150 million euro bid
Bricorama has bid more than 150 million euro to acquire the third largest French DIY chain, Mr. Bricolage, as it intends to “become a new major player in the DIY market”. With 223 stores and a turnover of 1 billion euro, Bricorama is considerably smaller than its intended target, who boasts 866 stores and a 2.2 billion euro turnover (1.9 billion euro in France). A threat to Mr. Bricolage however is that its turnover has been slipping, down 4.4 % last year.
Mr. Bricolage’s board does not seem willing to take up the offer: it mentioned having received an “indicative bid from Bricorama”, but immediately added “there had not been any negotiations”. ANPF, Mr. Bricolage’s major shareholder with 41.9 % of shares, said it received the bid, but “will not follow up on it”.
Remarkable detail: the day before the news broke about the bid, Jean-François Boucher, Mr. Bricolage’s CEO, resigned. He had been with the company for 18 years and was in favour of a marriage with Kingfisher, but has now resigned, officially “to focus on other professional activities”.
French DIY market barely achieves growth
Analysts believe a marriage between Bricorama and Mr. Bricolage makes sense, particularly in a market dominated by 2 international groups: the Adeo group (Leroy Merlin, Weldom, Bricoman) has a 38 % market share and Kingfisher (Brico Dépôt and Castorama) has a 33 % market share. This means that the two smaller companies would benefit from joining forces as Mr. Bricolage has an 8 % market share and Bricorama merely 3 %. Geographically, both groups would complement each other and they also mainly use entrepreneurs.
On top of that, the French DIY market is in a rut. Sales reached 24.891 billion euro last year, up merely 0.8 %. Back in 2006, the market grew an astonishing 8 %, a huge difference compared to now.
