(News Bulletin 247) – With the takeover of the Cora and Match stores, the French retailer has made its biggest acquisition in 20 years. The challenge: to strengthen its precious position as number two in the sector, behind Leclerc.

While Casino is fighting for its survival and has just issued a warning on its 2023 results, Carrefour is announcing its first major acquisition in 20 years. On Wednesday evening, the group led by Alexandre Bompard based in Massy announced that it had added the Cora and Match brands, properties of the Belgian distributor Louis Delhaize, to its basket.

A total of 60 hypermarkets and 115 supermarkets, under the Cora and Match brands respectively, will soon be in the hands of Carrefour. The transaction values ​​the acquired assets based on an enterprise value of €1.05 billion. The finalization of the acquisition of Match and Cora is expected “in the summer of 2024”, after consultation with the Competition Authority.

The acquisition of this store network will enable Carrefour to strengthen its positions in France by conquering new territories. The distributor based in Massy is indeed “little present in the North and East of France”, explains Stifel in his note devoted to this important operation for Carrefour.

Neck and neck with Leclerc

The contribution of Cora and Match to the scope of Carrefour translates into an additional turnover of 5.2 billion euros excluding taxes when the distributor achieved last year 42 billion euros in sales in the country. , this time taxes included.

Above all, Carrefour must multiply initiatives to strengthen itself in France so as not to be left behind by E.Leclerc, which remains number one in France to this day.

“All the players in the food distribution are realizing that we must react to grow and not be left behind by E.Leclerc which is on an impressive trend and by Intermarché”, explained Monday to AFP Clément Genelot , distribution specialist at Bryan Garnier & Co.

This is confirmed by an analyst interviewed by News Bulletin 247. This operation “also makes sense on a strategic level because it strengthens Carrefour’s market share against Leclerc in France. Post-operation, this market share would increase by 2.5 percentage points to 22.3% while Leclerc is at 23.5%. Which is interesting in terms of purchasing efficiency”, he explains.

Carrefour must also cope with the rise of Intermarché, which will buy 119 stores from Casino over the next three years, 57 of which will change banners at the end of the year.

But according to the anonymous analyst, the takeover of Match and Cora should help Carrefour insofar as the two brands “were part of the Intermarché purchasing centre. They will probably leave this centre, which will be negative for Intermarché”. And in the balance of power with agri-food manufacturers, the greater the weight of the distributor, the more its suppliers are inclined to grant it rebates in order to be referenced in their shelves.

On the financial side, the Cora and Match stores posted an EBITDA (gross operating profit) of 189 million euros. Carrefour believes that this takeover “offers significant synergy potential, estimated at 110 million euros in EBITDA on an annual basis 3 years after the effective completion of the transaction”. Besides, the integration of these two brands will cost 200 million euros (investments and operating expenses), over two years.

The takeover of the Match and Cora brands is deemed “cheap” for Stifel, with a transaction price “at 5.5 times EBITDA (2022) in enterprise value before synergies and 4.2 times after synergies targeted during the year”, advances the design office. This operation therefore makes sense from a financial point of view, because it will generate “an immediate accretion (an improvement, editor’s note) in earnings per share of 2% excluding synergies and 6% by integrating synergies”, abounds, for its part. anonymous analyst.

“The size of the operation should not prevent further share buybacks,” adds Stifel.

However, observers note black spots in this takeover of Cora and Match. The addition of hypermarkets can be perceived as negative by the market because “it reinforces the ‘mix’ of hypermarkets within Carrefour, which represented 49% of the total before the deal compared to 52% after the deal. But the market likes to think that hypermarkets are not the model of the future for Carrefour”, adds the Parisian analyst.

A position shared by Stifel who believes that market share gains are “not everything”. the design office prefers for its part, “organic gains, with the addition of new services to capture more customers and improve customer loyalty”.

On the Paris Stock Exchange, Carrefour rose 1.10% to 17.475 euros, around 11:00 a.m. after the announcement of the takeover of the Cora and Match brands. For its part, Carmila jumped 6.2%, the 36% subsidiary of Carrefour will take over 52 shopping malls adjacent to Cora stores which were 93% owned by the Louis Delhaize group.