France’s regulator clears Intermarché’s acquisition of Casino stores with conditions

France’s competition regulator, Autorité de la Concurrence, has approved Intermarché’s acquisition of 200 food retail stores from Casino Group. The decision, announced on Thursday, comes with a significant stipulation: Intermarché must sell 11 stores to other distributors to address concerns about reduced market competition.

The regulator underscored the importance of maintaining a competitive landscape in the food retail sector. It expressed concerns that the deal, without corrective measures, could result in higher prices and fewer choices for consumers in certain regions. Intermarché, a major player under the ownership of Groupement Les Mousquetaires, agreed to comply with the condition to secure approval.

This acquisition forms part of Casino Group’s broader strategy to stabilise its financial position amid mounting debt. Earlier this year, the embattled retailer reached agreements with Auchan Retail and Groupement Les Mousquetaires to sell a combined 288 hypermarkets and supermarkets for up to €1.35 billion. The transaction was valued on an enterprise basis, inclusive of debt.

Casino has been pursuing asset sales as a lifeline to sustain its operations. In recent months, the company disclosed that it had transferred 425 stores to competitors since September 2023. These moves are part of a comprehensive restructuring plan aimed at sharpening its focus on its core urban brands, Monoprix and Franprix, while shedding non-core assets.

For Intermarché, the acquisition represents an aggressive expansion effort. By adding these 200 stores to its portfolio, the company significantly strengthens its foothold in the French retail market. However, the mandate to divest 11 locations highlights the delicate balance regulators must strike between fostering industry growth and safeguarding consumer interests.

The competition authority emphasised that the divested stores should be sold to capable operators who can sustain their viability. This ensures that local markets maintain healthy competition and continue to offer diverse retail options. The Autorité de la Concurrence will oversee the process to ensure compliance with the divestiture requirement and to avoid any loopholes that could undermine the deal’s competitive integrity.

Casino’s financial troubles have amplified the urgency of its restructuring plans. Facing intense competition and declining profitability, the retailer has turned to strategic asset disposals as a means to stabilise its operations. The agreement with Intermarché and Auchan is pivotal in this regard, but the success of these measures hinges on the seamless execution of regulatory conditions and operational transitions.

Analysts suggest that this acquisition reflects the broader trend of consolidation in the French retail sector. With economic pressures mounting and consumer behaviours shifting, companies are seeking economies of scale and increased market penetration to sustain their growth.

As the deal moves forward, stakeholders will closely watch its impact on market dynamics. While Intermarché stands to gain a larger share of the retail market, the mandated divestitures are a reminder of the regulators’ role in balancing corporate ambitions with the need to protect consumer welfare.