French grocery retailer Carrefour has signed an agreement to sell 80% stake of its China operations to Suning.com in a deal worth about US$700m.
Carrefour may exit China completely
The transaction is expected to close by the end of 2019, subject to regulatory approval. Carrefour will retain a 20% stake in the business and two out of seven seats on Carrefour China’s Supervisory Board. However, the agreement allows Carrefour to sell the remaining 20% of its stake, suggesting an interest to exit the market entirely.
Suning is a Chinese electronics retailer and ecommerce player. It operates more than 8,881 stores in more than 700 cities and one of the country’s largest B2C ecommerce platform. Suning said yesterday in filing to Shenzhen stock exchange, “the stake acquisition will allow Suning.com to strengthen its brand, as well as boosting its marketing capabilities, food quality control and supply chain management in the fast-moving sector”.
About Carrefour China
Carrefour has been in China since 1995 but it has been struggling to grow in recent years amid fierce local competition and the rise of ecommerce channel. The retailer operates 210 hypermarkets and 24 convenience stores.
Retail Analysis Asia