Turkish conglomerate Sabancı warns Carrefour to find solution

ISTANBUL - Hürriyet

CarrefourSA top executive Zafer Kurtul said Feb. 24 that Sabancı would start talks with the French retailer in order to increase its share in the retailer to a majority level. Hürriyet photo

Turkish conglomerate Sabancı Holding has given an ultimatum to its partner, retail giant Carrefour, to come up with a solution to the uncertainties over their joint company CarrefourSA, saying it will take legal action otherwise.

The disagreement between Sabancı Holding and CarrefourSA might be solved through the legal system, according to a recent statement by the head of Sabancı’s retail and insurance group, Haluk Dinçer, who said the company was not satisfied with Carrefour’s operations in Turkey over the last five years. Carrefour’s global value decreased from 30 billion euros to 15 billion euros with a 50 percent loss in the last five years. “We will defend our rights against [Carrefour’s] underperformance and violations. We will take necessary steps to protect our legal rights,” Dincer, also ex-chairman of CarrefourSA, said.

After new CEO Georges Plassat, appointed last year, Paris-based Carrefour began to give its operation in France privileges, Dinçer said, noting that it left Malaysia, Singapore, Colombia and Greece. Carrefour cannot leave Turkey, as it has greater potential than those countries, he said, claiming that it is avoiding admitting its failure.

Dinçer noted that he and three board members of CarrefourSA resigned from their posts in July because they had not received the necessary support and assistance from Carrefour. He said they had offered to hand over the administration to Carrefour or to purchase all the shares of Sabancı during that period.

Plassat told shareholders in June that he was considering whether to exit some markets due to financial constraints. Plassat warned that Carrefour would need to reduce debt while restoring power to local managers, adding that it might exit Turkey or Indonesia.

Third partner option

Dinçer stated that they were still open to other options, such as a third partner in CarrefourSA. However, he underlined that while retail is one of the strategic fields of the Sabancı Group, they would not insist on staying in this field with such a situation. “If the company is sold, we will look forward to new opportunities, evaluate the markets,” he said.

Meanwhile, CarrefourSA top executive Zafer Kurtul said Feb. 24 that Sabancı would start talks with the French retailer in order to increase its share in the retailer to a majority level.

“Food retail is an important sector; if we can reach majority shares in Carrefour we could consider organic or inorganic growth. We will start talks with Carrefour soon,” said Kurtul.

Currently a 52.2 percent share of the joint venture is owned by Carrefour and 33.8 percent is owned by Sabancı Holding. A total 2.2 percent of shares in CarrefourSA are traded on the Istanbul bourse.