Carrefour is the largest food distribution company in Europe. It is worth close to 10,000 million euros on the stock market, but it is not experiencing its best moment, even though it is a company with an annual profit that exceeds 1,659 million euros. Two years ago, the market value of the French multinational was around 17 billion euros at a time when there was talk of a possible integration with one of its major competitors, Auchan, the parent company of Alcampo. However, that merger did not materialize and now the idea that Carrefour is studying a corporate operation is once again being heard in the market, although it is not at all clear what it may consist of.
The company led by Alexandre Bompard is working with a team of advisors to design different options for the future, according to information published by the Bloomberg agency. Among them, the entire range of possibilities: from buying a competitor, merging, selling assets, reorganizing your entire business or selling divisions by country, for example, your activity in Spain. It could even analyze the option of bringing in a new shareholder, according to the US agency, which cited knowledgeable sources. Carrefour did not want to comment on that information and that was the same response it gave to elDiario.es.
Although Carrefour is currently worth close to 10,000 million euros, its real valuation would be closer to 25,000 million, if the debt is added, which would make any transaction one of the great corporate movements in Europe in a sector where there are not so many large operations. as in other industries.
A share structure with changes
Carrefour has not had a stable shareholding for some time, which may give rise to corporate operations. According to the data communicated by the company, the majority of Carrefour’s shares are not in the hands of a reference shareholder, but are listed on the market. That would make it easier for a financial investor or a competitor to launch a purchase offer (OPA) for the distribution giant.
Its main shareholder is a company called Galfa, which a few months ago took a step back and sold part of its portfolio of Carrefour shares. Galfa is controlled by the Moulin family, owner of Galeries Lafayette, one of the most renowned Parisian department stores. In April, Galfa sold 25 million securities in an operation valued at nearly 365 million euros, according to information published by one of its advisors in this movement. That left Galfa’s stake in Carrefour at 10.5%.
Also in the capital was, until his death in February of this year, the Brazilian businessman Abilio Diniz, who accounted for more than 8.8% of Carrefour’s shares, which would now be in the hands of his heirs. Until 2021, another renowned French businessman, Bernard Arnault, owner of the luxury giant LVMH, was also at Carrefour. It came to have almost 10% of the capital of the French group but, between 2020 and 2021, it placed its shares on the market.
Two failed merger attempts
Arnault’s departure from Carrefour’s shareholding practically coincided with two operations that would have increased the size of the French multinational. In January 2021, the Canadian group Couche-Tard launched an offer for the supermarket group that valued the company at 16,145 million euros. Specifically, he offered 20 euros per share. Today each title is worth about 15 euros.
The North American company assured that it was a friendly offer, to create a global giant, but was met with direct rejection by the French Government, which vetoed the operation because it was a key company. “Food security is strategic for our country and we will not give in to one of the large French distributors,” said the then Minister of Economy, Bruno Le Maire.
Months later, another possible operation emerged, which did not entail so many political reluctance, but which did not end up taking place either. The French press assured that Auchan was willing to buy Carrefour, to integrate the two businesses. As it emerged at the time, the operation did not go ahead because the shareholders – Auchan is controlled by another family, the Mulliez – did not agree on the value of Carrefour’s shares.
It is not that during this time Carrefour has been sitting idly by. After the two merger attempts did not go ahead, Alexandre Bompard launched a strategic plan until 2026 that included, above all, promoting the private label so that it went from 33% of sales to 40%. A measure that was not applauded by the manufacturers. Nor was Carrefour’s decision to remove brands from its shelves because it understood that they were taking advantage of the inflationary spiral to skyrocket their prices even more. “We no longer sell this brand due to unacceptable price increases,” Carrefour justified regarding the withdrawal of products such as Lays or Pepsi.
The second largest operator in Spain
One of the options that would be on the table of Carrefour’s management, although the company does not comment on its plans, would involve the sale of its business in Spain. An activity that is going well.
Carrefour is the second largest operator in Spain, with a market share of 9.6%, according to Kantar. It is only behind Mercadona, although far from the position held by the Valencian group, which controls more than 26% of the market, according to the same analysis firm. The third is Lidl, with 6.4%.
Carrefour’s business in Spain works, although it is slowing down. Last year, at the height of food inflation, its income skyrocketed to historic highs, up to 11,821 million euros. The profit increased by 20%, reaching 348 million. For this 2024, with inflation on the decline, it has provided data at the end of September. In these nine months, comparable sales have decreased by 0.8% and stood at 8,513 million euros.
Despite this stagnation, Carrefour states in its presentation to investors that, in Spain, it sees “a clear improvement in activity” since September, which would translate into an increase in sales in the final stretch of the year.
#happening #Carrefour
