After being in China for 24 years, Carrefour sells its China business to Suning.com

The Chinese retailer has been on a buying spree this year.

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After being in China for 24 years, Carrefour sells its China business to Suning.com

Suning.com, one of China’s leading retailers with an online and brick-and-mortar presence, announced in a filing on Monday with the Shenzhen Stock Exchange that the company has entered into an agreement to buy an 80% stake in Carrefour China Holding N.V at RMB 4.8 billion (nearly USD 700 million). The deal will take place via its subsidiary Suning International.

Carrefour will continue to hold the remaining 20% of its China business.

This announcement is a departure from Carrefour’s plans in January 2018 to sell stakes to Tencent and supermarket company Yonghui.

Since Carrefour entered the Chinese mainland in 1995, it has opened 210 supermarkets, 24 convenience stores, and six warehouses in 22 provinces up to the end of March 2019, according to Suning.com’s filing.

In 2018, Carrefour China booked nearly RMB 30 billion (RMB 4.4 billion) in operational revenue, but made net losses of RMB 578 million (84 million), said Suning.com in the filing.

In the same period, Carrefour China also had a negative net asset which reached RMB 1.9 billion for its shareholders before this acquisition, said Suning.com, attributing this to the internet’s impact on brick-and-mortar retail.

Suning.com operates a network of over 8,881 stores in more than 700 cities in China. It runs the country’s third largest B2C e-commerce platform, said Carrefour, adding that “the strong complementarity between Carrefour China and Suning.com’s activities will accelerate the development of Carrefour China.”

Suning.com said the deal has been approved by its investors, but is subject to an antitrust probe by Chinese regulators.

The Chinese retailer announced in February that it would buy 37 department stores from commercial property group Wanda in China’s first- and second-tier cities, but did not disclose any financial details.