Casino, the French food retailer, has revised and extended its agreement with the Galeries Lafayette department store group concerning the city centre supermarket chain, Monoprix.
The two companies have a long history of working together, having first agreed to form a buying partnership in 1996. A year later, Casino took a 21.4 per cent stake in Monoprix at the time of its purchase of rival chain Prisunic, and in May 2000 both Casino and Galeries Lafayette agreed to share control of the Monoprix chain.
Monoprix is the leading city centre food retailer in France, with a turnover of €3.7 billion in 2002. The partnership between Galeries and Casino has already helped Monoprix substantially improve its operating profits, mainly through the pooling of resources in key areas such as marketing and purchasing.
This successful partnership will now be extended, with the two owners agreeing to withdraw Monoprix's shares from the stock exchange, buying them back at a price of €219 per share.
The two owners of Monoprix said that the extension of their agreement would allow the company not only to develop its business in France, but also on the international stage. "This agreement allows us not only to extend our successful partnership with Galeries Lafayette but also to set the scene for a possible capital increase at Monoprix," said Casino's Christian Couvreux.
"This fascia represents a key part of Casino's multiformat strategy and will help Casino continue on its path to profitable growth."
Philippe Houzé of Galeries Lafayette, who is also chairman of Monoprix, said that the deal would help increase the net value of the company's stake in Monoprix, as well as allowing Galeries to continue to play a part in the development of the successful city centre format.