Carrefour or “CarFur”? The gloomy scenario of a well-known economist after the sale of the French chain of stores

Professor Cristian Păun does not like the exit of the French from Carrefour and has reservations about the Dedeman holding's ability to manage this huge business.

The French from Carrefour sold their business in Romania. PHOTO: Shutterstock

Professor at the Bucharest Academy of Economic Studies, Cristian Păun addresses a controversial topic, because it touches the sensitive chord of economic nationalism versus the stability of large global corporations. It is about the takeover of Carrefour Romania by the Pavăl brothers' company, a topic that caused a stir. In fact, the topic was also addressed in the online environment, where experts in the economy to people who do not even have basic knowledge in this field expressed themselves.

“Macron is leaving us”

“With the departure of Carrefour from Romania, a Romanian company (with foreign capital) is replaced by another Romanian company (with Romanian capital). “Macron” leaves us, he goes, he screams and damages our sovereigns. Ours are not progressive, they do not vaccinate us, they do not put a mask on us…“, is the irony of Cristian Păun.

The bad news, in the professor's view, is that a huge company like Carrefour, one of the leaders of European and global trade, has chosen to leave Romania, and in its place is taken by an SRL labeled by him as “dubious and risky”.

“Actually, through the takeover, a group with a capitalization of around 10 billion euros, listed on the stock exchange, leaves. It leaves the place of a dubious and risky SRL, with tiny capital and spread over many, of around 1 billion euros diversified in investments on the stock market, real estate, retail. The SRL has limited liability, if something happens to the business, the shareholders are covered”claims Paun.

He argues this statement by the fact that the firm of the Pavăl brothers would not be the most solid and would present a series of vulnerabilities, as follows:

“They have limited liability. The LLC behind the new business is not listed on the stock exchange, it has not even listed bonds on the stock exchange. It is fully owned by the two brothers. It is mainly financed by bank loans (expensive and limited in amount and maturity compared to the capital market).”

Instead, the French at Carrefour are in a much better position, being a recognized brand and a huge company listed on European stock exchanges.

“On the other hand, Carrefour is listed on Euronext. 41% of its shares are “free”. Romanians can become “Pavăl brothers” in a few minutes if they want and if they don't consume everything they earn, month by month. Will they? Don't they consume all they have? They are one click away from becoming little “pavăli” too. Like many others who do. This aspect is very important. It is also one of the reasons why Carrefour is leaving us”adds Cristian Păun.

Professor Paun is convinced that prices will rise

The fact that from now on Carrefour Romania becomes a Romanian company will not automatically make domestic goods predominant, nor will it have an effect on the quality of the products.

“Yes, it is clear that after Dedeman's takeover of Carrefour we will see more Romanian parsley on the shelf, prices close to zero. You will find it difficult to find French or Italian products among the Romanian products that will weigh down the shelves of the new CarFur. It is clear that we will have only Romanian employees among the 17,000 employees who will be paid royally, well above the maximum salary in Romania. It is clear that no store in the Carrefour chain will be closed, they will be open new ones”continue the ironies of professor Cristian Păun.

In his opinion, it won't be long before the new company's losses are reflected in the price of products on the shelf.

“I can't wait for the moment when the losses of the financial vehicle with limited liability, from screws, real estate or the capital market, will be included in the commercial addition from the bananas and avocados of Dăbuleni. Ceiling of ciolaci. But that's how the Romanian is. He thinks that the whole world has something to do with him. That the solution is not to open up to the world, but to deal with what you don't have, here. That the solution is better to give yourself to adventurers, just for that they are “yours”… In principle, we have everything: water, horses and lots of straw… Out with the globalists in the country, right?“, concludes Cristian Păun on the same note.

Pavăl Holding, the company of the two brothers who also own the Dedeman chain, took many by surprise with the announcement of the takeover of Carrefour. There are voices that believe that the acquisition of Carrefour's operations represents too big a “hat” for the Romanian company, and Professor Cristian Păun is of course one of those who view with reservations the exit of the French from Carrefour and the takeover of the shares in the country by a Romanian company.

The acquisition of Carrefour Romania is currently the largest acquisition transaction of a business developed by a multinational by a Romanian holding company.