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February 2016

M&A Retail & Consumer in France2015 overview and 2016 prospects

Contents

2015 - Mega deals are back 1

2015 - Large deals reshape global Retail & Consumer landscape 3

Retail & Consumer M&A involving French players 6

Food Industry: “what’s on the menu” 7

Stores war: the retailers strike back 10

Apparel play with big boys 12

Specialized retail: international and reorganisation 13

Luxury and Wine & Spirits 14

Private equity trends 16

Conclusion Perspectives 2016 18

PwC | 1

Some US$4.700bn in mergers and acquisitions have been announced in 2015, the highest level since 1980, when Thomson Reuters started measuring the market.

While the number of all M&A activity remained stable between 2014 and 2015, we observed a significant 51% increase in transactions over US5bn. Indeed, the activity in 2015 was driven by “Mega-deals”. No less than 69 operations exceeded US$10bn each, of these 10 mega-operations exceeded US$50bn, including 2 entering the top 10 ever largest deals in history. The prize goes to the merger of giants Pfizer acquiring Allergan Health for US$160bn. Second place of the podium, in the food sector, the acquisition by the Belgian brewer ABInbev of its British rival SABMiller, for nearly US$ 120bn.

Overall, the health sector leads with 14% in value for a total of US$664.4bn, up 71% from 2014, followed by High tech, Energy and Industry, including Consumer goods. Retail deals remain fairly local.

141 “Mega Deals” over US$5bn account for 51% of overall M&A value, the highest percentage and number of mega deals on record

America dominated the market this year, with a total volume estimated at US$ 2 319bn against US$880bn in Europe and US$1.046bn in Asia (coming second, ahead of Europe, for the first time) in 2015.

2015 - Mega deals are back

Source: Thomson Reuters

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US and Asia Pacific M&A surpass all-time annual records, accounting once combined for 73% of worldwide deal making

Source: Thomson Reuters

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2 | M&A in Retail & Consumer in France

… but France is against the tide

According to data from Thomson Reuters, the Hexagon goes against the tide. Unlike the world record observed in 2015, transactions in France across all sectors were down by -30% to US$160.8bn (€147.21bn).

While we observed a relative underperformance in transactions in the domestic market, French companies have been more on the front foot than in the past, engaging in acquisitions of foreign operations, especially outside Europe.

Acquisitions of foreign companies by French groups have grown this year by 26% to US$ 64.1bn (€58.71bn).

Due to the decline in their markets, emerging economies are no longer the panacea. Companies are turning increasingly to the United States to diversify their international business.

PwC | 3

Whilst the Retail & Consumer M&A market globally was not the most dynamic sector, American Consumer Goods players kept their voracity and completed the largest mega deals in 2015.

Portfolio reorganization continues:

In the absence of large growth avenues for mature brands, retail and consumer products companies are focused on portfolio optimization as a critical aspect of their strategy. They are shedding non-core assets to free cash in order to strategically deploy capital to more high-value and growth initiatives.

Three mega deals in the Retail & Consumer sector illustrate this trend: i) the merger between Kraft and Heinz in the USA. The transaction creates the third-largest food and beverage company in North America and the 5th largest in the world with an unparalleled portfolio of iconic brands. ii) In cosmetics, Coty, the US maker of Calvin Klein and Chloe perfume, announced its acquisition of a first 48% of Procter & Gamble’s perfume, hair care and make-up businesses for US$12.5bn, the biggest cosmetics merger in recent history.

This transaction, which follows Coty’s acquisition of Bourjois from Chanel in 2014 instantly placed Coty as one of the world’s largest beauty companies, still far behind L’Oréal and Henkel. iii) Finally Japan Tobacco added another string to its bow by acquiring the Natural American Spirit cigarette brand outside of the USA from Reynolds cigarette group, for US$5bn. Japan Tobacco explains the operation by its interest in the “brand positioning of Natural American Spirit” as the only high-end cigarette without additives.

2015 - Large deals reshape global Retail & Consumer landscape

Contract


Be bigger to be stronger

Deep-discount retailer Dollar Tree caused a major shake-up in the “dollar-store” industry when it acquired its close rival Family Dollar Stores with its 8,200 stores in 2015. The huge US$8.5bn takeover instantly vaulted Dollar Tree into the No. 1 spot in the USA dollar stores market by annual revenue, ahead of its remaining competitor Dollar General.

As already mentioned, AB InBev acquired SABMiller. The transaction was facilitated by the downturn of the emerging markets in particular China and Brazil in which SABMiller has strong positions. The combined group will represent a third of the beer market in the world and 50% of its profits with strong positions outside the USA, becoming leader in 24 countries out of the 30 top beer markets in the world. The 3 European bottlers of Coca Cola (Coca-Cola Enterprises, Coca-Cola Iberian Partners and the German bottling activities of Coca-Cola, Coca Cola Erfrischungsgetränke AG) have merged to form Coca-Cola European Partners, creating the world’s largest independent Coca-Cola Bottler serving over 300 million consumers across 13 countries, with its head office moving from Atlanta to London - benefitting from a local corporate tax rate between 26 and 28%.

Think outside the box

Being disruptive is a key challenge for Retail & Consumer companies. They are looking to differentiate from competition and seduce an ever more demanding client. Some of them already made a move outside of their core business to secure innovation and customer service

US giant Amazon completed its acquisition of the carrier Colis privé in France. With this takeover, Amazon will, as it already does in China or England, control its own delivery service for the “last mile”. This is a crucial part of the customer services on which e-commerce players are fiercely competing to be the quickest and the cheapest.

