GUANGZHOU -- Chinese retailer Suning.com will acquire the local operations of France's Carrefour Group, looking to turn around and leverage a well-established business that has struggled in the face of the country's flagging economic growth and the rise of e-commerce.
The Suning Holdings Group unit will pay 4.8 billion yuan ($699 million) for an 80% stake in Carrefour China, which mainly operates hypermarkets. The deal will reinforce the "market competitiveness of fast-moving consumer goods" operations, Suning said Sunday.
Carrefour's roughly 30 million registered customers in China will be introduced to Suning services and stores, and the Chinese retailer will use Carrefour's six large distribution centers in the country to deliver products more efficiently.
Suning indicated that no restructuring is in the offing anytime soon, stating that Carrefour China will remain independent in its management for now and that there will be no major changes in payroll or real estate leases.
Carrefour has been in China since 1995 and operated 210 hypermarkets in about 50 cities here as of this past March. But the recent struggles of the business, whose net loss approached 600 million yuan in 2018 with revenue down 8% to 29.9 billion yuan, had fueled talk of a potential exit.
Meanwhile, Suning has been racing to diversify. It had 8,815 locations across China at the end of 2018, including appliance and convenience stores. The company also runs its own e-commerce platform and has made online-to-offline commerce a major part of its strategy. Suning.com's revenue surged 30% last year to 244.9 billion yuan, while net profit roughly tripled to 13.3 billion yuan. Laox, a Tokyo-based operator of duty-free stores, is a Suning subsidiary.
