Cession Leader Price Casino

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Debt-laden French retailer Casino has agreed to sell 567 Leader Price stores in France, plus three warehouses, to German discount rival Aldi in a deal with an enterprise value of 735. Casino group weighed down by colossal debt. The Leader Price brand does not disappear. The Casino group remains the owner and will even continue to operate 70 stores under this brand in France, only in areas far from those of Aldi. 'At the same time, the 95 Overseas and Italian Leader Prices also remain Leader Price,' said the spokesperson.

Casino Group completed the sale to ALDI France of 545 Leader Price stores, 2 Casino supermarkets and 3 warehouses

Paris, 30th November 2020,

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Casino group has completed the sale to ALDI France of 545 Leader Price stores, 2 Casino supermarkets and 3 warehouses, for an enterprise value of 717 million euros (including an earn-out of up to €35 million).

After taking into account €34 million of net liabilities transferred with the stores, disposal proceeds reach €683 million of which (i) €648 million received today, and (ii) up to €35 million earn-out which will be paid in the event of compliance with certain operational indicators during a transition period.

Furthermore, Casino group may sell additional Leader Price stores in the short term to ALDI, for an amount of up to €11 million.

The agreement includes a transition period, running throughout 2021, during which the Casino group will manage the day-to-day operations until the stores are progressively converted to the ALDI banner.

Casino group remains the owner of the Leader Price brand and will continue to operate it in France and internationally, under certain conditions agreed with ALDI. The Group will keep its profitable wholesale activity for 200 Leader Price franchise stores, and external or internal clients (Franprix, Casino Géant and Casino supermarkets).

This sale follows information and consultation with the employee representative bodies, and the approval of the French Competition Authority which was provided on November 17th, 2020. It brings the total amount of completed non-strategic assets disposals to €2.8 billion since July 2018.

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Jean-Charles Naouri, Casino group’s Chairman and CEO, said: “I want to thank all of our employees in stores and warehouses for their work and commitment, and I wish them every success in their future activities within ALDI group. The sale of Leader Price to ALDI a major player in the discount retail segment, is fully in line with the Group’s transformation plan which was launched in 2018. Casino group will now fully focus on its most buoyant formats, e-commerce, premium and convenience, and on its new high-growth energy and data businesses.”

Disclaimer

This press release was prepared solely for information purposes, and should not be construed as a solicitation or an offer to buy or sell securities or related financial instruments. Likewise, it does not provide and should not be treated as providing investment advice. It has no connection with the specific investment objectives, financial situation or needs of any receiver. No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgement. All the opinions expressed herein are subject to change without notice.


ANALYST AND INVESTOR CONTACTS
Lionel BENCHIMOL – +33 (0)1 53 65 64 17
lbenchimol@groupe-casino.fr
or

+33 (0)1 53 65 24 17
IR_Casino@groupe-casino.fr

PRESS CONTACTS
CasinoGroup – Direction of Communication
Stéphanie ABADIE - sabadie@groupe-casino.fr - +33 (0)6 26 27 37 05

or

+33(0)1 53 65 24 78 - directiondelacommunication@groupe-casino.fr

Agence IMAGE 7
Karine ALLOUIS - +33(0)1 53 70 74 84 - kallouis@image7.fr
Franck PASQUIER – Tel : +33 (0)1 53 70 74 91 - fpasquier@image7.fr

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The timing may seem surprising. In the midst of the coronavirus crisis, the Casino group has just announced this Friday morning the sale of its Leader Price stores to the German discounter, Aldi. 'From the moment a sales agreement was signed, we had a legal obligation to announce it immediately,' said the spokesperson for the group.

Started several months ago, negotiations have therefore come to a conclusion on the sale of a total of 567 Leader Price stores and three warehouses in mainland France for a total amount of 735 million euros. 'With this agreement, the transferred Leader Price stores will develop under the Aldi brand and will benefit from Aldi France's commercial momentum,' said the Casino press release.

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Price

It is 'a strong signal of optimism for the brand', welcomes a press release from the Aldi group, stating that this operation 'allows the brand to strengthen its presence on the French market'. Engaged in a showdown with its rival Lidl, which already has 1,500 stores and growth to make its competitors fade, Aldi, which has 868 stores in France, will now display a number of similar stores.

Are jobs going to be cut?

The transfer may still take several weeks since 'the completion of this sale will occur after consultation with employee representative bodies and subject to obtaining authorization from the Competition Authority,' said the press release.

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5,500 employees will therefore fall under the umbrella of Aldi. No details have been provided for the moment on their future and the continuity of their activity even if the employees of Leader Price hope that we will rely on the staff in place. What about Leader Price stores located in the same commercial area as Aldi? According to a count made by the magazine LSA at the end of September, there were 143 cities where the two brands face each other.

A situation that worries employees, especially since neither of the two groups raises this sensitive issue of employment. “What will Aldi do in cities where there are two Aldi and two Leader Price for example? Questions Michel Rieux, the CGT central union representative of Distribution Casino France. 'We suspect that they will not keep all the stores, but when we questioned them, lately, they did not communicate about anything: will they enlarge certain stores, keep the employees or not, we are in the dark total, ”he said.

Casino group weighed down by colossal debt

The Leader Price brand does not disappear. The Casino group remains the owner and will even continue to operate 70 stores under this brand in France, only in areas far from those of Aldi. 'At the same time, the 95 Overseas and Italian Leader Prices also remain Leader Price,' said the spokesperson.

Threatened by an enormous debt, the Casino group, which had been placed in the safeguard procedure by justice in May 2019, obtained at the beginning of March a new period of 3 years, which runs until 2023. To clear its debt, Casino s 'is notably found new financial allies, but also separates from part of its empire, by refocusing on what works: the premium (Monoprix in particular).

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In parallel with the sale of Leader Price to Aldi, he would also negotiate the acquisition of 40 hypermarkets by Leclerc, after having already sold several hypermarkets to other brands (Super U, etc.)