French retailer Casino is buying the Thai stores of rival Carrefour for 868 million euros ($1.2 billion), including debt, to step up the challenge to Britain's Tesco in the fast-growing south-east Asian country.
Casino said on November 16 the 42-store acquisition would help Big C Supercenter, in which Casino owns a 63 percent stake, to become co-market leader in Thailand, with an estimated turnover of about 2.4 billion euros for 2010.
International retailers are jockeying for position in emerging markets as they look for sources of growth outside maturing US and western European markets, though the cost of competing is often too much to justify widespread expansion.
Carrefour, which has exited eight countries over the past seven years, was the fifth-biggest operator in Thailand and said its growth prospects there did not fit in with its goal of focusing on countries where it can have a leading position.
Bernstein analyst Chris Hogbin said the price, at about 1.2 times net sales, appeared a little high, although that would depend on the value of the real estate assets being acquired.
Casino chief financial officer Antoine Giscard D'Estaing told analysts the price of the deal was consistent with equivalent transactions in the region.
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