Clear ‘non’ from French government on Carrefour acquisition

Canadian-headquartered Alimentation Couche-Tard, which owns Circle K here in the Republic, has received “a clear and final no" from French government on its proposed Carrefour takeover

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19 January 2021 | 0

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France’s Finance Minister Bruno Le Maire has registered his clear opposition to a €16.2 billion takeover of French supermarket giant Carrefour by Canada’s Alimentation Couche-Tard.

“The no is polite but it’s a clear and final no,” said Minister Le Maire in an interview with BFM TV on Friday.

Previously, the French government had already highlighted its concerns last Wednesday that the acquisition could threaten France’s “food sovereignty”. Despite this, negotiations with the concerned parties had continued.

The Irish Times reported that Alain Bouchard, Couche-Tard’s co-founder and chairman, had allegedly flown to Paris on Thursday in a bid to present Mr Le Maire with the proposal. However, judging by the Minister’s latest comments, it appears he was keen to torpedo the deal before it reached his desk.

The government is able to review takeovers of domestic companies by foreign buyers in certain strategic sectors under French law. Last year, “food security” was added to this list, which already included areas such as energy, water and telecoms.

Minister Le Maire said the government had the legal tool available to prevent the deal, even if he would prefer not to use it.

He said that the Covid-19 health crisis had demonstrated how “no price can be put” on the country’s food security, which the acquisition would threaten in his view.

Carrefour’s shares dropped approximately 4% during that morning’s trading.

On Saturday, Carrefour and Couche-Tard issued a joint statement, which said that “in light of recent events, preliminary discussions around a transaction…are no longer continuing”.

However, the two groups say they have decided to extend their discussions to examine opportunities for operational partnerships. Among the preliminary areas of cooperation to be explored are sharing best practices on fuel, pooling purchasing volumes, partnering on private labels, improving the customer journey through innovation, and evaluating ways of optimizing product distribution in the overlapping networks.

“The opportunity for operational partnerships with Carrefour will further our journey towards becoming a leading global retailer,” said Brian Hannasch, president and CEO of Couche-Tard.

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