Alimentation Couche-Tard of Canada broke off its € 16.2 billion buyout negotiations with Carrefour after opposition of the French government on the potential impact of the agreement on the food security and employment of the country could not be overcome, according to a person familiar with the matter.
Couche-Tard co-founder and president Alain Bouchard met with French Finance Minister Bruno Le Maire on Friday to try to convince him with a mix of assurances and commitments, including investing 3 billion euros out of five years, no layoffs for two years and double action lists.
This did not work, nor did the intervention a few hours later by Quebec’s Minister of the Economy, Pierre Fitzgibbon, who reminded Mr. Le Maire in a call that the French railway company Alstom had bought Canada’s Bombardier last year without Canada playing the protectionist card.
The failure of the discussions means Couche-Tard, which is the largest independent owner of convenience stores and gas stations in North America, will not now partner with one of Europe’s largest grocery retailers to create a central sales office at retail worth over $ 50 billion. The combined group is said to have been the third-largest retailer in the world after Walmart and Schwarz Group, which owns German discounter Lidl.
France’s opposition to the proposed deal was swift, with Le Maire saying the deal posed a threat to the country’s “food sovereignty” just 24 hours after the talks were published on Wednesday.
The position of President Emmanuel Macron’s government runs counter to the business-friendly image it has long sought to project. But as presidential elections approach next year, the policy of allowing one of France’s largest private sector employers to be bought out by a foreign company has been seen as treacherous.
A person familiar with the deal said: “The government has been weakened by criticism of its handling of the pandemic and the economic crisis, so it is reacting defensively. It is a purely political calculation that the opposition would have raked them over the embers for approving the sale of such a large company to a foreign buyer.
Under French law, the government can control takeovers of domestic companies by foreign buyers in sectors it deems strategic, such as energy, water and telecoms. France has gradually expanded the list of areas covered by the regulation and added “food safety” last year.
Carrefour’s three largest shareholders, who together control around 23% of the shares and enjoy double voting rights under French securities law, were willing to sell their stakes to facilitate the transaction, relatives said of the agreement to the Financial Times.
Among them, the richest man in France, billionaire LVMH Bernard Arnault and the Moulin family behind the department store group Galeries Lafayette.
The end of the talks was first reported by Reuters.