CHINA – Chinese retail giant, Suning has completed acquisition of 80% stake in French supermarket Carrefour’s China business in an all cash transaction worth 4.8 billion yuan (US$670 million).

The deal was announced in June this year in a move that the Nanjing-based Suning said would help the retailer to tap online food sales and expand its physical presence.

“This is a key step in Suning’s smart retail plan. Carrefour’s FMCG experience and supply chain capabilities can be integrated with Suning’s full-scenario retail model, solid logistics network and advanced technology,” said Zhang Jindong, chairman of Suning Holdings Group.

“With our smart retail capabilities, Suning can transform the Carrefour stores into fully integrated online-and-offline supermarkets to meet evolving consumer demands.

“The comprehensive digitization of retail elements is the first priority of traditional retail industry facing future development.”

Following the transaction, with Tian Rui, Vice President of Suning has been appointed as the new chief executive of Carrefour China business. Moving forward, Suning has unveiled a new business development plan for Carrefour China.

Zhang Jindong confirmed that Carrefour China will open 300 new stores in China’s tier 1-3 cities over the next five years.

He also revealed that Carrefour’s Chinese brand and operation will remain independent, while benefiting from Suning’s retail cloud model, open technology, logistics and supply chain capabilities to better access the lower tier markets.

In the future, Carrefour stores in China will also incorporate other Suning assets. Ultimately, Suning seeks to create a one-stop community center, integrating goods, services, experience and leisure.

The transaction represents the latest acquisition by Suning following those of Dia China and Wanda Department Stores, as Sunning continues to accelerate the expansion of its brick-and-mortar portfolio for its full-scenario retail model.

Analysts are positive about the synergies brought by the acquisition, which will further enhance Suning’s competitiveness by accelerating the company’s development in the FMCG category, enriching its smart retail portfolio, and helping reduce procurement and logistics costs.

With a presence in China dating back to 24 years, Carrefour China operates a network of 210 hypermarkets and 24 convenience stores, covering 22 provinces and 51 large and medium-sized cities. In 2018, it generated net sales of nearly RMB 30 billion (US$4.21bn).