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Carrefour Sells Majority Stake in Turkish Business to Local Partner

04/30/2013 | 01:09pm US/Eastern

By Nadya Masidlover and Joe Parkinson

PARIS--French retailer Carrefour SA (>> CARREFOUR) announced Tuesday that Haci Omer Sabanci Holding AS (>> Haci Omer Sabanci Holding A.S.) is set to become majority shareholder in their Turkish joint venture from July onwards.

In a statement, Carrefour said that Sabanci Holding will buy an additional 12% stake in its Turkish operations, called CarrefourSA, for a total of 60 million euros ($78.4 million). Carrefour will continue to hold 46.2% of CarrefourSA and Sabanci will own 50.8% of the company. The remaining 3% of the company will continue to be listed on the Turkish stock exchange.

CarrefourSA has a store network of 28 hypermarkets and 215 supermarkets representing net sales of EUR1.1 billion before taxes in 2012.

The move is the latest in a series of asset sales by Carrefour as the company reorganizes its global business in a bid to sharpen focus on operations close to home. Carrefour has disposed of assets in countries such as Indonesia, Colombia, Greece and Singapore as it seeks to concentrate efforts on turning around its business in France and Europe where sales have sagged amid euro-zone austerity and high unemployment. Carrefour has also said that it is looking to expand further in emerging markets, notably in Brazil and China.

A question mark has hung over Carrefour's future in Turkey following a long-running spat between the partners over management of the venture, with Sabanci executives repeatedly accusing Carrefour of poor management in the wake of a run of underperformance in Turkey's fast-expanding retail market.

Eight months ago Sabanci's four main representatives walked off the board of the joint venture after complaining of a deterioration in relations with the French retailing giant.

Sabanci Holding "will thus lead the next stage of development, putting its knowledge of the country and the market at the service of its joint venture with Carrefour", said Carrefour, in a statement.

Sabanci Holding hailed the move as a "new era" for the conglomerate, which has broad interests across the Turkish economy in sectors from banking to higher education.

"Our aim is to ensure CarrefourSA is as greatly successful as other Sabanci companies," Sabanci CEO Zafer Kurtul said in the press release.

Tuesday's news comes just weeks after Sabanci Holding sold its stake in discount supermarket chain DiaSA. Many analysts thought Sabanci would exit Turkey's food retail market altogether, following news reports the Turkish conglomerate would sell its joint venture with Carrefour.

Write to Nadya Masidlover at nadya.masidlover@dowjones.com and Joe Parkinson at joe.parkinson@dowjones.com

Stocks mentioned in the article : CARREFOUR, Haci Omer Sabanci Holding A.S.
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