(Adds details) by Dominique Vidalon
Auchan and Intermarché are in talks to form a buying alliance, reflecting their increasingly close ties a week after making a joint bid for the French hypermarkets and supermarkets that debt-ridden rival Casino CASP.PA is seeking to take over. Discard.
The long-term alliance would cover the purchase of national brand food products as well as non-food products, Auchan and Intermarché said in a joint statement on Tuesday.
It would complement an existing purchasing alliance between Intermarche and Casino for food and non-food products, they added.
By adding Auchan’s market share of around 9% to the Intermarché-Casino combination, the new alliance would constitute a major force in price transactions with suppliers, with nearly 30% market share, far ahead Leclerc’s 23.7% and Carrefour’s 20.4%.
News of the alliance came as Casino unions staged protests in Paris and at its historic headquarters in Saint-Etienne, central France, amid fears the group could be broken up.
Casino, which has issued two profit warnings in recent months due to the worsening situation at its hypermarkets, is working to reach a bailout deal to avoid bankruptcy early next year, when the Czech billionaire Daniel Kretinsky will take control of the group.
Casino said last week it had received preliminary and indicative offers from several buyers for an unspecified number of hypermarkets and supermarkets it had put up for sale.
Intermarche has already agreed to buy around 61 stores from Casino in May. It has an option, exercisable within three years, to purchase a second group of 72 stores.
A source close to the matter told Reuters on Tuesday that at this stage “most players in the French distribution market”, including Leclerc, had expressed interest in the sales process.
Potential candidates for Casino stores also include Carrefour CARR.PA and German discount group Lidl.
“The idea is to try to do something in 2023,” the source said of the timing of deals.
Last week, Serge Papin, a member of the board of directors of Auchan Retail, told BFM Business that Auchan and Intermarché had submitted a joint offer for all the stores that Casino is seeking to sell to raise funds.
The sale of hypermarkets and supermarkets, if carried out, would significantly reduce the size of Casino to around 8 billion euros in turnover compared to 33.6 billion euros in 2022, halving its market share in France at around 3%, estimates Nicolas Champ, analyst at Barclays.