Carrefour SA, the world's second-largest retailer, yesterday announced that it is taking over Tesco Stores (Taiwan) Co's six outlets and two development sites as part of an asset-swap deal with Tesco Plc in the UK valued at a total of 132 million euros (US$159 million).
In return, Carrefour will hand over its 11 outlets in the Czech Republic and 4 stores in Slovakia to the UK's biggest retailer at 189 million euros.
This is the first deal of its kind between two global retail groups. The swap reflects both companies' desire to focus on markets where they aim to become dominant players.
"It's hard to survive the fierce competition if you're not No. 1 or No. 2," Allan Tien (
"If you find yourself struggling hard to make headway in certain countries, why keep doing it? We're late in breaking into the Czech Republic and Slovakia, and Tesco faces the same situation in Taiwan. I think this new breakthrough will facilitate these two groups' healthy operations," he said.
The deal, which is currently pending approval by the nation's Fair Trade Commission, will boost Carrefour's market presence from 33 percent with 36 outlets nationwide to a promising 40 percent with 42 outlets, he said.
PHOTOS: YANG YA-MIN, TAIPEI TIMES
Tien promised that no job cuts will occur, as Carrefour Taiwan -- a joint venture between the company's Paris-based headquarters and Taiwan's Uni-President Enterprises Corp (統一企業) -- will accommodate all of its smaller rival's employees.
"As soon as the government approves the takeover, which might take around two months, we'll start replacing the store signs and product mix," which would mark the complete withdrawal of Tesco from the local market, he said.
Tesco chief financial officer Andrew Higginson said in an interview yesterday that the company's move into Taiwan was ill-timed, and its store openings were too slow.
The UK retailer entered the nation in 2000 with a relatively slow pace of store expansion compared with its stronger rivals, including Carrefour, which is still maintaining its policy of opening three to four stores in Taiwan every year.
"All the retailers have been spreading themselves too thinly abroad and now it's time for them to refocus on the areas where they're doing well," said Hilary Cook, director of investment strategy at Barclays Private Clients in London, which oversees the equivalent of about US$88 billion, including Tesco and Carrefour shares.
"Food retailing is all about economies of scale," he added.
Daisy Lee (
"Our operations and services will remain unchanged until the takeover procedure commences in several months. Consumers can still use their gift vouchers.
Carrefour, with about half of its 73 billion euros in annual sales coming from outside France, exited Mexico and Japan this year. Tesco, which is the biggest hypermarket operator in Slovakia, is bolstering its position in the country and neighboring Czech Republic.
Tesco's international sales climbed 17 percent at constant exchange rates in the 24 weeks ended Aug. 13. to ?4.2 billion pounds (US$7.4 billion). It makes about 30 percent of its sales overseas.
Higginson said Tesco had no plans to leave any other countries, nor for any other store-swap deals.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US