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The Wall Street Journal this morning reports on rampant speculation that France-based Carrefour, the world’s second largest retailer, could be an acquisition target and if sold could fetch as much as $50 billion (US).

The Journal writes that “Groupe Arnault, the personal investment company of Bernard Arnault, chief executive of LVMH Moët Hennessy Louis Vuitton SA, and Colony Capital, the U.S. private-equity fund that invests in real estate, said they acquired a 9.1% stake in Carrefour. The activist investors have made a bet of about $5 billion in the company… Separately, Carrefour supervisory board chairman and retail veteran Luc Vandevelde resigned Wednesday and was succeeded by Robert Halley, a member of the Halley family that owns a 13% stake in Carrefour, the company said.”

The potential move on Carrefour is seen as being part of a broader trend, which has J. Sainsbury in the UK also being a potential target.

And, according to the Journal, “Driving the shopping trend are private-equity firms, investment partnerships flush with cash and easy access to debt, looking to purchase companies as big as possible. Retailing in Europe is particularly attractive now for several factors: Several big chains are in nascent turnarounds, so potential buyers see it as a good time to come in to reap the benefits of the upside. Consumers are starting to spend in the continent's major economies.”

The Journal writes that Wal-Mart is considered to be one possible bidder for Carrefour.
KC's View:
One MNB user pointed out to us recently that it is unlikely that the French government would allow Carrefour to be acquired by a non-French firm. That certainly was the reaction recently when it looked like Group Danone might be acquired by an outside company, and there is no reason to think the reaction wouldn’t be identical if Carrefour comes into play.