Carrefour Exiting China After Resolving Suning Dispute

On the evening of Aug. 11, Suning.com Group announced that it had reached a settlement agreement with Carrefour, thus concluding a long-running dispute between the two companies. Under the deal, Suning will make a one-time payment of 220 million Chinese yuan ($30.7 million) to fully settle the outstanding balance for a 16.67% equity acquisition, unpaid intellectual property fees and multiple arbitration claims. Upon completion of the payment, Suning will assume full ownership of Carrefour China.

As early as June 2019, during its rapid expansion period, Suning reached an agreement with Carrefour Group to acquire an 80% stake in Carrefour China for 4.8 billion yuan ($670 million). It was also agreed that if Carrefour Group transferred the remaining 20% stake to Suning within two years, Suning would be obliged to purchase it unconditionally. Just a few months prior to that deal, Suning had spent 2.7 billion yuan ($377 million) to acquire all 37 Wanda Department Store outlets. At that time, although Carrefour had reported nearly 30 billion yuan ($4.19 billion) in revenue in 2018, with 210 large hypermarkets and 24 convenience stores in China, its cumulative losses for 2017–2018 had already exceeded 1.6 billion yuan ($223 million).

In April 2022, Suning paid 204 million yuan ($28.5 million) to Carrefour Group, increasing its stake to 83.33%, but it was unable to settle the remaining balance. As tensions escalated, Carrefour initiated arbitration in Hong Kong, Paris and other locations, seeking the outstanding equity payment, overdue interest and arbitration costs — claims that totaled over 1 billion yuan ($140 million). Meanwhile, Carrefour China’s operations continued to decline, with cumulative losses exceeding 4.6 billion yuan ($642 million) from 2022 to 2024, placing a significant strain on Suning’s cash flow.

In June of this year, Suning sold four Carrefour subsidiaries located in Ningbo, Hangzhou, Zhuzhou and Shenyang for just one yuan ($0.14) each. At the time, all four companies had ceased operations and carried heavy debt burdens. Through this asset disposal, Suning was able to eliminate over 500 million yuan ($69.8 million) in debt obligations from its listed entity.

Carrefour Group entered the Chinese market in 1995, allowing it to witness three decades of dramatic transformation in China’s brick-and-mortar retail sector. With the official resolution of the dispute between Suning and Carrefour, the remaining Carrefour stores will be rebranded, marking the formal end of Carrefour’s operations in China.

Image: Suning.com Group

This article was based on a Chinese article. Read the original article.