May 14, 2019 / 9:08 AM / 13 days ago

UPDATE 1-French group Auchan Retail sells its Italian subsidiary to Conad

(Adds Auchan details)

PARIS, May 14 (Reuters) - French supermarket group Auchan Retail has agreed to sell almost all the activities of its loss-making Auchan Retail Italia arm to Conad, the Italian co-operative retail group.

The French retailer had said in March that it was conducting a review of its loss-making markets, such as Italy and Vietnam where it has faced tough market conditions.

When asked about the financial terms of the deal, an Auchan spokesman said: “The business was in great difficulties. We are leaving to Conad a financial situation that will allow it to succeed with its acquisition project.”

With around 1,600 stores in Italy, Auchan Retail generated some 3.6 billion euros ($4.1 billion) in revenue in Italy last year.

In 2017, Auchan launched a three-year plan to modernise its hypermarkets, accelerate online expansion and focus more on smaller convenience stores. It already closed 23 loss-making stores in Italy last year.

The Italian disposal will be finalised following approval from the Italian competition authority, and the sale does not apply to the 33 non-franchised supermarkets located in Sicily or the 50 Lillapois drugstores.

$1 = 0.8898 euros Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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