Pet product deals are private equity’s best friend

The pet industry continues to attract growing interest from investors. The industry is profitable and records strong growth as the number of pet owners around the globe are increasing their purchasing power, this also benefits their pets. The industry appears certainly more resilient than many other consumer goods in the recent market, benefiting from niche positions in particular on health and innovative products.

Private Equity firms can’t seem to get enough of pet product companies. With steady growth in consumer demand, even during challenging economic times, this segment remains popular.

Two operations illustrate this trend in the top deals R&C 2015. PetSmart Inc., the largest specialty pet retailer, agreed to be bought by a group led by BC Partners Inc. for more than US$8.2bn, the largest private-equity buyout in an otherwise lackluster year for such deals.

The consumer packaged goods company J. M. Smucker completed the acquisition of Big Heart Pet Brands, a pet food and snack food company, which provides the Company an immediate and significant presence in the large, growing pet food and snacks category. Adding a third platform for growth, along with their existing food and beverage businesses. The transaction increases its center-of-the-store presence with consumers and retailers.

PwC | 5

Target Target Business

Acquiror Deal value (€m)

SABMILLER PLC UK Beverages ANHEUSER-BUSCH INBEV BE 117 406

KRAFT FOODS GROUP INC US Food HJ HEINZ CO US 62 573

JARDEN CORP US Consumer Products NEWELL RUBBERMAID INC US 19 983

PROCTER & GAMBLE (P&G BEAUTY BUSINESS)

US Personal Care COTY AU 14 911

KEURIG GREEN MOUNTAIN INC US Coffee AGNATEN SE; BDT CAPITAL PARTNERS LLC; MONDELEZ INTERNATIONAL INC

AU 14 263

MILLERCOORS LLC (58%) US Beverages MOLSON COORS BREWING CO US 12 000

CVS US Pharmacy services provider OMNICARE US 11 646

SAFEWAY US Retailer CERBERUS US 9 873

FAMILY DOLLAR US Retailer DOLLAR TREE US 8 500

PETSMART US Retailer

BC PARTNERS LTD LA CAISSE DE DEPOT ET PLACEMENT DU QUEBEC STEPSTONE GROUP LLC

UK CA US

8 141

COCA-COLA IBERIAN PARTNERS SA

BIG HEART PET BRANDS

REYNOLDS AMERICAN INC

ES Beverages COCA-COLA ENTERPRISES INC US 6 176

US Animal Food JM SMUCKER CO US 5 830

JA Tobacco JAPAN TOBACCO JA 5 000

COCA-COLA ERFRISCHUNGSGETRAENKE AG

GE Bottler COCA-COLA ENTERPRISES INC US 3 270

IGLO FOODS GROUP LTD UK Food NOMAD HOLDINGS LTD UK 2 810

Top deals - Retail & Consumer deals in the world in 2015

PwC Analysis - Sources: Zephyr, Merger Market, Capital Finance


M&A involving French players (either as Acquirers or Targets) in the Retail & Consumer remained shy compared to pre-crisis levels and the rest of the world.

The number of transactions increased to slightly above 300 operations in 2015 but with fewer deals above €20m than in 2014. The cumulated value of reported 2015 deals reached €14.8bn, 18% below 2014.

In 2015, the Retail segment, unlike in previous years, seems to have attracted more transactions above €20m than the Consumer industry. Some large operations have marked the year such as i) Motier (the Galeries Lafayette family’s holding company) increasing its investment in Carrefour Groupe from 6.1% to 9.5% for €712m and an additional 1,95% through GALFA (equally Moulin Family) for €375m, ii) the strategic investment of the Swiss frozen bakery specialist Aryzta for 49% in Picard Surgelés for €1.1bn with an option to acquire full control within 3 to 5 years and iii) Lavazza, the world’s 7th biggest coffee roaster in the world, finally acquired the French brand Carte Noire for around €800m from Douwe Egberts, in a deal that would trebble the Italian company’s turnover in France.

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PwC | 7

Food industry: “What’s on the menu?”The revival of French Wines

With the high volatility of food raw materials, the continuous pressure on retail prices both from food distributors and an overall dull consumer demand, food companies are looking to diversify the activities and geographies to capture margin and growth.

InVivo, Europe’s 5th largest cooperative based in France, already present in Grains, Seeds, Animal nutrition and Distribution, illustrates this diversification with the announcement in 2015 of the creation of a new branch, InVivo Wine. It started with the

acquisition in Summer 2015 of Cordier-Mestrezat (Bordeaux wine trade company) and Vignobles du Soleil (specialized in the wholesale of wine sold abroad in bulk) on the distribution side, combined with a partnership to secure supply through the acquisition of 21% of the largest wine cooperative in France Vinadeis (former Val d’Orbieu in Narbonne) representing 6% of the French wine production. In one year, it gave birth to InVivo Wine, the third actor in the French wine market, behind Castel and Grands Chais de France. The

ambition is to reach €1bn sales in 2025 by creating - from scratch - the first French wine brand under the name of Cordier for the export of wine from small French properties at a price around 10€ per bottle. It expects to win market share competing with Australian and American wines across the world.

Terrena, another diversified French cooperative, Europe’s 15th largest, also invested in wine by taking control of Ackerman, known for its sparkling wines of the Loire Vallée, appellations “Saumur” and “Crémant de Loire”.

