Couche-Tard drops $20bn Carrefour takeover plan
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Canada’s Alimentation Couche-Tard has dropped its €16.2bn ($19.6bn) bid to acquire European retailer Carrefour SA after the takeover plan ran into stiff opposition from the French government, two sources familiar with the matter told Reuters on Friday.
The decision to end merger talks came after a meeting on Friday between French Finance Minister Bruno Le Maire and Couche-Tard’s founder and chairman, Alain Bouchard, the sources said, speaking on condition of anonymity as the matter is confidential.
Couche-Tard and Carrefour declined to comment.
Earlier on Friday, France ruled out any sale of grocer Carrefour on food security grounds, prompting the Canadian firm and its allies to mount a last-ditch attempt to salvage the deal.
“Food security is strategic for our country so that’s why we don’t sell a big French retailer. My answer is extremely clear: We are not in favour of the deal. The no is polite but it’s a clear and final no,” Le Maire said.
Couche-Tard was hoping to win the government’s blessing by offering commitments on both jobs and France’s food supply chain and by keeping the merged entity listed in both Paris and Toronto, with Carrefour boss Alexandre Bompard and his Couche-Tard counterpart Brian Hannasch leading it as co-CEOs, one of the sources said.
The plan included a pledge to keep the new entity’s global strategic operations in France and having French nationals on its board, he said.
Couche-Tard, advised by Rothschild, was also going to pump about €3bn of investments into the French retailer which was working on the deal with Lazard.
The proposal was widely backed by Carrefour which employs 105,000 workers in France, its largest market, making it the country’s biggest private-sector employer.
France’s rejection of the deal less than 24 hours after talks were confirmed sparked grumbling in some business circles over how French President Emmanuel Macron, a former investment banker, is turning away foreign investment. Some politicians and bankers said the pushback could tarnish Macron’s pro-business image, while others highlighted that the COVID-19 crisis had forced more than one country to redefine its strategic national interests.
Questions & Answers
Q.Why did Alimentation Couche-Tard drop its takeover bid for Carrefour?
Why did Alimentation Couche-Tard drop its takeover bid for Carrefour?
The Canadian firm abandoned its bid after facing strong opposition from the French government. France's Finance Minister, Bruno Le Maire, explicitly stated the government would not approve the sale due to concerns about food security.
Q.What reasons did the French government give for rejecting the takeover plan?
What reasons did the French government give for rejecting the takeover plan?
The French government rejected the deal on the grounds of food security, stating it is strategic for the country. Finance Minister Bruno Le Maire declared a 'clear and final no' to the sale of the French retailer.
Q.What proposals did Couche-Tard make to try and secure government approval?
What proposals did Couche-Tard make to try and secure government approval?
Couche-Tard offered commitments on jobs and France's food supply chain. They also planned for the merged entity to be listed in Paris and Toronto, with co-CEOs and French nationals on the board, and a €3bn investment in Carrefour.
Q.What was the reaction in French business circles to the government's decision?
What was the reaction in French business circles to the government's decision?
Some business circles grumbled about French President Macron potentially turning away foreign investment, suggesting it could tarnish his pro-business image. Others noted the COVID-19 crisis had led countries to redefine national interests.