Carrefour SA (CA), France’s biggest retailer, agreed to sell its 60 percent stake in its Indonesian unit to local partner CT Corp. for 525 million euros ($671 million) in the latest move to exit peripheral businesses.
The transaction will give CT Corp. full control of Indonesia’s third-largest retailer, which has 84 outlets and had revenue of 1 billion euros in 2011, Carrefour said today in a statement. The 25-year-old buyer will become Carrefour’s exclusive franchisee in the Asian country.
Carrefour is cutting jobs and exiting overseas markets it doesn’t dominate to generate cash and reduce debt as part of a three-year turnaround plan formulated by Chief Executive Officer Georges Plassat. The retailer this month sold its Malaysian unit to Aeon Co. for 250 million euros. It is also exiting Singapore and Greece and agreed last month to sell its Colombian stores to Chilean retailer Cencosud SA (CENCOSUD) for 2 billion euros.
“Carrefour’s retrenchment brings in further cash to reduce indebtedness and increases its focus on western Europe, China and core Latin America,” Darren Shirley, an analyst at Shore Capital, wrote in a note. “The process of international consolidation continues apace.”
Carrefour has also put its Polish and Turkish units under review and is considering a combination of the latter with competitor Migros Ticaret AS (MGROS), people with knowledge of the situation said in September. And the company is preparing a $4.9-billion initial public offering of its Atacadao cash-and- carry unit in Brazil, Veja magazine reported Oct. 27.
The French retailer, which has been present in Indonesia since 1998, said it has “full confidence” in CT Corp.’s ability to develop the brand and strengthen its market position. The transaction will be completed in January, subject to approval by Indonesia antitrust authorities, Carrefour said.
CT Corp., the Indonesian conglomerate with interests spanning retail, media and financial services, approached lenders seeking a bridge loan of about $750 million to fund the purchase, three people familiar with the matter said last month.
To contact the editor responsible for this story: Celeste Perri at email@example.com