Target Deal type Target Business Acquiror Deal value (€m)

LIBERTAD SA (Casino) SEGISOR SA (Casino)

AR FR

100% and 50% Retailer ALMACENES EXITO SA CO 1 645

PICARD SURGELES SAS FR 49% Frozen products ARYZTA AG CH 1 103

CARTE NOIRE FR 100% Consumer Products LUIGI LAVAZZA S.p.A. IT 800

AK GIDA SAN TIC AS TR 80% Consumer Products GROUPE LACTALIS SA FR 722

CARREFOUR SA FR From 6.1% to 9.5% Retailer MOTIER SAS FR 712

QUICK FR Build-up Fast food restaurants GROUPE BERTRAND FR 700

SOLINA FR LBO Food ingredients provider ARDIAN FR 650

AUTODISTRIBUTION FR Quaternary LBO Car and vehicle parts retailer BAIN CAPITAL FR 615

CARREFOUR BRESIL FR 10% Retailer PENINSULA BR 560

IKKS GROUP SAS FR Buy-out 70% Clothing retailer LBO FRANCE GESTION SAS SILVERFERN

FR 420

ROGER VIVIER FR 100% Shoes products TOD'S IT 415

COMPAGNIE DU PONANT FR 100% Cruiseline ARTEMIS SA (Pinault) FR 400

CARREFOUR SA FR Minority stake 1.948%

Retailer GALFA (Famille Moulin) FR 375

SHOWROOMPRIVE.COM FR IPO Online clothing retailer VIPSHOP CH 256

INTERFLORA France FR LBO Flowers retailer LFPI MONTEFIORE INVESTMENT GROUP

FR 230

IRCA SRL IT Buy-out 80% Bakery and pastry products ARDIAN FRANCE FR 230

INVIVO NSA SA FR Development Agribusiness

UNIGRAINS EURAZEO SA (17%) QUALIUM INVESTISSEMENT SAS IDIA-SODICA SAS

FR 215

GNOSIS IT 51% Agribusiness LESAFFRE FR 200

DAVIGEL SA FR 100% Frozen products BRAKES GROUP UK 200

ROCHAS (PROCTER & GAMBLE)

FR 100%Perfumes and fashion products

INTER PARFUMS SA FR 101

Top 20 - Retail & Consumer - France - 2015



The saga continues in the meat and milk industry

LDC bought the poultry activities of Avril (ex Sofiproteol), increasing from 38 to 44 its industrial sites. Reciprocally, Avril acquired the animal feed of LDC to reinforce its branch Sanders. The two players expect to reach sufficient size to be able to compete on the European market.

Following serious difficulties in recent years, the Breton poulterer Doux is about to change hands and should join officially the agricultural cooperative group Terrena early 2016.

In the context of the end of milk EU quotas, the sector pursues its consolidation. After two years of tumultuous engagement, Agrial and Eurial finally announced the first part of their merger with the completion of the consolidation of their industrial and commercial dairy activities (cheese ingredients, ultra-fresh, butter/cream...). The merging cooperatives will in turn be voted in June 2016 and will require the approval of the Competition Authority. The new group will take second place in France behind the dairy cooperative Sodiaal.

The cooperative l’Armoricaine Laitière (Côtes d’Armor) merged with Even

(Finistère) and La Coopérative Laitière de Haute-Normandie joined Sodiaal.

International to find growth

The race to ‘go global’ is still on but the actors did not go as far this year.

The biggest players invested in developed countries: Lactalis takes full control of Walhorn AG, the Belgian dairy venture it had with its European peer Arla Foods and bought Ak Gida, the first milk producer in Turkey. By buying Ak Gida, Lactalis enters in Turkey, a country with 78 million inhabitants, the largest producer of milk with a collection of 18 billion liters (against 24 billion in France) and a major consumer of dairy products.

Tereos acquired the independent sugar distributor, Napier Brown Sugar Limited, a key step in its strategy of commercial development in Europe for the Group. The Transaction will significantly reinforce Tereos’ position in the UK, a strategic market for French producers.

Avril Group announced its acquisition of The Kerfoot Group, supplier, packer and blender of vegetable oil products, which will broaden the scope of its activities in the UK.

Bel completed the acquisition of a Moroccan company, Safilait. With this

transaction, Bel and Safilait will broaden their offering in the Moroccan market, where the two companies already have strong brands and market positions.

Biscuit Bouvard realized its first operation outside of France by acquiring the Italian company Euro Cakes.

More exotic, the French seed maker Vilmorin is to become the first international industry player with a direct presence in Vietnam in the garden vegetable seeds market through the acquisition of local company Tropdicorp as part of its push into emerging markets.

Portfolio complement

Companies added new activities to their portfolio. Among them, Lesaffre is broadening its position in the nutrition and health sectors with the acquisition of a majority stake in the Italian fermentation company Gnosis and the acquisition of Anchor Yeast in Zimbabwe.

Lavazza acquired the largest French coffee label, Carte Noire. With Carte Noire in its portfolio, Lavazza’s sales from foreign activities has risen from 50 % to 70 % of its turnover.

Snacking madness

Out-of-home catering is storming ahead in a morose market and M&A in the area demonstrated its dynamism. Snacking has become more popular in France. French people spend no more than 22

minutes on average for their lunch break in 2015. They eat take away food about 50% of the time and they look primarily for quality, fresh and authentic products.

In that trend, Labeyrie entered into the French snack market with Salé Sucré’s acquisition last Summer.

The Panzani Group, held by Spanish based Ebro Foods, world leader for rice and second in pasta, completed the acquisition of Roland Monterrat, with its €64m of sales is the French leader of “Paté en croute”, also present in the segment of sandwiches and toasted sandwiches. This allows Panzani to enter the snacking market, the most dynamic category within self-service deli.

Chocolate fondue

Under the pressure of distribution prices and competition, some sectors

of the French food industry suffered more than others with unavoidable restructuring. As already the case in 2014 in the milk and meat sectors, in 2015, the small actors of the chocolate sector struggled to secure sufficient margins to survive despite strong headwinds: historically high cocoa prices, lower demand demand in a climate-dependent market and margin pressure in a highly concentrated market.

