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Carrefour sells China business to retailer Suning.com
[PARIS] French supermarket giant Carrefour said Sunday it had agreed to sell 80 per cent of its China business to leading Chinese retailer Suning.
One of the world's biggest food retailers, the French group is in the middle of a major reorganisation, with the deal valuing its Chinese operations at 1.4 billion euros (S$2.16 billion), the company said in a statement.
"The purchase price for the acquisition of 80 per cent of Carrefour China shares is 4.8 billion renminbi, or 620 million euros," it said, indicating the deal was expected to be completed by the year's end.
This price is subject to a closing adjustment mechanism, based on the evolution of Carrefour China's net financial debt and working capital, it added.
The implied enterprise value of 1.4 billion euros includes debt and minority interests.
Carrefour Group will retain a 20-per cent stake in the business and two of the seven seats on Carrefour China's supervisory board, although it includes a clause which provides "several liquidity windows" for it to sell that stake.
Present in China since 1995, Carrefour operates a network of 210 hypermarkets and 24 convenience stores, and last year posted sales of 3.6 billion euros, down almost 10 per cent on the figure for 2017.
A major appliance seller and e-commerce platform, Suning.com is one of the largest non-government retailers in China, running a network of over 8,881 stores in more than 700 cities.