France's fifth largest food retailer, Auchan, has reiterated its determination to remain a family business and said it will not succumb to Wal-Mart, the world's leading retailer. US-based Wal-Mart has been moving into Europe in the last two or three years and now has significant holdings in Germany and the UK. The group is thought to be seeking acquisitions in the Netherlands or France, but Auchan is holding steady. Group president Gerard Mulliez turned down a FF100bn (??5.2bn) offer from the US giant last year and recently confirmed his stance.

One thing is certain - nobody will ever be able to launch a successful hostile takeover bid for Auchan. One of France's most secretive groups, it has never published its financial results and 85% of the shares in it are held by the Mulliez family. The remaining stake is held by employees, through the holding company ValAuchan. Auchan' s share price is established each year by a group of experts, and all employees are encouraged to buy shares in ValAuchan. Moreover, the 350 family members who hold stakes are not permitted to sell their shares outside the group, which is not listed on the stock exchange.

GOOD BUSINESS FIT WITH CASINO?

While recent statements by the Mulliez family are interpreted as sending a clear message of independence to Wal-Mart, they have apparently not rejected the possibility of merging with Casino. On paper, such a merger looks promising and could offer a real competitor to the new giant created by the alliance of Carrefour and Promodes (see Eurofood, 9 September 1999, p5). It would generate annual turnover of ??75bn. Auchan is strong in the North of France and operates a strong portfolio of hypermarkets in the Paris area, while Casino is the leader in the South of France and very active in the supermarket and hard discount sector in Paris. However, there is a serious question mark hanging over the willingness of Jean-Charles Naouri, head of Casino, to relinquish control of his group.

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