In this context, La Chocolaterie de Bourgogne in financial difficulties is taken over by two Dutch funds Varova and Nimbus, in association with the Plot Groups from Ghana. Similarly, the biscuit manufacturing Burton group takes over Chocolats Réauté.

PwC | 9

Target Deal type Target Business


CARTE NOIRE FR 100% Consumer Products LUIGI LAVAZZA IT 800,0

AK GIDA TR 80% Dairy products producer GROUPE LACTALIS FR 722,4

SOLINA FR LBO Food ingredients provider ARDIAN FR 650,0

IRCA SRL IT Buy-out 80% Bakery and pastry products ARDIAN FRANCE FR 230,0



FR 215,0

GNOSIS IT 51% Agribusiness LESAFFRE FR 200,0

DAVIGEL SAS FR 100% Frozen products BRAKES GROUP UK 200,0

SUMOL+COMPAL PT 49.9% Soft drinks manufacturer COPAGEF (Castel) FR 88,2

NAPIER BROWN UK 100% Sugar manufacturer TEREOS GROUP FR 47,0

PROVENCE HUILES FR 100% Vegetables oil producer ITOCHU CORPORATION JP 45,0

ROLAND MONTERRAT FR 100% Ready-to-serve food manufacturerLES TRAITEURS LYONNAIS GROUPES (Panzani)

FR 44,3

CORDIER MESTREZAT FR 78% Wine producer INVIVO GROUP FR 31,2

ANCHOR YEAST ZW 60% Yeast manufacturer LESAFFRE FR 10,2

SALES SUCRES FR 78% Ready-to-serve food manufacturer LABEYRIE FINE FOODS FR 8,6

Main deals in the Food sector - 2015

Main deals in the Food sector - 2015 (Deal value unknown)



CHOCOLATERIE DE BOURGOGNE SAS

FR 100% Chocolate manufacturerNIMBUS BV VAROVA BV

NL n/c

CONSERVES FRANCE SA (ST MAMET)

FR 100% Canned fruit and jam manufacturer FLORAC FR n/c

ACKERMAN SA FR From 44% to 66% Wine producer TERRENA SCA FR n/c

LAITERIE WALHORN BE From 51% to 100% Dairy products producer LACTALIS FR n/c

TROPDICORP VN 100%Vegetable seed production services provider

VILMORIN & CIE SA FR n/c

REAUTE FR 100% Chocolate manufacturer BUTON FR n/c

EURO CAKES IT 70% Cakes manufacturer BISCUITS BOUVARD FR n/c

VINADEIS FR From 13% to 21% Wine producer INVIVO GROUP FR n/c

NUTRIFONT ALIMENTOS SA BR 100% Dairy products producer GROUPE LACTALIS SA FR n/c

BRETAGNE VIANDES DISTRIBUTION

FR 100% Meat producer EVEN FR n/c

KUNTEJ ZRT HU 100%Milk and dairy products manufacturer

GROUPE LACTALIS SA FR n/c

MOLSON COORS BREWING COMPANY (UK) LTD'S MALTINGS DIVISION

UK 100% BreweryMALTERIES SOUFFLET SAS

FR n/c

SAFILAIT MA 69.82%Milk and dairy products manufacturer

FROMAGERIES BEL FR n/c

KERFOOT UK Minority stake unknown % Vegetables oil producer AVRIL FR n/c

GROUPE DOUX FR 100% Meat producerSOFIPROTEOL SA; TERRENA SARL

FR n/c

SOCIETE DE PRODUCTION DES HUILES DE BOURBON

FR 100% Vegetables oil producer LESIEUR SAS FR n/c

AGRIAL S.A. FR Merger Dairy products producer EURIAL FR n/c

LES VIGNOBLES DU SOLEIL FR 100% Wine producer INVIVO GROUP FR n/c

L'ARMORICAINE LAITIERE FR 100% Dairy products producer EVEN FR n/c

SIBELL SAS FR Merger 100% Crisps producer EUROPE SNACKS SAS FR n/c

COOPERATIVE LAITIERE DE HAUTE-NORMANDIE

FR 100% Dairy products producer SODIAAL UNION FR n/c

AGRIAL FR 100% Dairy products producer LDC FR nc

GLON SANDERS/AVRIL FR 100% Meat producer LDC FR nc

DELPEYRAT (Traiteur) FR 100% Ready-to-serve food manufacturer TALLEC FR n/c

SFIR/ASR IT Minority stake unknown % Sugar producer CRISTAL UNION FR n/c

DIPRAL RESTAURATION FR Acquisition 100% Consumer: Milk EVEN FR n/c

LA COCINERA ES Acquisition 100% Consumer: Frozen prepare dishes FINDUS FR n/c



In a context of stagnating consumption in France, retailers need to rethink their business models, innovate products and formats to continuously improve the consumers journey in order to restore margins and capture a greater share of consumers wallets.

In France, the Retail landscape continued its concentration. Alliances to mutualize purchasing platforms to better negotiate with manufacturers: Carrefour with Cora, Intermarché with Casino, but essentially Auchan with Système U, extending to retail formats alignments.

French Law for economic growth and activity, known as the “Macron Law”, entered into force on 6 August 2015. The Macron Law introduces some major innovations to French commercial and distribution law. The main legal changes include amendments designed i) to make it easier for franchises to change distribution networks, ii) to develop a specific single commercial agreement for wholesale distribution, iii) stricter rules in relation to maximum payment terms, iv) increased penalties for restrictive commercial practices, and v) measures to encourage e-invoicing.

