Retail Holding acquires CDCI, the #2 supermarket player in Côte d’Ivoire

Retail Holding, which is Carrefour’s partner in Morocco has now taken complete ownership of CDCI. CDCI is the #2 grocery retail chain in Côte d’Ivoire, with a national network of retail and wholesale outlets. Founder Yasser Ezzedine has sold his 40% stake for an undisclosed amount.

The move follows the sale by investment company Amethis of its 25% share to Retail Holding, which it had held since 2014. CDCI operates 158 outlets across Côte d’Ivoire in the retail and wholesale channels with three banners: CDCI Gros (wholesale), CDCI Demi-Gros (cash and carry/discount) and King Cash (retail).

Retail Holding owns 51% of Label’Vie, which is Carrefour’s Moroccan partner and a major player in the Moroccan grocery retail sector. It is also the Moroccan franchisee for apparel retailer Kiabi, Virgin Megastore and Burger King. In August 2019, Retail Holding raised MAD600m ($62.5m) in a bond issue to increase its stake in CDCI.

It adds to more pressure on Prosuma, the Ivorian market leader, as CFAO has announced plans to open five new Carrefour stores in Côte d’Ivoire. The map above shows both CDCI and Prosuma stores, taken from Trendtype’s Retail Explorer interactive tool.

The interesting dynamic is how Carrefour’s close partnership with Retail Holding may influence events in Côte d’Ivoire down the line in terms of a sale of CDCI. We note that there had been rumours earlier in 2019 that CFAO was in talks to buy CDCI. Ivorian regulators are likely to look hard at any acquisition of CDCI by either CFAO or Carrefour but it makes strategic sense – all the more so given Carrefour’s desire to establish a significant footprint in Sub Saharan Africa.

We also believe that the pressure on Prosuma makes it more likely to sell its supermarket business while it can extract a premium for it. Its store estate needs investment. It will have to expand and modernise to meet the threat of an accomplished modern grocery retailer operating its main competitor. Realistically, Prosuma’s interests in non-grocery retail and FMCG distribution do not preclude an exit from grocery retail. Who could be likely suitors?

Firstly, we think any suitor is more likely to be a francophone company. Groupe Casino, one of Prosuma’s partners in Côte d’Ivoire is a possibility. However, we note that Casino has sold its interests in the Indian Ocean and is in the process of selling its discount brand, Leader Price. Auchan, the market leader in Senegal, is a strong option. Currently it has two stores in Mauritania but no other presence in sub Saharan Africa. Unlikely options could be other French retailers such as Super U or E. Leclerc (Super U, a cooperative, has franchised stores in francophone West Africa, but no track record of acquisition; E. Leclerc has been idly rumoured to be moving into West Africa for years).

Beyond that, the best options look more like:

  • An outside investor fund such as Actis, capable of modernising Prosuma’s operations and with an interest in retail in francophone Africa.
  • South African supermarket chain Shoprite. Shoprite overwhelmingly prefers to grow organically and tends to focus more on anglophone markets. But it has stores in both DRC and Angola a strong presence in Nigeria and a small network of stores in Ghana.
  • An established francophone emerging markets player such as Groupe Bernard Hayot (GBH). GBH operates a significant supermarket business and also operates in Côte d’Ivoire via its automobile distribution business Socida, acquired in 2017.