Carrefour sells its Colombian assets

Carrefour sells its Colombian assets

SANTIAGO - Reuters
Carrefour sells its Colombian assets

French Carrefour, also largely active in Turkey, is pulling out of Colombia. REUTERS photo

Struggling French retail giant Carrefour is selling its Colombian assets for $2.6 billion to Chile’s Cencosud, pulling out of another non-core country to better defend its key markets. Carrefour had announced in August that it is also considering put an end to its operations in key markets like Turkey and Indonesia, which are currently under review.

Carrefour, the world’s second-largest retailer, has embarked on a major restructuring under new Chief Executive Georges Plassat to cut costs and debt, and its withdrawal from Colombia follows exits from Greece and Singapore.

The deal gives acquisition-hungry retailer Cencosud a large footprint in Colombia, which like other Latin American economies is benefiting from a growing middle class and increasingly easy access to credit.

The Carrefour deal will give it 72 hypermarkets, 16 convenience stores and 4 cash and carry stores in Colombia, adding to the some 900 stores and 26 commercial centres it operates in the region. It expects to close the deal by the end of the year.

While Latin American firms have started to flex their M&A muscles, European retailers have been hurt by poor performances in austerity-hit countries and as hypermarkets have suffered from a shift towards more local and online shopping.

In August Carrefour announced plans to cut up to 600 jobs in Francebut Plassat, whose reputation as a cost-cutter has earned him the nickname of “Le Nettoyeur” (the cleaner), gave few details of his turnaround plans.

He did say that Carrefour wanted to defend mature markets like France and Spain as well as its operations in growth markets Brazil and China.

“This transaction is in line with Carrefour’s new strategy of focusing on geographies and countries in which it holds or aims to develop a leading position,” the French retailer said in a statement.