In the retail sphere, the major operations this year have been the IPO, at the end of 2014, of CNova Casino’s internet branch, and recently the announced intention by FNAC to partner up with Darty, still awaiting the Concentration Authority’s approval.

Stores war: the retailers strike back


Acquiror Deal value

(€m)

LIBERTAD SA (CASINO) SEGISOR SA (CASINO)

AR/ FR

100% and 50% Retailer ALMACENES EXITO (CASINO)

CO 1 645,3

PICARD SURGELES FR 49% Frozen products ARYZTA SZ 1 102,5

CARREFOUR SA FR From 6.1% to 9.5% Retailer MOTIER SAS FR 712,0

CARREFOUR BRÉSIL FR 10% Retailer PENINSULA BR 560,0

CARREFOUR SA FR Minority stake 1.948% Retailer GALFA (FAMILLE MOULIN) FR 375

Main deals in the Retail sector - 2015

PwC | 11

Capitalistic moves

Carrefour at international level opened up its capital in Brazil, allowing Peninsula (equally shareholder of Brazilian Food), chaired by Abilio Diniz, to increase its share from 10% to 12% in partnership with GIC (Government of Singapore Investment Corporation) in Carrefour’s Brazilian subsidiary in order to support the Group’s local growth, leverage on the local retail experience of this new shareholder, with a view to increase its stake to 16% in 5 years.

In France, the Moulin family (owners of Galeries Lafayette) following the disposal of Monoprix to Casino in 2013, continues its investment in Carrefour, increasing its stake from 6.2% to 9.5% and an additional 1.95% through GALFA (equally owned by the Moulin Family) to become the second-biggest shareholder of the Group.

At the same time, Casino Group changed its Latin America organization by regrouping all its operations under its Colombian subsidiary Éxito. A way to rebalance Casino Group’s debt structure under the scrutiny of shareholders and in particular the activist fund Muddy Waters. The total transaction value amounts to €1.7bn.

Private equities continue to play a significant role in the retail segment in France with consistently high number of operations in the sector, the largest ones being the disposal by Lion Capital of the multi LBO emblematic food retailer

Picard Surgelés, sold for an initial stake of 49% to the Swiss frozen bakery group Aryzta, with the opportunity to sell the rest of the capital in a few years and Autodistribution, which changed PE owners, switching from Towerbrook to Bain and LBO France securing the acquisition of IKKS

Investing in e-commerce

Retailers are reinforcing their omnichannel strategies and develop their presence in various formats: e-commerce, drives, proximity and franchise.

Last summer, Carrefour took everyone by surprise when acquiring key player in non-food e-commerce marketplace, Rue du Commerce, from Altarea Cogedim, thus materialising Georges Plassat’s announced omnichannel strategy.

Some other operations also show the appetite of physical stores for internet players:

Casino/Monoprix acquired the women’s multibrand fashion e-commerce platform monshowroom.com, Adeo Group acquired a majority stake in Tikamoon, a pure player furniture specialist, joining the decor division, which already includes Zôdio, Delamaison, Lightonline, Decoclico and Home’s Up. Orchestra acquired 13% of Destination maternity corporation.

Development to capture growth or to defend existing positions

Carrefour announced an agreement to acquire Billa Romania from Rewe group in 2016, to become the leading supermarket operator in Romania, strengthening its multi-format offering in this country.

Groupe Bertrand, which owns the Burger King licence in France, bought the Quick Group sold by Qualium Investissement, and thus closing the gap on their growth ambitions.

In July 2015, Affelou continued its expansion and diversified on the low cost segments with the acquisition of Optical Discount, a banner with more than 90 franchised stores in France, Belgium and Morocco, which consolidates its position on the segment with its others low cost banner Claro.

Integration

Casino, following the example of Intermarché, announced their plans to acquire some food manufacturers, such as Entreprise laitiere de Savin and a chicken factory from Groupe Gastronome, in order to create a new agrobusiness division to integrate upstream. On the downstream side, Amazon has acquired French company Colis Privé, specialist of the last mile delivery, enhancing thus its distribution capabilities, a key enabler for superior customer service.


Acquiror Deal value

(€m)

ENTREPRISE LAITIERE DE SAUVAIN SAS

FR Majority stake Local cheese manufacturer CASINO GUICHARD-PERRACHON SA FR n/c

CARREFOUR SA (26 STORES) FR 100% Retailer CASINO GUICHARD PERRACHON SA FR n/c

CARREFOUR SA (17 STORES) FR 100% Retailer GROUPE AUCHAN SA FR n/c

RUE DU COMMERCE FR 100% Online retailer and market place CARREFOUR FR n/c

GASTRONOME (LUCHÉ-PRINGÉ)

FR 100% Meat manufacturer CASINO GUICHARD PERRACHON SA) FR n/c

Main deals in the Retail sector - 2015 (deal value unknown)



Apparel plays with the big boys

Go for growth

Vente-privée took a majority stake in its Belgian competitor vente-exclusive.com but also diversified in acquiring an airtravel BtoC pure player MisterFly, created by two former GoVoyages employees.

Showroomprivé.com launched its IPO on Euronext to increase the Group’s visibility, access a new source of financing in order to support its development in France and abroad markets. In a smaller scale, Miliboo successfully completed its IPO end of 2015.

Vestiaire Collective aims to become world No.1-second hand luxury goods with one of last year’s most important fundraising rounds. The French start-up completed a financing round of € 33 million led by Eurazeo with existing investors.

This operation should allow Vestiaire Collective to deploy rapidly internationally in particular in the US.

After The Kooples, LBO France grabs the IKKS brand. A new asset in the growing fashion industry. While the French market contracted, IKKS is growing at more than 5% per year since 2012.

