French retail group Carrefour has denied rumours it has been in talks with Hong Kong-based company China Resources about a potential tie-up in the Chinese retail scene.
Speculation about a deal between the two has been aired in Chinese and French media since August, but Carrefour has dismissed the rumours.
The most recent suggestion of a deal came from French newspaper Les Echos, which reported on Sunday Carrefour was looking at investing in some of China Resources’ joint venture projects to expand the retailer’s presence in the country, with a possibility of China Resources taking a stake in Carrefour. The Les Echos report did not cite its sources.
“We formally deny the information published by Les Echos,” a Carrefour spokeswoman said on Sunday.
Carrefour currently runs 208 stores in China. Responding to rumours of a sell-off in August, the company said it had full confidence in the Chinese market long-term, and aimed to pursue a strong expansion pace in the country.
Government-owned China Resources is one of the largest retailers on both the Chinese mainland and Hong Kong, where it operates the Vanguard supermarket chain. The company is expected to expand its retail operations in the next few years.
“China Resources will focus on growing scale in its retail business in the next few years,” Shanghai-based Sinopac Securities Asia analyst Vivian Liu told Bloomberg.
China Resources retail group posted a 35.1 per cent increase in net profit for the third quarter to HK$77m, but year-on-year earnings for the first nine months fell 0.5 per cent to HK$727m on the back of rising labour costs, reported the South China Morning Post.
