CARREFOUR and PROMODES join forces to create the world's second largest retail group.

Carrefour and Promodès jointly announce a friendly merger between their two companies, to take the form of a public exchange offer by Carrefour for the shares and other capital instruments of Promodès. The exchange ratio consists of 6 Carrefour shares for each Promodès share.

The board of Promodès, which met on Sunday 29 August 1999, has recommended the company's shareholders to tender their shares to Carrefour's offer; the founding families and their partners have formally undertaken to tender their shares which will enable Carrefour to secure the majority of the fully diluted capital of Promodès. For their part, the family shareholders of Carrefour and their partners have committed to vote in favour of the required capital increase which will be put before the Carrefour Shareholders Meeting of which notification will be given after September, 1st.

Paul-Louis HALLEY, Chairman of Promodès, commented that "against a background of accelerating consolidation in the retail sector, this merger is well-timed and represents without doubt the best opportunity for each of the two partners".

Daniel Bernard, Chairman of Carrefour, stressed the parties' shared objective ' to join forces to win the retail battle worldwide. Thanks to its strong growth prospects, the new entity will create value and be beneficial for all its employees".

This alliance will create the largest retailer in Europe and the second largest worldwide, present in 26 countries. It's headquarters will be based in France.

The new group will bring together some 9,000 stores, including 680 hypermarkets and 3,200 discount stores. It will employ 240,000 people, of which 110,000 in France. The estimated net sales for 1999 should reach 54 billion Euros (FFr 355 billion).

This merger will allow the groups to accelerate their growth in profitability and to double the group share of ordinary net profit (both before and after goodwill amortisation) in three years, that is to say by 2002.

This merger allows us to harness new growth momentum to the benefit of all the group's stakeholders:
- The employees of the new group will benefit, whatever their country or function, from improved prospects and more varied career opportunities.
- Suppliers
-and in particular the small/medium manufacturers and agricultural producers, with whom the two companies have developed partnerships which will be expanded in scope in the future
- will benefit from additional opportunities to export their products;
- Shareholders stand to benefit fully from the value resulting from the merger and from the creation of what will be one of the largest companies by market capitalisation on the Paris Bourse;
- Our customers will benefit from an unparallaled multi-format store network, from additional resources directed towards quality and food saftey, from innovation in technology and marketing, from own labels and service intiatives.

The key management positions will be: Daniel BERNARD, Chairman and CEO of the new Carrefour Group, Luc Vandevelde, Deputy Chairman; Hervé DEFFOREY, Finance Director. In addition, Daniel BERNARD will ask the Board to approve the creation of a Strategic Committee and will propose that Paul-Louis HALLEY should be appointed its Chairman.