Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News
Sponsored By
CARREFOUR, PROMOTES MERGER PROBED
PARIS -- An investigation has been launched into whether insider trading and fraudulent activities were undertaken in the days leading up to the announcement of the merger between French retailers Carrefour and Promodes, judicial officials revealed.The Parquet de Paris began its investigation Aug. 8, officials said, following a recommendation in late July by the Commission des Operations de Bourse.A
August 28, 2000
2 Min Read
ROBERT MURPHY
PARIS -- An investigation has been launched into whether insider trading and fraudulent activities were undertaken in the days leading up to the announcement of the merger between French retailers Carrefour and Promodes, judicial officials revealed.
The Parquet de Paris began its investigation Aug. 8, officials said, following a recommendation in late July by the Commission des Operations de Bourse.
A spokesman for Carrefour declined to comment on the investigation, but said the firm was confident it would not be adversely affected by a ruling.
Although further details were not immediately available, it is widely believed the inquiry will focus on who was responsible for a leak made to the French press days before the deal was announced Monday, Aug. 30, 1999.
As investors caught wind of the merger, Promodes shares rose 6.71% to finish Friday, Aug. 27, at $637.
According to terms of the deal, Carrefour acquired Promodes Aug. 31 in a friendly stock swap, which paid a 20% premium on Promodes' closing price the previous Friday. The deal valued Promodes at $16.7 billion. The transaction was completed in January.
With the acquisition, Carrefour became the world's second-largest retailer, behind U.S. giant, Wal-Mart. The new group has more than 8,800 stores in 26 countries, including 3,200 discount stores, 680 hypermarkets and 2,600 supermarkets.
At the time, analysts said the deal was partly designed to pre-empt Wal-Mart's aggressive acquisition strategy in Europe.
Besides Europe, where it is the largest retailer, the merger also bolstered Carrefour's position in South America, where it has the top spot in Argentina and Brazil, and in Asia, where it is the market leader in Taiwan and Indonesia.
Meanwhile, the French press reported last week that Continent supermarkets have been reflagged as Carrefour. This was one of the final steps in the acquisition process, according to the Dow Jones International News Service.
All prices are translated from the euro at the current exchange rate.
You May Also Like
