French retail giant Carrefour SA is selling its stake in a leading supermarket chain in Greece because of economic uncertainty in the country, which faces elections this weekend that may determine whether it falls out of the euro currency union.
Carrefour announced in a statement Friday, just two days before the election, that Greek group Marinopoulos will buy its stake in the two companies' joint venture, Carrefour Marinopoulos.
The Carrefour Marinopoulos supermarkets are among the most popular in Greece, with branches in most parts of Athens and other cities. But business in Greece has come under pressure as the country wallows in a fifth year of recession due to harsh government austerity cuts that have drastically reduced many Greeks' disposable income.
Friday's statement cited "the challenges of Greece's prevailing economic environment" and said the sale will result in a charge of $220 million to the Carrefour group. As a result of the deal, the Marinopoulos group will manage the venture's supermarkets in Greece, Cyprus and in Balkan nations.
The president of Marinopoulos Brothers SA, Leonidas Marinopoulos, said in the statement that the sale would give the supermarket venture "the means and flexibility to refine its business model." He didn't elaborate, including on whether there would be store closures or job cuts.
Pending authorization by antitrust authorities, Carrefour expects the deal to be completed in the next few weeks.
Carrefour, Europe's biggest retailer by revenue, has been growing in Latin America but is suffering in its core market in Europe. The debt crisis that started in Greece has spread to other eurozone countries, crippling sales and making consumers more cautious across the continent. A new CEO, Georges Plassat, took over at Carrefour last month as the company works on a turnaround plan.