French Retailers Plan Merger
PARIS (AP) _ French supermarket group Carrefour SA is buying rival Promodes in a $16.3 billion stock deal to create the world’s second-largest retailer behind Wal-Mart Stores Inc. of the United States.
The combined operation will have a market capitalization of $49 billion and annual sales of nearly $50 billion, much smaller than Wal-Mart, which had sales of $138 billion last year.
Carrefour is offering six shares for one of Promodes, a statement from both companies said today.
The offer was announced by Carrefour President Daniel Bernard and Promodes President Paul-Louis Halley at a joint news conference in Paris.
Wal-Mart’s expansion into the United Kingdom and Europe has put pressure on European retailers. The Bentonville, Ark.-based company, which owns 95 stores in Germany and 229 stores in the United Kingdom, is expected to target France soon.
Wal-Mart spokesman Mike Maher declined to comment on the Carrefour-Promodes deal, or ``on any speculation about our business in Europe.″
Halley said that ``taking into account the speed of consolidation in the retail sector, this linkup comes at the right time, and is without doubt the best possible for each of the two companies.″
Halley, whose family has 52.7 percent of Promodes’ voting rights, said he has recommended that Promodes shareholders support Carrefour’s offer.
Promodes is a leading food retailer in Europe, with its strength in Spain. Carrefour operates superstores selling everything from food to clothes to car batteries. It is strong in Asia and Latin America.
The combined group would operate in 26 countries with 9,000 stores, including 680 superstores and 2,600 supermarkets. It will employ 240,000 people, about half in France.
The fusion of Carrefour and Promodes is the latest example of merger mania that has gripped France this year, particularly in the banking and oil sectors.