Louis Delhaize exits France, sells stores to Carrefour

Ailing Belgian supermarket group Louis Delhaize has sold its 175 French shops to Carrefour. What can the future still hold for the abandoned Belgian branch?

Good deal for Carrefour

Carrefour has paid 1.05 billion euros for the 60 Cora hypermarkets and 115 supermarkets of the Match enseigne, whose 24,000 employees turn over 5.2 billion euros – more than two-thirds of Louis Delhaize’s group sales. Carrefour is also taking over the real estate of 55 hypermarkets and 77 supermarkets.

For Carrefour, it says it is a very interesting deal because there is a “very strong geographical complementary”: Cora and Match are particularly strong in the northern regions closer to the Belgian border, where Carrefour is “relatively weak”.

Synergies

Carrefour hopes the merger will generate 110 million euros in annual synergy benefits. Half of that should come from optimising omnichannel costs, the other half thanks to a better distribution and marketing cost optimisation.

The French competition authorities still have to approve the acquisition. If they do, the two retailers involved hope to complete the acquisition by next summer.

End for Louis Delhaize?

For Louis Delhaize’s Belgian business, the takeover is another serious blow. The shops have been performing poorly for years and already faced several restructuring plans. Match (and “little brother” Smatch) were actually supposed to disappear from Belgium altogether, but that decision was reversed in April.

On top of that, a lot of economies of scale will be lost: not only is the French branch dropping out of the group, but in April Carrefour also took over the Romanian branch. Or could the billion euros associated with this acquisition be the salvation for Belgian shops after all?