FRANCE – French multinational retailer, Carrefour has announced that it has agreed to sell the entire share capital of its logistics real estate property assets to property company Argan for 290 million euros (US$326 million).
The company said the divestment will contribute to its 2022 plan of divesting 500 million euros of non-strategic real estate assets.
Cargo Property Assets was founded in 2016 and owns about one-third of the Group’s distribution centers in France.
The company is 32% owned by Carrefour group, alongside co-investor partners and is dedicated to the Group’s logistics real estate in France.
The transaction is expected to complete by the end of 2019 and according to Carrefour, it would be based on valuation of the real estate assets held by Cargo Property Assets of 900 million euros.
The divestment is part of a five-year restructuring plan meant to boost group sales and profits.
Launched last year, the strategy involves the divestiture of €500 million of non-strategic real estate assets plus other initiatives to achieve productivity and competitiveness gains, deploy a simplifying organisation while promoting food safety.
The retailer has committed to make overall investments of €2 billion (US$2.25 billion) per year targeting to maintain the group’s assets and implement its transformation plan.
It also includes a cost reduction plan of € 2 billion on a full-year basis by 2020 involving optimization of direct purchasing and reduction of both logistics and structural costs.
To achieve productivity and competitiveness gains, Carrefour plans to reduce the number of ex-DIA stores by 273, citing difficulties in adapting to their catchment areas.
The Group also wants to accelerate the deployment of the cash & carry format by opening 20 Atacadão stores per year in Brazilas of 2018, including 5 hypermarket conversions this year.