Spain's Dia agrees to sell French unit to Carrefour
MADRID (Reuters) - Spain's Dia (DIDA.MC), the world's third-largest discount supermarkets group, said on Friday it had reached a preliminary deal to sell its loss-making Dia France unit to Carrefour (CARR.PA).
The deal values Dia France, which operates more than 800 stores, at 600 million euros ($814 million) including debt, the two companies said in separate statements.
France's Carrefour previously owned Dia but spun it off in 2011 when the company was listed on the Spanish stock exchange.
Dia has done well in its home market but faced tough going in France, where discounters compete with hypermarkets which have been slashing prices to lure shoppers in difficult economic times.
In France, the market share of discounters has slipped to 12.2 percent in 2013 from a 2009 peak of 14.9 percent, according to Kantar WorldPanel data. Dia's French market share was 1.6 percent last year.
Dia made a net loss of 18 million euros ($25 million) in France last year and unions have voiced concern it might close its least profitable stores, around 200 of them, putting 1,500 jobs at risk.
Carrefour said completion of the transaction was subject to the signing of final agreements following consultations with Dia France's employee representative bodies and to the approval of the relevant antitrust authorities.
The purchase could raise competition issues as Dia has a strong presence in the Paris area and in southeastern France.
Analysts also questioned the rationale for Carrefour, which does not operate deep-discount stores, to expand into a format which has been struggling in France.
But the retailer said the acquisition would boost its development.
"This transaction would contribute to the growth of Carrefour's multiformat store network in its domestic market and would allow Carrefour to best serve its customers by offering services tailored to the evolution of their consumption habits," it said in a statement.
Other French retailers Casino (CASP.PA) and Systeme U have expressed interest in Dia's French assets in recent weeks.
(Reporting by Julien Toyer; editing by Keiron Henderson)