UK’s Tesco Plc, Japan’s Aeon Co, Hong Kong’s Dairy Farm International Holdings Ltd and Thailand’s Big C Supercenter Pcl may be putting in bids for Carrefour SA’s Malaysia, Singapore and Thailand assets, Bloomberg reported, quoting sources.
It also said South Korea’s Lotte Group was earlier approached to make a bid.
According to the sources, Carrefour has approached potential buyers and may ask for bids by early September and the combined operations could fetch US$800mil to US$1bil.
Sources said the world’s second largest retailer would consider selling the units separately as potential buyers might not be interested in bidding for all three combined.
Carrefour’s Thai business may be worth US$500mil to US$600mil, while the Malaysian and Singapore operations may be valued at US$350mil to US$400mil.
When contacted by StarBiz, Amandine Cuinet from Carrefour Group’s press office in France responded in an email that the group “does not (wish to) make any comment about this”.
A spokesman from Magnificient Diagraph Sdn Bhd, which operates the Carrefour hypermarket chain in Malaysia, said “no comment” when contacted.
According to a Dow Jones report, Big C and Tesco were interested in the Thai assets; Tesco, Dairy Farm and Japanese supermarkets were keen on the Malaysian stores; and Tesco was also interested in Carrefour’s assets in Singapore.
“If a single buyer emerges for all three countries, the deal will probably be wrapped up this year. If not, it could take a bit longer,” the report quoted a source as saying.
When contacted by Bloomberg, Aeon spokesman Eiichi Yamatani declined to comment, saying Japan’s second-largest retailer was “checking the situation.”
Tesco China corporate affairs vice president Zhuang Nanbin declined to comment on “market rumours.” Dairy Farm and Big C also declined to comment.
However, Lotte Group’s Seoul-based spokesman Lee Byung Hee said the group was not considering a purchase of Carrefour’s assets.
A local analyst said the sale of Carrefour’s units in Malaysia, Singapore and Thailand was possible as it was the group’s intention to focus on high growth markets like China and India.
She said the proposed sale was not a new development as the retailer had exited Japan and South Korea to focus on larger and fast-growing markets. The Malaysian retail market’s annual growth of about 3% to 5% was not considered strong, she told StarBiz yesterday.
China’s retail sales rose 18.7% year-on-year to US$183bil in May while India’s total retail sales are expected to grow from an estimated US$353bil in 2010 to US$543.2bil by 2014.
On the potential buyers for the local operations, the analyst said Tesco and Mydin might be interested to expand their operations, adding that Tesco had purchased Makro and might be looking to grow its business further.
Another analyst from a local brokerage concurred, saying that the sale of Carrefour’s local business was possible given the limited growth in the “quite saturated” mass grocery market.
“Carrefour might keep its assets in Indonesia given that the market is one of the high growth areas and provides huge business potential,” she said.
According to the Carrefour website, its Malaysian business registered sales of 328mil euros (including value-added tax) for the financial year ended Dec 31, 2009 (FY09), compared with 326mil euros in FY08. Its Singapore business recorded a total sales of 90mil euros (including value-added tax) in FY09, slightly lower than 94mil euros in FY08 while its Thai operations posted a total sales of 634mil euros in FY09 against 584mil euros in FY08.
Malaysia, Singapore and Thailand contributed about 4.5%, 1.2% and 8.7% respectively of Carrefour’s total sales in Asia in FY09.
There are currently 23 Carrefour outlets in Malaysia and two in Singapore.
By LEE KIAN SEONG
lks@thestar.com.my
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