British DIY group Kingfisher and French Mr. Bricolage seem to have had a rough ride in their 'engagement': the rift may even cause the previously-announced acquisition to falter.
"Engaged" for nearly a year
Nearly a year ago, Kingfisher announced that it wanted to acquire French DIY group Mr. Bricolage. To achieve that goal, it wanted to buy out Mr. Bricolage's two largest shareholders, ANPF (41.9 % of the shares) and the Tabur family (26.3 %), at 15 dollars per share.
The French antitrust authority immediately questioned the deal, as Kingfisher already owns Castorama and Brico Dépôt in France. The authority feared the resulting group might endanger the free market because of its huge market share: in order to get the deal approved, Kingfisher would have to sell 15 to 60 stores.
Mr. Bricolage's board is allegedly not happy with the current state of affairs: it convened because "Kingfisher's commitments gravely damage the interests" of Mr. Bricolage and its shareholders. Not only would the chain have to sell too many stores, but it would also have to cancel a series of deals with independent partners which operate under their own brand names. A Mr. Bricolage press release states that there were "far more [cancelled deals] than partners could anticipate".
Will "Madame Bricolage" head to court?
The French "declaration of war" has not gone over well at Kingfisher, which has officially stated it does not agree with the statements from Mr. Bricolage's board. Its share has been taken off the Parisian stock exchange while RetailWeek reports Kingfisher is even considering pursuing legal steps.
It is not the ideal start for French Véronique Laury, who took over as Kingfisher's CEO in January. "Madame Bricolage", as the French press call her, has been active in the DIY business for 26 years and was previously Castorama's CEO. Earlier this year, the London-based holding asked her to take over from Ian Cheshire, the man who designed the French acquisition.