France Blocks $20 Billion Takeover of Carrefour by Canada's Couche-Tard
January 15 2021 - 2:48PM
Dow Jones News
By Noemie Bisserbe
PARIS -- The French government shot down an offer from Canada's
Alimentation Couche-Tard Inc. to acquire hypermarket chain
Carrefour SA, according to people familiar with the matter, saying
the move threatened jobs and France's food security amid the
Covid-19 pandemic.
Couche-Tard's offer to buy Carrefour for 16.1 billion euros,
equivalent to $19.66 billion, would have created the world's
third-largest grocery retailer, behind Walmart Inc. and Lidl owner
Schwarz Group. But French Finance Minister Bruno Le Maire told
Couche-Tard Chairman Alain Bouchard in a closed-door meeting in
Paris on Friday that he was opposed to the takeover, according to
people familiar with the matter.
Mr. Le Maire told the executive the sale would put France's food
security and tens of thousands of jobs at risk, the people said.
Carrefour is one of the country's largest employers with 105,000
staff.
Canada Prime Minister Justin Trudeau told reporters he was aware
of discussions between Couche-Tard and the French government but
declined to comment further.
Mr. Le Maire later spoke on the phone with Quebec's economy
minister, Pierre Fitzgibbon, about the offer. Mr. Fitzgibbon's
office didn't immediately respond to a request for comment.
The French government's intervention is a sign of how the
Covid-19 pandemic is exacerbating protectionism. Under French law,
the government can block takeovers of domestic companies by foreign
buyers in sectors deemed strategic, such as energy, defense and the
more recently added sector of food distribution. The use of
lockdowns to fight Covid-19 has underscored the vital role that
grocers like Carrefour play in delivering essential goods to the
public, Mr. Le Maire told French TV.
"The day you go to Carrefour... and there's no more pasta or
rice or other essential goods, what do you do?" Mr. Le Maire
added.
Public fears over food and equipment shortages soared in the
spring as borders closed and governments scrambled to secure
vaccines and protective-gear like surgical masks. In the U.K., the
government proposed in November new legislation to bolster its
powers to block foreign takeovers of British companies. Under the
proposed rules, investors would have to notify the government about
transactions in 17 sectors including nuclear, artificial
intelligence, transport, energy and defense.
Protectionism has also risen in Italy, Spain and Germany over
the past year as concerns grow that companies whose share prices
have slumped because of the coronavirus outbreak are vulnerable to
unwanted approaches from bargain hunters. European governments have
strengthened their protections against foreign business takeovers
to shield industries that are deemed strategic or important to the
country's national security.
The 31-year-old Couche-Tard is the largest independent
convenience store operator in North America by number of stores,
operating under brands such as the Corner Store, Circle K and
Holiday. It also operates a network of gas stations in Europe and
has stores there and elsewhere in the world.
Couche-Tard sent Carrefour a nonbinding offer letter in early
January and met with the French company's management on Jan. 8 in
Paris, according to the people familiar with the negotiations.
Carrefour said the approach was friendly. On Tuesday evening,
Carrefour Chief Executive Alexandre Bompard sent a message to Mr.
Le Maire to let him know about the ongoing negotiations, according
to the people familiar with the negotiations.
The following day, Couche-Tard's chief executive flew back to
Paris to reassure the government with pledges on jobs, suppliers,
governance and management, according to people familiar with the
matter.
Mr. Bouchard, Couche-Tard's chairman, flew in on Friday morning
to meet with Mr. Le Maire, according to the people familiar with
the negotiations.
On Friday Mr. Le Maire reiterated his opposition to the deal in
a second TV interview.
"My answer is extremely clear," he said. "It's no. A polite but
clear and final no."
Write to Noemie Bisserbe at noemie.bisserbe@wsj.com
(END) Dow Jones Newswires
January 15, 2021 14:33 ET (19:33 GMT)
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