Canada drops Carrefour takeover bid after French veto vow

PARIS – Canadian convenience store chain Couche-Tard has reportedly pulled out of a multibillion-euro takeover of supermarket giant Carrefour after the French government said it will veto the deal.

Negotiations over the €16 billion (RM78.4 billion) deal ended after a meeting between French Economy Minister Bruno Le Maire and the founder of Couche-Tard, Alain Bouchard, reported Bloomberg, citing sources.

French ministers yesterday insisted that they will not agree to the takeover because it could jeopardise food security, an even more important consideration given the coronavirus pandemic.

In an attempt to reassure ministers, Bouchard promised to invest billions in Carrefour, and said he would maintain employment for two years and the group would be listed on the Paris Stock Exchange in parallel with Canada, reported Bloomberg.

Contacted by AFP, neither Couche-Tard nor Carrefour confirmed the information yesterday evening.

Although the talks have stopped, anonymous sources cited by Bloomberg said negotiations may resume if the French government changes its position.

But yesterday, Le Maire made his choice public, telling BMTV and RMC: “My position is a polite, but clear and definitive, ‘No’.”

“Food security is a strategic consideration for our country, and one does not just hand over one of the large French distributors like that.

“Carrefour is the biggest private sector employer in France with nearly 100,000 employees.”

The group also accounts for 20% of the food-distribution market in the country.

The French statements have not convinced the Canadian government.

A Canadian federal source said while concerns about allowing a foreign firm to take over such a large national employer are understandable, the worries over food security are unsubstantiated.

“But we cannot accuse a leading Canadian company like Couche-Tard of endangering the food sovereignty of an entire country,” the source, who requested anonymity, told AFP.

On Wednesday, Couche-Tard submitted a non-binding offer for Carrefour, valuing the group at more than €16 billion.

Le Maire immediately made clear his opposition to a deal involving “an essential link in food security for the French, of food sovereignty”.

Carrefour has more than 12,300 stores of various formats in over 30 countries, and in 2019 generated a net profit of €1.3 billion on a revenue of €80.7 billion. – AFP, January 16, 2021