The company will provide shareholder loans to Carrefour China to support its operating funds, depending on the net liabilities and operating funds of Carrefour China on the delivery date, according to the announcement issued by Suning Easy-to-buy on the Shenzhen Stock Exchange.
"Through the acquisition of Carrefour China, the company can further enrich the layout of the company's smart retail scene, speed up the development of large and fast elimination categories, help to reduce procurement and logistics costs, enhance the company's market competitiveness and profitability." The announcement said.
Carrefour Group (CARR. PA) said it expected the deal to be completed by the end of 2019, retaining 20% of Carrefour China and two board seats. Carrefour spokesman also said that the deal with Suning announced the termination of negotiations with Tencent (0700.HK) on the acquisition of Carrefour's Chinese stake, but the deal would not affect Carrefour's current partnership with Tencent.
According to the announcement of Suning Easy to Buy, Carrefour China achieved 29.958 billion yuan in revenue in 2018, down 7.7% from the same period last year; the net profit attributable to the owner of the parent company was - 578 million yuan, and that attributable to the owner of the parent company was - 1.099 billion yuan in 2017; and the total equity attributable to the owner of the parent company was - 1.927 billion yuan by the end of 2018, and - 1.337 billion yuan by the end of 201
"The main reason for Carrefour's negative net book assets in China is that offline retail formats have been impacted by the Internet in recent years. Although Carrefour China has responded positively, it still brings phased operating losses." The announcement said.
Carrefour China officially entered the Chinese mainland market in 1995. It is one of the first foreign retail enterprises to carry out business in China. It mainly operates large-scale comprehensive supermarket business. As of March 2019, Carrefour China has about 30 million members in China. It has 210 large-scale supermarkets, 24 convenience stores and six major warehousing and distribution centers, covering 22 provinces and 51 large and medium-sized cities.
The announcement pointed out that there was a break-up fee arrangement in this transaction. If the transaction could not be delivered due to the failure of Suning's international reasons or anti-monopoly approval, Suning International would have to pay the break-up fee.
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