Casino Said to Discuss Merger of French Retail Arm With Teract

Casino Guichard-Perrachon SA is exploring a potential multibillion-dollar combination of its French retail operations with Teract SA, a challenger backed by billionaire Xavier Niel, people familiar with the matter said.

(Bloomberg) — Casino Guichard-Perrachon SA is exploring a potential multibillion-dollar combination of its French retail operations with Teract SA, a challenger backed by billionaire Xavier Niel, people familiar with the matter said.

Paris-listed Casino is in preliminary talks about a potential deal with Teract, the people said, asking not to be identified because the information is private. It plans to seek a majority stake in the combined business, according to one of the people.

Casino has a market capitalization of about €1.2 billion ($1.3 billion), while Teract is valued at €447 million. The companies may eventually seek a public listing for the merged entity if they decide to proceed with a transaction, the people said. Discussions are still at an early stage, and Casino could decide against a deal or pursue talks with another partner.

In June, Casino simplified its corporate structure in France, regrouping all its food retail labels in its home country under a single holding company. It operates brands such as Franprix and Monoprix, two convenience store chains with a strong presence in the Paris region. It’s been selling off assets in the past few years as it seeks to lower its debt pile.

The Betaville blog wrote on Tuesday about market rumors that Casino was considering merging some of its retail operations with another player such as Teract. A representative for Casino declined to comment, while a spokesperson for Teract didn’t immediately respond to requests for comment.

Teract traces its roots to a special purpose acquisition company formed by French retail entrepreneur Moez-Alexandre Zouari along with Niel, who made his money in the telecom sector, and banker Matthieu Pigasse. They merged their blank-check firm with InVivo Retail, owner of the Jardiland garden chain as well as Frais d’Ici food stores. Zouari has been a longtime Casino partner as he operates some Franprix and Monoprix franchises.

Casino said in 2018 it spurned an approach by Carrefour SA for a possible merger, and Chief Executive Officer Jean-Charles Naouri has ever since been resistant to letting go control of the company.

–With assistance from Dinesh Nair.

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