Chinese retailer Suning.com will takeover Carrefour China, the French retailer’s China business, after agreeing to acquire an 80% equity stake in the business for €620m (US$704m).
Dating back to 1995, Carrefour China has a network of 210 hypermarkets and 24 convenience stores across the country.
The transaction will accelerate Suning.com’s expansion in all categories merchandise retailing and bolster its bricks-and-mortar presence, the buyer said in a statement.
“In the future, we expect to open up the access for Suning’s various business models, such as household electronics selling, Redbaby, JIWU, Suning Financial Services, SuFresh and Suning Xiaodian’s Immediate Delivery, to get into Carrefour China’s stores located in the central business and living areas of Chinese 1st and 2nd tier cities,” said Tian Rui, vice president of Suning.com.
The deal values Carrefour China at €1.4bn (US$1.59bn), with the business generating net sales of €3.6bn and EBITDA of €66m, according to the seller.
“It will help us better meet more consumers’ needs due to strengthened core capabilities achieved by retail store innovation,” the VP added.
“With 400 million registered customers of the Company’s retailing segment, Suning.com’s users-ecosystem will also be complemented with Carrefour China’s membership system, fully improving the customer value.”
Carrefour will retain a 20% share in the business and two seats out of the seven supervisory board seats.
The deal is scheduled to close by the end of the year.
The deal comes after Suning.com acquired Chinese conglomerate Dalian Wanda’s entire Chinese department store portfolio, comprising 37 sites, in February this year.
Real estate investors made some big bets on Chinese retail, with Blackstone purchasing a 50% stake in three shopping centres across China and South Korea from retail REIT Taubman Centers for US$480m in February.
Late last year, Hong Kong-listed Link REIT snapped up the 67,546 sq.m. Beijing Jingtong Roosevelt Plaza retail property in Beijing’s Tongzhou district for RMB2.56bn (US$374.6m).
Suning.com operates a network of more than 8,800 stores and runs China’s third-largest business-to-consumer e-commerce platform.