A Deal to Create Europe's Walmart? Give It Time
Carrefour has dropped the ball on its third attempted deal in three years. But a tie-up with Auchan may not be as dead as it looks.
There no need to rush for a deal involving Carrefour.
Photographer: Bloomberg/BloombergThe last thing President Emmanuel Macron needs right now is a merger between two of France’s biggest employers ahead of an election. Given the manifest potential for job losses and reduced competition in essential groceries, it’s convenient that talks to combine hypermarket operators Auchan and Carrefour SA have stalled. But the political context will change, and the deal’s financial and anti-trust obstacles aren’t as big as supposed.
There is an air of desperation about the two “big-box” retailers even attempting a tie-up in a world where consumers prefer convenience stores or shopping online. Carrefour’s stock has more than halved in value since 2015. Chief Executive Officer Alexandre Bompard has now tried three deals without success since 2018. Auchan, owned by the low-profile Mulliez family, doesn’t have a share price passing judgment but, like Carrefour, it’s been losing market share, according to data provider Kantar. Leader Leclerc and discounter Lidl remain formidable rivals.