Carrefour-Auchan merger: the reasons for failure

It was almost midnight, Thursday, October 7, when Alexandre Bompard, CEO of Carrefour, informed the Mulliez family, owner of Auchan, that he was ending negotiations on a merger between the two brands. Hours earlier, he had called a meeting of Carrefour’s strategic committee, as revealed Le Figaro. Faced with the reluctance of its major shareholders – the Brazilian businessman Abilio Diniz and especially the Moulin family (owner of Galeries Lafayette), 38% of the voting rights in total – and the difficulty of agreeing on valuations, the leader preferred to throw in the towel.

The world revealed on September 30 that the two houses had initiated discussions to unite their forces, against the backdrop of the crisis of historical players in mass distribution. The Mulliez family had contacted Mr. Bompard in May to offer him an alliance. Several scenarios were studied, including that of a takeover of Auchan by Carrefour.

Article reserved for our subscribers Read also On the supermarket market, the trail of a Carrefour-Auchan wedding

According to a person close to the file, the very latest scheme provided for the acquisition of Carrefour by the Nordic family: it was ready to compensate the shareholders of its competitor up to nearly 70% in cash, at a price of 21.50 euros. per share, the balance being paid in shares of the new Auchan-Carrefour group, listed on the stock exchange. But, in one direction or the other, the exchanges always stumbled on the valuation of Auchan. The Mulliez judged that their sign was worth at least as expensive as Carrefour. Unacceptable for Mr. Bompard.

Pass of arms

Despite this, in the Mulliez camp, the feeling was that an agreement was near. At Carrefour, on the other hand, we were more circumspect. Mr. Bompard had however put Bruno Le Maire in the confidence. On Wednesday, September 29 at 7 p.m., the CEO and the Minister met just before the holding – finally postponed by one day – of a Carrefour strategic committee, of which Philippe Houzé, chairman of the Galeries Lafayette board, are members, and Abilio Diniz.

Mr. Le Maire was opposed in January to the acquisition of the French distributor by the Canadian Couche-Tard. This time, it was the large shareholders, and in particular the Moulin family, who fell in the clouds: for them, discussions had indeed taken place but, to their knowledge, they had stopped in the summer. This had also allowed the Financière Agache, holding company of Bernard Arnault, CEO of LVMH, to settle at the end of August its stake in the capital of Carrefour, without the risk of appearing insider.

You have 20.92% of this article left to read. The rest is for subscribers only.