Carrefour Said to Cancel Sale of Malaysia, Singapore Units After Review

Carrefour SA, the world’s second- largest retailer, canceled plans to sell its businesses in Malaysia and Singapore after a strategic review, according to a person familiar with the situation.

The operator of more than 3,000 supermarkets and hypermarkets worldwide decided it would create more value by keeping the units than by selling them, said the person, who declined to be identified as the plans aren’t public.

Carrefour this week agreed to sell its business in Thailand to French rival Casino Guichard-Perrachon SA for 868 million euros ($1.18 billion) as part of a plan to focus on markets such as China and Latin America, where it may be in the top two. Some of the proceeds from that sale will be used to develop the business in Malaysia, the person said.

“It was always going to be a challenge to meet their valuation,” Khair Mirza, an analyst at Maybank Investment Bank Bhd., said in a phone interview today. “If you look at what Thailand sold for, 13 times earnings before interest, taxes, depreciation and amortization -- retailers based in Singapore and Malaysia don’t trade at those valuations.”

Economic growth in Malaysia and Singapore may also have been helped Paris-based Carrefour decide against selling the assets there, said Mirza. “Most of Carrefour’s hypermarkets in Malaysia are less than five years old. So there’s definitely upside to their earnings that they can maximize in the near- term.”

Malaysia, Singapore Stores

Carrefour’s Malaysian and Singapore operations may be valued at $350 million to $400 million, four people familiar with the matter said in July.

“If the offer price was very dilutive, it makes more sense to hang on to the assets,” Fabio Fazzari, an analyst at Equita Sim in Milan, said in a phone interview. “I don’t think this will have large repercussions for Carrefour or for the sector in general. Carrefour’s focus is on its hypermarket strategy.”

The retailer’s 19 hypermarkets in Malaysia generated 329 million euros in revenue last year while the two outlets in Singapore contributed 85 million euros, its annual report shows. Carrefour’s 39 Thai hypermarkets and one convenience store generated 598 million euros of net sales.

The retailer had last year had 3,062 supermarkets and hypermarkets worldwide as well as 4,726 hard-discount stores, according to its annual report.

Lars Olofsson, Carrefour’s chief executive officer, has pinned the retailer’s turnaround on a $2 billion revamp of its hypermarket, or superstore, format in Europe during the next two years. Revenue growth has stagnated at the stores as consumers buy groceries closer to home or opt for department and specialty stores for apparel and beauty products.

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To contact the editor responsible for this story: Celeste Perri at

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