Eurofood: French giant Casino hooks up with Laurus - Food Retailing

France-based supermarket operator Casino has revealed its 2001 profits in line with its expectations, as well as news of plans to acquire a majority stake in struggling Dutch food retailer Laurus.

Casino has signed an agreement with Laurus and its banks, which includes plans for a major change in the shareholding and financial structure of Laurus. The French food retailer is purchasing a 37.6% stake in Laurus, with an option to increase this stake to 51% at any time within the next six years. Laurus' banks, ABN Amro, ING and Rabobank, will together hold 13.4% of the shareholding.

In total, a capital injection of some 400m [euro] will be pumped into Laurus, comprising of 200m [euro] from Casino, 130m [euro] from a public share offering, and 70m [euro] from the banks. The capital increase will be used to ease debt.

The deal also secures new credit lines for Laurus to the tune of 1.16bn [euro].

Laurus first hit problems some 18 months ago, when a restructuring programme, aimed at transforming the group's many different formats into a single fascia, backfired.

WORSENING SALES

The plan resulted in worsening sales and financial performances, prompting it and its banking creditors to seek the backing of a strategic partner.

With a market share of 25%, Laurus is the number-two food retailer in the Netherlands totalling about 4.2bn [euro] in sales with 856 stores.

Laurus is also present in Belgium where it generates sales of 645m [euro] with 454 stores, as well as in Spain where sales attain some 910m [euro] with 666 stores.

The 400m [euro] injection into Laurus will enable the Dutch firm to restructure and focus on its key formats. The tie up also gives Casino significant market share in the Netherlands, as well as further afield in Europe.

SALES RISE

French firm Casino, the number two retailer in France behind giants Carrefour, posted a 15.3% increase in its consolidated sales excluding VAT. Sales excluding VAT rose to 22bn [euro] from 19bn [euro].

Growth at comparable rates was 9.8%. Earnings before interest and tax EBIT rose by 30.8% to 853.6m [euro]. Net profit was 379.0m [euro] compared to 315m [euro] in 2000.

On the international front, business in the US and Thailand helped offset the difficulties in the Latin America region.