Casino Group today announces the signature with Aldi France of a unilateral promise to purchase with a view to the sale of 3 warehouses and 567 stores in the Leader Price perimeter in metropolitan France, for an enterprise value of €735 million (including a €35 million earn-out, paid in the event of compliance with operational indicators during a transition period).
Casino has just announced the sale of 567 Leader Prince stores to the German discounter Aldi. No guarantee is provided by both companies The timing may seem surprising. In the midst of the coronavirus crisis, the Casino group has just announced this Friday morning the sale of its Leader Price stores to the German discounter, Aldi. Debt-laden French retailer Casino has agreed to sell 567 Leader Price stores in France, plus three warehouses, to German discount rival Aldi in a deal with an enterprise value of 735 million euros.
With this agreement, the transferred Leader Price stores will develop under the Aldi banner and will benefit from the commercial dynamics of Aldi France.
Casino Group will remain the owner of the Leader Price brand in order to continue to operate it under certain conditions agreed with Aldi, in France and internationally.
The sale will take place after consultation with employee representative bodies and subject to obtaining the authorization of the French Competition Authority.
The talks, which started after Aldi sent an expression of interest for Leader Price, are aimed at the submission of a binding offer, Casino said. No financial details were disclosed, but Les Echos. Casino Group announced on 20 March it had come to an agreement with Aldi France regarding the sale of 567 Leader Price stores and three warehouses. Stores to be converted to Aldi branding. The transferred stores will be converted to the Aldi banner.
The timing may seem surprising. In the midst of the coronavirus crisis, the Casino group has just announced this Friday morning the sale of its Leader Price stores to the German discounter, Aldi. 'From the moment a sales agreement was signed, we had a legal obligation to announce it immediately,' said the spokesperson for the group.
Started several months ago, negotiations have therefore come to a conclusion on the sale of a total of 567 Leader Price stores and three warehouses in mainland France for a total amount of 735 million euros. 'With this agreement, the transferred Leader Price stores will develop under the Aldi brand and will benefit from Aldi France's commercial momentum,' said the Casino press release.
It is 'a strong signal of optimism for the brand', welcomes a press release from the Aldi group, stating that this operation 'allows the brand to strengthen its presence on the French market'. Engaged in a showdown with its rival Lidl, which already has 1,500 stores and growth to make its competitors fade, Aldi, which has 868 stores in France, will now display a number of similar stores.
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Are jobs going to be cut?
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The transfer may still take several weeks since 'the completion of this sale will occur after consultation with employee representative bodies and subject to obtaining authorization from the Competition Authority,' said the press release.
5,500 employees will therefore fall under the umbrella of Aldi. No details have been provided for the moment on their future and the continuity of their activity even if the employees of Leader Price hope that we will rely on the staff in place. What about Leader Price stores located in the same commercial area as Aldi? According to a count made by the magazine LSA at the end of September, there were 143 cities where the two brands face each other.
A situation that worries employees, especially since neither of the two groups raises this sensitive issue of employment. “What will Aldi do in cities where there are two Aldi and two Leader Price for example? Questions Michel Rieux, the CGT central union representative of Distribution Casino France. 'We suspect that they will not keep all the stores, but when we questioned them, lately, they did not communicate about anything: will they enlarge certain stores, keep the employees or not, we are in the dark total, ”he said.
Casino group weighed down by colossal debt
The Leader Price brand does not disappear. The Casino group remains the owner and will even continue to operate 70 stores under this brand in France, only in areas far from those of Aldi. 'At the same time, the 95 Overseas and Italian Leader Prices also remain Leader Price,' said the spokesperson.
Threatened by an enormous debt, the Casino group, which had been placed in the safeguard procedure by justice in May 2019, obtained at the beginning of March a new period of 3 years, which runs until 2023. To clear its debt, Casino s 'is notably found new financial allies, but also separates from part of its empire, by refocusing on what works: the premium (Monoprix in particular).
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In parallel with the sale of Leader Price to Aldi, he would also negotiate the acquisition of 40 hypermarkets by Leclerc, after having already sold several hypermarkets to other brands (Super U, etc.)