Thursday, November 1, 2012

So it's confirmed AEON buying Carrefour Malaysia

News today, AEON (don't know which yet, but the news is saying AEON Ltd, Japan) is buying Carrefour's Malaysian operations for Euro250 million (almost RM1 billion) lock stock and barrel (which includes the debt). I do not see Carrefour Malaysia having much debt though.

Contrary to some of the analysts reports, I doubt AEON will be operating a hypermart but rather supermart and mall. That's my speculation as AEON is better off operating malls and supermarts being its expertise.

On another note, whether it is AEON Japan buying or it using AEON Malaysia's balance sheet to buy, I see the purchase to be merged up with AEON Malaysia's operations. No sane management would be managing and having a structure which is separate from one another in terms of holding structure.

In fact, AEON Malaysia's balance sheet is strong enough to absorb the operations almost immediately. This is premature, but I am even confident of it not needing to raise additional cash from rights issuance or private placements. But any of these options may be possible as well so as not to burden the balance sheet too much.

If anyone is interested, in the longer term or even shorter term, AEON Credit would benefit from this immediately as compared to AEON Malaysia itself.

I nevertheless sees it as positive for both AEON Malaysia and AEON Credit despite reports that there are overlapping in locations.

AEON Credit would be able to immediately increase its reach while AEON Malaysia (the supermart and mall) tasks would be trickier - i.e. turning around a hypermart. Nevertheless, the move is good for an immediate increase in outlets as well as doubling its reach. The business of supermarket is about reach, size, logistics and strong balance sheet.

My other articles on AEON:

AEON Credit: Perhaps this other AEON is even better

AEON: Using other people's money

AEON buying Carrefour would be positive for AEON Malaysia


khengsiong said...

News say that Carrefour will be re-branded Aeon Big. Meaning that it will be different from normal Aeon.

felicity said...

thanks time to sell