MSN Money

India's Reliance eyes Carrefour stake

March 15, 2007

Reliance Industries is looking to buy a stake in France's Carrefour in a move that would catapult India's largest private sector group into the ranks of the world's top retailers.

Reliance was looking at the possibility of buying the 13 per cent stake held by the Halley family, Carrefour's largest shareholder, although talks had not yet been initiated, a person familiar with the situation said.

"If the opportunity [to buy the Halley stake] is available, we'd like to explore the opportunity and take it forward," said the person familiar with the situation.

The Halleys' stake in Carrefour, the world's second-largest retailer by sales, was last night worth nearly €5bn. They control 20 per cent of the group's voting rights thanks to a convention that allows longer-term investors to have a larger say in its affairs.

Carrefour said on Wednesday that it was not and had not been in talks with Reliance, neither about the latter taking a stake, nor about the creation of a joint venture.

Mukesh Ambani, Reliance chairman, is planning to spend more than $5bn to launch a network of hypermarkets, supermarkets and convenience stores across India over the next few years.

The person familiar with the situation said Carrefour's global supply chain could act as a conduit for Reliance to source products into India and also for the Indian group to sell its own products overseas as its planned agribusinesses got off the ground.

Reliance declined to comment on whether it was interested in the Halley stake.

Carrefour shares, which have already been buoyed by takeover speculation this year, rose 1.3 per cent to close at €53.29 on Wednesday, giving it a market capitalisation of €38bn.

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