Carrefour facing new takeover prospect
French retailer warns on sales dip
The possibility of a merger between the worlds’ two biggest retailers has been raised again after Carrefour warned that its 2004 sales will be below forecasts.
The markets are again speculating that Carrefour is vulnerable to a takeover approach from Wal-Mart, reviving rumours that have surfaced several times this year.
France-based Carrefour has said that its now expects full-year sales to increase by 5 per cent rather than the 6 per cent previously forecast. Total group sales rose 4.4 per cent to €19.78bn in the second quarter at constant exchange rates, but fell by 0.2 per cent in France, which accounts for half of Carrefour’s revenue.
The retail group’s core French hypermarket business has lost share to rivals, particularly the discounters, in a tough home market.
Wal-Mart has declared an interest in European expansion, having said recently it would consider taking the UK Asda brand into other countries.
[img r]carrefourchinainstore.jpg[/img]Carrefour’s global operations, including a strong presence in China, would also be attractive to Wal-Mart.
However, the world’s biggest retailer would almost certainly face regulatory opposition from the French government, which would be reluctant to see such a high profile French business fall into foreign hands.
