Two of France's largest distributors have struck a deal to exchange stores: Auchan will take over Système U's hypermarkets, while the latter takes care of Auchan's supermarkets.
"Intensify our collaboration"
Officially the move is not a merger, but just an "intensification" of the Auchan-Système U collaboration from September 2014 in which both distributors decided to purchase products together in an attempt to have a bigger say in the price negotiations.
"Nobody is buying anybody", the Auchan board has apparently said in an internal document, according to labour unions. The document also mentions "the foundation of a new entity", managed by a "jointly-appointed board of directors".
Moreover, Système U will enter Eurauchan's capital (Auchan France's purchase entity), while both groups will also intensify their collaboration in regards to house brand product development.
The most remarkable issue in the new five year project is that both distributors will exchange stores: all Hypermarchés U meeting the conditions (larger than 5,000 sqm and with a 50 million euro turnover) will transfer to Auchan. According to Linéaires, 15 out of 67 Hypermarchés U will transfer immediately, although eventually all stores may turn into Auchan stores.
At the same time, the 262 Simply Market stores, one of Auchan's brands, will transform into Super U stores. The consumer should be able to see the first changes after the summer.