If a European player - as opposed to, for example, Canada's Couche-Tard - were to present itself as a prospective buyer of French supermarket group Carrefour, France would probably be inclined to accept the deal. That is what Secretary of State for European Affairs Clément Beaune has stated.
Recently, the French government tossed and turned when Canada's Couche-Tard emerged as a potential buyer of Carrefour. While the Canadians were having exploratory and friendly talks with Carrefour CEO Alexandre Bompard, the French Minister for the Economy Bruno Le Maire went to the barricades.
Le Maire used terms like "food sovereignty" to justify his opposition. He considers Carrefour to be an "essential link" in the French food chain, which should not fall into foreign hands. A rather strong statement, which in fact had to mask a typical French protectionist reaction. Although Le Maire did go a bit overboard in his zeal to suggest that pasta or rice could suddenly no longer be found on the shelves of Carrefour if the chain were to fall into foreign hands.
The somewhat inflated rhetoric did not fail to achieve its goal, as the takeover talks between Carrefour and Couche-Tard were quickly broken off. Instead, both companies are now looking at how they can work together differently in the future.
Different evaluation process for European companies
Hands off Carrefour, then? Not quite, as it turns out. The French Secretary of State for European Affairs gave an interview to television channel LCI, during which he indicated that a possible European candidate acquiring Carrefour would be met with far less resistance. "Our priority is national and European sovereignty."
Though Beaune was quick to add that whoever felt inclined should wait for the Covid crisis to end. The crisis has reinforced the strategic importance of Carrefour for the French. "There is no bid for Carrefour as we speak, but at the moment that would not be a good option anyway," said Beaune.
More French levers in European deal
Beaune's stance does not come as a surprise. In a European constellation, the French government has much more leverage to safeguard France's interests in a possible deal. But in fact, this mainly means that we should not count on a takeover of Carrefour in the near future. A French takeover is already out of the question: the overlap between Carrefour's store network and that of its competitors is too large to achieve economies of scale.
And elsewhere in Europe, there are not many players with the necessary strength to undertake such a takeover. Not to mention the question of whether Ahold Delhaize, for example, has a desire to embark on a French adventure, seeing they already have a Belgian-Dutch and an American branch. The acquisition would also come with a lot of challenges which Carrefour itself has not yet been able to tackle properly in all those years.
The only likely candidate could be the British supermarket chain Tesco. They already work together with Carrefour in the field of purchasing. Bundling the two would undoubtedly result in a European champion. The question remains whether France, in a post-Brexit world, still considers a British player as "European".