French supermarket retailer Carrefour is selling an 80 percent stake in its China operations to Suning.com in a deal worth about US$700 million.
The deal values Carrefour China at 1.4 billion euros (US$1.59 billion), including debt, Reuters reports.
It is expected to close by the end of 2019, pending regulatory approvals, the report said, citing a statement.
The agreement includes several windows of opportunity for Carrefour to sell the remaining 20 percent stake it holds in the Chinese subsidiary, signaling its aim to exit the market entirely, Reuters noted.
Carrefour, which has been in China since 1995, has spent years trying to fix a business which saw sales fall 5.9 percent last year amid fierce competition from local players and e-commerce firms.
The deal with Suning, a Chinese electronics retailer and e-commerce player, puts an end to preliminary talks Carrefour has held with Chinese tech giant Tencent over a potential sale of a minority stake in its local business.
“The talks that have started since January 2018 for the sale of a minority stake (in Carrefour China) to Tencent are over,” a Carrefour spokeswoman was quoted as saying. “However, the strategic business partnership with Tencent remains in place.”
Carrefour announced a partnership last year with Tencent, which led to the opening of a store in Shanghai.
Carrefour also said at the time that Tencent and Yonghui, a retailer specializing in fresh food and small stores, could take a stake in Carrefour China.
Carrefour China operates 210 hypermarkets and 24 convenience stores. It generated net sales of 3.6 billion euros and earnings before interest, tax, depreciation and amortization (EBITDA) of 66 million euros in 2018.
“The stake acquisition will allow Suning.com to strengthen its brand, as well as boosting its marketing capabilities, food quality control and supply chain management in the fast-moving sector,” Suning said in a filing to the Shenzhen stock exchange on Sunday.
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