Sergent Major, owned by funds Siparex and Edrip, is finalising the acquisition of its struggling competitor, children’s fashion chain Du Pareil au Même (DPAM), the deal is still waiting for the approval of Competition Authority.

Verywear (known for its flagship brand Devianne), the leading French multi-brand retailer based in Lille, enters the distribution on line with the acquisition of the website Des-marques-et-vous.com



IKKS FR Buy-out 70% Clothing retailer LBO FRANCE GESTION SAS SILVERFERN

FR 420,0

SHOWROOMPRIVE.COM FR IPO Online clothing retailer VIPSHOP CH 256,0

DU PAREIL AU MEME FR 100% Clothing retailer SERGENT MAJOR FR 50,0

VESTIAIRE COLLECTIVE FR Development Online clothing retailer

VENTECH SA EURAZEO SA IDINVEST PARTNERS BALDERTON CAPITAL (UK) LLP CONDE NAST INTERNATIONAL LTD

FR / UK 33,0

MONSHOWROOM.COM FR 100% Online clothing retailer MONOPRIX FR 14,3

DESTINATION MATERNITY CORPORATION

US Minority stake 13.305%

Online clothing retailer ORCHESTRA FR 8,8



VENTE-EXCLUSIVE.COM BE 100%Online fashion and lifestyle retailer

VENTE-PRIVEE.COM FR n/c

DES MARQUES ET VOUS FR 100% Online retailler VERYWEAR FR n/c

GERARD DAREL FR 100% Clothing retailer GERBI FAMILY FR n/c

SNOW & ROCK GROUP GB Buy-out 100% Online outdoor activities AS ADVENTURE FR n/c

FRONTLINE DE 100% Online clothing retailer MENLOOK.COM FR n/c

ADIEU SHOES FR Development Online shoes retailer BPIFRANCE FR n/c

BATA FRANCE DISTRIBUTION SAS

FR Development Shoes retailer ETAM DEVELOPPEMENT SA; COURIR SA; FRANCOIS LE MENAHEZE (PRIVATE INDIVIDUAL)

FR n/c

BA&SH SAS FR DevelopmentWomen's clothing manufacturer

L CAPITAL MANAGEMENT SA FR n/c

Main deals in the Apparel sector - 2015

Main deals in the Apparel sector - 2015 (deal value unknown)


PwC | 13

Specialized retail:international and reorganization

In early 2015, electrical trade distributor Sonepar expanded its international footprint by acquiring the Italian distributor Grupo Matel, and a month later announced the acquisition of Rexel’s Latin American operations (Brazil, Chile, Peru) for an enterprise value of US$51m.

For Rexel, this divestment plan is meant to allow the group to refocus on three main geographies (Europe, North America and Asia-Pacific) and to continue its targeted acquisitions in these regions… But also in France as demonstrated through its acquisition of Sofinther, which will enable Rexel to reinforce its expertise in thermal control, regulation and in the connected devices market.

Same strategy for Raja, family owned European leader in the distribution of packaging supplies and equipment for

businesses, who acquired Morplan, a distance seller of retail supplies and equipment to reinforce its presence in the UK.

Other specialized retailers look for synergies and portfolio development like Findis Group, specialist in the distribution of electrical products through the acquisition of the group Desamais Distribution, involved in the distribution of DIY, hardware, home and garden. This way Findis progress in its strategy to diversify its activities.

Auchan revisits its Internet strategy renouncing hyperspecialization in this area. Ten years after acquiring Grosbill.com, an online site selling high tech products, the distributor has accepted a takeover offer from Mutares, German private equity that proceedeed to the acquisition of Pixmania in 2014.

Similarly interesting operations took place in the automotive sector enabling buyers to develop their offering online and reinforce their after-sales service: Norauto acquired the “Nordic Oscaro” Skruvat, a year after it had taken over another Scandinavian car parts pure player, Bythjul. PSA Peugeot Citroën entered the electronic commerce market by buying the French spare-parts website Mister-Auto.com and Michelin purchased Blackcircle.com in the UK after Allopneu in France the year before.

Ludendo proceeded with the disposal of Hamleys, the oldest toy store in London for £100m to the Hong Kong shoe distribution group C.Banner, in order to free cash to invest in its main brand La Grande Recré.

Target Deal typeTarget Business


AUTODISTRIBUTION FR LBO Car and vehicle parts retailer BAIN CAPITAL FR 615,0

BLACKCIRCLES.COM UK 100% Online tyre retailer MICHELIN FR 67,0

REXEL (AMÉRIQUE LATINE) SA 100% Electrical products and services retailer

SONEPAR FR 47,0



GRUPPO MATEL SPA IT 100% Online children's products retailer SONEPAR FR n/c

AGEM SA FR 100% Custom interior SOGAL FRANCE SAS FR n/c

MISTER AUTO FR 100% Used furniture retailer PSA PEUGEOT CITROËN FR n/c

MORPLAN UK 100%Mail order distributor to UK’s retail and fashion industry

RAJA FR n/c

TOOL FITNESS FR 100% Online fitness retailer GROUPE GO SPORT SA FR n/c

SKRUVAT RESERVDELAR AB SE 100%

Services (other) - Distributors, fresh produce / France-based fresh and frozen foods distributorCar parts & accessories Online

MOBIVIA GROUPE SA FR n/c

SOFINTHER FR 100%Thermal, heating and control solutions retailer

REXEL SA FR n/c

DESAMAIS DISTRIBUTION FR 100% DIY, hardware, home and garden retailer FINDIS FR n/c

Main deals in the Specialized retail sector - 2015

Main deals in the Specialized retail sector - 2015 (deal value unknown)



Luxury and Wine & Spirits

Exposed to the turmoil of Asian economy, French luxury groups spent less on acquisitions this year as they placed their energy in securing market shares and margins

LVMH has taken a minority stake in the Italian jeweler Repossi and L Capital, LVMH related fund, acquired 50% of Ba&sh and 49% of the Spanish men and womenswear brand El Ganso with a view to expand their distribution network and accelerate their international expansion. As the diversification, LVMH made 2 interesting acquisitions: • on the entertainment side, it took a 5% stake in the capital of Société des Bains de Mer de Monaco, which also owns the Casino of Monaco and various hotels, in a deal worth € 31.5m. • on the media side, LVMH, which already owns the financial daily Les Echos, expanded its footprint and purchased Le Parisien from The Amaury Group.

