French retailer Carrefour is not interested in making a major acquisition in
China in response to Wal-Mart's reported expansion plans, the retailer's chief
executive said Friday.
Carrefour could lose its top spot as China's largest foreign retailer if U.S.
giant Wal-Mart succeeds in buying Trust-Mart, which owns 100 supercenters in
China.
"We asked ourselves should we keep the emphasis on organic growth or take the
risk of doing a large acquisition with all the problems and challenges of
integration," chief executive officer Jose Luis Duran said. "We are more
interested in organic growth, and we will not deviate from that."
"Our priority is clearly to develop internally," Duran said. "To grow
externally, we have two conditions, one is a rational price and the second is to
ensure that we can integrate without endangering our existing base."
"In the case of Trust-Mart, these two conditions were not completely met,"
Duran said, while admitting that Carrefour was earlier interested in purchasing
the Trust-Mart chain.
Duran was speaking to reporters during a business visit to China with French
President Jacques Chirac.
Sources have said Wal-Mart is planning to buy Taiwan's Trust-Mart for US$1
billion, which would more than double its presence in the world's most populous
country.
Carrefour aims to open at least 20 hypermarkets, which sell food along with
household items, such as fridges and TVs, in China this year and beyond. It
opened its 84th hypermarket Saturday, which is its 7th in Beijing and 1,000th in
the world.
Carrefour, the world's second-largest retailer after Wal-Mart, was more
interested in tactical purchases of local retail chains, Duran said, citing but
not naming a chain of 14 stores in Wuhan and another chain in the country's
northeastern city of Harbin.
Of the nearly US$2 billion in Carrefour's global revenues in 2005, the
Chinese market only represented a modest 2 percent.
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