Carrefour Sells Chile

Carrefour's new CEO is making major changes and focusing on areas where Carrefour can dominate. Yesterday they announced the sale of their Chile subsidiary see below from Business Week:-

Cencosud SA (CENCOSUD), Chile’s biggest retailer by sales, agreed to buy Carrefour SA (CA)’s Colombian unit for 2 billion euros ($2.6 billion) including debt, as it seeks to tap rising consumer spending across Latin America.

Carrefour, the world’s second-largest retailer, gained the most in almost two months in Paris trading as analysts applauded the transaction, which Jefferies International’s James Grzinic described today as “an incredible exit.”

The French retailer is cutting jobs and exiting overseas markets to generate cash and cut debt as part of a three-year turnaround plan formulated by Chief Executive Officer Georges Plassat. The exit from Colombia after 14 years will help Cencosud boost its food, home improvement and department store business with Carrefour’s 72 hypermarkets, 16 convenience stores and four cash-and-carry stores.

The deal “indicates Plassat is prepared to sell non-core assets and the strategy is on track,” said Caroline Gulliver, an analyst at Espirito Santo with a buy recommendation on the stock. “It’s a good price at 1.3 times sales.”

Carrefour shares rose as much as 6.6 percent to 18.48 euros, the steepest intraday advance since Aug. 30. The stock was trading up 5.7 percent at 18.33 euros at 9:20 a.m.