Canadian firm pulls out of Carrefour takeover after France insists ‘No’

PARIS (AFP) – Canadian convenience store chain Couche-Tard has reportedly pulled out of a multi-billion euro takeover of supermarket giant Carrefour after the French government said it would veto the deal.

Negotiations over the EUR16 billion deal ended after a meeting between the French Minister of the Economy Bruno Le Maire and the founder of Couche-Tard Alain Bouchard, Bloomberg news agency said, citing sources.

French ministers had insisted on Friday they would not agree to the takeover because it could jeopardise food security, an even more important consideration given the coronavirus pandemic.

In an attempt to reassure ministers, Bouchard had promised to invest billions in Carrefour, said he would maintain employment for two years and that the group would be listed on the Paris Stock Exchange in parallel with Canada, Bloomberg reported.

Contacted by AFP, neither Couche-Tard nor Carrefour had confirmed the information on Friday evening.

Although talks had stopped, anonymous sources cited by Bloomberg said negotiations could resume if the French government changes its position.

French ministers had insisted they would not agree to the Carrefour takeover because it could jeopardise food security. PHOTO: AFP

But on Friday, France’s Economy Minister made his choice public, telling BMTV and RMC: “My position is a polite, but clear and definitive ‘No’.”

“Food security is a strategic consideration for our country and one does not just hand over one of the large French distributors like that,” Le Maire said.

“Carrefour is the biggest private sector employer in France with nearly 100,000 employees,” he noted, and the group accounts for 20 per cent of the food distribution market in  the country.

The French statements have not convinced the Canadian government.

A Canadian federal source said while they could understand concerns over allowing a foreign firm to take over such a large national employer, concerns over food security were unsubstantiated.

“But we cannot accuse a leading Canadian company like Couche-Tard of endangering the food sovereignty of an entire country,” the source, who requested anonymity, told AFP.

On Wednesday, Couche-Tard submitted a non-binding offer for Carrefour, valuing the group at more than EUR16 billion.

Le Maire made clear immediately that he was not in favour of a deal involving “an essential link in food security for the French, of food sovereignty”.

The government’s reaction had caused “surprise” at Carrefour itself, according to sources who said the comments were “premature” given that merger discussions had barely begun.