A Carrefour store in Henan province. (Photo/CNS)
International hypermarket chain Carrefour has denied claims that it plans to sell its Chinese division for US$6 billion to China Resources or to the country's state-owned foodstuff company COFCO and says the chain is dedicated to pursuing long-term growth in China.
Some reports said that Carrefour talked to COFCO around a year ago to sell its operations in China but they did not arrive at a deal because the state-run company only offered US$3 billion, half the price the French company was seeking. The rumors were given weight by the fact that the retailer has pulled out of several markets this year, including Singapore.
Carrefour's CEO George Plassat officially denied the reports during the company's conference where it announced its financial report for the first half of this year. He said the chain will not sell its Chinese operations as it has strong confidence in the future of the China market. Carrefour will continue to invest in China for long-term development, he said.
The reports were not likely to have been groundless, however, according to one industrial insider. Although the two Chinese companies have also denied the claim, COFCO has been looking for opportunities to develop a retail department and acquiring a retailer the size of Carrefour would be ideal. COFCO is said to have been paying attention to the French retailer for years.
Another report said COFCO had expressed interest in acquiring Carrefour but considered the asking price too high, even though the chain earns around US$7 billion a year from its 203 stores in China. A single outlet in China earns US$60 million more than its US rival Walmart.
Retailing has played an important role in commercial property, said Ding Liguo, the founder of Topretailing, a web portal focusing on retail and commercial properties. COFCO has been building a supply chain but has not developed its own retail network. Its supply chain and property business will benefit substantially if it were to acquire an international retail brand like Carrefour, Ding noted.
Ding Liguo 丁利國
China Resources 華潤集團