Kering took a 40% minority stake in the iconic sixties fashion house Courrèges and closed the sale of the Italian luxury shoemaker Sergio Rossi to the private InvestIndustrial. The group also completed the disposal of Movitex (Daxon and Balsamik brands) to its management, ending its Redcats episode. In addition, Kering’s holding Artémis acquired from Bridgepoint for $ 400 m the French luxury cruise operator Ponant boosting its ambition to be a global player in the high-end cruise market.

Hermès followed its strategy to preserve its supplier unique know-how and secure its supply chain by acquiring its long-standing partner Tanneries du Puy, specialized in working the calf leather “box” which is one of Hermès’ iconic materials.



ROGER VIVIER FR 100% Shoes products TOD'S IT 415,0

COMPAGNIE DU PONANT FR 100% Cruiseline KERING FR 400,0

ACTURUS CAPITAL (EL GANSO) ES 49% Luxury clothing retailer L CAPITAL (LVMH) FR 100,0

LOUIS ROYER FR 100% Online cognac retailerTERROIRS DISTILLERS SAS EMPERADOR, INC.

FR PH

100,0

HENRI MAIRE FR 54.79% Wine producer GROUPE BOISSET FR 8,5

CHATEAU MIREFLEURS FR 90% Wine producer YANTAI CHANGYU PIONEER WINE CO., LTD CH 3,3

Main deals in the Luxury and Wine & Spirits sector - 2015


PwC | 15



PENHALIGON L'ARTISAN PARFUMEUR

FR / UK

100% Perfume producer PUIG ES n/c

COURREGES FR 30% Perfume producer ARTEMIS (KERING) FR n/c

TANNERIES DU PUY FR 100%Leather tanning manufacturer

HERMES FR n/c

REPOSSI MC Minority stake unknown %

Jewellery manufacturer LVMH FR n/c

ERCUIS & RAYNAUD FR 100% Porcelain manufacturer SAMBONET PADERNO IT n/c

WENNEKER'S NL 100% Spirits manufacturer LA MARTINIQUAISE FR n/c

INSPIRITS PREMIUM DRINKS BV NL Minority stake unknown %

Spirits manufacturer LA MARTINIQUAISE FR n/c

BELVEDERE SA FR Minority stake unknown %

Spirits manufacturer DIANA HOLDING MO n/c

CHATEAU VALLON DES BRUMES FR 100% Wine producer BOISSONNEAU (HONG KONG) LTD HK n/c

DROUET FRERES FR 100% Wine producer ACKERMAN SA FR n/c

SERGE LUTENS FR 100% Perfume producer SHISEIDO JA n/c

International groups’ shopping spree in France

Italian shoemaker Tod’s acquired the Roger Vivier luxury brand from Tod’s CEO Diego Della Valle and his family. It will pay €415m ($441 m) for the French shoe designer brand with an additional €20 m for its Paris operations. Tod’s operated the Roger Vivier label under license for about a decade. This will reinforce the positioning of Tod’s brands portfolio. Puig committed to expand its presence in the prestige perfumery sector and acquired the brand L’Artisan Parfumeur Paris. The Italian group Sambonet Paderno Industrie acquired the French silverware company Ercuis and its subsidiary, the French china porcelain manufacturer Raynaud.

The Moroccan group Diana holding reinforced its share in the capital of Belvedere to reach 13% to become a strong commercial and industrial partner, not excluding a take control of the group in the future.

Chinese buyers have concluded their 120th acquisition in the wine & spirit sector

Indeed, Chateau Vallon des Brumes, AOC Bordeaux Superior, has been bought by its Chinese importer Boissoneau Hong Kong ltd willing to concentrate on its historical properties.

Castel Group sold 90% of one of its 22 Bordeaux wine chateaux, Château Mirefleurs, to the Chinese giant wine producer Changyu in a deal worth €3.33m.

Development / Diversifications

La Martiniquaise, owner of Label 5 Scotch whisky, has acquired 3 spirit brands from Dutch liquors producer Wenneker and took a stake in Holland’s second-largest drinks distributor, Inspirits.

Suntory Holdings sold Louis Royer Cognac to Terroirs Distillers, a privately-held fine spirits company based in France. Suntory wished to sell this asset further to the acquisition in January 2014 of Beam Global in the US whose subsidiary Courvoisier is also a cognac producer. The family-owned wine producer and exporter Boisset Estates in Burgandy acquired Henri Maire Development, the Jura wine house to improve portfolio and notoriety.


Main deals in the Luxury and Wine & Spirits sector - 2015 (deal value unknown)


Private equity trends

PE gets hands on fashion, online and premium

The involvement of Private equity remained stable and essentially concerned local players.

Apart from the biggest operation by Towerbrook which sold Autidistribution to Bain, most PE deals were concluded with medium size French companies in fashion, online and luxury sectors.

E-commerce continued to be a favored investment for venture capitalists showing their will to sustain “French nuggets”, mainly high-end, in their international expansion.

