Share this story!            

Carrefour says Wal-Mart deal for Trust-Mart too risky

BEIJING: The head of French retail giant Carrefour said Saturday his company was not interested in a bidding war with rival Wal-Mart for a Chinese chain due to integration risks that large acquisitions pose.

“Our priority is clearly to develop internally,” Jose Luis Duran, chief executive officer of Carrefour told AFP as he oversaw in China the opening of the chain’s 1,000th superstore worldwide.

“To grow externally we have two conditions, one is a rational price and the second is to ensure that we can integrate without endangering our existing base.”

Duran was commenting on Wal-Mart’s recently reported 1.0 billion dollar purchase of the 100 retail outlets of the Chinese chain Trust-Mart. If the deal goes through, Wal-Mart would become the leading foreign retailer in China ahead of Carrefour. “In the case of Trust-Mart, these two conditions were not completely met,” Duran said, while admitting that Carrefour was earlier interested in purchasing the Trust-Mart chain.

“Trust-Mart is of such a size the we thought it could not become one of our priorities ... we would have had to sacrifice our internal growth efforts to make an acquisition like this.”

Carrefour was more interested in tactical purchases of local retail chains, he said, citing but not naming a chain of 14 stores in central China’s Wuhan city and another chain in the country’s northeastern city of Harbin.

So far this year, Carrefour has opened 14 of the 20 new stores that it expects to open in China in 2006, Duran said. The retail giant now has 83 Carrefour super stores in China and another 230 Dia discount stores here, he said. Of the nearly 2 billion dollars in Carrefour’s global revenues in 2005, the Chinese market only represented a modest 2.0 percent. afp

Home | Business

Share this story!