• Ex-Tesco boss Leahy may become chairman if deal gets approved
  • Offer continues brisk year for dealmaking in European retail

Clayton, Dubilier & Rice and a partner have entered exclusive talks to acquire French furniture retailer BUT Group in what would be the latest deal in a rapidly consolidating European retail industry.

The U.S. buyout firm and WM Holding, an investment company linked to European furniture retailer XXXLutz Group, have made a binding offer for BUT, according to a statement from CD&R Wednesday. CD&R adviser Terry Leahy, the former chief executive officer of U.K. grocer Tesco Plc, might assume the chairman’s role if the deal gets approved.

The pursuit of the French retailer is the latest in what’s become a brisk year for dealmaking across European retail. U.K. grocer J Sainsbury Plc is swallowing up Argos owner Home Retail Group Plc, while Groupe Fnac SA is buying French electronics retailer Darty Plc. South Africa’s Steinhoff International Holdings NV, meanwhile, abandoned its pursuit of both Home Retail and Darty, only to be spurned this month in its latest effort to buy British discounter Poundland Group Plc.

Not all deals have come to pass: British home-improvement retailer Kingfisher Plc last year scrapped its proposed purchase of Mr Bricolage SA, France’s third-largest home-improvement chain, after disagreements on how to get the deal past antitrust regulators.

The acquisition of BUT would be expected to close in the second half of the year, CD&R said. Terms were not disclosed.

Founded in 1972, BUT operates 303 company and franchisee-owned stores that sell furniture, appliances, decorative accessories and electronics. The business was owned by Darty’s predecessor company until 2008, when it was acquired by a group of investors including Goldman Sachs Group Inc. and OpCapita LLP for 550 million euros ($609 million). Last year, the chain generated revenue of 1.3 billion euros.

CD&R is being advised by Bank of America Merrill Lynch, BNP Paribas, Lazard and M&M Capital Ltd., while Clifford Chance and Debevoise & Plimpton LLP are providing legal advice. Ernst & Young and Roland Berger are providing due diligence support.

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