As already demonstrated in former chapter, many private equity firms invested last year in online clothing start-ups: I run, smallable, mytailor is free, chictypes.com, le slip français, Roseanna, patatam, but also in other online businesses like wine: bibovino, les grappes… or Interflora.

Premium brands like IKKS, Ba&sh, ElGanso were also on their shopping list.

e-commerce

PwC | 17



SOLINA FR LBO Food ingredients provider ARDIAN FR 650,0

AUTODISTRIBUTION FR LBOCar and vehicle parts retailer

BAIN CAPITAL FR 615,0

IKKS FR 70% Clothing retailer LBO FRANCE GESTION SAS SILVERFERN

FR 420,0

IRCA SRL IT 80%Bakery and pastry products

ARDIAN FRANCE FR 230,0

INTERFLORA FRANCE SA FR 100% Flowers retailer LFPI MONTEFIORE INVESTMENT GROUP

FR 230,0



FR 215,0

ARC INTERNATIONAL SA FR 100%

Consumer: Other - Household products / France-based company that manufactures and markets tableware products

PEAKED HILL PARTNERS LLC US 60,0

VESTIAIRE COLLECTIVE FR Development Online clothing retailer

VENTECH SA EURAZEO SA IDINVEST PARTNERS BALDERTON CAPITAL (UK) LLP CONDE NAST INTERNATIONAL LTD

FR / UK

33,0

I-RUN SAS FR DevelopmentOnline sporting clothing retailer

IXO PRIVATE EQUITY SAS BPI GROUPE SA

FR 5,0

SMALLABLE SAS FR Development Online clothing retailer ALVEN CAPITAL SA AURINVEST SAS SIGMA GESTION SA

FR 5,0

CHICTYPES.COM FR Development Online clothing retailer EXISTING INVESTORS 360 CAPITAL MANAGEMENT SA MR PASCAL CAGNY

FR 4,0

LE SLIP FRANCAIS SAS FR Development Clothing retailer 360 CAPITAL MANAGEMENT SA FR 2,0

OLT SAS (OLYMPIA LE-TAN) FR Development Online clothing retailer AUDACIA SAS FR 1,0

BIBOVINO FR Development Online Wine retailer CAPITAL & DIRIGEANTS PARTENAIRES FR 1,0

ROSEANNA FR Development Online clothing retailer BPIFRANCE FR 0,8

PATATAM SAS FR DevelopmentOnline children's clothing retailer

HERRIKOA SA AQUITAINE CREATION INVESTISSEMENT SAS MR PIERRE KOSCIUSKO-MORIZET MR PIERRE KRINGS MR FREDERIC MAZZELLA PG DEVELOPPEMENT SASU ADOUR BUSINESS ANGELS MR FRANCIS NAPPEZ MR DAMIEN GRULIER

FR 0,7

LES GRAPPES FR Development Online wine retailer

ANGEL INVESTORS MR FABRICE BERGER DUQUENE MR OLIVIER BERNASSON MR PIERRE OURLIAC MR ALBERT MALAQUIN MR ARNAUD DE LACOSTE

FR 0,7

MY TAILOR IS FREE SAS FR Development Tailoring servicesANGEL INVESTORS BPI GROUPE SA

FR 0,2



BA&SH SAS FR DevelopmentWomen's clothing manufacturer

L CAPITAL MANAGEMENT SA FR n/c

ADIEU SHOES FR Development Online shoes retailer BPIFRANCE FR n/c

Main deals - Private Equity - 2015

Main deals - Private Equity - 2015 (deal value unknown)



Conclusion Perspectives 2016

While the strong upsurge in mergers and acquisitions in 2015 rather benefited the US and Asia, we are convinced Europe, despite gloomy economical perspective, should remain in 2016 a focus of attention for potential foreign investors.

The rise of the dollar against the euro, the abundance of liquidity encouraged by the unstopped quantitative easing program of the Central Bank in Europe and the perception of a lower risk of the Eurozone are all factors that could confirm the attractiveness of the European market for mergers and acquisitions and overcome its still modest economic growth.

The ongoing mutations in the Retail and consumer sector make it a focus of interest for Private Equity in search for growth equity stories. Customer behavior changes and the rapid change of the competition landscape will keep the actors of the sector under constant pressure. M&A should be a way to capture transformation opportunities.

We saw three important trends emerge in 2015 that should continue in 2016.

The first trend is the potential for large transactions as consumer goods companies continue to reshuffle their portfolio of brands to concentrate on finance marketing, research and innovation on their core activities and most promising products.

The second trend, which is a fairly new pattern, relates to “smart transactions”, i.e. structured transactions intended to reorganize the operational footprint, search for critical mass, synergies through asset swaps, joint-ventures and international reorganization.

The third trend is related to the increasing influence of minority shareholders’ on large corporate M&A strategy, in particular activist funds always pushing to extract the maximum value in a short timeframe, which should stimulate mergers and acquisitions. Contrary to popular belief, France is not immune to the actions of these disruptive players.

This let us believe that France M&A in Retail & Consumer promise to be animated in 2016 and the coming years.

www.pwc.fr

Sabine Durand-Hayes Partner PwC Transactions Retail & Consumer Leader PwC France [email protected] +33 1 56 57 85 29

Ghislaine Chevalier Director PwC Transactions [email protected] +33 1 56 57 16 04

Anne-Lise Glauser Partner Strategy&, Business Strategy [email protected] +33 1 56 57 84 53

Cécile Bouzereau Marketing & Business Development [email protected] +33 1 56 57 13 17

Ludivine Allardon Marketing & Business Development [email protected] +33 1 56 57 10 13

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