The French retailer Carrefour is in the early stages of analyzing ways to unlock market value, more than three years after negotiations to sell itself to an industry rival failed, according to people with knowledge of the matter.
Carrefour is discussing various scenarios internally and talking to consultants about possible options for the business, the sources said. Possibilities under analysis include asset divestments, growth through partnerships and acquisitions, or an operational reorganization.
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Paris-listed Carrefour could also consider a full sale or sell a stake in the company if an interested party emerges, the people said. Another possibility would be to remain independent while seeking measures to increase its competitiveness through strategic changes and new investments, they said.
Carrefour shares have fallen around 30% since their recent peak in 2022, giving the company a market value of approximately €10.1 billion ($11 billion).
A sale could attract interest from private equity firms and industry players if Carrefour moves forward, according to the sources. Deliberations are at an early stage, and there are currently no formal conversations with potential buyers.
A Carrefour representative declined to comment.
Brazil and Spain
Carrefour’s largest markets include France, Brazil and Spain. Its unit listed in Brazil has a market value of approximately US$2.9 billion in São Paulo.
Alimentation Couche-Tard, owner of Circle K, in early 2021 abandoned talks on a proposed $20 billion merger with Carrefour after strong opposition from the French government. The Canadian company is currently trying to buy the Japanese giant of convenience stores and retail Seven & i Holdings Co.
French rival Auchan has also studied a possible transaction with Carrefour several times in recent years, although a deal never materialized.
A private takeover of Carrefour by a private equity firm would face challenges, including the large value of the transaction, with an enterprise value of around €25 billion including debt, a difficult retail market and potential political repercussions.
Carrefour assets, such as those in Brazil or certain European markets, could be easier to monetize.
Any transaction would need the support of Carrefour’s billionaire shareholders, including the Moulin family, owner of French department store group Galeries Lafayette. One holding created by the late Brazilian businessman Abilio Diniz also has a significant stake in Carrefour.
Sale of participation
The Moulin family, which is behind Carrefour’s biggest shareholder and investment vehicle Galfa, has been looking to reduce its stake following poor share performance. The unit sold a stake back to the French retailer in March.
Carrefour CEO Alexandre Bompard, who took the helm in 2017, is seen as a dealmaker and previously oversaw the acquisition of Darty when he was CEO of retailer Fnac. Carrefour has faced stiff competition from French discount retailers such as Aldi and Lidl amid the cost of living crisis.
Lately, there have been signs that inflationary pressure is easing, with consumers in France, its biggest market, spending more on organic food, Bompard said last month. Carrefour’s third quarter revenue update showed that the recovery has been slower than expected.
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