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Carrefour to Create Shopping Mall Group

The French retailer plans to buy 124 malls from Klépierre for $2.7 billion.

PARIS — Carrefour said Monday it had signed a memorandum of understanding with real estate investment firm Klépierre to buy 127 shopping malls in France, Spain and Italy for a total of 2 billion euros, or $2.7 billion at current exchange, as part of a plan to boost its European hypermarket business.

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The world’s second-largest retailer behind Wal-Mart Stores Inc. said it would create a company encompassing a total of 172 shopping malls adjoining its hypermarkets.

It will own a 42 percent stake in the venture, paying 100 million euros, or $136 million, in cash and contributing 45 malls in France worth 700 million euros, or $952 million, to the new company. Unidentified institutional investors are to hold the remaining 58 percent.

“With over 800,000 square meters of retail space, assets of 2.7 billion euros and a value-creating renovation and extension plan, the company will rank among the leading European shopping mall companies,” Carrefour stated.

The company will be financed through 1.8 billion euros, or $2.45 billion, in equity and 900 million euros, or $1.2 billion, in debt.

Carrefour plans to spend 100 million euros a year over five years on renovating and extending those sites with the strongest potential for growth, a spokeswoman for the group said.

The deal will bring Carrefour greater control of the sites around its hypermarkets as it battles to lure back customers against growing competition from specialists and online retailers.

The 172 malls — 57 in France, 63 in Spain and seven in Italy — have a combined gross annual rental income of around 180 million euros, or $245 million.

The transaction will be submitted for consultation to employee representative bodies and should close in the first half of 2014, pending final agreement between the parties and the approval of the relevant regulatory authorities.