NEWS | Landmark group signs agreement with French retailer Auchan

<

In May, Max hypermarkets and Dutch grocery retailer Spar International announced they would not renew their partnership after 31 December, 2012, as both companies pursue operations separately in India.

The Landmark group and Auchan were in talks since February to form a joint venture. However, as India is yet to allow foreign direct investment or FDI in multi-brand retail, the talks are now centered on a franchise agreement.

“The two parties are interested in working together. The terms and conditions are being worked out. It will be a franchise agreement,” said an investment banker familiar with the arrangement. He did not wish to be named.

In January, the government increased the ceiling on FDI in single-brand retail from 51% to 100% but did not review its decision on FDI in multi-brand retail.

“The agreement with Auchan will be a licensing agreement, similar to the one that Landmark had with Spar,” said a second person familiar with the development. This person, who also did not wish to be identified, added the two companies have yet to choose a brand name for the retail stores in India.

SOURCE:http://www.livemint.com/2012/06/22180319/Landmark-group-signs-agreement.html