Carrefour buys 75% stake in Alfa

The Jakarta Post, Jakarta

Giant retailer PT Carrefour Indonesia officially purchased a 75 percent stake in local company PT Alfa Retailindo worth Rp 674 billion (around US$71.3 million) on Monday.

Carrefour, which focuses mainly on the sale of food, purchased the shares from majority shareholders in Alfa, PT Sigmantara Alfindo, and Singapore-based Prime Horizon Pte. Ltd. at Rp 1,921 per share.

After the acquisition, 20 percent of Alfa's shares are still owned by Sigmantara and Prime Horizon, while the remaining five percent are held by the investing public.

"With this acquisition, Carrefour can strengthen its position as a leader in the sale of food in Indonesia," Carrefour president director Jean Noel Bironneau told a media conference.

The president commissioner of Alfa, Djoko Susanto, said the decision to collaborate with Carrefour was made in order to survive tight competition in the country's retail sector.

"Carrefour is the right partner as it has international skills in managing the supply chain and the distribution network," he said.

He said the company also wanted to focus more on its minimarket business.

Bironneau said while the acquisition was still being processed, Alfa would not open any new stores with the joint brand.

"Alfa has been a strong company, and we want to make it stronger. And for now we will only support the supply chain of Alfa," he said.

Ten-year-old Carrefour operates 37 retail outlets, while Alfa, which was established in Jakarta in 1989, operates 29 supermarket outlets throughout the country.

Alfa's sales dropped 9 percent to Rp 2.4 trillion during the first nine months of 2007, from Rp 2.63 trillion in the same period of 2006.

Carrefour recorded a 14.4 percent increase in sales in the first nine months of 2007 from $908 million in the same period of 2006.(ndr)