Carrefour has completed its acquisition of the Cora and Match brands in France from the Louis Delhaize group. This strategic move enhances Carrefour's presence in the French food distribution market.
The acquisition includes 60 Cora hypermarkets and 115 Match supermarkets, primarily located in the Grand East and Northern regions of France, areas previously underserved by Carrefour. Together, these stores represent about 2.4% of the nation's food distribution market share.
Acquisition Details
Carrefour expects consumer benefits from this acquisition due to anticipated price reductions
The transaction's enterprise value stands at €1.05 billion, incorporating the purchase rights of 55 hypermarkets and 77 supermarkets. The deal was consummated fully in cash.
Carrefour received a waiver from the French Competition Authority to complete the transaction, although the Authority will provide a final decision regarding the transaction's merits and potential remedies by the end of the first quarter of 2025.
Carrefour expects consumer benefits from this acquisition due to anticipated price reductions and the geographic complementarity of the two groups, perceiving limited competition issues.
Integration and Conversion Plans
In preparation for the full integration, Carrefour plans to rebrand Cora hypermarkets under the Carrefour banner by the end of 2024. Starting September, Carrefour products will be available in Cora and Match stores.
While retaining the Match brand, known for its strong identity in North-East France, Carrefour aims to reinforce its Market banner through this acquisition.
Synergies and Financial Outlook
These synergies are projected to arise from improved store performance, enhanced commercial investments
The expected synergies from this acquisition have been revised upwards, with an anticipated contribution to EBITDA of €130 million annually by 2027, an increase from the previous €110 million estimate.
These synergies are projected to arise from improved store performance, enhanced commercial investments, deployment of Carrefour-branded products, and expanded omnichannel and merchant services.
The other half will focus on optimizing costs, including savings in direct and indirect purchases and shared marketing and advertising expenses. Integration costs are estimated at €250 million between 2024 and 2025, including approximately €150 million in operating costs and €100 million in capital expenditures.
Strategic Vision
Alexandre Bompard, Chairman and CEO of Carrefour, stated, "With the acquisition of the Cora and Match banners, Carrefour is carrying out its largest operation in France in more than twenty years and is consolidating its leadership in food distribution on its domestic market."
"Cora and Match bring quality, profitable assets to Carrefour that are highly complementary to the existing portfolio, and will in return benefit from our strong brand equity, from the power of our private label products, and from our growth in e-commerce."
"Bompard expressed his admiration for the Bouriez family and the Louis Delhaize group, acknowledging their entrepreneurial spirit and the dedication of the 22,000 employees joining Carrefour, emphasizing their role in strengthening Carrefour's business model. This acquisition reflects Carrefour's disciplined external growth strategy aimed at creating value for customers, employees, stakeholders, and shareholders."
Carrefour announces that it has finalized the acquisition of the Cora and Match banners in France, from the Louis Delhaize group.
This operation consolidates Carrefour's position in the food distribution market in France, with 60 Cora hypermarkets and 115 Match supermarkets, mainly located in the Grand East and Northern regions of France, where Carrefour has historically had little presence. These stores represent approximately 2.4% of the food distribution market share in France.
operation for the final consumer
The enterprise value of the operation is €1.05 billion. It includes the purchase of the premises of 55 hypermarkets and 77 supermarkets. The transaction was carried out 100% in cash. Carrefour obtained a waiver from the French Competition Authority to finalize the transaction.
The Authority must still decide on the merits and on possible remedies by the end of the first quarter of 2025. Taking into account the expected benefit of the operation for the final consumer (thanks in particular to price reductions) and the strong geographic complementarity of the two Groups, Carrefour considers the competition issues limited.
Integration program and plans
In the meantime, Carrefour will initiate its integration program and plans to convert Cora hypermarkets under the Carrefour banner before the end of 2024.
Carrefour products will be available at both Cora and Match from September. Concerning Match, the Group intends to maintain and strengthen the banner, which enjoys a strong brand equity in the North-East of France, in parallel with Carrefour Market.
Potential for synergies
The potential for synergies is revised upwards, reaching an additional contribution to EBITDA of €130m at an annualized rate by 2027 (compared to €110m previously). Half of these synergies will be generated by an acceleration in the commercial performance of stores, following commercial investments, the introduction of the Carrefour branded products, the development of omnichannel and the deployment of financial and merchant services.
The other half will come from cost optimization, in particular through gains in direct & indirect purchases, and the mutualization of marketing & advertising costs. The associated integration costs, mainly distributed between 2024 and 2025, are estimated at €250m (compared to €200m previously), including ~€150m in operating costs and ~€100m in investments (Capex).
Carrefour's external growth strategy
Alexandre Bompard, Chairman and CEO of the Carrefour Group, declared: “With the acquisition of the Cora and Match banners, Carrefour is carrying out its largest operation in France in more than twenty years and is consolidating its leadership in food distribution on its domestic market. Cora and Match bring quality, profitable assets to Carrefour that are highly complementary to the existing portfolio, and will in return benefit from our strong brand equity, from the power of our private label products, and from our growth in e-commerce."
"I want to pay tribute to the Bouriez family and the Louis Delhaize group, whose entrepreneurial spirit has permanently driven these wonderful brands which we are honored to take over. I also want to salute the commitment and know-how of the 22,000 employees who are joining us today, whose expertise will allow us to strengthen our business model. This operation once again demonstrates Carrefour's ability to implement its virtuous and disciplined external growth strategy, serving its customers, its employees, its stakeholders, and the creation of value for its shareholders”.
