Abstract

The case covers Fnac’s acquisition of Darty. Fnac is a French retailer distributing cultural and electronic products, while Darty is a French electrical retail chain specialized in the sale of household electrical goods, computer equipment and multimedia products. In September 2015, Fnac caused a sensation when it announced its intention to acquire Darty. Depicted by the press as a “surprise wedding proposal”, the operation was mainly a defensive alliance aiming to counter the growing competition of e-commerce. In November, Fnac thought the deal was settled. The company would acquire Darty for 864 million euros. However, in March 2016 a released announced that a new buyer had made a bigger offer for Darty. Steinhoff, a colossus South African holding company, had made an unexpected entrance in the negotiation. After unforeseen developments and an intense bidding war on the stock exchange, Fnac succeeded in acquiring Darty for €1.16 billion in April 2016. Nevertheless, there were pending questions and challenges for Fnac regarding the acquisition. Fnac now had to build a strong group combining two emblematic competitors. Will the Group succeed in reaching the €130 million synergies it had announced before the acquisition and therefore keep investors’ trust? Will it be able to create a French leader and face the growing competition from online businesses such as Amazon? The case main objective is to question the rationale of the acquisition and analyze the situation of the retail industry. It can be used for a Mergers & Acquisitions class, as well as a Strategic Management or Corporate Finance class.

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