A French multinational retailer Carrefour is one of the largest hypermarket chains in the world. It operates in more than 30 countries and wants to acquire its rival Casino. Casino Groups are a French mass-retail group who have started to grow internationally at the end of the 90s. It deals with food and non-food items, hypermarkets, supermarkets, wholesale store, etc. throughout the world.
Carrefour has been getting ready for the acquisition of Casino from the last few weeks. The amount offered to acquire Casino is between 4 billion to 4.2 billion euros, which is at present 25% more than the market value. The tie-up between Carrefour and Casino would make them the market leaders in France and Brazil. Carrefour leaders are forcing banks to stop helping Casino because it is sure that the Casino’s CEO Jean-Charles Naouri will definitely reject the proposal from Carrefour instead of being in a difficult situation. The companies associated with Casino are protected against the creditors, but Rallye, the parent company of Casino is undergoing a hardship of 2.9 billion euros debt.
However, the tie-up between the two retail groups will face a competitive issue with the recently merged companies Sainsbury and ASDA. Sainsbury is the second-largest retail chain of supermarket in the United Kingdom, and ASDA is a British Supermarket retailer. The merger between Carrefour and Casino will have a 30 percent market share in France and 50 percent or more in Brazil.
Czech investor Daniel Kretinsky acquired 4.36% state in Casino last week together with his business partner Patrik Tkac. The casino is suffering from huge debts, and Carrefour denies the attack on Casino.
Carrefour tried to acquire Casino in the year 2011 but was unable to do it. Last year, many competitors approached the possible merger between the two groups, but it was denied by Carrefour. There is a need for collaboration between Carrefour and Casino, but Alexandre Bompard fears that the separation of Casino group may lead to benefit their competitors like Auchan or E. Leclerc.
Will the merger take place? Many mergers earlier had only limited success like the collaboration between Carrefour and Promodes. However, Casino shareholders are in doubt whether they can be determined on an interesting bonus from Casino as a majority of them are in negotiating position due to the financial problems and high level of debt on Casino Group.