Paris Four years ago, Czech billionaire Daniel Kretinsky took a minority stake in French supermarket giant Casino. Now he is supposed to save the heavily indebted group. Late on Monday evening, the company’s management decided to only negotiate a takeover with Kretinsky and his partners.
This means a revolution for the retail sector in France: For the first time, one of the traditional retail chains in the country could no longer be in French hands.
In the past, foreign interests had always been blocked, not least by political pressure from Paris.
Kretinsky’s ambitions, who made his fortune from coal and gas, which is estimated at ten billion euros, extend far beyond France. The 48-year-old investor is building a trading empire with the profits from the fossil energy business.
In Germany, he has expanded his power at the wholesaler Metro in recent years. There are also holdings in the French electronics chain Fnac Darty and the British supermarket operator Sainsbury’s. He also holds shares in the US shoe retailer Foot Locker.
Casino takeover would be Kretinsky’s biggest coup
Trade is “one of our investment axes,” Kretinsky told the French business newspaper “Les Echos” a few days ago. His philosophy is to invest in the basic needs of the population. “That’s true of energy, and that’s true of food, too.”
The traditional supermarket chain writes high losses.
(Photo: IMAGO/ABACAPRESS)
The proposed casino takeover is Kretinsky’s biggest coup to date, who has teamed up with French billionaire Marc Ladreit de Lacharrière’s investment firm Fimalac for the project. The retailer made sales of around 34 billion euros last year. The casino group employs a good 50,000 people in France and around 200,000 people worldwide.
However, Casino is also heavily indebted at 6.4 billion euros. Market shares in the highly competitive French retail sector have recently plummeted, and according to media reports, the group is currently posting a loss of 100 million euros every month.
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The plan, with which Kretinsky was able to convince the management and the major creditors, includes a capital injection of 1.2 billion euros. Overall, the debt burden is to be reduced by almost five billion euros.
“Kretinsky’s strategy is to deleverage Casino through negotiations with creditors and fresh capital,” says Olivier Salomon of consulting firm Alix Partners. The deal could be worthwhile for the investor from the Czech Republic, as the group is currently heavily undervalued.
Billionaire describes himself as a ‘Francophile’
“Casino has a high quality branch network,” explains Salomon. The group has many stores in inner-city locations and is also strongly represented in the greater Paris area. There would also be other well-known brands: In addition to the casino markets, the company also owns chains such as Monoprix and Franprix.
Kretinsky told Les Echos that he wasn’t just pursuing business interests with the casino takeover. “There’s also an emotional dimension: I’m a Francophile.” In his Czech homeland, the son of a computer science professor and a judge learned French at school and traveled to France on exchange programs.
Kretinsky later studied law in Dijon and worked briefly as a lawyer in his Czech hometown of Brno before making a name for himself in the investment industry with energy deals. In Germany, he bought up coal-fired power plants with his Energeticky a Prumyslovy Holding (EPH).
Kretinsky holds his trading interests through various holdings under the umbrella of his EP Group. The shares in Fnac Darty, Casino and Sainsbury’s are held by Vesa Equity Investment. He founded the EP Global Commerce for the 45 percent stake in the German wholesaler Metro.
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His long-standing business partner Patrik Tkac has a stake of less than 50 percent in both. Through the EP Group, Kretinsky also holds a 50 percent stake in the Spanish supermarket chain Grupo Eroski.
The Czech billionaire recently separated his energy holding company EPH from his other holdings under company law, clearly emphasizing his ambitions in the trading sector. Wholesalers and retailers with offline and online activities could quickly develop into a mainstay with similar economic power like the energy sector, the investor explained.
The complete takeover of Metro has so far failed
In Germany, his ambition to take over Metro completely failed for the time being due to the remaining major shareholders. So far, they have not been willing to give up their shares. In the meantime, however, Kretinsky has come to terms with the holding companies of the families of Metro founders Schmidt-Ruthenbeck and Beisheim and coordinates with them strategically.
Together they installed Steffen Greubel as CEO two years ago, who has successfully turned the company into a pure wholesaler with an increasing share of delivery business. Kretinsky is not a silent partner at Metro, but quite willing to have a say: he has gradually increased his stake to 45.6 percent and has had four members on the supervisory board since this year.
Kretinsky has a stake of over 40 percent in the German group.
Even if Kretinsky has delegated the management of his holdings to persons of trust, he is personally involved in many details. Before joining Metro, he spent about weeks dealing with the retail market and developed very clear ideas for the direction of the company.
With a view to his casino plans, he said to “Les Échos”: “It is easier to invest in a traditional industry such as food retail than in new technologies, where you have to be an expert.” The experience in retail is greater and allows ” an objective view of the market”.
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