UPDATE 1-Carrefour gives board seat to billionaire Arnault

(Adds further detail, background, executive comment)

By Sudip Kar-Gupta

PARIS, May 12 (Reuters) - Carrefour (CARR.PA: Quote, Profile, Research, Stock Buzz), the world's second-biggest hypermarket retailer, said on Monday that billionaire Bernard Arnault would join its supervisory board, as Arnault further increases his influence on the group.

Carrefour said Arnault would replace Robert Halley on the supervisory board. The Halley family has a key stake in Carrefour but has recently loosened its grip on the company.

Robert Halley will become an honorary president while Amaury de Seze will become chairman of the Carrefour supervisory board.

"The supervisory board is going to work with Jose Luis Duran, chairman of the management board, to extract all the potential within the group," de Seze said in a statement.

Arnault, 59, is one of France's richest men and is chairman and chief executive of luxury goods group LVMH (LVMH.PA: Quote, Profile, Research, Stock Buzz).

Over the last year, Arnault has teamed up with U.S. property company Colony Capital to build up a stake in Carrefour, which is the world's second-biggest hypermarket retailer by stock market value behind U.S. leader Wal-Mart (WMT.N: Quote, Profile, Research, Stock Buzz).

Arnault and Colony have formed a joint holding company called Blue Capital, which has gradually built up a 10.7 percent stake in Carrefour.