Bids roll in for Carrefour's S.E. Asian stores: reports
British and Japanese retail giants along with local operators are in an auction battle to take over the Southeast Asian business of French supermarket chain Carrefour, reports said Thursday.
Britain's Tesco is among more than 10 bidders for Carrefour's assets in the region, which total 61 stores in Malaysia, Singapore and Thailand, the Financial Times said.
Singapore-based retail group Dairy Farm and French retailer Casino are also in the bidding, but US titan Wal-Mart has not entered the race, the FT said.
Company executives from Carrefour Singapore and Dairy Farm were not immediately available to comment.
Dow Jones newswires reported that another Singapore retailer, NTUC FairPrice, as well as Malaysia-based private equity group Navis Capital, had placed bids for Carrefour assets in the two countries.
NTUC FairPrice, which describes itself as Singapore's largest retailer, declined to comment on reports that it is interested in acquiring Carrefour's two branches in the city-state.
Executives from Navis Capital's head office in Kuala Lumpur were also unavailable for comment.
Japan's Aeon group also declined to comment on a report in the Nikkei business daily that it hoped to expand into Southeast Asia via the Carrefour auction to make up for sluggish consumer demand at home.
Aeon acquired Carrefour's Japanese operations in 2005, five years after Carrefour entered Japan.
Jon Wright, a London-based retail analyst with market intelligence firm Euromonitor International, said Asia's fast-growing economies were producing more affluent households that can patronise supermarket chains.
"The long-term potential for these assets makes it worth investing in," he told AFP. "The supply chain is in place, what you are doing is essentially improving your margins and generate more profits."
According to Wright, Asia's supermarket sector was worth 389 billion US dollars in 2009 and is projected to grow 3.3 percent annually till 2014.
In contrast, the sector is expected to expand only 2.1 percent globally for the same period.
Malaysia's deputy trade minister Mukhriz Mahathir had said in August that Carrefour was believed to be looking to disinvest its business in the country, where it has 19 stores.
Carrefour also has 40 stores in Thailand and two in Singapore.
The French retail giant on Tuesday said it made a net profit of 82 million euros (104 million dollars) in the first half, after a loss in the same period of 2009.
At the results announcement, Carrefour chief executive Lars Olofsson refused to comment on the group's plans in Asia amid speculation that he wants to raise money to fund an ambitious revamp of hypermarkets in Europe.
Tesco, the world's third-biggest retailer behind Wal-Mart and Carrefour, has also declined to comment on the Asian auction. The British group has been steadily expanding in the region, notably through smaller "express" stores.
Carrefour's website says international markets account for 57 percent of the group's total sales and that future growth will likely come from China, Indonesia, Brazil, Poland and Turkey.
The FT said Carrefour has no intention of abandoning China, which accounts for 70 percent of the group's stores in Asia. It also plans to remain in Indonesia and Taiwan, the report said.
© 2010 AFP