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CARREFOUR

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France Blocks $20 Billion Takeover of Carrefour by Canada's Couche-Tard

01/15/2021 | 02:34pm EDT

By Noemie Bisserbe

PARIS -- The French government shot down an offer from Canada's Alimentation Couche-Tard Inc. to acquire hypermarket chain Carrefour SA, according to people familiar with the matter, saying the move threatened jobs and France's food security amid the Covid-19 pandemic.

Couche-Tard's offer to buy Carrefour for 16.1 billion euros, equivalent to $19.66 billion, would have created the world's third-largest grocery retailer, behind Walmart Inc. and Lidl owner Schwarz Group. But French Finance Minister Bruno Le Maire told Couche-Tard Chairman Alain Bouchard in a closed-door meeting in Paris on Friday that he was opposed to the takeover, according to people familiar with the matter.

Mr. Le Maire told the executive the sale would put France's food security and tens of thousands of jobs at risk, the people said. Carrefour is one of the country's largest employers with 105,000 staff.

Canada Prime Minister Justin Trudeau told reporters he was aware of discussions between Couche-Tard and the French government but declined to comment further.

Mr. Le Maire later spoke on the phone with Quebec's economy minister, Pierre Fitzgibbon, about the offer. Mr. Fitzgibbon's office didn't immediately respond to a request for comment.

The French government's intervention is a sign of how the Covid-19 pandemic is exacerbating protectionism. Under French law, the government can block takeovers of domestic companies by foreign buyers in sectors deemed strategic, such as energy, defense and the more recently added sector of food distribution. The use of lockdowns to fight Covid-19 has underscored the vital role that grocers like Carrefour play in delivering essential goods to the public, Mr. Le Maire told French TV.

"The day you go to Carrefour... and there's no more pasta or rice or other essential goods, what do you do?" Mr. Le Maire added.

Public fears over food and equipment shortages soared in the spring as borders closed and governments scrambled to secure vaccines and protective-gear like surgical masks. In the U.K., the government proposed in November new legislation to bolster its powers to block foreign takeovers of British companies. Under the proposed rules, investors would have to notify the government about transactions in 17 sectors including nuclear, artificial intelligence, transport, energy and defense.

Protectionism has also risen in Italy, Spain and Germany over the past year as concerns grow that companies whose share prices have slumped because of the coronavirus outbreak are vulnerable to unwanted approaches from bargain hunters. European governments have strengthened their protections against foreign business takeovers to shield industries that are deemed strategic or important to the country's national security.

The 31-year-old Couche-Tard is the largest independent convenience store operator in North America by number of stores, operating under brands such as the Corner Store, Circle K and Holiday. It also operates a network of gas stations in Europe and has stores there and elsewhere in the world.

Couche-Tard sent Carrefour a nonbinding offer letter in early January and met with the French company's management on Jan. 8 in Paris, according to the people familiar with the negotiations.

Carrefour said the approach was friendly. On Tuesday evening, Carrefour Chief Executive Alexandre Bompard sent a message to Mr. Le Maire to let him know about the ongoing negotiations, according to the people familiar with the negotiations.

The following day, Couche-Tard's chief executive flew back to Paris to reassure the government with pledges on jobs, suppliers, governance and management, according to people familiar with the matter.

Mr. Bouchard, Couche-Tard's chairman, flew in on Friday morning to meet with Mr. Le Maire, according to the people familiar with the negotiations.

On Friday Mr. Le Maire reiterated his opposition to the deal in a second TV interview.

"My answer is extremely clear," he said. "It's no. A polite but clear and final no."

Write to Noemie Bisserbe at noemie.bisserbe@wsj.com

(END) Dow Jones Newswires

01-15-21 1433ET

Stocks mentioned in the article
ChangeLast1st jan.
ALIMENTATION COUCHE-TARD INC. -0.66% 49.9 Delayed Quote.15.79%
CARREFOUR -1.72% 14.875 Real-time Quote.6.02%
EURO / CANADIAN DOLLAR (EUR/CAD) 0.00% 1.49185 Delayed Quote.-4.02%
WALMART INC. 0.33% 145.03 Delayed Quote.0.61%
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Analyst Recommendations on CARREFOUR
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Financials
Sales 2021 71 875 M 84 519 M 84 519 M
Net income 2021 1 094 M 1 286 M 1 286 M
Net Debt 2021 7 024 M 8 259 M 8 259 M
P/E ratio 2021 10,6x
Yield 2021 3,69%
Capitalization 11 583 M 13 627 M 13 621 M
EV / Sales 2021 0,26x
EV / Sales 2022 0,24x
Nbr of Employees 255 952
Free-Float 73,6%
Chart CARREFOUR
Duration : Period :
Carrefour Technical Analysis Chart | CA | FR0000120172 | MarketScreener
Technical analysis trends CARREFOUR
Short TermMid-TermLong Term
TrendsBearishBearishNeutral
Income Statement Evolution
Consensus
Sell
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Mean consensus BUY
Number of Analysts 19
Last Close Price 14,88 €
Average target price 19,32 €
Spread / Average Target 29,9%
EPS Revisions
Managers and Directors
Alexandre Bompard Chairman & Chief Executive Officer
Matthieu Malige Chief Financial Officer
Miguel Ángel González Gisbert Global Chief Technology Officer
Charles Edelstenne Independent Director
Mathilde Lemoine Independent Director
Sector and Competitors
1st jan.Capi. (M$)
CARREFOUR6.02%13 928
ALIMENTATION COUCHE-TARD INC.15.79%42 589
SEVEN & I HOLDINGS CO., LTD.43.92%41 635
AVENUE SUPERMARTS LIMITED44.11%35 086
SM INVESTMENTS CORPORATION-4.19%24 553
COLES GROUP LIMITED-5.84%16 644