French retailer Leclerc is negotiating with its competitor Casino to take over "certain hypermarkets" of the Géant Casino chain. Casino recently offered up 20 of its 110 hypermarkets for sale.
"Not all twenty"
CEO Michel-Edouard Leclerc confirmed the news about the negotiations in an interview with French magazine Challenges. "We are discussing the takeover of the Casino group's Géant hypermarkets," he says, hurrying to add that he means "certain hypermarkets" and certainly not all twenty.
These takeovers should allow the group to remain competitive and offer strong prices, particularly in the wake of the new law on agriculture and nutrition that was voted in by the French government. That law limits the stunt discounts that have become Leclerc's trademark. The CEO has always fought this law, believing that it will lead to higher prices for the consumer, but was forced to give up his resistance in the end.
Lowering Casino's debts
The turnover of Géant hypermarkets has seen annual decrease since 2012 and the rumour of Casino's desire to lose a number of Géant hypermarkets surfaced in the middle of last September. On 5 October the unions received confirmation that the group is selling 20 of its 110 French hypermarkets, which employ some 2,000 people.
The sale fits in a larger plan to lower debts. Casino announced the plan last summer, intending to reduce its debt by a billion euro by the end of this year, bringing it down to 2.7 billion. At the start of this month, the group announced that it already had a "binding promise of purchase" from an unnamed institutional investor for the sale of 55 Monoprix stores for the amount of 565 million euros. The rumour of a merger of Carrefour and Casino – which was later denied – should also be considered in that context.