Dubai: Majid Al Futtaim Holding has acquired the remaining 25 per cent stake in Majid Al Futtaim Hypermarkets LLC from its partner French retailer Carrefour Group for €530 million (Dh2.5 billion), a joint statement said on Wednesday evening.
“Carrefour Group announced the sale of its 25 per cent stake in Majid Al Futtaim Hypermarkets for €530 million to its regional partner, Majid Al Futtaim Holding,” Carrefour said in a statement. “Carrefour expresses its full confidence in Majid Al Futtaim’s ability to continue to develop the brand successfully and consolidate its position in these growing markets.”
Majid Al Futtaim (MAF) Holding holds the regional franchise for Carrefour – the world’s second biggest retailer after Walmart. Despite Carrefour’s stake sale, both partners have agreed to strengthen their partnership by extending the franchise agreement of Carrefour until 2025.
“Under the agreement signed, Majid Al Futtaim will own 100 per cent of Majid Al Futtaim Hypermarkets’ shares. The exclusive franchise partnership with the Carrefour Group is renewed until 2025 and extended to new formats and new countries,” MAF Holding said in a statement.
“Majid Al Futtaim sees this as a strategic transaction driving long-term growth, with its demonstrated expertise and track record to develop the brand successfully, and will keep and strengthen the strategic partnership with Carrefour in new countries and new formats.”
Closing of the transaction is subject to approval by the relevant authorities.
MAF Holding brought Carrefour to the region by acquiring the franchise in 1995 and subsequently opening the first Continent (Carrefour’s predecessor) Hypermarket at the Deira City Centre – that had begun to change the face of the UAE’s organised retail sector – that used to be dominated by a handful of supermarket chains.
It currently operates 50 hypermarkets and 44 supermarkets under the Carrefour brand in several countries in the Middle East, North Africa and Central Asia.
The move is a possible reflection of the company’s declining sale in its home market – France as well as Europe and China. The company has already discontinued its operations in some of the key markets such as Greece, Singapore, Colombia, Malaysia, Indonesia while it has sold it Portuguese business recently.
It’s exit from MAF Hypermarkets stake is part of a strategic move to reduce its €4.3 billion debts and create a more leaner and efficient company.
“More generally, the company’s international divestment programme is now largely complete – question marks still hang over Turkey and possibly Taiwan – but the business is now more lean and able to invest,” Gildas Aitamer, Retail Analyst at Planet Retail, commented recently.