understand the strategic rationale," Raymond James analysts said of Couche-Tard's approach.

With food retailers across the world benefiting from surging demand as more consumers stay home during the COVID-19 pandemic, Carrefour reported robust third-quarter results in France as well as other key markets Brazil and Spain.

Chief Executive Alexandre Bompard has repeatedly said the retail sector was bound to consolidate and that his mission was to ensure Carrrefour emerges as a winner.

In 2018 Carrefour and French rival Casino were locked in a dispute after Casino said it had rejected a tie-up approach that Carrefour denied making.

Carrefour also struck a purchasing alliance with Britain's Tesco (LON:TSCO) that year and retreated from the highly competitive Chinese market, where it sold loss-making operations to electronics retailer Suning.com.

($1 = 0.8216 euros)

Carrefour shares leap on Couche-Tard $19.7 billion takeover talks
 

Related Articles

AMC Jumps After Raising Nearly $1 Billion in Cash
AMC Jumps After Raising Nearly $1 Billion in Cash By Investing.com - Jan 25, 2021

Investing.com -- AMC Entertainment Holdings Inc (NYSE:AMC) shares jumped 30% on Monday after the company said it raised $917 million in cash since December, enough to stave of a...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email